The Issue For Case No. 01-1607: Whether the Agency for Health Care Administration (AHCA) is entitled to change Oak Terrace Specialty Care Center's (Oak Terrace's) license from a Standard to a Conditional license from February to May 2001 pursuant to various deficiencies alleged in its letter of February 22, 2001. For Case No. 01-1985: Whether AHCA is entitled to fine Oak Terrace $1,000 for a violation of Section 483.25(1)(a)- (m), Florida Statutes, and Rule 59A-4.107(5), Florida Administrative Code, upon proof of a Class III (Tag F309) deficiency as set forth in its April 23, 2001, Administrative Complaint.
Findings Of Fact AHCA is the state agency responsible for evaluating nursing homes in Florida pursuant to Section 400.23(7), Florida Statutes. Oak Terrace is a licensed nursing home located in Green Cove Springs, Florida. These cases arise out of surveys conducted on the facility in December 2000, January 2001, February 2001, and March 2001. A focal point of this case is to determine which alleged deficiencies constitute "new" as opposed to "uncorrected" deficiencies in sequence. AHCA conducted a complaint survey of Oak Terrace on December 19, 2000. A complaint survey is in response to a complaint. The subsequent December survey report, commonly referred to as a "2567 Report," is, by the agreement of the parties, one of the charging documents in this case. The December 2567 Report charges that Oak Terrace failed to provide care and services to one resident to allow her to attain or maintain her highest practicable well-being. The 2567 Report also charges that this deficiency violates 42 CFR Section 483.25, which is made applicable to Florida nursing homes by Rule 59A-4.1288, Florida Administrative Code. The December 2567 Report identifies the standard of care at issue as Tag F309. AHCA is required to rate the severity of any deficiency identified in a survey with a federal scope and severity rating and a "class" rating. It assigned the F309 deficiency from the December 2567 Report a federal scope and severity rating of "G," which is an allegation that the deficiency caused actual harm to the resident but was an isolated incident. AHCA also assigned the deficiency a Class III rating, which is an allegation that the deficiency presents "an indirect or potential relationship (threat) to the health, safety, or security of the nursing home residents." See Rule 59A-4.128(3)(b), Florida Administrative Code.1 AHCA conducted an annual survey of Oak Terrace from January 9-12, 2001. AHCA prepared a January 2567 Report after that survey was completed, which is also a charging document in this case. The January 2567 Report does not identify that there was any violation of Tag F309. However, it charges that Respondent failed to have a systematic methodology to provide low-functioning residents with a program of activities designed to meet their interests and well-being. The 2567 Report also charges that this deficiency violates 42 CFR Section 483.15(f)(1), and identifies the standard of care at issue as Tag F248. AHCA assigned this deficiency a Class III rating. On February 2, 2001, AHCA conducted a follow-up survey to both the December 2000 and January 2001 surveys to determine if the deficiencies identified in both of those surveys had been corrected. AHCA prepared two separate 2567 reports after the February 2002 survey was completed. These reports are also charging documents in this case. The February 2567 Report charges that Respondent again violated Tags F248 and F309, and that each of these new violations was a Class III deficiency. Because it found new violations of Tag F248 and F309 on February 2, 2002, AHCA determined that the deficiencies that had been identified in December 2000 and January 2001 were uncorrected and changed Respondent's licensure rating from "Standard" to "Conditional." AHCA conducted a follow-up survey to the February survey on March 22, 2001. The purpose of this survey was to determine if the deficiencies cited in February had been corrected. AHCA prepared a 2567 report after the March survey was completed. The March 2567 Survey Report is yet another charging document in this case. The March 2567 Report did not find any continuing violations of Tag F248, but alleged that there was a violation of Tag F309. The F309 deficiency was assigned a Class III rating. Based upon its belief that the F309 deficiency from February remained uncorrected, AHCA proposes to continue the Conditional rating that it had imposed in February and to impose a $1,000 fine against Oak Terrace for this "repeat" deficiency.2 On May 29, 2001, AHCA conducted a follow-up survey to the March survey to determine if the F309 deficiency had been corrected. AHCA determined that Oak Terrace was in substantial compliance with all applicable regulatory requirements and changed Oak Terrace's licensure rating back to Standard. The December 2000 Survey Tag F309 Tag F309 requires a facility to "provide [to residents] the necessary care and services to attain or maintain the highest practicable physical, mental and psychosocial well- being, in accordance with the comprehensive assessment and plan of care." See 42 CFR Section 483.25. The December 2567 Report charges that Oak Terrace violated Tag F309 in its care and treatment of Resident 2. The allegations of inadequate care under Tag F309 of the December 2567 Report are set forth in an introductory paragraph followed by four separate numbered paragraphs. Respondent stipulated at hearing that it did not contest AHCA's ultimate determination that there was an F309, Class III deficiency in December 2000. However, Respondent does dispute the allegation of inadequate care contained in the introductory paragraph and the first numbered paragraph of that Tag, and AHCA's resultant claim, via the "G" scope and severity rating, that the inadequate care described in the first paragraph of the Tag caused "actual harm" to Resident 2. Resident 2 tragically had been placed in a trash bag as an infant. As a result, she suffered hypoxia (oxygen deprivation), resulting in a number of health problems, including cerebral palsy, blindness, inability to speak, lack of muscle control, and a seizure disorder. Despite three prescribed seizure medications, Resident 2 often had "breakthrough" seizures. Breakthrough seizures seem to be seizures occurring despite proper administration of correctly ordered medication. On the morning of November 29, 2000, Respondent sent Resident 2 to the hospital after she was noted to simultaneously manifest an elevated temperature of 103.6 degrees, seizure activity, and difficulty breathing. AHCA charged that Oak Terrace could have prevented Resident 2's decline and her hospitalization if Oak Terrace's staff had recognized earlier manifestations that Resident 2 was declining and, at that time, had notified Resident 2's physician. Because Resident 2 was noted to have a temperature of 102.4 degrees at 9:02 p.m., November 26, 2000, AHCA charged that Resident 2's physician should have been notified at 9:30 p.m., November 26, 2000 (roughly two and a half days before the facility actually notified him.) AHCA's expert nurse surveyor acknowledged that there is no nursing standard that requires a facility to notify a resident's physician when the resident has a temperature of 102.4 degrees. Instead, standard nursing practice provides that a physician should not be notified about an elevated temperature unless there are other symptoms present that indicate that the resident has experienced a change of condition. On November 26, 2000, Resident 2 had no other symptoms besides the elevated temperature. Staff provided her with Tylenol for her fever. Tylenol is an appropriate intervention. Resident 2's fever was reduced to 99.7, within two hours. AHCA also charged that Resident 2's physician should have been notified November 27, 2000, at 11:18 p.m., due to increased temperature. Nursing notes state that Resident 2 had a mild temperature of 100.8 degrees at that time. Those notes do not reflect that the temperature had been on-going from the previous night, nor do they indicate that Resident 2 had any other signs or symptoms that would indicate a change in her condition that required staff to notify her physician. The Resident was given fluids for her temperature, which is an appropriate intervention, and there was no further indication in the nursing notes that Resident 2 then experienced any further distress or sign of illness that night. Nancy Smith, R.N., AHCA's surveyor, stated for the first time at hearing that Respondent's staff also should have notified Resident 2's physician on the evening of November 27, 2000, because, since Resident 2 was fed through a gastrointestinal tube (g-tube), she felt the nurse should not have given the resident "extra" fluids without a physician's order for those fluids. Survey reports must be reasonably specific so that a Plan of Correction can be devised and accomplished by the facility and so that they can be checked up on by the Agency at the end of the time specified for correction. The December 2000, survey report does not charge that the facility had an obligation to obtain a physician's order prior to the administration of "extra" fluids or that the failure to notify Resident 2's physician caused Resident 2 to decline. Accordingly, it is inappropriate to use this charge to support a finding of a deficiency under Tag F309 in December.3 AHCA failed to provide any evidence that Resident 2 received fluids in excess of her assessed or ordered requirements. It is possible that the fluids she was given were early administration of flushes that were scheduled to be administered two hours later. There is no clarity on this issue. AHCA also asserted that Resident 2's physician should have been notified at 9:51 p.m., on November 28, 2000, when Resident 2 was noted to have a mild temperature of 100.2 degrees and also was noted to have "mild seizure activity," characterized by "rapid eye movement and upper extremity tremors," although the observed eye and body movements were consistent either with the resident's history of breakthrough seizures or her lack of muscle control. However, AHCA provided no evidence that the resident's fever and the seizure were related to each other or that they otherwise reflected a change in her condition which required notifying her physician. The appropriate nursing intervention for any resident who experiences a mild seizure is to allow the seizure to run its course, while monitoring the resident and protecting the resident from injury. In any case, nothing would have been done for Resident 2 with regard to evaluating whether her seizure medication needed to be changed without first doing lab work. Lab work would not have been done in the normal course of affairs until the following morning. Staff monitored Resident 2 throughout the evening of November 28, 2000, and no further seizure activity or any other type of distress was noted that would have required notification of the physician. It was also asserted that Oak Terrace should have notified Resident 2's physician at 6:00 a.m., on November 29, 2000, when staff noted that Resident 2's temperature was 100.8 degrees and the resident was noted to have "extra-ocular" movements. The noted eye movements were not consistent with seizures, but were consistent with the resident's on-going physical problems, and did not indicate a significant change of condition which would have required notification of her physician. However, at approximately 6:00 a.m., on November 29, 2000, staff noted for the first time that Resident 2 had airway congestion. The nursing staff gave Resident 2 Tylenol, continued to monitor her, and notified the oncoming nursing shift of Resident 2's condition. This is appropriate nursing practice. Around 7:00 a.m., Resident 2's temperature was read at 101 degrees. At 7:50 a.m., it was read at 103.6 degrees. At that time, Resident 2's oxygen saturation was tested and noted to be poor. Resident 2 also had labored breathing and seizure activity. She was given her scheduled administration of anti- seizure medication. At 8:05 a.m., staff notified Resident 2's physician of the three concurrent symptoms, and he ordered that Resident 2 be sent to the hospital. It would seem that Resident 2 was not ordered to the hospital due to her seizure activity, which was not remarkable, given her medical history. Apparently, her breathing difficulties and congestion, with the morning's elevated and now quickly increasing temperature, were the combined reasons staff phoned the physician and the physician ordered her to the hospital. AHCA contended that Resident 2 would not have experienced a decline from November 26, 2000, to November 29, 2000, that caused her to go to the hospital on November 29, 2000, if Resident 2's physician had been notified earlier and given an opportunity to order treatments for her. However, the only evidence offered in support of this conclusion was the testimony of surveyor Ms. Smith. She was accepted as an expert in nursing principles, practices, and procedures. However, she is not a physician, and her testimony in the disputed-fact hearing was only that there was a "possibility" that Resident 2's symptoms on the morning of November 29, 2000, could have been prevented by earlier notification of the physician, presumably between 7:00 a.m. and 8:05 a.m. (see Findings of Fact 17-31). She did not identify any intervention the physician might have initiated during that period of time. She did not identify a treatment that the doctor could have ordered that would have prevented Resident 2 from having to go to the hospital. When Nurse Smith interviewed Resident 2's physician as part of her survey investigation, she did not ask him if he could have done something for Resident 2 if the facility had notified him earlier.4 The evidence in this record does not support a finding that Resident 2 experienced "actual harm" as a result of any failure by Respondent to notify the physician earlier. At most, any failure to notify the physician presented a potential that Resident 2 could have been harmed. If a deficiency only presents a potential for harm to a resident, the Agency's assigned scope and severity rating of "G," is inappropriate. A severity rating of "D," which is defined as a deficiency which presents only the potential for causing more than minimal harm to a resident would be appropriate. The December 19, 2000, survey specifies January 19, 2001, as the date for correction. January 2001 Survey Tag F248 Tag F248 requires a facility to "provide for an ongoing program of activities designed to meet, in accordance with the comprehensive assessment, the interests and physical, mental, and psychosocial well-being of each resident." See 42 C.F.R. Section 483.15(f)(1). The January 2567 Report charges that Oak Terrace violated this regulation because it did not have a "systematic methodology" to provide an on-going program of activities for five residents (Residents 1, 4, 7, 11, and 15), who were deemed to be lower-functioning due to cognitive impairment and limited bed mobility. Cindy Adams, who testified about the January F248 deficiency, testified that records review, staff interviews, and observation did not reveal any resident care plans being implemented by staff. Respondent's witness, Alice Woods, an L.P.N. at Oak Terrace, and exhibits demonstrated that the facility had a systematic methodology for determining each resident's activities needs and for providing a program of activities to meet those needs as follows: Each Oak Terrace resident is assessed using the Minimum Data Set (MDS Assessment). This assessment is conducted at least quarterly for every resident. Based upon needs or problems that are triggered through that assessment, the facility's Activities Director determines whether or not a care plan is appropriate for a resident. If a care plan is needed, the Activities Director develops individualized activities calendars which are posted in each resident's room. Not all activities are provided by the Activities Director. Some are provided by other staff members. Appropriate activities for lower functioning residents can include reading to them, playing them audio tapes, employing sensory stimulation such as touching, or even playing games with them. AHCA offered no evidence to indicate that the facility failed to design care plans that included those types of activities for any of the five cited residents. AHCA did not provide any examples of a failure by Oak Terrace to provide a calendared activity to one of these residents. The activities calendars contain appropriate daily activities that staff are supposed to provide to the respective residents. After an activity is provided to the resident, the staff member who has provided the activity is supposed to mark the activity on the calendar with a highlighter. The surveyor was not aware of Respondent's use of the calendars. Staff did not point them out to her, and she did not see them during the survey. Therefore, she did not factor them into her allegation of a deficiency under Tag F248. The activities calendar system may be a record-keeping problem for AHCA surveyors and further notation in the care plans of the activities prescribed may be a good idea, but the evidence does not support any degree of a Tag F248 violation. Tag F309 Oak Terrace had been directed by AHCA to correct the December F309 deficiency within thirty days of December 19, 2000. The January 9-12, 2001, survey was an annual recertification of Oak Terrace. During that survey, the surveyors reviewed the files of 21 sampled residents to determine if the facility was substantially complying with all regulatory standards applicable to nursing homes, including those under Tag F309. The survey team found no violation of Tag F309. February 2001 Survey Tag F248 The February 2567 Report charged that Respondent violated Tag F248 by failing to provide adequate activities to Residents 2, 7, and 8, all of whom were deemed to be low- functioning residents due to cognitive impairment. AHCA abandoned its allegations relating to Resident 7 at hearing. The allegations related to Resident 2 assert that Oak Terrace failed to assess the resident's activities needs or provide her with any care plan for activities. However, Resident 2's activities calendars for January and February note one-on-one visitations, book club, and relaxation and stimulation. Resident 2 also had cognition and communication care plans that contained interventions relating to Spanish talking books and music because she spoke Spanish. This suggests that Resident 2's activities needs had been assessed and that a program had been developed for her. AHCA admitted that these activities are appropriate for low functioning residents. At hearing, AHCA's surveyor, Bettianne Stankus, stated she had observed Resident 2 banging on the table of her wheelchair during the survey (once while out of her room and shortly afterwards in her room) and that the facility had violated Tag F309 because it had failed to provide Resident 2 with an activity that caused her to stop the banging. Whether this testimony was directed to showing that a pre-assigned activity would have prevented this behavior, which could evidence the resident's frustration with inactivity when no activities were assessed or provided, or was intended to show that a distracting activity should have been provided, as an intervention, is not entirely clear. The witness conceded that a toy had been given to Resident 2 when she returned to her room. The banging was not demonstrated to be an ongoing problem that required a care plan, and the surveyor acknowledged that there was no activity which would have altered the behavior. In any case, this charge was not recorded in the February 2567 Report, so it should not be considered as part of the deficiency in February.5 AHCA asserted that Respondent failed to provide adequate activities for Resident 8 because the surveyor could not find evidence in the "one-on-one books" provided by staff that staff had conducted one-on-one visits with Resident 8, four times a week, as required by the Resident's activities care plan. Nurse Adams testified that she had been told by staff that only a single one-on-one visit was occurring per week, due to lack of staff.6 AHCA's surveyor was not aware of, and did not consider, Resident 8's activities calendar before making her allegation of a deficiency. See, supra. However, Resident 8's activities' calendar for January and February, produced by Nurse Woods, specified a goal of four, one-on-one visits per week. They also indicated one-on-one visits up to six times a week had occurred during that time period. Nurse Woods' testimony confirmed this, and the hearsay allegation of insufficient staff is therefore not credible or proven. After the survey, Oak Terrace's personnel reassessed Resident 8 and determined that four, one-on-one visits per week were not needed to meet the resident's activity needs. Ms. Adams acknowledged that there was no potential for harm to Resident 8 if, after the survey, the facility re-assessed the resident and determined that fewer one-on-one visits per week were necessary and the resident was, in fact, getting those visits. Although the undersigned interprets this testimony to refer to a lesser number of necessary visits after such a reassessment, it also suggests that those visits made in January and February were sufficient. Therefore, the F248 charge as to Resident 8 was not proven. Tag F309 The February 2567 Report charges that Respondent violated Tag F309 in its care and treatment of Residents 1, 4, 6, and 10. It does not name Resident 2 in this Tag. See Findings of Fact 45-50. AHCA presented no evidence at hearing to support its charge of inadequate care of Resident 1. Resident 4 had a scalp condition that had been a problem since her admission to the facility ten years earlier when her hair reached her knees. For some time, the facility had treated the condition with Nizoral, a medicated shampoo, with some success, but the condition would periodically re- appear on Resident 4's head. In February 2001, the surveyor observed that an area of Resident 4's scalp near her left ear was yellowish, crusty, and flaky. In testimony, the surveyor acknowledged that Respondent was treating the area with a medicated shampoo, but she concluded that the treatment was ineffective because of the condition of the area she observed. In her opinion, the facility should have notified the Resident's physician about the ineffectiveness of the shampoo it was using to treat the area, presumably so that he could prescribe another treatment. The cited F309 deficiency was based on this alleged "failure to notify the physician." Medical records maintained by Oak Terrace to monitor Resident 4's scalp condition reflected that, during the months of December 2000, and January 2001, her scalp condition was chronic because it would periodically appear and disappear, every few days, even with treatment. A weekly skin assessment sheet also noted that, on January 27, 2001, staff had identified the area that was observed by the surveyor. The physician was notified about the area and saw the resident the following day. In his progress note, the physician directed the facility to continue use of the Nizoral shampoo. AHCA's surveyor did not identify another treatment that could, or should, have been used in place of the medicated shampoo. It is not the surveyor's duty or that of the facility to second-guess the attending physician. In fairness, however, the surveyor was not aware, before deciding on February 2, 2001, that the physician should have been notified of the alleged ineffectiveness of the Nizoral, that, in fact, Resident 4 had been so recently examined by her physician, on January 28, 2001, or that the physician had ordered continued use of Nizoral in his progress note. The evidence failed to establish that Resident 4 was deprived of any necessary care or service to maintain her highest practicable well-being, so as to warrant an F309 Tag. Resident 6 could not take foods or fluids orally and was fed through a g-tube. However, two orders on her medication administration sheet indicated that she was to receive Zinc and Vitamin C orally (by mouth). The resident also had two orders for provision of fluids through her g-tube (900 cc. and 1000 cc. respectively, and totaling 1900 cc.) The surveyor believed these two orders could result in Resident 6 receiving more fluids than her assessed needs. AHCA cited the facility for a deficiency under Tag F309 because if staff followed the orders they might give the resident medications and fluids that could cause her harm. However, AHCA's surveyor acknowledged that she could not describe any harm that could have occurred to Resident 6 by virtue of the fluid orders. The surveyor's concerns with the oral medications included possible aspiration. The AHCA surveyor acknowledged that any nurse who reviewed the resident's medical chart would see that the resident took food and fluids through a g-tube, and that she did not see any staff member offer oral medication to the resident. The surveyor's concern was that contradictory records, while not necessarily dangerous in the hands of a facility nurse on a standard shift, still might create a hazard where an agency (temporary) nurse filled-in for regular staff, but she failed to provide any information regarding the resident's assessed fluid needs that would justify her concern that combining the two fluid orders for 900 cc. and 1000 cc. might provide the resident with excessive fluids. She conceded that because the resident had no medical conditions that would indicate that her fluids should be restricted, probably no harm could come to the resident even if 1900 cc. were administered. Moreover, Oak Terrace established that Resident 6 did not have the orders for fluid administration that the surveyor contended she had in the February 2001 survey. Prior to that survey, the facility evaluated Resident 6's fluid needs and obtained a physician's order indicating that the resident was to receive 2250 cc. of fluid per day. That order also provided that Resident 6 was to receive 100 cc. of water before and after her medications, 10 cc. of fluid with each medication she received, and 100 cc. of fluid during each tubing change. These were the orders for fluid administration in effect for the resident at the time of the survey, not the ones cited by the surveyor. The undersigned has to wonder if Resident 6 was supposed to be receiving 2250 cc. of fluid daily, at the time of the February 2001 survey, if the two orders cited by the surveyor could have misled facility personnel into giving less fluid than Resident 6 was supposed to get, but no evidence to that effect was presented. Assuming arguendo that AHCA established any type of deficient practice under Tag F309 with regard to Resident 6, it only involved a failure by Respondent to maintain correct documentation of physician's orders for Resident 6, and the Tag for improper records had not been cited in the December 2000 survey. Resident 10 was re-admitted to Respondent facility in December 2000, after spending time in the hospital. On her re- admission, she weighed seventy-nine pounds and had one pressure sore on her coccyx and one on her heel. Respondent's dietician evaluated her and, among other dietary recommendations, recommended lab tests and consideration of the use of Procalamine, a dietary supplement, to promote weight gain and assist in the healing of Resident 10's pressure sores. On December 11, 2000, a medical physician issued an order to implement the dietician's recommendations. During the February 2001 survey, AHCA's surveyor could not find any evidence that the facility had followed through with the physician's order in either December 2000 or January 2001, or any evidence that the order had been discontinued. She contended that the facility's failure to follow the physician's order had placed Resident 10 at risk for continued weight loss and inadequate protein stores necessary to promote healing of the pressure sores. She cited the facility for a deficiency under Tag F309. However, the surveyor acknowledged at hearing that the alleged deficiency involved an issue of dietary care which was more appropriately covered by the dietary standards of Tag F325. Oak Terrace provided other interventions to Resident 10 to promote weight gain and healing of her pressure sores. Between December 11, 2000, when the physician wrote the order, and December 25, 2000, Resident 10 gained seven pounds. That weight gain put her at her usual body weight as of December 25, 2000, and she maintained her usual body weight as of the February 2001 survey. Resident 10's pressure sores began to progressively heal so that the area on her coccyx was completely healed by December 28, 2000, and the area on her heel was completely healed by January 3, 2001. Oak Terrace advanced the defense that due to the weight gain and the complete healing of Resident 10's pressure sores, and because implementation of the Procalamine treatment would have involved use of an invasive intravenous feeding line, the December 11, 2000, physician's order was not carried forward to the Resident's January or February 2001, physician's order sheets. Technically, the physician's order should have been fulfilled or carried forward on the charts until discontinued. Still, failure to do this was not demonstrated to be either actual or potential harm to Resident 10, under the circumstances. The evidence as a whole failed to establish that Resident 10 was deprived of any necessary care or service that prevented her from achieving her highest practicable well-being. Rather, the evidence demonstrated that Resident 10 experienced steady and desired weight gain and pressure sore healing after her return from the hospital, on or about December 11, 2000, that she was restored to normal weight as of December 28, 2000, and that her pressure sores were completely healed by January 3, 2001. March 2001 Survey Respondent did not dispute AHCA's allegation that there was a Class III deficiency in March 2001.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED that the Agency for Health Care Administration enter a Final Order revising the December 19, 2000, 2567 Report by deleting the findings of paragraph 1 of Tag F309; revising the January and February 2001, 2567 Reports by deleting any deficiencies described under Tags F248 and F309; issuing a Standard rating to Oak Terrace to replace the previously issued Conditional rating that ran from February 2, 2001 until May 29, 2001; and dismissing the Administrative Complaint which seeks to impose a $1000 fine against Oak Terrace. DONE AND ENTERED this 6th day of May, 2002, in Tallahassee, Leon County, Florida. ELLA JANE P. DAVIS 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 6th day of May, 2002.
The Issue Whether the Agency for Health Care Administration (AHCA) should award Life Care Centers of America, Inc., Certificate of Need 8069 which would authorize both the transfer of an existing certificate of need and the combination of the transferred certificate with another certificate of need. The combination would allow Life Care to operate a 130-bed nursing facility to be built on Cypress Boulevard in Winter Haven within 1000 feet of a nursing home owned and operated by Florida Convalescent Center, Inc., a site on which Life Care intends and is authorized to build a 57-bed facility regardless of the outcome of this case.
Findings Of Fact The Parties Life Care Life Care of America, Inc., is a privately held company, the largest privately held nursing home company in the nation. Founded by Forest Preston in 1975, it currently operates in 27 states, with approximately 170 facilities. A Tennessee corporation authorized to do business in Florida, Life Care owns and/or operates six nursing homes in the state. Whether CON 8069 is awarded or not, Life Care will add a seventh nursing home to its Florida operations: a newly built facility on Cypress Boulevard in Winter Haven, Polk County. If CON 8069 is granted, the facility will be authorized to house 130 beds; if not, then only 57 will be built, these under the authority of another CON, discussed below. FCC FCC began operation in Florida in the mid-1980's and currently operates 16 nursing home facilities in the state. Florida Convalescent Centers, Inc., d/b/a Palm Garden of Winter Haven, operates the 120-bed skilled nursing facility which recently opened a 35-bed addition during 1995 on Cypress Boulevard in Polk County. Licensed by the state, the facility is superior rated. Most significantly, the facility's Cypress Boulevard location is less than 1000 feet from the proposed site of the nursing home facility Life Care hopes to build and operate under the authority of CON 8069. 3. AHCA The Agency for Health Care Administration (the "agency" or "AHCA") is the "single state agency [designated by statute] to issue, revoke, or deny certificates of need ... in accordance with the district plans, the statewide health plan, and present and future federal and state statutes." Section 408.034(1), F.S. Background 1. CON 7138 On March 10, 1994, Life Care, as the result of a settlement with FCC whereby both parties were given beds from a 92-bed fixed need pool, was awarded CON 7138. Fifty-seven of the 92 beds were apportioned to Life Care. In issuing the certificate, the agency authorized Life Care to construct a "freestanding ... community nursing home consisting of 34,025 GSF and involving $2,308,512 in construction costs." The only condition that appears on the face of the CON is that, "[a] minimum of 74 percent of the total annual patient days of care for the 57 bed facility shall be allocated to Medicaid patients." Of course, the terms of the CON are not limited to just the conditions expressed on the face of the Certificate of Need, itself. Indeed, the Applicant explicitly recognized that it would be subject to many other terms when, in support of the application, it filed the Certification of the Applicant dated March 9, 1995. There, Life Care certified that "if issued a Certificate of Need as a result of [the] application, [it would be] bound by the representations in it." Life Care's Ex. No. 1, Certification of the Applicant, p. 3. Although Life Care originally proposed to locate the facility authorized by CON 7138 somewhere within a triangle bounded by Lakeland, Bartow and Winter Haven, no specific site was selected. More pertinently, no condition or term of the CON restricted the facility's site within the triangle. Despite the absence of any condition or term of the CON limiting the site within the proposed triangle in the subdistrict, FCC believed it had an understanding with Life Care that Life Care would not build the 57 beds from CON 7138 in close proximity to FCC's existing nursing home on Cypress Boulevard in Winter Haven. Life Care acknowledges that, in fact, it discussed the location of the facility authorized by CON 7138. But beyond this discussion, there was no definitive evidence produced in this proceeding that the two had a meeting of the minds on the issue. No written contract exists reducing the ephemeral agreement to writing. And as stated above, AHCA was not persuaded by either of the parties, let alone both as the result of any agreement, that CON 7138 should have a limit on where within the subdistrict the 57 bed facility could be located. Life Care plans to build the facility authorized by CON 7138 on the Cypress Boulevard site (and there is no apparent impediment to this plan), the same site it proposes for the facility it hopes will be authorized by CON 8069. Whatever may be the origin of the dispute over the site of the facility authorized by CON 7138, (discussions between FCC and Life Care, or even some unwritten agreement if ever entered,) the appropriateness of the Cypress Boulevard site for CON 7138 is beyond dispute. Rather, the issue in this case centers on whether the Cypress Boulevard site may accommodate more than just the "CON 7138" facility. The issue, in short, is whether the Cypress Boulevard site may serve as the location for 73 beds authorized by a CON issued later than CON 7138 with which Life Care hopes to combine CON 7138. This later CON is CON 7354. 2. CON 7354 Certificate of Need 7354 was granted to SHCC Services, Inc., by Final Order rendered by AHCA on February 21, 1995. It authorized the addition of 42 beds to an existing 31-bed facility. It did more. It also authorized the replacement of the existing facility. The facility is found in Lake Alfred, a short drive north of Winter Haven. At the time CON 7354 was issued, the facility had long been known as the Lake Alfred Restorium. In the meantime, its name has been changed. It will be referred to in this order, for the most part, therefore, as the "Lake Alfred Facility." The Lake Alfred Facility Now known as the Lake Alfred Health Care Center, the Lake Alfred Facility, as one would expect from its name, is in Lake Alfred, Florida. Lake Alfred, approximately two miles north of the northern boundary of the City of Winter Haven, is unincorporated. The facility, itself is more than five miles from the proposed site on Cypress Boulevard where Life Care will build at least a 57-bed facility. With a history extending back for many decades to its inception as a "restorium," it is one of the oldest facilities of its kind in the state. There is no question that this physically declining facility needs to be replaced. Constructed initially as a residence, the Lake Alfred Facility, some time ago, was converted to a nursing home. It is presently owned and operated by Life Care, having been owned previously by SHCC Services, Inc. At the time of hearing, there were about 30 residents living at the Lake Alfred Facility. Of the thirty, six are from Lake Alfred. Most of the families of the Lake Alfred residents, however, now reside in Winter Haven. The residents of the facility receive the bulk of needed medical support from sources outside Lake Alfred, (primarily from Winter Haven), because there are neither hospitals nor physicians with offices in Lake Alfred. SHCC awarded CON 7354 In February of 1994, prior to Life Care's acquisition of the Lake Alfred Facility, SHCC was awarded CON 7354 by the agency. Prior to the final decision by the agency, SHCC had been in competition with Life Care for 42 beds based on a fixed need pool of like number. Indeed, Life Care had requested an administrative hearing on the agency's initial decision to award the 42 beds to SHCC. But, the hearing was never held. Life Care voluntarily dismissed its petition as part of a settlement agreement. Whatever the terms of the settlement agreement, the award was at least a partial, if not total, victory for SHCC in the battle for the 42 beds; SHCC was awarded all 42 while Life Care's application was denied. Certificate of Need 7354, however, did not just authorize 42 new beds. It authorized the construction of a 73- bed nursing home in AHCA District 6, Subdistrict 5, Polk County. The 73 beds were awarded based upon the fixed need pool of 42 beds and the applicant's desire to replace the aging 31-bed restorium. One of main reasons, if not the paramount reason, for awarding the 42 beds to SHCC rather than Life Care, was that the beds could be added to the 31 existing beds at the restorium. This expansion, in turn, would be the catalyst for the replacement of the 31 beds. The result of such an arrangement would be the continuation of a single replaced and expanded facility in Lake Alfred, as opposed to the scenario should Life Care prevail: a new 42-bed facility elsewhere, leaving in Lake Alfred an existing 31-bed restorium, badly in need of replacement but without the incentive to carry it out. A decision favoring SHCC over Life Care was appealing as well because it retained for the Lake Alfred Community a facility which the community had utilized for many years and over those years had come to depend on. Furthermore, these many years of the facility's service to the community had led to the firm establishment of the venerable restorium's reputation for high quality of care. Terms Relating to the Location of the 31-Bed Replacement Facility Authorized by CON 7354 Just as in the case of CON 7138, SHCC agreed when it submitted its Certification of the Applicant on AHCA Form 1455A, Oct 92, as part of its application for the CON that it would be "bound by the representations contained in [the] application." FCC Ex. No. 8, Omissions Response, CON Number 7354, p. 3. As part of the same application, again on AHCA Form 1455A, Oct 92, SHCC submitted a page entitled "Conditions Predicated Upon Award." See FCC Ex. No. 8, Omissions Response, CON Number 7354, p. 4. In the Omissions Response, in Paragraph C., of the "Conditions" page, the following is stated: I have checked and described the items which represent special features or address unique circumstances that shall appear as conditions on a certificate of need should one be issued. Id. Four items follow, the first of which reads, "Specific site within the subdistrict. The parcel or address is as follows". No address, however, is listed nor is the item checked. The State Agency Action Report ("SAAR") for CON 7354, which co- incidentally reports on CON 7455, lists Objective 5 of the eight objectives existing for the CON review criteria found in Section 408.035, Florida Statutes, as, "To Locate Nursing Homes in Market Areas Where They Become Integral Component[s] of the Local Health Care Delivery System Continuum (125 points)." FCC Ex. No. 2, p. 21. Three items comprise Objective 5: 5A-Community Linkages, Non-Nursing Home Services and Geographic Access; 5B-Geographic Area Served; 5C-Geographically Underserved Area. Id. The SAAR goes on to state with regard to "CON Number 7354:" SHCC Services, Inc. attained 100 points out of a maximum 125 points ... In addressing geographic access issues, the applicant stated, "the facility is planned to be located within 5 miles of Lake Alfred. By locating the facility close to the existing facility, the existing relationships with medical providers and social service agencies listed above will remain intact." Id. (e.s.) Indeed, a review of SHCC's application for CON 7354 proves that the quoted statement in the SAAR was made by SHCC as part of its application. In its Omissions Response, Part 2: Requirements, under Item 5A and the heading, "Geographic Access," at p. 27c, the following appears: The proposed facility location will maximize geographic access for residents and their families, facility staff, and other providers and agencies in Polk County. As discussed in question 5B, [the facility is planned to be located within 5 miles of Lake Alfred]. By relocating the replacement facility close to the existing facility the existing relation- ships with medical providers and social service agencies listed above will remain intact. Furthermore, the geographic access of these providers and agencies will remain undisturbed. (Emphasis added). The import of locating the expanded replacement facility within five miles of Lake Alfred is explained further elsewhere in the application. Under Item 5B in the Omissions Response, "Reasons for Selecting Particular Geographic Area to be Served," there are several references to the distance "5 miles." For example on p. 27e, the following appears: "... Lake Alfred is located approximately 5 miles from Winterhaven [sic] ...". On p. 27f, the following references are made, "Located just 5 miles north of Winterhaven [sic], Lake Alfred serves as a bedroom community for Winterhaven [sic]", and "Lake Alfred is also only 5 miles from Interstate 4 which connects Orlando and Tampa." As evidenced by SHCC's application, however, its intent was that the replacement nursing home be not just within 5 miles of Lake Alfred, but actually in Lake Alfred. The following unambiguous statement appears as the first sentence under Item 5B on p. 27e of the Part 2: Requirements, Omissions Response, FCC Ex. No. 8: "SHCC has chosen Lake Alfred in Polk County for the location of the replacement nursing home." In the main, the remainder of the discussion of Item 5b, "Reasons for Selecting Particular Geographic Area to be Served," is devoted to the basis for a "Lake Alfred" location for the replacement facility. Among the reasons are SHCC's desire to continue to operate the Lake Alfred Restorium because the restorium's "established presence and reputation in the area took years to build," id. p. 27e. In addition, "[w]ithin Polk County, Lake Alfred provides a favorable combination of geographic access and small town comforts for residents," id. p. 27f. Finally, in elaboration of these points, SHCC represented: Residents of Lake Alfred enjoy the small town atmosphere as well as access to larger towns. The elderly Lake Alfred Restorium residents are especially appreciative of the quietness and safety of this town. The crime rate is low, and the local police department and fire department are nearby and very responsive. The surrounding area has many lakes and parks which the nursing home residents visit on outings. Id. Of course, since Lake Alfred is unincorporated, it is difficult to state with certainty what is within the limits of Lake Alfred as opposed to what is not within it yet within 5 miles of it. Nonetheless, there is no doubt that any location within the city limits of Winter Haven cannot be, at the same time, in Lake Alfred. Other Issues 1. Construction and Other Matters Relating to Site The proposed 130-bed facility will have distinct units of 60, 50 and 20 beds, comprising approximately 66,000 square feet, for a cost of about $82.00 per square foot. With a reasonable construction schedule and using Type 5 construction, the project satisfies all state and federal requirements for a nursing home. Life Care chose the proposed site on Cypress Boulevard for many of the same reasons FCC chose its location less than 1,000 feet away. It is close to hospitals and has good access to roads and highways which promotes accessibility to most needed medical services. In contrast to the Lake Alfred Facility, the Cypress Boulevard site is much better in terms of medical services accessibility, one of the primary considerations in selecting a nursing home site. The site for the nursing home is a 5.8 acre parcel which is part of a larger (12.3) acre piece of property in Winter Haven. Life Care paid $1,387,000 for the entire 12.3 acres, but is allocating only $360,000 for the 130-bed project. The remainder of the property will be used for an assisted living facility and for a drainage pond via easement to the Department of Transportation. Life Care had not purchased the site at the time the application for CON 8069 was filed, but had begun negotiations for the site as a potential location for the facility. The negotiations resulted in a contract. Life Care did not make a final decision on the site until after the CON application had been filed. It was intended from the beginning of negotiations that only a part of the 12.3 acres would (if purchased) be used for the 130-bed project and that $360,000 would be allocated to the project at issue. Life Care projected land costs for the project based upon the combination of land costs from the CONs which it is attempting to combine. This combination of costs is an acceptable method for compiling figures for "combination" applications and was accepted as reasonable by the agency. The projections, based upon reasonable expectations, indicate the project will be financially feasible in the short term and long term. 2. Compliance with Health Plans Life Care's application complies with the three allocation factors in the District Health Plan. As for Allocation Factor 1, (the provision of services to Medicaid patients,) although the weighted average of all 130-beds in the newly proposed combined facility is 57.2 percent, well below the present district average of about 70 percent, it agreed to conditions for the newly- approved beds (those other than the 31 beds from the old Lake Alfred Restorium), in excess of 74 percent. The weighted average of all 130-beds is lower than the percentage for newly-authorized beds only because there is no condition, nor has there ever been one, relating to Medicaid allocation for the existing 31 beds at the Lake Alfred Facility. Life Care has also agreed to have specialized nursing home services at the facility (Allocation Factor 2) and not to discriminate against the provision of services and care to HIV infected residents, (Allocation Factor 3). Backing up its stance of non-discrimination against HIV infected residents is Life Care's history of serving "some HIV patients." (Tr. 176) There is no competing applicant against which Life Care's Medicaid average can be tested. But it is fair to point out that FCC's Cypress Boulevard facility has a condition that only 44 percent of its resident population be Medicaid patients. Granting CON 8069, therefore, will likely increase Medicaid patient access to nursing homes in Winter Haven. The need in Polk County for the beds Life Care wants to place at its Cypress Boulevard location has previously been determined and are not at issue. Since the issuance dates of the two underlying CONs, 7138 and 7354, the agency has projected need numbers for over 200 new beds in addition to the 130 beds Life Care hopes to house at the Cypress Boulevard facility. 3. Other Health Planning Concerns The five nursing homes in Winter Haven are currently operating at over 90 percent occupancy. Both the state and local health plans prefer beds to be located in areas with high occupancy. Winter Haven is the second largest city in Polk County and contains a high percentage of elderly persons, a population that is rapidly growing. The bed to population ratio is a health planning measurement used in determining need. Winter Haven has a lower ration of nursing home beds per 1,000 residents than Polk County as a whole. In contrast, Lake Alfred, with only 2500 or so residents, has a much smaller population than Winter Haven. As stated elsewhere, one of the main advantages of Winter Haven over Lake Alfred for placing a nursing home is the closer proximity to hospitals and medical services. 4. Operations and Programs Life Care is proposing a complete range of programs at its facility, including Alzheimer's Care, adult day care, subacute care, respite care and numerous non-nursing services. Relocation of the existing facility to Winter Haven would have a positive effect on services being provided. Staff necessary to provide the services and programs would come primarily from a 15-mile radius of the facility. Skilled personnel to perform those services would come, at least in part, from local nursing programs already existing in Winter Haven. The majority of the staff at Lake Alfred Care Center come from outside Lake Alfred. Many or most are from the City of Winter Haven. Life Care has obtained commitments from all staff at the Lake Alfred Facility to continue employment with Life Care upon completion of the new facility if authorized by CON 8069. There would be a broader range of services available at the 130-bed facility than at the two smaller facilities, the Lake Alfred Facility and a smaller 57-bed Cypress Boulevard facility. The construction and operation of the facility proposed under CON 8069 would have a positive impact on care in the area because it would force FCC to remain even more competitive in the provision of quality services in a quality work environment than if Life Care's new facility were to be limited to 57 beds. 5. Life Care's Service Record Life Care's facilities in Florida meet or exceed the Medicaid average in the subdistricts in which they are located. Of Life Care's six existing facilities in Florida, the three facilities eligible for Superior Rating are indeed rated Superior by the State. The other three facilities have the highest rating to which they are entitled. Life Care maintains affiliations with schools to provide scholarships for students pursuing professions in long term health care. The agency considers Life Care a major provider of care and a provider of quality health care services.
Recommendation Based on the foregoing, it is, hereby, RECOMMENDED: That the Agency for Health Care Administration deny CON 8069. DONE AND ENTERED this 2nd day of May, 1996, in Tallahassee, Leon County, Florida. DAVID M. MALONEY, 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 2nd day of May, 1996.
The Issue The issues to be determined are whether, with respect to each application filed, Florida Housing Finance Corporation’s (Florida Housing) review and decision-making process in response to the Request for Applications 2020-201 (RFA) was contrary to the agency’s governing statutes, the agency’s rules or policies, or the RFA.
Findings Of Fact Florida Housing is a public corporation created pursuant to section 420.504, Florida Statutes. Its purpose is to promote public welfare by administering the governmental function of financing affordable housing in Florida. Section 420.5099 designates Florida Housing 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. The low-income housing tax credit program (commonly referred to as “tax credits” or “housing credits”) was enacted to incentivize the private market to invest in affordable rental housing. These housing credits are awarded competitively to housing developers in Florida for rental housing projects which qualify. The effect is to reduce the amount that the developer must otherwise borrow. Because the total debt is lower, the housing credit property can (and must) offer lower, more affordable rents. Developers also covenant to keep rents at affordable levels for periods of 30 to 50 years as consideration for receipt of the housing credits. The demand for housing credits provided by the federal government exceeds supply. The Competitive Application Process Section 420.507(48) authorizes Florida Housing to allocate housing credits and other funding through requests for proposals or other competitive solicitations, and Florida Housing has adopted Florida Administrative Code Chapter 67-60 to prescribe the competitive solicitation process. Chapter 67-60 provides that Florida Housing allocate its competitive funding through the bid protest provisions of section 120.57(3). Applicants for funding request, in their applications, a specific dollar amount of housing credits to be given to the applicant each year for a period of ten years. Applicants normally will sell the rights to the future stream of income housing credits (through the sale of almost all of the ownership interest in the applicant entity) to an investor to generate the amount of capital needed to build the development. The amount an applicant can receive depends on several factors, such as a certain percentage of the projected total development cost; a maximum funding amount per development based on the county in which the development will be located; and whether the development is located within certain designated areas of some counties. These are just examples of the factors considered, and this is by no means an exhaustive list. Housing credits are made available through a competitive application process that starts with the issuance of an RFA. An RFA is considered to be a “request for proposal” as indicated in rule 67-60.009(4). The RFA in this case was issued on August 26, 2020, and responses were due November 5, 2020. The RFA was modified September 11, 2020, and October 12, 2020, but with no change with respect to the response deadline. Through the RFA, Florida Housing expects to award up to an estimated $15,275,810 of housing credits to proposed developments in medium-sized counties, and up to an estimated $1,453,730 of housing credits to proposed developments in small counties. Florida Housing received 84 applications in response to RFA 2020-201. A Review Committee was appointed to review the applications and make recommendations to the Florida Housing Board of Directors (Board). The Review Committee found 79 applications eligible and five applications ineligible for funding. Through the ranking and selection process outlined in the RFA, 10 applications were preliminarily recommended for funding. The Review Committee developed charts listing its eligibility and funding recommendations to be presented to the Board. The federal government enacted the Consolidated Appropriations Act (CCA) in December 2020, and as a result, an additional $3,367,501 in housing credits became available for affordable housing for Escambia, Santa Rosa, Okaloosa, Walton, and Bay Counties, which were impacted by Hurricane Sally. The staff at Florida Housing recommended using the CCA funding to award housing credits to additional highest-ranking eligible applications in qualified disaster areas, subject to the county award tally, regardless of the county size in RFA 2020-201 and developed a chart listing its CCA funding recommendations to be presented to the Board. On January 22, 2021, the Board met and considered the recommendations of the Review Committee and staff for RFA 2020-201. At approximately 2:50 p.m. that day, all of the applicants in RFA 2020-201 were provided notice that the Board determined whether applications were eligible or ineligible for consideration of funding, and that certain eligible applicants were preliminarily selected for funding, subject to satisfactory completion of the credit underwriting process. Notice was provided by posting on the Florida Housing website two spreadsheets: one listing the Board-approved scoring results in RFA 2020-201; and one identifying the applications which Florida Housing proposed to fund. In the January 22, 2021, posting, Florida Housing announced its intention to award funding to 24 applicants, including The Villages, Pinnacle at Hammock Springs, and Rosemary Place. Petitioners timely filed Notices of Protest and Petitions for Formal Administrative Proceedings. All Intervenors have been properly recognized as such. The terms of RFA 2020-201 were not challenged. RFA 2020-201 Ranking and Selection Process The RFA contemplates a structure in which the applicant is scored on eligibility items and obtains points for other items. A summary of the eligibility items is listed in Section 5.A.1. of the RFA, beginning at page 71. Only applications that meet all of the eligibility requirements will be eligible for funding and considered for the funding selection. This challenge does not raise any issues with respect to the point totals awarded to the applicants. The RFA has four funding goals: The Corporation has a goal to fund five Medium County Developments that qualify for the Local Government Areas of Opportunity Funding Goal outlined in Section Four A.11.a of the RFA, with a preference that three of the Applications meet the criteria outlined in Section Four, A.11.b(1) of the RFA to be considered submitted but not awarded in RFA 2019-113, and two of the Applications meet the criteria outlined in Section Four, A.11.b(2) of the RFA to be considered not submitted in RFA 2019-113. The Corporation has a goal to fund one Development that qualifies for the Local Revitalization Initiative Goal outlined in Section Four A.5.i of the RFA. The Corporation has a goal to fund two Developments with a Demographic commitment of Family that select and qualify for the geographic Areas of Opportunity/ SADDA Goal outlined in Section Four A.10.a(1)(d) of the RFA. The Corporation has a goal to fund one Development that qualifies for the SunRail Goal outlined in Section Four, A.5.e.(5) of the RFA. *Note: During the Funding Selection Process, outlined below, Developments selected for these goals will only count toward one goal with one exception: If an Application that was selected to meet the Local Government Areas of Opportunity Goal or Local Revitalization Initiative Goal also qualifies for the SunRail Goal, the SunRail Goal will also be considered met. (Jt. Exh. 1, pp.75). At page 76 of Joint Exhibit 1, the RFA also sets forth the sorting order to be used when selecting applications to meet the Local Government Areas of Opportunity Funding Goal: The highest scoring applications will be determined by first sorting together all eligible Priority I Medium County Applications from highest score to lowest score, with any scores that are tied separated in the following order. This will then be repeated for Priority II Applications: First, counties of the Applications that (i) qualified for the Local Government Areas of Opportunity Funding Goal in FRA 2019-113 and (ii) were invited to enter credit underwriting will receive lower preference than other Medium Counties competing for the Local Government Areas of Opportunity Funding Goal. This affects the following counties: Brevard, Lee, Santa Rosa, Sarasota, and Volusia. The remaining counties will receive higher preference. Next, by the Application’s eligibility for the Per Unit Construction Funding Preference which is outlined in Section Four A.10.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.10.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 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); 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 finally, by lottery number, resulting in the lowest lottery number receiving preference. Next, the RFA sets forth the sorting order for selecting applications to meet the Local Revitalization Initiative Goal. It then sets for the sorting order after selecting applications to meet the Local Government Areas of Opportunity Funding Goal (LGAO Designation) and Local Revitalization Initiative Goal. The RFA includes a funding test where a) small county applications will be selected for funding only if there is enough small county funding ($1,453,730) available to fully fund the Eligible Housing Credit Request Amount, and b) medium county applications will be selected for funding only if there is enough medium county funding ($15,275,810) available to fully fund the Eligible Housing Credit Request Amount. The RFA outlines a specific County Award Tally based on Priority Levels as follows: Priority I County Award Tally As each Priority I Application is selected for tentative funding, the county where the Development is located will have one Application credited towards the County Award Tally. The Corporation will prioritize eligible unfunded Priority I Applications that meet the Funding Test and are located within counties that have the lowest County Award Tally above other eligible unfunded Priority I Applications with a higher County Award Tally that also meet the Funding Test, even if the Priority I Applications with a higher County Award Tally are higher ranked. Priority II County Award Tally As each Priority II Application is selected for tentative funding, the county where the proposed Development is located will have one Application credited towards the County Award Tally. The Corporation will prioritize eligible unfunded Priority II Applications that meet the Funding Test and are located within counties that have the lowest County Award Tally above other eligible unfunded Priority II Applications with a higher County Award Tally that also meet the Funding Test, even if the Priority II Applications with a higher County Award Tally are higher ranked. (Jt. Exh. 1, pp. 78-79) The RFA outlines the selection process at pages 79-81 as follows: Five Applications that qualify for the Local Government Areas of Opportunity Funding Goal Applications that were submitted in RFA 2019- 113 but not Awarded The first three Applications that will be considered for funding will be the highest ranking eligible Medium County Priority I Applications that qualify for the Local Government Areas of Opportunity Funding Goal that were submitted in RFA 2019- 113 but not awarded, subject to the Funding Test and County Award Tally. Priority I Applications will continue to be selected until this preference is met. If there are no remaining eligible unfunded Priority I Applications that qualify for this preference, then the process will continue using Priority II Applications until this preference is met. Applications that were not submitted in RFA 2019-113 The next Applications that will be considered for funding will be the highest ranking eligible Medium County Priority I Applications that qualify for the Local Government Areas of Opportunity Funding Goal that were not submitted in 2019-113, subject to the Funding Test and the County Award Tally. Priority I Applications will continue to be selected until this Goal is met. If there are no remaining eligible unfunded Priority I Applications that qualify for this Goal, then the process will continue using Priority II Applications until this Goal is met or until it is determined that there are not eligible unfunded Applications that can meet this Goal. One Application that qualifies for the Local Revitalization Initiative Goal The next Application selected for funding will be the highest ranking eligible unfunded Priority I Application that qualifies for the Local Revitalization Initiative Goal, subject to the Funding Test and the County Award Tally. If there are no eligible unfunded Priority I Applications that qualify for this Goal, then the highest ranking eligible unfunded Priority II Application that qualifies for the Local Revitalization Initiative Goal will be selected, subject to the Funding Test and the County Award Tally. Two Family Applications that qualify for the Geographic Areas of Opportunity/ HUD-designated SADDA Goal The next two Applications select [sic] for funding will be the highest ranking eligible unfunded Priority I Family Applications that qualify for the Geographic Areas of Opportunity/ HUD-designated SADDA Goal, subject to the Funding Test and the County Award Tally. Priority I Applications will continue to be selected until this goal is met. If there are no remaining eligible unfunded Priority I Applications that qualify for this Goal, then the process will continue using Priority II Applications until this Goal is met or until it is determined that there are no eligible unfunded Applications that can meet this goal. One Application that Qualifies for the SunRail Goal If an Application that was selected to meet the Local Government Areas of Opportunity Goal described in a. above or Local Revitalization Initiative Goal described in b. above also qualifies for the SunRail Goal, this Goal will be considered met without selecting an additional Application. If none of the Applications selected to meet the Local Government Areas of Opportunity Goal or Local Revitalization also qualify for the SunRail Goal, the next Application selected for funding will be the highest ranking eligible unfunded Priority I Application that qualifies for the SunRail Goal, subject to the Funding Test and the County Award Tally. If there are no eligible unfunded Priority I Applications that qualify for this Goal, then the highest ranking eligible unfunded Priority II Application that qualifies for the SunRail Goal will be selected, subject to the Funding Test and the County Award Tally. The next Applications selected for funding will be the highest ranking eligible unfunded Priority I Small County Applications that (i) can meet the Small County Funding Test and (ii) have a County Award Tally that is less than or equal to any other eligible unfunded Small County Priority I Applications. If Small County funding remains and no unfunded eligible Small County Priority I Application can meet the Small County Funding Test, then the process will continue using Priority II Applications until this Goal is met or until no unfunded Small County Priority II Application can meet the Small County Funding Test. If Small County funding remains and no unfunded eligible Small County Applications can meet the Small County Funding Test, no further Small County Applications will be selected, and the remaining Small County Funding will be added to the Medium County funding amount. The next Applications selected for funding will be the highest ranking eligible unfunded Priority I Medium County Applications that (i) can meet the Medium County Funding Test and (ii) have a County Award Tally that is less than or equal to any other eligible unfunded Medium County Priority I Applications. If Medium County funding remains and no unfunded eligible Medium County Priority I Applications can meet the Medium County Funding Test, then the process will continue using Priority II Applications until this Goal is met or until no unfunded eligible Medium County Priority II Applications can meet the Small County Funding Test. If Medium County Funding remains and no unfunded eligible Medium County Application can meet the Medium County Funding Test, no further Applications will be selected and the remaining funding will be distributed as approved by the Board. After the description of the sorting process, the RFA specifies: Funding that becomes available after the Board takes action on the Committee’s recommendation(s), due to an Applicant withdrawing, an Applicant declining its invitation to enter credit underwriting or the Applicant’s inability to satisfy a requirement outlined in this RFA, and/or provisions outlined in Rule Chapter 67-48, F.A.C., will be distributed as approved by the Board. All 84 applications for RFA 2020-201 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 Fletcher Black Application During the scoring process, Florida Housing determined that the Fletcher Black application was eligible for funding, but ineligible for the LGAO Designation. Fletcher Black was not selected for preliminary funding. If Fletcher Black’s application was eligible for the LGAO Designation, it would have been selected for funding. It would have been selected as the second of the three developments selected for the LGAO Priority I applications that qualified for the preference for those development applications submitted in RFA 2019-113, but not awarded as outlined on pages 69-70 of the RFA. Additionally, if Fletcher Black is eligible for the LGAO Designation, then The Villages and Pinnacle at Hammock Springs will be displaced from funding. In order to qualify for the LGAO Designation and Goal, applicants must “demonstrate a high level of Local Government interest in the project via an increased amount of Local Government contributions in the form of cash loans and/or cash grants.” The RFA outlines the types and amounts of contributions from Local Governments that will be accepted to meet the LGAO Designation. Fletcher Black’s proposed development is in Bay County. Therefore, Fletcher Black would be required to demonstrate a contribution of at least $340,000 to be considered for the LGAO Designation. The RFA at page 67 expressly limits the number of applications from the same government jurisdiction as follows: Limit on the number of Applications within the same jurisdiction A proposed Development may only qualify where a jurisdiction (i.e., the county or a municipality) has contributed cash loans and/or cash grants for any proposed Development applying for this RFA in an amount sufficient to qualify for the Local Government Areas of Opportunity Designation. A Local Government can only contribute to one Application that qualifies for the Local Government Area of Opportunity Designation, regardless of how the contribution is characterized. Any single jurisdiction may not contribute cash loans and/or cash grants to more than one proposed Development applying for the Local Government Areas of Opportunity Designation. If multiple Applications demonstrate Local Government Areas of Opportunity Funding from the same jurisdiction and those Applications qualify for the Local Government Areas of Opportunity Designation, then all such Applications will be deemed ineligible for the Local Government Areas of Opportunity Designation, regardless of the amount of Local Government Areas of Opportunity Funding or how the contribution is characterized. However, Local Governments may pool contributions to support one Application (i.e., the county and the city may provide contribution to the same Development and each Local Government will submit its own form as an Attachment to the Application). Page 68 of the RFA describes the requirements for demonstrating LGAO funding: In order to be eligible to be considered Local Government Areas of Opportunity Funding, the cash loans and/or cash grants must be demonstrated via one or both of the Florida Housing Local Government Verification of Contribution Forms (Form Rev. 07-2019), called “Local Government Verification of Contribution – Loan” form and/or the “Local Government Verification of Contribution -- Grant” form. The forms must meet the Non-Corporation Funding Proposal Requirements outlined in 10.b.(2)(a) above, the qualifying funding must be reflected as a source on the Development Cost Pro Forma, and the applicable form(s) must be provided as Attachment 16 to the Application. Applications are not required to reflect the value (difference between the face amount and the net present value of the payment streams) on any Local Government Verification Forms. Similarly, Section 10.b.(2)(a) of the RFA specifies that, Note: Eligible Local Government financial commitments (i.e., grants and loans) can be considered a source of financing without meeting the requirements above if the Applicant provides a properly completed and executed Local Government Verification of Contribution – Grant Form (Form 0702019) and/or the Local Government Verification of Contribution – Loan Form (Form 07-2019). Fletcher Black submitted a Local Government Verification of Contribution – Grant Form (Grant Form) from the City of Panama City in the amount of $340,000. Fletcher Black’s Grant Form was executed by Greg Bridnicki, as the Mayor of Panama City and “Approved as to Form and Correctness” by Nevin Zimmerman, City Attorney. Fletcher Black’s request for funding from Panama City was placed on the agenda for the City of Panama City City Commission’s August 25, 2020, meeting, and approved by the City Commission, which authorized Mr. Bridnicki to sign the Grant Form. Fletcher Black had obtained a similar LGAO Form in the previous year using the same established process. Fletcher Black did not submit any documentation in the RFA Application regarding the process used to gain approval of the grant. However, no party identified any requirement in the RFA that such a description must be included in the Application. Fletcher Black cannot be faulted for not supplying something that is not required. Another Applicant, Panama Manor App. No. 2021-074C, submitted a Grant Form from the City of Panama City in the amount of $340,000 executed by Michael Johnson. Mr. Johnson’s title is listed as the Director of Community Development/CRA/CDBG/SHIP. During the scoring process, Florida Housing’s scorer found that since both Fletcher Black and Panama Manor submitted documentation for the LGAO Designation from the same jurisdiction, the City of Panama City, according to the terms of the RFA, both applications were deemed ineligible for the LGAO Designation. The Grant Form submitted by both Fletcher Black and Panama Manor contains the following instruction regarding who is authorized to sign the form on behalf of the local government: This certification must be signed by the chief appointed official (staff) responsible for such approvals, Mayor, City Manager, County Manager/ Administrator/ Coordinator, Chairperson of the City Council/Commission or Chairperson of the Board of County Commissioners. … One of the authorized persons named above may sign this form for certification of state, federal or Local Government funds initially obtained or derived from a Local Government that is directly administered by an intermediary such as a housing finance authority, a community reinvestment corporation, or a state-certified Community Housing Development Organization (CHDO). Other signatories are not acceptable. The Applicant will not receive credit for this contribution if the certification is improperly signed. To be considered for points, the amount of the contribution stated on this form must be a precise dollar amount and cannot include words such as estimated, up to, maximum, not to exceed, etc. Michael Johnson was not authorized by the City of Panama City to sign the Grant Form. Greg Bridnicki, as Mayor of Panama City, is an authorized signatory. Panama Manor’s request was not submitted to the City Commission for approval. Because the Grant Form was improperly signed, Panama Manor should not, by the terms of the RFA, receive credit for the LGAO Designation. Had Panama Manor’s application received the LGAO Designation, it would not have been selected for funding because its lottery number was too high. Michael Johnson is the Director of Community Development for the City of Panama City. While he is an employee for the City of Panama City, he also performs duties for Bay County through an interlocal agreement between the city and the county. The Grant Form submitted for Panama Manor stated on its face that it was signed on behalf of the City of Panama City, but Mr. Johnson testified that the form was supposed to reflect that it was for Bay County. Mr. Johnson testified that over the last 17 years, he has executed approximately 40 forms for applications for funding from Florida Housing. He acknowledged that there are multiple types of forms that may need signatures from city or county officials to complete a Florida Housing application, such as zoning forms and infrastructure-verification forms, as well as local government contribution forms. Since Florida Housing changed its process to use RFAs in 2013, Mr. Johnson could not recall if he signed the Grant Forms or whether the city manager did. He could not confirm signing a single Grant Form for either the city or the county since 2013. Mr. Johnson believed that he had the authority to sign Grant Forms on behalf of both the city and the county. Mark McQueen, the City of Panama City city manager and Mr. Johnson’s boss, does not share his belief. According to Mr. McQueen, whose testimony is credited, Panama City committed only to the Fletcher Black property, took no official action with respect to Panama Manor’s application, and Mr. Johnson was not authorized to sign the Grant Form committing funds on behalf of the City. When Mr. Johnson realized that the Panama Manor Grant Form stated that it was signed on behalf of Panama City as opposed to Bay County, he called the legal department for Florida Housing to explain the error. He testified that he spoke with several people at Florida Housing, including Jean Salmonson, David Weston, and someone in the multi-family development section. Mr. Johnson was not sure of the dates when these telephone calls were made, but it appears that the telephone calls were after the submission of the applications but before the posting of funding selections. Marissa Button is Florida Housing’s Director of Multifamily Programs. She testified that Florida Housing is aware of the contention that the form submitted by Panama Manor was signed in error and should have reflected that it was signed on behalf of Bay County. She was also aware that according to Mr. McQueen, Mr. Johnson did not have the authority to sign a Grant Form on behalf of the City of Panama City. She stated: Q. How does that information impact Florida Housing’s scoring decision? A. This --at this juncture it does not impact Florida Housing’s scoring determination as to the Panama Manor or Fletcher Black being designated as LGAO goal. … We take the requirement of the RFA specifically references the – the submission of what – when there’s a submission of multiple applications from the same jurisdiction, and so we, Florida Housing, consider that as of – as of the application deadline what this applicant has submitted is a form executed on behalf of the City of Panama City. To change the designation, which I understand from Mr. Johnson’s testimony it was a mistake, he intended to issue on behalf of Bay County and reflect that, we interpret that to be a – an improper amendment or modification to the application after the application submission. So we do not consider it to change the scoring designation of the – of either the Panama Manor application or the resulting consequence to the Fletcher Black application. * * * Q. Now, Fletcher Black may argue that it’s unfair to treat its application as ineligible for the LGAO designation and goals when the Fletcher Black [application] did not contain an error. What would your response be to that? A. You know, my response is, we score the application in accordance with the terms of the RFA. The applications are responsible for all parts of that – that RFA with regard to their application submission. It’s clear in this RFA that there would be a consequence if other applications were submitted from the same jurisdiction for an LGAO designation. And, unfortunately, that’s the mistake that happened, but the fairness – it is a fair process because we are – we are administering the RFA as it has been, you know – as the terms exist to the public and to the fellow applications that came in for funding. So, I – I do believe it’s unfortunate that that consequence impacts their application; however, it is – it is fair because that’s the consequence if it happens. (T-39-40, 45-46). Panama Manor’s application did not demonstrate local government funding because the Grant Form was not signed by someone with authority to do so. The RFA specifically states that “[o]ther signatories are not acceptable. The Applicant will not receive credit for this contribution if the certification is improperly signed.” Where forms signed by local government officials are challenged, Ms. Button indicated that Florida Housing has in the past relied upon or deferred to local government officials to address the propriety of the forms signed. The issue usually arises with forms related to zoning or other facets encompassed in the Ability to Proceed forms. Here, the credible testimony of local officials is that the Grant Form for Panama Manor was intended to reflect a funding commitment from Bay County and the signator on Panama Manor’s Grant Form was not authorized to sign on behalf of the City of Panama City. It would be contrary to competition if Panama Manor were allowed to amend its application to correct the Grant Form. It is appropriate to disregard Panama Manor’s Grant Form, given the inaccuracies contained therein. If Panama Manor’s application is not selected for the LGAO Designation because of its failure to demonstrate that the City of Panama City is providing local support for Panama Manor’s project, then there is only one application with a valid Grant Form from the City of Panama City, and that is Fletcher Black. Ms. Button testified that it would provide a competitive advantage to Fletcher Black if Fletcher Black were considered for the LGAO Designation. However, she stated that applicants are responsible for all parts of their application submission. Fletcher Black did not make an error in its application and is not requesting that it be amended in any way. It is asking that the application be considered as submitted, just as other applications are considered. Florida Housing’s decision to find Fletcher Black ineligible for the LGAO Designation is clearly erroneous, in light of the clear demonstration that Panama Manor did not demonstrate a local funding commitment from the City of Panama City, and Fletcher Black is the only entity that did so. The Rosemary Place Application Florida Housing deemed the Rosemary Place application to be eligible and, pursuant to the terms of the RFA, preliminarily selected Rosemary Place for funding. One of the requirements for eligibility under the RFA is that applicants demonstrate Site Control by providing a properly completed and executed Florida Housing Finance Corporation Site Control Certification form (Site Control Form). For the Site Control Form to be considered complete, the applicant must attach documentation demonstrating that it is a party to an eligible contract or lease or is the owner of the subject property. Applicants can demonstrate Site Control by providing documentation that meets the requirements in the RFA for an eligible contract, deed or certificate of title, or a lease. The RFA specifies at pages 39-40 that an eligible contract must meet the following conditions: It must have a term that does not expire before May 31, 2021 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 May 31, 2021; It must specifically state that the buyer’s remedy for default on the part of the seller includes or is specific performance; The Applicant must be the buyer unless there is an assignment of the eligible contract, signed by the assignor and the assignee, which assigns all of the buyer’s rights, title and interests in the eligible contract to the Applicant: and The owner of the subject property must be the seller, or is a party to one or more intermediate contracts, agreements, assignments, options, or conveyances between or among the owner, the Applicant, or other parties, that have the effect of assigning the owner’s right to sell the property to the seller. Any intermediate contract must meet the criteria for an eligible contract in (a) and (b) above. The RFA notifies applicants that Florida Housing’s review of the Site Control documents is limited. At page 40, the RFA states: Note: The Corporation will not review the site control documentation that is submitted with the Site Control Certification form during the scoring process unless there is a reason to believe that the form has been improperly executed, nor will it in any case evaluate the validity or enforceability of any such documentation. During scoring, the Corporation will rely on the properly executed Site Control Certification form to determine whether an Applicant has met the requirement of this RFA to demonstrate site control. The Corporation has no authority to, and will not, evaluate the validity or enforceability of any eligible site control documentation that is attached to the Site Control Certification form during the scoring process. During credit underwriting, if it is determined that the site control documents do not meet the above requirements, the Corporation may rescind the award. The RFA also requires that, for the purpose of demonstrating Site Control, “documentation must include all relevant intermediate contracts, agreements, assignments, options, conveyances, intermediate leases and subleases. If the proposed Development consists of Scattered Sites, site control must be demonstrated for all of the Scattered Sites.” A “scattered site” is defined in Florida Administrative Code Rule 67- 48.002(106) as “a Development site that, when taken as a whole, is comprised of real property that is not contiguous (each such non-contiguous site within a Scattered Site Development, is considered to be a “Scattered Site”). For purposes of this definition ‘contiguous’ means touching at a point or along a boundary. …” Rosemary Place submitted a properly completed and executed Site Control Form which was accepted by Florida Housing during its review, scoring, and ranking process. As an attachment to its Site Control Form, Rosemary Place attached a Purchase and Sale Agreement (Rosemary Place Agreement) between Kyle McDorman as the Seller and RM FL XX Prime, LLC (the applicant entity for Rosemary Place) as the Purchaser. The Rosemary Place Agreement has a term that does not expire before May 31, 2021, and states that the buyer’s remedy for default on the part of the seller includes or is specific performance. The Rosemary Place Application identified the address of the proposed development as “690’ N of intsctn of 331-Bus & Azalea Dr on W side of 331- Bus; within city limits of Freeport, FL (Walton County).” (J-16, page 5). The Development Location Point, consisting of latitude and longitude coordinates was correctly identified, and the Rosemary Place Application stated that the proposed development did not consist of scattered sites. Exhibit A of the Rosemary Place Purchase and Sale Agreement identifies the property as follows: That Thirteen (13.0) Acres situated in the City of Freeport, FL (Distrct 2); Section 10, Township 1S, Range 19, and which is part of Walton County, FL Parcel 10-1S-19-23000-009-0020 which is further described in the land records of Walton County, FL as 210FT SQ FT IN THE SE/C OF THE W1/2 OF THE NE1/4 OF SW1/4 IN SEC 10-1S-19W, 204-184, 1204-279, 2660- 2976, 3084-4417 and which is recorded in that Warranty Deed from Grantor Aaron M and Rachel N Sloan Elkins to Grantee Kyle J. McDorman which Warranty Deed is recorded in the land records of Walton County, FL at Book 3084 and Page Number 4417. The Property is further described and identified as the shaded area denoted with an X in the image below. Based on the Walton County Property Appraiser map, the shaded area denoted with an X is contained within Parcel No. 10-1S-19-23000-009-0000, which is owned by the Seller, Kyle McDorman, as opposed to Parcel No. 10- 1S-19-23000-009-0020. Timshell contends that the shaded area denoted with an X overlaps parcels outside of Parcel No. 10-1S-19-23000-009-0000. Timshell contends that the submitted Site Control documentation submitted by Rosemary Place is not consistent with the requirements of the RFA because of the uncertainty of the property that is actually being purchased and where the proposed Development site is actually located. Timshell also contends that the Rosemary Place Purchase and Sale Agreement, as written and submitted to Florida Housing, denotes scattered sites which were not disclosed by Rosemary Place in its application. Rosemary Place contends, and Florida Housing agrees, that the shaded area denoted with an X on Exhibit A to the Rosemary Place Agreement sufficiently identifies the property being purchased through the agreement as the Development site. Moreover, the visual depiction of the property is consistent with the written description of the development location in the Rosemary Place Application at J-16, page 5. The Rosemary Place Application does not depict scattered sites. Even assuming that the parcel number included in Exhibit A were part of the purchase reflected in the Sale and Purchase Agreement, an eligible contract may involve the purchase of multiple properties or a larger parcel of property than will be developed. What is most important is that the documents show where the development will be located, which Rosemary Place’s application demonstrates, and that the applicant will have control over the location. Ms. Button testified that Florida Housing did not consider the Rosemary Place Application to be proposing a scattered sites development. Rosemary Place affirmatively stated that it was not proposing a scattered sites development; did not list coordinates for scattered sites; and did not identify the location of scattered sites on other forms required by the RFA. Exhibit A to the Purchase and Sale Agreement contains typographical errors in the written description of the property being sold. Stewart Rutledge, who prepared the Purchase and Sale Agreement, testified credibly that parcel numbers are listed on the Walton County Property Appraiser website, and that to see a particular parcel description, the user clicks on the parcel number he or she wants to see. When preparing the Purchase and Sale Agreement, Mr. Rutledge mistakenly clicked on the parcel number immediately above the parcel number he wanted, and he did not notice the error. The parcel number reflected in the Purchase and Sale Agreement references another parcel owned by the seller, Kyle McDorman. Florida Housing considered the typographical error within Exhibit A that results in the listing of the wrong parcel number and property description to be a waivable minor irregularity because the error did not result in the omission of any material information; did not create uncertainty that a term of the RFA was met; and did not adversely impact Florida Housing or the public. The same could be said for other typographical error in the Purchase and Sale Agreement, such as capitalizing the word “property” when it should not have been. Ms. Button also noted that the RFA does not require applicants to submit a land survey of the proposed development site with its application. The RFA states that Florida Housing reserves the right to waive minor irregularities. A minor irregularity is defined in rule 67-60.008 as: those irregularities in an Application, such as computation, typographical, or other errors, that do not result in the omission of any material information; do not create any uncertainty that the terms and requirements of the competitive solicitation have been met; do not provide a competitive advantage or benefit not enjoyed by other Applicants; and do not adversely impact the interests of the Corporation or the public. Minor irregularities may be waived or corrected by the Corporation. Timshell presented the testimony of Stephen Rutan, a professional land surveyor. Mr. Rutan believed that, based on the property description in the Purchase and Sale Agreement, the proposed development site overlapped with another parcel not owned by the seller. Mr. Rutan did not perform a professional land survey and admitted that the boundary lines in his informational Exhibit (Timshell Exhibit 4) were not completely accurate. Given that the measurements that Mr. Rutan provided were estimates and not the result of a survey, and the testimony by Mr. Rutledge that the parcel identification was the result of a clerical error, Mr. Rutan’s testimony is given little weight, and does not demonstrate that the error in the Purchase and Sale Agreement included in Rosemary Place’s application created any real uncertainty that the terms and requirements of the competitive solicitation have been met. Florida Housing’s determination that the error in Rosemary Place’s application was a waivable minor irregularity is not clearly erroneous. Madison Oaks East, Madison Oaks West, and Madison Grove Florida Housing determined that the Madison Oaks West, Madison Oaks East, and Madison Grove Applications were eligible for funding but ineligible for the “submitted but not awarded in RFA 2019-113 Preference.” Madison Oaks West, Madison Oaks East, and Madison Grove were not selected for preliminary funding. Within the LGAO Designation and Goal, the RFA contained preferences for funding. One of those preferences was for developments that were submitted but not awarded in RFA 2019-113 (the 2019-113 Preference). In order to qualify for the 2019-113 Preference, an Applicant must meet the following requirements: The question at 11.b.(1) of Exhibit A must reflect confirmation that the Development was submitted but not awarded in RFA 2019-113; The Application in RFA 2019-113 must have provided a Local Government Verification of Contribution – Loan or Grant form demonstrating the minimum Local Government Areas of Opportunity Funding Amount outlined in RFA 2019-113; The Development Location Point and latitude and longitude coordinates for all scattered sites stated at question 5. of Exhibit A for the proposed Development must be located on the same site(s) as the Application submitted in RFA 2019-113. These coordinates do not need to be identical to the Application submitted in RFA 2019-113. All entities that are Principals for the Applicant and Developer(s) disclosed on the Principal Disclosure Form submitted for the proposed Development and the Application submitted in RFA 2019-113 must be identical; and The Application submitted in RFA 2019-113 was not invited to enter credit underwriting. Florida Housing scored Madison Oaks East, Madison Oaks West, and Madison Grove as qualifying for all requirements of the 2019-113 Preference except for the requirement that “[a]ll entities that are Principals for the Applicant and Developer(s) disclosed on the Principal Disclosure Form submitted for the proposed Development and the Application submitted in RFA 2019-113 must be identical.” (Identical Principals Requirement). The Principals disclosed on the Principals Disclosure Form for Madison Oaks West, Madison Oaks East, and Madison Grove in RFA 2019- 113 were identical to the Principals disclosed in the applications submitted for RFA 2020-201. The plain language of the RFA only requires that the “entities that are Principals for the Applicant and Developer(s) be identical.” The plain language of the RFA does not require that the Applicant and Developer entities be identical to those listed in the 2019-113 application. Madison Oaks West, Madison Oaks East, and Madison Grove met the requirements for the 2019-113 preference. However, even though Madison Oaks East, Madison Oaks West, and Madison Grove are eligible for the 2019-113 Preference, they would not be selected for funding under the terms of the RFA. The Villages Florida Housing determined that The Villages Application is eligible and, pursuant to the terms of the RFA, The Villages has been preliminarily selected for funding. During scoring, Florida Housing reviewed the Villages’ Zoning Form and determined that it met the requirements of the RFA to demonstrate appropriate zoning. Madison Oaks East, Madison Oaks West, and Madison Grove alleged in their Petitions that The Villages failed to demonstrate Ability to Proceed and appropriate zoning as required by the terms of the RFA. Prior to hearing, Madison Oaks West, Madison Oaks East, and Madison Grove withdrew their challenge to The Villages’ eligibility for funding. However, should Florida Housing determine, as recommended, that Panama Manor’s Grant Form did not demonstrate a funding commitment from Panama City, then Fletcher Black would receive funding as opposed to The Villages and Pinnacle at Hammock Springs.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Housing Finance Corporation enter a final order as to Case No. 21-0515BID, finding that Fletcher Black is eligible for the LGAO Designation, and awarding funding to Fletcher Black, subject to the successful completion of credit underwriting; that with respect to Case Nos. 21-0516BID, 21-0517BID, and 21-0518BID, finding that Madison Oaks East, Madison Oaks West, and Madison Grove are eligible for the 2019-113 Preference, but are not selected for funding; and with respect to Case No. 21-0520BID, finding that the decision to award funding to Rosemary Place was not clearly erroneous, and the error in its application was a minor waivable irregularity. DONE AND ENTERED this 14th day of April, 2021, in Tallahassee, Leon County, Florida. COPIES FURNISHED: J. Timothy Schulte, Esquire Zimmerman, Kiser & Sutcliffe, P.A. 315 East Robinson Street Post Office Box 3000 (32802) Orlando, Florida 32801 Lawrence E. Sellers, Jr., Esquire Holland & Knight, LLP Suite 600 315 South Calhoun Street Tallahassee, Florida 32301 Michael P. Donaldson, Esquire Carlton Fields, P.A. Suite 500 215 South Monroe Street Tallahassee, Florida 32302 Corporation Clerk Florida Housing Finance Corporation Suite 5000 227 North Bronough Street Tallahassee, Florida 32301-1329 S LISA SHEARER NELSON Administrative Law Judge 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 14th day of April, 2021. M. Christopher Bryant, Esquire Oertel, Fernandez, Bryant & Atkinson, P.A. Post Office Box 1110 Tallahassee, Florida 32302-1110 Hugh R. Brown, General Counsel Florida Housing Finance Corporation Suite 5000 227 North Bronough Street Tallahassee, Florida 32301-1329 Betty Zachem, Esquire Florida Housing Finance Corporation Suite 5000 227 North Bronough Street Tallahassee, Florida 32301 Tiffany A. Roddenberry, Esquire Holland & Knight, LLP Suite 600 315 South Calhoun Street Tallahassee, Florida 32301
Findings Of Fact The Petitioner originally applied for a certificate of need to construct and operate a 180 bed community nursing home in Broward County, Florida. By stipulation, the Petitioner's application was amended to be an application for a certificate of need for 120 nursing home beds at a cost of $4,600,000. Stipulation filed August 9, 1985. The only issue in this case is whether there is a need for 120 nursing home beds in Broward County. T. 25. The parties agree that need is to be determined in this case by application of rule 10-5.11(21), Florida Administrative Code. Prehearing Stipulation, pp. 2-3. In the case at bar, the relevant district is District X, which is Broward County and is not subdivided into subdistricts. T. 147. Rule 10-5.11(21)(b)1-4, which is applicable to this case, requires use of the following data and abbreviations: The number of licensed beds ("LB"). The current district population age 65-74 (POPC"). The current district population age 75+ ("POPD"). The district population age 65-74 projected three years ahead ("POPA"). The district population age 75+ projected three years ahead ("POPB"). The average occupancy rate for licensed nursing home beds in the district ("OR"). The number of nursing home beds in the district which have received CON approval but are not yet licensed ("approved beds"). HRS gathers data-from local health councils as to the number of patients in a given nursing home on the first day of each month, and this data, collected in six month segments, is compiled into a semiannual occupancy report. T. 145-46. Joint Exhibit 17 is the semiannual census report and bed need allocation published June 3, 1985, and contains data collected on the first days of the months of October-December 1984 and January-March, l98. T. 147; Joint Exhibit 17. The population figures to be used in this case are from the office of the Governor, and neither party disputes the accuracy of these figures. Relying upon the data in Joint Exhibit 17, HRS concluded that there is only a net need for 11 community nursing home beds in District X on the date of the hearing. Joint Exhibit 17, Joint Exhibit 15, T. 150. This was correctly calculated in Petitioner's proposed finding of fact 20: Underlying data: LB = 2,875 POPC = 157,371 POPD = 104,860 POPA = 168,793 POPB = 124,570 OR = 87.59 percent Approved beds = 415 Calculations: Bed rates: BA = LB POPC + (6 x POPD) = 2,875 157,371 + (6 x 104,860) = 2,765 786,531 = 3.65/1,000 BB = 6 x BA = 6 x 3.65/1,000 = 21.93/1,000 Age-adjusted bed total: A = (POPA x BA) + (POPB x BB) = (168,793 x 3.65) + (124,570 x 21.93) 1,000 ( 1,000) = (168.793 x 3.65) + (124,570 x 21.93) = 617 + 2,732 = 3,349 Occupancy-adjusted total: SA = A x OR 90 = 3,349 x 87.59 90 = 3,259 Deduction for licensed & approved beds: Net beds = SA - LB - .9 (approved beds) = 3,259 - 2,875 - .9 (415) = 384 - 373 Net beds = 11 Beverly Manor was licensed as a community nursing home for 120 beds on May 13, 1985. T. 140-41, 151; Petitioner's Exhibit 16. The Department of Health and Rehabilitative Services has a policy to use May 1, 1985, as the cutoff date for Counting licensed nursing home beds for the June 1985 semiannual report, and based on that policy, did not consider the licensed beds at Beverly Manor in calculating bed need in Joint Exhibit 17 and 15. T. 149, 151-52. The Department of Health and Rehabilitative Services uses a variety of other cutoff dates in compiling the semiannual report. Poverty data is from 1980. Approved bed count is from May 1, 1985. Population data is from January 1985. T. 148-50. The reason offered by HRS for using May 1, 1985, for a cutoff date for counting licensed nursing home beds was to give HRS employees enough time to put all the data together t issue the semiannual report on the due date, June 1985. T. 159-60. Daystar, Inc., is reported to be a 44 bed nursing home in District X on Joint Exhibit 17. The Department of Health and Rehabilitative Services includes in the semiannual report all nursing homes that are licensed by the HRS office of licensure and certification. T. 152. HRS included Daystar, Inc., on the semiannual report. Id. Daystar, Inc., operates a 44 bed facility far Christian Scientists that does not offer medical treatment or medication of any kind, but relies solely upon spiritual healing. T. 36-37. On September 29, 1981, certificate of need number 1746 was issued to Colonial Palms Nursing Home East. Petitioner's Exhibit 18. The termination date was extended to March 27, 1983. Id. Three days before the termination date, HRS issued an amended certificate of need number 1746, to Colonial Palms, Inc. to construct the 120 beds in two phases. Phase I was the addition of 46 beds to an existing facility, which HRS did not name, and phase II was to construct a new 74 bed nursing home facility. Petitioner's Exhibit 19. On April 5, 1983, a Robert T. Held wrote to HRS on "Colonial Palms Nursing Home" letterhead stating that construction regarding certificate of need 1746 had commenced. On June 3, 1985, a William R. Meyer spoke with a Ruth Dixon, Control Clerk, Broward County Permit Bureau, and Ms. Dixon advised Mr. Meyer that no building permit had been issued to Colonial Palms West at 51 West Sample Road, Pompano Beach, Florida 33064 or to Bodee Construction Company for 74 beds. Ms. Dixon further advised Mr. Meyer that "Colonial Palms" has not been issued a building permit since 1983, and that she checked both addresses of Colonial Palms and under the construction company in her investigation. HRS takes the position that the Colonial Palms Certificate of need for 74 new beds is still valid since it is still on its approved list and has not been taken off as void. T. 156-57. The foregoing evidence is not sufficient to conclude that certificate of need lumber 1746 is void in whole or in part due to failure to commence construction. The evidence is ambiguous as to which entity holds the certificate of need or which entity was checked for construction permits, and there is no evidence as to whether construction could have been initiated without a construction permit on file in Broward County. Moreover, the Broward County evidence is hearsay, and although there has been no objection to it, the Hearing Officer independently does not regard it to be sufficient, pursuant to section 120.58(1)(a), Fla. Stat., to be relied upon. Finally, it is entirely unclear what type of construction, undertaken by what entity, would be required for this certificate of need to satisfy the "commence construction" requirement. Colonial Palms was not licensed for an additional 46 beds until January 18, 1985, and thus it had only 81 licensed beds on the first of January, 1985; thus, the occupancy report for Colonial Palms for January, 1985, should have been 83 patients in 81 licensed beds. T. 154; Petitioner's Exhibit 13. The "occupancy rate" contained in the semiannual reports, Joint Exhibit 17 and Petitioner's Exhibit 9, is calculated by dividing the total of the patient census in all nursing homes on the first of each month for the six month reporting period by the total of all licensed nursing home beds for those same facilities during the same months. T. 161. Petitioner's Exhibit 10 is an example of how HRS makes this calculation. Id. As a result of adding the 120 licensed beds at Beverly Manor, the "licensed beds" (LB) figure in the formula increases to 2,995, and "approved beds" changes from 415 to 295. The correction to the January 1985 licensed beds at Colonial Palms (corrected to 81 licensed beds), results in a change to the "occupancy rate" from 87.59 percent as reported in Joint Exhibit 17, to 88.06 percent. This calculation is derived from Petitioner's Exhibits 12, 13, and 14. The patient census for October 1984 through March 1985 was 13,051. The licensed beds total for the same months, however, would be 14,820, which is the result of subtracting 46 beds from Colonial Palms for January 1985. The result, 13,051 divided by 14,820, is 88.06 percent. In the past, HRS has granted partial approval of a lesser number of beds than sought by the applicant for a certificate of need. T. 142. The computations contained in conclusion of law paragraph 10 are found to be the correct computation of need pursuant to the rule, and are hereby incorporated by reference as a finding of fact.
Recommendation It is therefore recommended, subject to paragraph 12 above, that the Department of Health and Rehabilitative Services issue to the Petitioner, Health Quest Corporation d/b/a Regents Park of Broward, a certificate of need to construct and operate 120 community nursing home beds in District X. DONE and ORDERED this 6th day of November 1985, in Tallahassee, Florida. WILLIAM C. SHERRILL, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 6th day of November, 1985. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 84-3297 The following proposed findings of fact by Petitioner are adopted herein, if these proposed findings have not already been adopted in the findings of fact: 1, 2, 3, 4, 5, 6, 7, 8, 13, 14, 17, 19, 20 and 21. The following proposed findings were concerned with the December 1984 semiannual report, and thus are not relevant since better and more current data, the June 1985 semiannual report, exists: 9, 10, 11, 15, and 16. See conclusions of law 2-6. The following proposed findings are rejected to the extent that they concern exclusion of Daystar, Inc., data, or to the extent that they are based upon exclusion of Colonial Palms data due to the theory that the Colonial Palms certificate of need is void due to failure to commence construction: 18, 22, and 23. The rejection of these factual matters has been explained in findings of fact 14-16 and conclusions of law 7-9. Proposed finding 24 is rejected as irrelevant, since a net bed need is shown by the rule formula. See rule 10- 5.11(21)(b)10. Moreover, even if the net bed need, which is called the "net bed allocation" by the rule, were zero, the facts proposed in finding of fact 24 are not of the type permitted under this exception of the rule. COPIES FURNISHED: Paul V. DeBianchi, P.A. 2601 East Oakland Park Blvd. Suite #500 Fort Lauderdale, Florida 33306 Charles M. Loeser, Esquire Assistant General Counsel Health Quest Corporation 315 W. Jefferson Blvd. South Bend, Indiana 46601-1586 Harden King, Esquire Assistant General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301 =================================================================
Findings Of Fact On September 29, 1988, HRS published its July 1991 Planning Horizon Florida Community Nursing Home Bed Need Projections ("the Original Bed Need Projections"). According to the Original Bed Need Projections, there is a need for 86 additional beds in HRS District 4, Subdistrict 3 (i.e., St. Johns County and southeast Duval County, hereafter, "Subdistrict 3"), a need for 187 additional nursing beds in Orange County, and a need for 35 additional nursing beds in Palm Beach County. On October 7, 1988, HRS published notice of the Original Bed Need Projections in the Florida Administrative Weekly ("FAW"), Vol. 14, No. 40, pages 3838-3839. On October 19, 1988, HRS published a memorandum and attached errata sheet ("the Errata Memorandum") detailing certain errors in the Original Bed Need Projections. The Errata Memorandum notes that the errors which had been discovered up to that time do not affect the number of additional beds that are projected to be needed by the Original Bed Need Projections. On October 24, 1988, Health Quest filed three petitions: A "Petition for Formal Hearing" was filed with HRS. Health Quest served an "Amendment to the Petition for Formal Hearing," correcting wordprocessing errors in the original Petition, on November 10, 1988, which "Amendment to the Petition for Formal Hearing" was forwarded by HRS to the Division of Administrative Hearings (DOAH) on November 28, 1988 simultaneously with the original "Petition for Formal Hearing", and these pleadings together are here considered as the "120.57 Petition." They/it was assigned DOAH Case No. 88-5848 and are the basis for the instant proceeding. A Petition for Determination of Invalidity of Rule 10-5.008 (2)(a) F.A.C., the fixed need rule, pursuant to Section 120.56, F.S. ("the 120.56 Rule Challenge"), was filed with DOAH and was subsequently assigned DOAH Case No. 88-5228R; and A Petition for Determination of Invalidity of Non-Rule Policy, referencing the same fixed need rule, pursuant to Sections 120.54 and 120.56, F.S. ("the NonRule Policy Challenge"), was filed with DOAH and subsequently assigned DOAH Case No. 88-5230R. Each of the three petitions challenged HRS' determination that additional nursing beds were needed in Subdistrict 3, Orange County, and in Palm Beach County. The petitions also note that Petitioner Health Quest owns and operates nursing homes in Subdistrict 3, Orange County, and Palm Beach County. On October 31, 1988, HRS published its Revised July 1991 Planning Horizon Florida Community Nursing Bed Need Projections ("the Revised Bed Need Projections"). In contrast with both HRS' Original Bed Need Projections and its Errata Memorandum, the Revised Bed Need Projections change the number of additional beds that are needed for Orange County and Palm Beach County. Specifically, the Revised Bed Need Projections decrease the number of beds that are needed in Orange County from 187 to )15, and increase the number of beds that are needed in Palm Beach County from 35 to 62. On November 4, 1988, HRS published a Notice of Correction to Nursing Home Fixed Pools ("the Correction Notice") in the FAW, Vol. 14, No. 44, page 4404. The Correction Notice altered the number of additional beds that are needed for Orange County and Palm Beach County "based on recalculations of net need," as described above in paragraph 6. On November 14, 1988, Health Quest and HRS executed a Stipulation and Agreement ("the Stipulation"). The Stipulation states that HRS acknowledges Health Quest's standing to contest the Original Bed Need Projections, as corrected pursuant to the Revised Bed Need Projections. HRS therefore agreed to refer the 120.57 Petition (this instant case) to DOAH. In reliance on such acknowledgment and agreement, Health Quest voluntarily dismissed both the Rule Challenge (DOAH Case No. 88-5228R) and the Non-Rule Policy Challenge (DOAH Case No. 88-5230R). See Finding of Fact 4, above. The undersigned hearing officer scheduled the instant case (the 120.57 Petition) for final formal hearing at a date stipulated by Health Quest and HRS; however, subsequent to the filing of unilateral prehearing statements by the parties, the undersigned cancelled the formal hearing and by Order of March 20, 1989, required memoranda of law upon the issues discussed in the following Conclusions of Law. Prior to the date for filing such memoranda, Arbor Health Care Company was granted Intervenor status by a March 23, 1989 Order, upon the basis that it had received written notice on March 14, 1989 that HRS intended to issue CON No. 5785, effective March 10, 1989 to Arbor for construction of an 86-bed nursing home to be located in St. John's County, Florida. Arbor had applied for the CON on or before November 23, 1988 in response to the Summary Bed Need Projections published in FAW by HRS on October 7, 1988.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that HRS enter a final order dismissing the Petition herein. DONE and ENTERED this 3rd day of May, 1989, in Tallahassee, Leon County, Florida. ELLA JANE P. DAVIS 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 3rd day of May, 1989.
The Issue Whether the applications for certificates of need filed by Petitioners Alachua General Hospital, Inc., Oakhurst Manor Nursing Corporation and Florida Convalescent Centers, Inc., meet the requirements of law and should be approved based on application of the statutory review criteria or upon other considerations.
Findings Of Fact Oakhurst Manor Nursing Center is a community-based skilled nursing facility of 120 beds located in Ocala, Florida. Oakhurst has a history of high occupancy and is a superior rated facility. At hearing, Oakhurst acknowledged a number of inaccuracies in its application. Some staffing ratios were misstated. The data utilized to calculate financial ratios is different from the data set forth in the combined statement. The physical location of the facility was incorrectly identified. The application misstated the existing number of beds in the facility. Section 408.035(1)(a), Florida Statutes, requires consideration of the need for the health care facilities and services and hospices being proposed in relation to the applicable district plan and state health plan, except in emergency circumstances which pose a threat to the public health. As to the application of Oakhurst, utilization rates indicate that need exists for additional community nursing care services in Marion County. Oakhurst experiences full occupancy. Projected occupancy levels set forth in the Oakhurst application are reasonable. The evidence establishes that the need for additional beds exists and that the application of Oakhurst is consistent with the applicable district and state health plans. Section 408.035(1)(b), Florida Statutes, requires consideration of the availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of like and existing health care services and hospices in the service district of the applicant. Approval of the Oakhurst application will increase the availability of community nursing care at a superior rated facility and will meet the projected need determined by the AHCA's determination of the fixed pool. Section 408.035(1)(c), Florida Statutes, requires consideration of the applicant's ability to provide quality of care and the applicant's record of providing quality of care. Oakhurst is a superior rated facility with a history of providing high quality care. There is no indication that the 60 bed unit addition will result in a decline in quality of care. Section 408.035(1)(e), Florida Statutes, requires consideration of the probable economies and improvements in service that may be derived from operation of joint, cooperative, or shared health care resources. The evidence fails to establish that approval of the Oakhurst application will result in probable economies and improvements in service from joint, cooperative, or shared health care operations. Section 408.035(1)(i), Florida Statutes, requires consideration of the immediate and long-term financial feasibility of the proposal. Since purchase by the current owners, Oakhurst's financial performance has been satisfactory. Losses experienced during the two years following the purchase are attributed to accelerated depreciation. The facility is currently profitable. Although there was evidence that insufficient funds are being generated to maintain the facility's physical plant, the evidence is insufficient to establish that Oakhurst is unable to maintain the facility. Projected occupancy rates are reasonable. Funds for capital and operating expenditures are available to Oakhurst. Notwithstanding current operation of the facility and availability of funds, Oakhurst's proposal is not financially feasible. Oakhurst's revenue projections are not reasonable. This finding is based on the credible testimony of expert Charles Wysocki. Mr. Wysocki opined that the Oakhurst application is not financially feasible in the short and long term and that the financial projections in the Oakhurst application are not reliable. Mr. Wysocki's testimony was credible and persuasive. Oakhurst's current Medicaid rate is $71.68. Oakhurst application Schedule 10 projects Medicaid rates as follows: $77.41 during the construction year; $104.69 during operation year one; and $99.75 during operation year two. Oakhurst's projected Medicaid rates are unreasonable. Projected Medicaid rates are overstated and do not appear to account for Medicaid program rate ceilings. Medicaid program payment restrictions will not permit payment of such rates during years one and two. Oakhurst's current Medicare rate is $186.87. Oakhurst application Schedule 10 projects Medicare rates as follows: $340 during the construction year; $361 during operation year one; and $328 during operation year two. Oakhurst's projected Medicare rates are overstated and unreasonable. Medicare program payment restrictions will not permit payment of such rates. Oakhurst's application overstated revenue projections related to private pay patients. Further, according to Mr. Wysocki, Oakhurst has underestimated expenses related to depreciation, amortization and property taxes. Section 408.035(1)(l), Florida Statutes, requires consideration of the probable impact of the proposed project on the costs of providing health services proposed by the applicant, upon consideration of factors including, but not limited to, the effects of competition on the supply of health services being proposed and the improvements or innovations in the financing and delivery of health services which foster competition and service to promote quality assurance and cost-effectiveness. Approval of Oakhurst's application can be expected to have a positive competitive impact on the supply of services being proposed based on the fact that the addition of beds will increase the supply of appropriate placements. Section 408.035(1)(n), Florida Statutes, requires consideration of the applicant's past and proposed provision of health care services to Medicaid patients and the medically indigent. Although Oakhurst has historically participated in the Medicaid program, Oakhurst is currently not subject to Medicaid participation requirements. If the CON at issue in this proceeding is awarded, Oakhurst will be required to provide at least half of the expanded facility's 160 beds to Medicaid patients. Section 408.035(2)(b), Florida Statutes, requires consideration of whether existing inpatient facilities providing inpatient services similar to those proposed are being used in an appropriate and efficient manner. To the extent that such information is available, there is no evidence that these services are used inappropriately or inefficiently. Section 408.035(2)(d), Florida Statutes, requires consideration of whether patients will experience serious problems in obtaining inpatient care of the type proposed in the absence of the proposed new service. As to community nursing home beds, the AHCA has determined that a need exists for additional capacity in the planning area's nursing homes. It is likely that failure to meet projected need will result in difficulty in locating appropriate placements. The state health plan sets forth "preferences" which are considered in comparative evaluations of competing CON applications. Preference is given to applicants proposing to locate nursing homes in areas within subdistricts with occupancy rates exceeding 90 percent. The occupancy rate is higher in the Alachua planning area than in the Marion planning area. Oakhurst is in the Marion planning area and has the highest occupancy in the planning area. Oakhurst meets this preference. Preference is given to applicants who propose to serve Medicaid residents in proportion to the average subdistrict-wide percentage of the nursing homes in the same subdistrict. Exceptions shall be considered for applicants who propose to exclusively serve persons with similar ethnic and cultural backgrounds or propose the development of multi-level care systems. The Marion County Medicaid participation average is 72.93 percent. Oakhurst's application subjects the facility to a 50 percent Medicaid average. Oakhurst does not meet this preference. Preference is given to applicants proposing to provide specialized services to special care residents, including AIDS residents, Alzheimer's residents, and the mentally ill. Oakhurst intends to operate a separate 20 bed subunit specializing in skin and wound care. A distinct subacute care program targeted at a specific patient population is a specialized service. Oakhurst does not have specialized Alzheimer services. Oakhurst does not provide care to AIDS patients. Oakhurst does not meet this preference. Preference is given to applicants proposing to provide a continuum of services to community residents, including but not limited to, respite care and adult day care. The Oakhurst proposal does not address respite care or adult day care. Oakhurst does not meet this preference. Preference is given to applicants proposing to construct facilities which provide maximum resident comfort and quality of care. These special features may include, but are not limited to, larger rooms, individual room temperature controls, visitors' rooms, recreation rooms, outside landscaped recreation areas, physical therapy rooms and equipment, and staff lounges. Oakhurst's application meets this preference. Preference is given to applicants proposing to provide innovative therapeutic programs which have been proven effective in enhancing the residents' physical and mental functional level and which emphasize restorative care. No party proposes to offer any therapeutic programs which may credibly be identified as "innovative." Preference is given to applicants proposing charges which do not exceed the highest Medicaid per diem rate in the subdistrict. Exceptions are be considered for facilities proposing to serve upper income residents. Oakhurst's projected rates exceed the highest Medicaid per diem rate in the subdistrict, therefore Oakhurst does not meets this preference. Preference is given to applicants with a history of providing superior resident care programs in existing facilities in Florida or other states. HRS' evaluation of existing facilities shall consider, but not be limited to, current ratings of licensure facilities located in Florida. AHCA is the successor agency to HRS. All applications meet this preference. Preference is given to applicants proposing staffing levels which exceed the minimum staffing standards contained in licensure administrative rules. Applicants proposing higher ratios of RNs- and LPNs-to-residents than other applicants shall be given preference. Although FCC and Oakhurst propose reasonable staff levels, Alachua's hospital-based unit, by virtue of location, more closely meets this preference than FCC or Oakhurst. Preference is given to applicants who will use professionals from a variety of disciplines to meet the residents' needs for social services, specialized therapies, nutrition, recreation activities, and spiritual guidance. These professionals include physical therapists, mental health nurses, and social workers. All applications meet this preference. Preference is given to applicants who document plans to will ensure residents' rights and privacy, to use resident councils, and to implement a well-designed quality-assurance and discharge-planning program. All applications meet this preference. Preference is given to applicants proposing lower administrative costs and higher resident care costs compared to the average nursing home in the district. Oakhurst has higher administrative costs and lower resident care costs compared to the average nursing home in the district. Oakhurst does not meet this preference. The district health plan sets forth preferences which are to be considered in comparative evaluations of CON applications. The first applicable district preference is directed toward providing geographic access to nursing home beds. None of the applications meet this preference. The second applicable district preference requires consideration of existing bed utilization. Based on the percentage of elderly population and utilization of existing beds in each area, relative priorities are established. Oakhurst is in a "high need" planning area. Existing nursing homes in the Marion planning area are experiencing occupancy levels between 80 and 90 percent placing Oakhurst in a "moderate occupancy" planning area. According to the preference matrix set forth in the district plan, Oakhurst is in a priority two planning area (high need and moderate occupancy.) The evidence establishes that Oakhurst meets this preference. The third preference relates to the conversion of acute care beds to skilled nursing use. Oakhurst does not intend to convert underutilized hospital beds into skilled nursing beds for step-down or subacute care. The fourth and fifth preferences apply to new facilities of at least 60 beds. No application meets these preferences. The sixth preference states that priority consideration should be given to facilities which propose to offer specialized services to meet the needs of the identified population. Oakhurst proposes to offer a subunit specializing in skin and wound care. Oakhurst meets this preference.
Recommendation RECOMMENDED that a Final Order be entered determining the application of Oakhurst Manor Nursing Center for Certificate of Need #7326 to be incomplete and withdrawn, GRANTING the application of Florida Convalescent Centers, Inc., for Certificate of Need #7325 for the 60 remaining beds in the applicable fixed need pool and GRANTING the application of Alachua General Hospital for Certificate of Need #7320 to convert 30 existing acute care beds into a skilled nursing unit. DONE and RECOMMENDED this 5th day of October, 1994, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of October, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-6264 To comply with the requirements of Section 120.59(2), Florida Statutes, the following constitute rulings on proposed findings of facts submitted by the parties. Alachua General Hospital, Inc.'s proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 15. Rejected, irrelevant as to the AHCA's review of the proposals prior to notice of intended award. 16, 20. Rejected, unnecessary. 21-26. Rejected, subordinate. 30. Rejected, recitation of testimony is not finding of fact. 32, 34. Rejected, subordinate. 42-50. Rejected, not supported by the evidence. The preferences set forth in the proposed finding are not those contained within Alachua's exhibit #1, which has been utilized in this Recommended Order. 52. Rejected, immaterial. Rejected, recitation of testimony is not finding of fact. Rejected, evidence fails to establish that therapy offered is "innovative." 62. Rejected, cumulative. 63-64. Rejected, subordinate. 72. Rejected as to SAAR, unnecessary. 73-76. Rejected, recitation of testimony is not finding of fact. Oakhurst Manor Nursing Corp.'s proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 4,6, 8-51. Rejected, unnecessary, application rejected as incomplete and withdrawn from consideration. 52-54, 56-58. Rejected, irrelevant. Although it is true that the application contained the combined audited financial statements for the Harborside facilities, such statement fails to meet the requirement that the application contain an audited financial statement for the applicant. Harborside is not the applicant. 55. Rejected, irrelevant. The agency has cited no authority which would permit the waiver of the statutory requirement. 59. Rejected, immaterial. The document was admitted to demonstrate that the material required by law was not submitted with the CON application. Further consideration constitutes an impermissible amendment to the CON application and is rejected. Florida Convalescent Centers, Inc.'s proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 3. Rejected, unnecessary. 5-91. Rejected. The Oakhurst application has been rejected as incomplete and treated herein as having been withdrawn. 93. Rejected, unnecessary. 102-143. References to Oakhurst application, rejected, unnecessary. Agency for Health Care Administration's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 3. Rejected, irrelevant. 4-5. Rejected, unnecessary. 6. Rejected, subordinate. Rejected. The Oakhurst application has been rejected as incomplete and treated herein as having been withdrawn. Rejected, not supported by the greater weight of evidence. 13-16. Rejected. The Oakhurst application has been rejected as incomplete and treated herein as having been withdrawn. 19. Rejected, contrary to the comparative review contained herein. Rejected, contrary to the greater weight of the evidence, wherein the CON application sets forth such information. Rejected, unnecessary. The Oakhurst application has been rejected as incomplete and treated herein as having been withdrawn. Comparison is inappropriate. Rejected, contrary to the comparative review contained herein. Rejected, contrary to the evidence. The CON application sets forth the information which the agency asserts was not provided. Rejected, contrary to the comparative review contained herein. Rejected, contrary to the evidence as related to applicable criteria for review set forth in the statute. 35. Rejected, not supported by credible evidence or the administrative rules cited in the proposed finding of fact. COPIES FURNISHED: Douglas M. Cook, Director Agency for Health Care Administration 2727 Mahan Drive Tallahassee, Florida 32308 Sam Power, Agency Clerk Agency for Health Care Administration The Atrium, Suite 301 325 John Knox Road Tallahassee, Florida 32303-4131 Dean Bunton, Esquire Agency for Health Care Administration The Atrium, Suite 301 325 John Knox Road Tallahassee, Florida 32303-4131 R. Terry Rigsby, Esquire Geoffrey D. Smith, Esquire BLANK, RIGSBY & MEENAN 204 South Monroe Street Tallahassee, Florida 32302 Gerald Sternstein, Esquire Frank Rainer, Esquire RUDEN, BARNETT, McCLOSKY, SMITH 215 South Monroe Street Barnett Bank Building, Suite 815 Tallahassee, Florida 32301 Alfred W. Clark, Esquire 117 South Gadsden Street, Suite 201 Tallahassee, FL 32301
