The Issue Whether petitioner should take disciplinary action against respondent for the reasons alleged in the administrative complaint.
Findings Of Fact At all pertinent times, Clifton Jerome Locke has held Florida Teacher's Certificate Number 361372 for the areas of psychology, administration and Junior ROTC, and has taught as a Junior Army ROTC instructor at Crestview High School. Major Jordan was the director of army instruction for the Okaloosa County School Board and Sgt. Locke's "superior officer" at all pertinent times. Ever since Sgt. Locke began as a Junior Army ROTC instructor at Crestview High School, in January or February of 1971, Major Clifton D. Jordan's job was "[t]o coordinate and to command, really, if you will, the Army ROTC operations within the county school system." (T. 39-40) TELEPHONE BILLS The Okaloosa County School Board relied on the ROTC program to secure reimbursement from the U. S. Army for long distance charges incurred by ROTC. When the School Board received telephone bills for the ROTC telephone at Crestview High School, the office of the assistant superintendent for finance paid them, and sent copies of the bills to Crestview High School's Junior ROTC program. As the monthly phone bills arrived, Sgt. Locke looked them over, then gave them to a cadet, who prepared DA Form 360 and DA Form 3953, for Major Jordan's signature. Major Jordan signed the Army form to which a copy of the monthly telephone bill was attached, DA Form 3953. This form and attachments were regularly sent to the signal officer at Fort Rucker, Alabama, until the practice ceased in the spring of 1978. Although unsure whether his office, the school principal or Major Jordan received the Army's reimbursement checks, Creel Richardson, Jr., assistant superintendent for finance for the Okaloosa County School Board, testified without contradiction that the U. S. Army had not reimbursed long distance charges incurred by the Junior ROTC program at Crestview High School over a 46-month period beginning in the spring of 1978. During this entire period, Major Jordan was "telephone control officer." Army regulations precluded Sgt. Locke's serving as telephone control officer. (T. 81) Some time in 1978 Sgt. Locke received a note from Mrs. Strauder of the signal office which read: Returning your bill to be corrected. Please mark calls on the phone bill that add up to fifty-three ninety- five ($53.95), all three copies, please. It was about this time that Sgt. Locke and Major Jordan discussed the use of the telephone for other than official long distance calls. Although Major Jordan did not recall this conversation, he did testify at hearing that he had made various personal long distance calls on the ROTC telephone and had sought Army reimbursement for them by failing to delete personal items from the phone bill copies forwarded to Fort Rucker. Without counting calls made in 1982, Major Jordan made more than two hundred personal, long distance calls on the ROTC telephone, between February 14, 1978, and May 26, 1983. See Respondent's Exhibit No. 5. Eventually, the Federal Bureau of Investigation looked into Major Jordan's personal use of the ROTC telephone for long distance calls, but criminal charges were not brought. Other school personnel also made unauthorized use of the ROTC telephone. Major Jordan, who had never delegated any responsibility or duty in connection with telephone bill reimbursement to Sgt. Locke in writing, told him not to be concerned about which of the phone calls were in fact official calls. Sgt. Locke continued for a few months to give phone bills to cadets for preparation of the reimbursement request forms and the forms continued to be prepared. But Major Jordan stopped signing them and Sgt. Locke eventually stopped giving the phone bills to the cadets who prepared the forms. Of the 46 monthly bills for which no reimbursement was sought, 29 had not been opened in March of 1982, at the time Sgt. Locke was transferred from the ROTC department and Major Jordan went through respondent's desk drawers. At some point, Sgt. Locke told Major Jordan he would rather not be involved in preparation of the forms. He told the student cadets responsible for preparing the forms to deal directly with Major Jordan. In or about October of 1982, the signal office inquired about phone call reimbursement and charges for long distance. Phone calls billed to the ROTC number at Crestview High School aggregated $2,974.42 over the 46-month period. How much of this sum reflected official calls was not clear from the record. Another year elapsed after Sgt. Locke's transfer from the ROTC department before Major Jordan signed and transmitted any phone bill reimbursement forms to the signal office, with the result that reimbursement for any official calls was lost to the Okaloosa County School Board for much of that period as well. CANDY SALES Toward the beginning of the 1981-1982 school year, Jerry Pilgrim, a candy salesman from Milton, Florida, spoke to Major Jordan and Sgt. Locke about the ROTC students' selling candy to raise money. In October, it was agreed that a sale would take place later in the fall. Mr. Pilgrim discussed the candy sales with Major Jordan, who told him to deal with Sgt. Locke. Orders for candy to be delivered in November and December were not filled on time, so Sgt. Locke cancelled them, fearful the upcoming Christmas vacation would complicate matters. When Mr. Pilgrim stopped by the school to apologize for his failure to deliver the candy on time, Major Jordan said ROTC might sell candy some other time. In all, Mr. Pilgrim spoke to Major Jordan six to ten times and never got any indication that Major Jordan opposed a candy sale. It was Major Jordan who chose the particular kind of candy (Reese's candy bars) the day Mr. Pilgrim handed out samples. Major Jordan never told respondent not to conduct a candy sale. Major Jordan and Sgt. Stakley's testimony otherwise has not been credited. In January, Sgt. Locke placed another order for candy by telephone and Mr. Pilgrim delivered the candy the third week of January, 1982. He unloaded the trunk of his car at the ROTC office at Crestview High School, and returned two days later with 20 more cases of candy. Two weeks later he again called at the school, but Sgt. Locke told him that the principal was upset and that ROTC would not be ordering more candy. For the 1981-1982 school year and for some time previously, there was a written policy at Crestview High School requiring approval in advance of fund raising projects, and requiring, with respect to sales conducted by students, that a form be filed reflecting beginning inventory, cost per item, closing inventory, profit, total cost and total items sold. Petitioner's Exhibit No. 1. Both Major Jordan and Sgt. Locke knew or should have known of this policy, even though there was no evidence that the ROTC program had followed it in the past. Approval was not obtained for the candy sale in advance, nor was the required form filed. On January 21, 1982, six students turned in a total of $89.50 to Sgt. Locke, money they had been paid for candy. On January 25, 1982, six students turned in more candy sale proceeds to the respondent, aggregating $86.00. On January 26, 1982, Sgt. Locke entered the hospital, having suffered a mild stroke. He had trouble seeing, was unable to change gears driving, and finally fainted, slumping over his typewriter at Crestview High School. In the hospital, he remembered the money in his desk and asked his daughter, Cynthia Faith, who was also a cadet in the ROTC program, to retrieve the cash from his desk drawer. Sgt. Locke could not see well enough to count the money, so his wife, his daughter and his parents, who were visiting at the hospital, counted it for him. His wife drew a check in the amount of $175.50 on a joint account she shared with respondent, and one of the respondent's daughters gave the check, Petitioner's Exhibit No. 6, along with the required "Report of Monies Collected" forms, Petitioner's Exhibit No. 5, to the school bookkeeper, Ms. Earlene Carter, on February 5, 1982. (T. 163) Proceeds from the candy sale totalled at least $1385.86 and there were no complaints about the handling of the rest of the money. Insofar as the evidence shows, all the money the students turned in was ultimately deposited with the school bookkeeper. School policy required that "teachers who receive money from students in a school related activity should . [t]urn the money into the bookkeeper the day it is collected or as soon thereafter as possible." Petitioner's Exhibit No. 2. Pictures were taken of the ROTC students by James L. Davis of Stone Studio in Pensacola. Most of the students showed up with their money at the time pictures were taken in January of 1982. Others, including respondent's two daughters, did not pay for their photographs the day they were taken, but Cynthia Faith Locke later gave Sgt. Stakley $20 for the pictures taken of her sister and herself, and the photographer was eventually paid in full. Major Jordan testified at hearing that he found a "collection voucher" in Sgt. Locke's desk drawer reflecting that four ROTC students had made payments of ten dollars each for photographs, but that no money was attached to the voucher or present elsewhere in the drawer. Two of the students Major Jordan said were listed on the "voucher" were Sgt. Locke's daughters. The evidence was insufficient to show that Sgt. Locke ever received any money from any student for photographs. The "voucher" Major Jordan claimed he found was not produced at hearing. Aside from Major Jordan's testimony, which has not been credited in this regard, no evidence suggested any impropriety in the handling of any moneys respondent may have received in connection with the sale of photographs to ROTC students. APPLICATION LATE Dean Oliver Casey, a student enrolled in the ROTC program at Crestview High School, filled out an application for an ROTC scholarship in December of 1980. Major Jordan and Dean Casey had discussed the scholarship application two or three times between September 1, 1980, and mid-November of that year, and Major Jordan had told him to mail the completed application to Fort Monroe, Virginia, but he missed the December 15, 1980, deadline. Later Dean Casey gave the completed application to Sgt. Locke who asked Major Jordan if he could "pull any strings" to get the application considered, even though the deadline for submission had passed. After Major Jordan "relieved" Sgt. Locke of his ROTC assignment, respondent went to work in Okaloosa County School Board's finance department at the Carver Hill complex. On the assumption that the allegations against him were true, his effectiveness as a ROTC instructor had been impaired, the consensus of the testimony was, but there was no evidence of the impact on his effectiveness on the assumption that the charges were false, even in part; and no evidence as to his effectiveness while employed in the finance department. The parties' proposed findings of fact have been considered in preparation of the foregoing. To the extent they have not been adopted, they have been rejected as unsupported by the weight of the evidence, immaterial, cumulative or subordinate.
Recommendation It is, accordingly, RECOMMENDED: That petitioner dismiss the administrative complaint filed against respondent. DONE and ENTERED this 25th day of May, 1984, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 25th day of May, 1984. COPIES FURNISHED: J. David Holder, Esquire Post Office Box 1694 Tallahassee, Florida 32302 Ronald G. Meyer, Esquire Pamela Cooper, Esquire Post Office Box 1547 Tallahassee, Florida 32302 Ralph D. Turlington Commissioner of Education Department of Education The Capitol Tallahassee, Florida 32301 Donald L. Griesheimer Executive Director Department of Education 125 Knott Building Tallahassee, Florida 32301
The Issue The issue to be determined in this bid protest matter is whether Respondent, Florida Housing Finance Corporation’s, intended award of funding under Request for Applications 2017- 108, entitled “SAIL Financing of Affordable Multifamily Housing Developments To Be Used In Conjunction With Tax-Exempt Bond Financing And Non-Competitive Housing Credits” was clearly erroneous, contrary to competition, arbitrary, or capricious.
Findings Of Fact Florida Housing is a public corporation created pursuant to section 420.504, Florida Statutes. Its purpose is to provide and promote public welfare by administering the governmental function of financing affordable housing in Florida. Florida Housing is designated as the housing credit agency for Florida within the meaning of section 42(h)(7)(A) of the Internal Revenue Code. As such, Florida Housing is authorized to establish procedures to distribute low income housing tax credits and to exercise all powers necessary to administer the allocation of these credits. § 420.5099, Fla. Stat. For purposes of this administrative proceeding, Florida Housing is considered an agency of the State of Florida. To promote affordable housing in Florida, Florida Housing offers a variety of programs to distribute housing credits. (Housing credits, also known as tax credits, are a dollar-for-dollar offset of federal income tax liability.) One of these programs is the State Apartment Incentive Loan program (“SAIL”), which provides low-interest loans on a competitive basis to affordable housing developers. SAIL funds are available each year to support the construction or substantial rehabilitation of multifamily units affordable to very low- income individuals and families. See § 420.5087, Fla. Stat. Additional sources of financial assistance include the Multifamily Mortgage Revenue Bond program (“MMRB”) and non- competitive housing credits. Florida Housing administers the competitive solicitation process to award low-income housing tax credits, SAIL funds, nontaxable revenue bonds, and other funding by means of request for proposals or other competitive solicitation. Florida Housing initiates the competitive application process by issuing a Request for Applications. §§ 420.507(48) and 420.5087(1), Fla. Stat.; and Fla. Admin. Code R. 67-60.009(4). The Request for Application at issue in this matter is RFA 2017-108, entitled “SAIL Financing of Affordable Multifamily Housing Developments to Be Used in Conjunction with Tax-Exempt Bond Financing and Non-Competitive Housing Credits.” Florida Housing issued RFA 2017-108 on August 31, 2017. Applications were due by October 12, 2017.6/ The purpose of RFA 2017-108 is to distribute funding to create affordable housing in the State of Florida. Through RFA 2017-108, Florida Housing intends to award approximately $87,000,000 for proposed developments serving elderly and family demographic groups in small, medium, and large counties. RFA 2017-108 allocates $46,279,600 to large counties, $32,308,400 to medium counties, and $8,732,000 to small counties. RFA 2017-108 established goals to fund: Two Elderly, new construction Applications located in Large Counties; Three Family, new construction Applications located in Large Counties; One Elderly, new construction Application located in a Medium County; and Two Family, new construction Applications located in Medium Counties. Thirty-eight developers submitted applications in response to RFA 2017-108. Of these applicants, Florida Housing found 28 eligible for funding, including all Petitioners and Intervenors in this matter. Florida Housing received, processed, deemed eligible or ineligible, scored, and ranked applications pursuant to the terms of RFA 2017-108, Florida Administrative Code Chapters 67- 48 and 67-60, and applicable federal regulations. RFA 2017-108 provided that applicants were scored based on certain demographic and geographic funding tests. Florida Housing sorted applications from the highest scoring to the lowest. Only applications that met all the eligibility requirements were eligible for funding and considered for selection. Florida Housing created a Review Committee from amongst its staff to review and score each application. On November 15, 2017, the Review Committee announced its scores at a public meeting and recommended which projects should be awarded funding. On December 8, 2017, the Review Committee presented its recommendations to Florida Housing’s Board of Directors for final agency action. The Board of Directors subsequently approved the Review Committee’s recommendations and announced its intention to award funding to 16 applicants. As a preliminary matter, prior to the final hearing, Florida Housing agreed to the following reassessments in the scoring and selection of the applications for funding under RFA 2017-108: SP Lake and Osprey Pointe: In the selection process, Florida Housing erroneously determined that SP Lake was eligible to meet the funding goal for the “Family” demographic for the Family, Medium County, New Construction Goal. (SP Lake specifically applied for funding for the “Elderly” demographic.) Consequently, Florida Housing should have selected Osprey Pointe to meet the Family, Medium County, New Construction Goal. Osprey Pointe proposed to construct affordable housing in Pasco County, Florida. Florida Housing represents that Osprey Pointe is fully eligible for funding under RFA 2017-108. (While Osprey Pointe replaces SP Lake in the funding selection for the “Family” demographic, SP Lake remains eligible for funding for the “Elderly” demographic.) Sierra Bay and Northside II: In the scoring process, Florida Housing erroneously awarded Sierra Bay proximity points for Transit Services. Upon further review, Sierra Bay should have received zero proximity points. Consequently, Sierra Bay’s application is ineligible for funding under RFA 2017-108. By operation of the provisions of RFA 2017-108, Florida Housing should have selected Northside II (the next highest ranked, eligible applicant) for funding to meet the Elderly, Large County, New Construction Goal. Florida Housing represents that Northside II is fully eligible for funding under RFA 2017-108. Harbour Springs: Florida Housing initially deemed Harbour Springs eligible for funding under RFA 2017-108 and selected it to meet the Family, Large County, New Construction Goal. However, because Harbour Springs and Woodland Grove are owned by the same entity and applied using the same development site, under rule 67-48.004(1), Harbour Springs is ineligible for funding. (Florida Housing’s selection of Woodland Grove for funding for the Family, Large County, New Construction Goal, is not affected by this determination.) The sole disputed issue of material fact concerns Liberty Square’s challenge to Florida Housing’s selection of Woodland Grove to meet the Family, Large County Goal. Liberty Square and Woodland Grove applied to serve the same demographic population under RFA 2017-108. If Liberty Square successfully challenges Woodland Grove’s application, Liberty Square, as the next eligible applicant, will be selected for funding to meet the Family, Large County Goal instead of Woodland Grove. (At the hearing on December 8, 2017, Florida Housing’s Board of Directors awarded Woodland Grove $7,600,000 in funding.) The focus of Liberty Square’s challenge is the information Woodland Grove provided in response to RFA 2017-108, Section Four, A.5.d., entitled “Latitude/Longitude Coordinates.” Liberty Square argues that Woodland Grove’s application is ineligible because its Development Location Point, as well as the locations of its Community Services and Transit Services, are inaccurate. Therefore, Woodland Grove should have received zero “Proximity” points which would have disqualified its application for funding. RFA 2017-108, Section Four, A.5.d(1), states, in pertinent part: All Applicants must provide a Development Location Point stated in decimal degrees, rounded to at least the sixth decimal place. RFA 2017-108 set forth scoring considerations based on latitude/longitude coordinates in Section Four, A.5.e, entitled “Proximity.” Section Four, A.5.e, states, in pertinent part: The Application may earn proximity points based on the distance between the Development Location Point and the Bus or Rail Transit Service . . . and the Community Services stated in Exhibit A. Proximity points will not be applied to the total score. Proximity points will only be used to determine whether the Applicant meets the required minimum proximity eligibility requirements and the Proximity Funding Preference ” In other words, the Development Location Point identified the specific location of an applicant’s proposed housing site.7/ Applicants earned “proximity points” based on the distance between its Development Location Point and selected Transit and Community Services. Florida Housing also used the Development Location Point to determine whether an application satisfied the Mandatory Distance Requirement under RFA 2017-108, Section Four A.5.f. To be eligible for funding, all applications had to qualify for the Mandatory Distance Requirement. The response section to Section Four, A.5.d., is found in Exhibit A, section 5, which required each applicant to submit information regarding the “Location of proposed Development.” Section 5 specifically requested: County; Address of Development Site; Does the proposed Development consist of Scattered Sites?; Latitude and Longitude Coordinate; Proximity; Mandatory Distance Requirement; and Limited Development Area. Section 5.d. (Latitude and Longitude Coordinates) was subdivided into: (1) Development Location Point Latitude in decimal degrees, rounded to at least the sixth decimal place Longitude in decimal degrees, rounded to at least the sixth decimal place In its application, Woodland Grove responded in section 5.a-d as follows: County: Miami-Dade Address of Development Site: NE corner of SW 268 Street and 142 Ave, Miami-Dade, FL 33032. Does the proposed Development consist of Scattered Sites? No. Latitude and Longitude Coordinate; Development Location Point Latitude in decimal degrees, rounded to at least the sixth decimal place: 25.518647 Longitude in decimal degrees, rounded to at least the sixth decimal place: 80.418583 In plotting geographic coordinates, a “-” (negative) sign in front of the longitude indicates a location in the western hemisphere (i.e., west of the Prime Meridian, which is aligned with the Royal Observatory, Greenwich, England). A longitude without a “-” sign places the coordinate in the eastern hemisphere. (Similarly, a latitude with a negative value is south of the equator. A latitude without a “-” sign refers to a coordinate in the northern hemisphere.) As shown above, the longitude coordinate Woodland Grove listed in section 5.d(1) did not include a “-” sign. Consequently, instead of providing a coordinate for a site in Miami-Dade County, Florida, Woodland Grove entered a Development Location Point located on the direct opposite side of the planet (apparently, in India). At the final hearing, Florida Housing (and Woodland Grove) explained that, except for the lack of the “-” sign, the longitude Woodland Grove recorded would have fallen directly on the address it listed as its development site in section 5.b., i.e., the “NE corner of SW 268 Street and 142 Ave, Miami-Dade, FL 33032.” In addition to the longitude in section 5.d., Woodland Grove did not include a “-” sign before the longitude coordinates for its Transit Services in section 5.e(2)(b) or for any of the three Community Services provided in section 5.e(3). Again, without a “-” sign, the longitude for each of these services placed them in the eastern hemisphere (India) instead of the western hemisphere (Miami-Dade County). In its protest, Liberty Square contends that, because Woodland Grove’s application listed a Development Location Point in India, Florida Housing should have awarded Woodland Grove zero proximity points under Section Four, A.5.e. Consequently, Woodland Grove’s application failed to meet minimum proximity eligibility requirements and is ineligible for funding. Therefore, Liberty Square, as the next eligible applicant, should be awarded funding for the Family, Large County Goal, under RFA 2017-108.8/ Liberty Square asserts that a correct Development Location Point is critical because it serves as the beginning point for assigning proximity scores. Waiving an errant Development Location Point makes the proximity scoring meaningless. Consequently, any such waiver by Florida Housing is arbitrary, capricious, and contrary to competition. At the final hearing, Woodland Grove claimed that it inadvertently failed to include the “-” sign before the longitude points. To support its position, Woodland Grove expressed that, on the face of its application, it was obviously applying for funding for a project located in Miami-Dade County, Florida, not India. In at least five places in its application, Woodland Grove specified that its proposed development would be located in Miami-Dade County. Moreover, several attachments to Woodland Grove’s application specifically reference a development site in Florida. Woodland Grove attached a purchase agreement for property located in Miami-Dade County (Attachment 8). To satisfy the Ability to Proceed requirements in RFA 2017-108, Woodland Grove included several attachments which all list a Miami-Dade address (Attachments 9-14). Further, Woodland Grove submitted a Local Government Verification of Contribution – Loan Form executed on behalf of the Mayor of Miami-Dade County, which committed Miami-Dade County to contribute $1,000,000.00 to Woodland Grove’s proposed Development (Attachment 15). Finally, to qualify for a basis boost under RFA 2017-108, Woodland Grove presented a letter from Miami-Dade County’s Department of Regulatory and Economic Resources, which also referenced the address of the proposed development in Miami-Dade County (Attachment 16). In light of this information, Woodland Grove argues that its application, taken as a whole, clearly communicated that Woodland Grove intended to build affordable housing in Miami-Dade County. Nowhere in its application, did Woodland Grove reference a project in India other than the longitude coordinates which failed to include “-” signs. Accordingly, Florida Housing was legally authorized to waive Woodland Grove’s mistake as a “harmless error.” Thus, Florida Housing properly selected the Woodland Grove’s development for funding to meet the Family, Large County Goal. Florida Housing advocates for Woodland Grove’s selection to meet the Family, Large County Goal, under RFA 2017- 108. Florida Housing considers the omission of the “-” signs before the longitude coordinates a “Minor Irregularity” under rule 67-60.002(6). Therefore, Florida Housing properly acted within its legal authority to waive, and then correct, Woodland Grove’s faulty longitude coordinates when scoring its application. In support of its position, Florida Housing presented the testimony of Marisa Button, Florida Housing’s current Director of Multifamily Allocations. In her job, Ms. Button oversees the Request for Applications process; although, she did not personally participate in the review, scoring, or selection decisions for RFA 2017-108. Ms. Button initially explained the process by which Florida Housing selected the 16 developments for funding under RFA 2017-108. Ms. Button conveyed that Florida Housing created a Review Committee from amongst its staff to score the applications. Florida Housing selected Review Committee participants based on the staff member’s experience, preferences, and workload. Florida Housing also assigned a backup reviewer to separately score each application. The Review Committee members independently evaluated and scored their assigned portions of the applications based on various mandatory and scored items. Thereafter, the scorer and backup reviewer met to reconcile their scores. If any concerns or questions arose regarding an applicant’s responses, the scorer and backup reviewer discussed them with Florida Housing’s supervisory and legal staff. The scorer then made the final determination as to each application. Ms. Button further explained that applicants occasionally make errors in their applications. However, not all errors render an application ineligible. Florida Housing is authorized to waive “Minor Irregularities.” As delineated in RFA 2017-108, Section Three, A.2.C., Florida Housing may waive “Minor Irregularities” when the errors do not provide a competitive advantage or adversely impact the interests of Florida Housing or the public. See Fla. Admin. Code R. 67- 60.002(6) and 67-60.008. Such was the case regarding Woodland Grove’s application. Heather Green, the Florida Housing staff member who scored the “Proximity” portion of RFA 2017-108, waived the inaccurate longitude coordinates as “Minor Irregularities.” Ms. Green then reviewed Woodland Grove’s application as if the proposed development was located in Miami-Dade County, Florida. Florida Housing assigned Ms. Green, a Multifamily Loans Manager, as the lead scorer for the “Proximity” portion of RFA 2017-108, which included the Development Location Point listed in Exhibit A, section 5.d. Ms. Green has worked for Florida Housing since 2003 and has scored proximity points for Request for Applications for over ten years. At the final hearing, Florida Housing offered the deposition testimony of Ms. Green. In her deposition, Ms. Green testified that she is fully aware that, to be located in the western hemisphere (i.e., Miami-Dade County), a longitude coordinate should be marked with a negative sign or a “W.” Despite this, Ms. Green felt that the longitude coordinates Woodland Grove used without negative signs, particularly its Development Location Point, were clearly typos or unintentional mistakes. Therefore, Ms. Green waived the lack of a negative sign in front of the longitude coordinates in section 5.d. and section 5.e. as “Minor Irregularities.” Ms. Green understood that she was authorized to waive “Minor Irregularities” by rule under the Florida Administrative Code. Ms. Green felt comfortable waiving the inaccurate longitude coordinates because everywhere else in Woodland Grove’s application specifically showed that its proposed housing development was located in Miami-Dade County, not India. Accordingly, when scoring Woodland Grove’s application, Ms. Green corrected the longitude entries by including a negative sign when she plotted the coordinates with her mapping software. Ms. Green then determined that, when a “-” was inserted before the longitude, the coordinate lined up with the address Woodland Grove listed for the Development Location Point. Therefore, Woodland Grove received proximity points and was eligible for funding under RFA 2017-108. (See RFA 2017-108, Section Five.A.1.) However, Ms. Green acknowledged that if she had scored the application just as it was presented, Woodland Grove would not have met the required qualifications for eligibility. Ms. Button relayed that Florida Housing fully accepted Ms. Green’s decision to waive the missing negative signs in Woodland Grove’s response to section 5.d. and 5.e. as “Minor Irregularities.” Ms. Button opined that Woodland Grove’s failure to place a “-” mark before the longitude was clearly an unintentional mistake. Ms. Button further commented that Florida Housing did not believe that scoring Woodland Grove’s development as if located in the western hemisphere (instead of India), provided Woodland Grove a competitive advantage. Because it was evident on the face of the application that Woodland Grove desired to develop a housing site in Miami-Dade County, Ms. Green’s decision to overlook the missing “-” sign did not award Woodland Grove additional points or grant Woodland Grove an advantage over other applicants. Neither did it adversely impact the interests of Florida Housing or the public. However, Ms. Button also conceded that if Ms. Green had scored the application without adding the “-” sign, Woodland Grove would have received zero proximity points. This result would have rendered Woodland Grove’s application ineligible for funding. Ms. Button also pointed out that Ms. Green waived the omission of “-” signs in two other applications as “Minor Irregularities.” Both Springhill Apartments, LLC, and Harbour Springs failed to include negative signs in front of their longitude coordinates. As with Woodland Grove, Ms. Green considered the development sites in those applications as if they were located in Miami-Dade County (i.e., in the western hemisphere). Ms. Green also waived a mistake in the Avery Commons application as a “Minor Irregularity.” The longitude coordinate for the Avery Commons Development Location Point (section 5.d(1)) was blank. However, Ms. Green determined that Avery Commons had placed the longitude in the blank reserved for Scattered Sites coordinates (section 5.d(2)). When scoring Avery Commons’ application, Ms. Green considered the coordinate in the appropriate section. According to Ms. Button, Florida Housing felt that this variation did not provide Avery Commons a competitive advantage. Nor did it adversely impact the interests of Florida Housing or the public. Finally, Ms. Button explained that the application Florida Housing used for RFA 2017-108 was a relatively new format. In previous Request For Applications, Florida Housing required applicants to submit a Surveyor Certification Form. On the (now obsolete) Surveyor Certification Form, Florida Housing prefilled in an “N” in front of all the latitude coordinates and a “W” in front of all the longitude coordinates. However, the application used in RFA 2017-108 did not place an “N” or “W” before the Development Location Point coordinates. Based on the evidence presented at the final hearing, Liberty Square did not establish, by a preponderance of the evidence, that Florida Housing’s decision to award funding to Woodland Grove for the Family, Large County Goal, under RFA 2017-108 was clearly erroneous, contrary to competition, arbitrary, or capricious. Florida Housing was within its legal authority to waive, then correct, the missing “-” sign in Woodland Grove’s application as “Minor Irregularity.” Therefore, the undersigned concludes, as a matter of law, that Petitioner did not meet its burden of proving that Florida Housing’s proposed action to select Woodland Grove for funding was contrary to its governing statutes, rules or policies, or the provisions of RFA 2017-108.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Florida Housing Finance Corporation enter a final order dismissing the protest by Liberty Square. It is further recommended that Florida Housing Finance Corporation rescind the intended awards to Sierra Bay, SP Lake, and Harbour Springs, and instead designate Northside II, Osprey Pointe, and Pembroke Tower Apartments as the recipients of funding under RFA 2017-108.10/ DONE AND ENTERED this 19th day of April, 2018, in Tallahassee, Leon County, Florida. S J. BRUCE CULPEPPER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 19th day of April, 2018.
Findings Of Fact At all times material hereto, Edward P. Skiff has been the owner and operator of Petitioner Skiff's Workingman's Nursery. For 28 years the nursery was located on State Road 7 (US 441), one of the busiest traffic arteries in Broward County. In 1981, Respondent Department of Transportation first contacted Skiff to advise him that he would be required to relocate his business due to the construction of I-595, the Port Everglades Expressway. In 1985 Respondent purchased the property on which Skiff's Workingman's Nursery was located and ordered Skiff to vacate the property by January 1, 1986. Between 1981 and 1985 Skiff searched for a comparable piece of property on which to operate a retail nursery in Broward County. As requested by the Respondent, Skiff submitted to the Department a list of six properties he was considering, only 2 or 3 of which were platted. There is no indication that Department employees objected to any of sites under consideration. Skiff closed on his new site located on Hillsboro Boulevard in Broward County in 1985. At the time, that site was not yet platted, and Skiff was required by Broward County to plat the property. Prior to his purchase of the site, no mention was made of impact fees by the Department or anyone else. Skiff began processing his application for plat approval with Broward County. During the processing, he was advised that he would be required to pay impact fees to Broward County for the relocation site, a requirement that had been imposed by Broward County for any site within that county and not just for the relocation site selected by Skiff. The Department of Transportation knew at the time that impact fees had been imposed for any development in Broward County so that relocating businesses would be required to pay such fees. When Skiff was several months into the platting process with Broward County he was further advised that his relocation site had been annexed by the City of Coconut Creek, Broward County, Florida. Accordingly, Skiff became obligated to pay impact fees assessed by the City of Coconut Creek in addition to the impact fees assessed by Broward County. Skiff was required to pay to Broward County transportation impact fees as a condition precedent to recording the plat for Skiff's Workingman's Nursery. He was also required to pay to the City of Coconut Creek water, sewer, and street connection charges as a condition precedent to obtaining a building permit and a certificate of occupancy. Skiff paid to Broward County, in order to record his plat, impact fees in the amount of $32,887.00. Skiff also paid to the City of Coconut Creek water and wastewater impact fees in the amount of $4,499.20 and sewage and street connection charges in the amount of $24,634.00. None of the connection fees paid to the City of Coconut Creek involved bringing the utilities from the right-of-way to a building or improvement upon Skiff's property. The impact fees imposed by the City of Coconut Creek and by Broward County were necessary and reasonable. The fees were derived according to a specific formula which has a correlation to estimated usage, and they were not arbitrary numbers. Likewise, the mandatory sewage connection charges were both reasonable and necessary and involved the construction of a lift station required by the City of Coconut Creek. When Skiff submitted to Respondent his claim for reimbursement of the impact fees paid by him to Broward County and the City of Coconut Creek, Respondent preliminarily denied that claim reasoning that operating expenses of a business are not reimbursable under the Department's relocation assistance program. The Department never considered whether an impact fee is reimbursable as a license, permit, or certification required of a displaced person at the replacement location. The sole basis for the Department's denial was a memorandum written by an employee of the United States Department of Transportation Federal Highway Administration in a different case which did not address the question of whether an impact fee qualifies as a reimbursable permit, license, or certification required by a governmental entity prior to the creation of a new business. At the time that Respondent denied Skiff's claim for reimbursement of impact fees, the district relocation administrator believed those fees to be reimbursable. However, the state relocation administrator who was new to her job, who could not define the term "operating expense of a business," who was unaware of the regulations qualifying permits and licenses and certifications as expenses eligible for reimbursement, and who did not consider whether the impact fees were eligible under those provisions, denied the claim. Her successor also believed the claim to be reimbursable. There are no definitional guidelines as to the terms "operating expense", "license, permit or certification", or any of the other terms relevant to these proceedings, contained in either the Code of Federal Regulations or in the Florida Department of Transportation guidelines. Accordingly, those terms must be given their common, everyday meaning. An impact fee is a developmental permit fee, i.e., a one-time fee mandated by a governmental entity which must be paid prior to that governmental entity's permitting development; it is a charge which allows a new or relocating business to start conducting business activities at a new location. An impact fee is therefore a start-up cost and not an operating expense since an operating expense is an ongoing cost of doing business for an existing business. The Department's decision-making personnel who testified in this proceeding all agree that the term "operating expense" assumes that a business is in operation. The Department has failed to consider whether impact fees are reimbursable under the proper criteria. In preparation for its move to the relocation site, Skiff's Workingman's Nursery paid professional consultant's fees (architectural and engineering) in the amount of $14,915.85 for site planning and site preparation planning for the a nursery. Skiff submitted his claim for reimbursement for design services to Respondent. Although the district relocation administrator believed those costs to be reimbursable under the specific provision allowing reimbursement for professional services related to the move of personal property, the claim was denied by the state relocation administrator who was new to her job and who stated that nurseries were excluded, without identifying where in the law such an exclusion was written. While the Department was considering Skiff's claims for reimbursement for impact fees and design services, it conducted its own survey of nurseries asking those nurseries for information pertaining to relocation of a nursery, asking specifically about eligible move costs and necessary land and soil preparations if a nursery had to be relocated to virgin land. Responses received by the Department indicated the importance of site location, plant layout, and soil considerations required by both the plants and customers of the nursery and the importance of paying impact fees. There is no evidence that the information the Department gleaned from its own survey was considered in determining whether the payment of impact fees by a nursery and whether the payment of professional design services by a nursery were reasonable and necessary expenses incurred by a displaced nursery required by the government to relocate to a new site. The Department took the position that although nurseries were an exclusion from the provision that businesses were entitled to be reimbursed for professional services attendant to relocation, an exception to the exclusion could be granted based upon appropriate documentation. It concluded, however, that Skiff's had not submitted the appropriate documentation. Yet it failed to advise Skiff as to what documentation would be appropriate and failed to request any additional documentation. After Skiff's plat was recorded, he filed an application with Broward County to modify that plat in order to provide access to the nursery from Hillsboro Boulevard, the main thoroughfare, rather than requiring customers to gain access to the nursery from the back of the nursery off a side street. Access from Hillsboro Boulevard was approved, and Skiff paid $7,500.00 to construct a traffic turn lane from Hillsboro Boulevard onto the nursery property. The first claim for reimbursement for that cost which would give Skiff's Workingman's Nursery access to a major thoroughfare comparable to the major thoroughfare from which it had been displaced by the Department was made during the course of the final hearing in this cause.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED that a Final Order be entered: Granting Petitioner's claim for reimbursement for water and wastewater impact fees imposed by the City of Coconut Creek in the amount of $4,499.20; Granting Petitioner's claim for reimbursement for transportation impact fees imposed by Broward County in the amount of $32,887.00; Granting Petitioner's claim for reimbursement for sewage and street connection charges imposed by the City of Coconut Creek in the amount of $24,634.00; Granting Petitioner's claim for reimbursement for professional consultant's fees for design services in the amount of $14,915.85; and Denying without prejudice Petitioner's claim for reimbursement for the cost of constructing a traffic turn lane in the amount of $7,500.00 which was not properly a part of this proceeding. DONE and RECOMMENDED this 28th day of November, 1988, at Tallahassee, Florida. LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of November, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-1652 The first unnumbered paragraph of Petitioner's proposed findings of fact has been rejected as being unnecessary for determination of the issues herein. Petitioner's second through sixth unnumbered paragraphs of Petitioner's proposed findings of fact have been adopted either verbatim or in substance in this Recommended Order. Respondent's proposed findings of fact numbered 1-3 have been rejected as not being supported in their entirety by the weight of the evidence in this cause. COPIES FURNISHED: Kaye N. Henderson, Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32301 J. Philip Landsman, Esquire Emily Tracey, Esquire Broward Financial Centre 500 East Broward Boulevard Suite 1850 Fort Lauderdale, Florida 33394 Vernon L. Whittier, Jr., Esquire Department of Transportation Haydon Burns Building, Mail Station 58 605 Suwannee Street Tallahassee, Florida 32301 Thomas H. Bateman III, Esquire Department of Transportation Haydon Burns Building, Mail Station 58 605 Suwannee Street Tallahassee, Florida 32301 =================================================================
The Issue The issues in this bid protest are whether Respondent's preliminary decision to award low-income housing tax credits to Intervenor should be implemented, notwithstanding the fact that, unbeknownst to Respondent during the evaluation and scoring of the competing applications, Intervenor's application contained a material misrepresentation about a transit service, which Intervenor urges is a minor irregularity that can be waived; and, if the preliminary decision is set aside, whether Respondent should award the credits to Petitioner, who is next in line, but whose application, Intervenor alleges, contains material deviations from the specifications that render it nonresponsive.
Findings Of Fact Respondent Florida Housing Finance Corporation ("FHFC") is the housing credit agency for the state of Florida whose responsibilities include the awarding of low-income housing tax credits, which developers use to finance the construction of affordable housing. Tax credits are made available annually pursuant to a competitive cycle that starts with FHFC's issuance of a Request for Applications. On November 21, 2014, FHFC issued Request for Applications 2014-115 (the "RFA"), whose full title——"Housing Credit Financing for Affordable Housing Developments Located in Broward, Duval, Hillsborough, Orange, Palm Beach, and Pinellas Counties"——generally describes the developments for which FHFC expects to award tax credits totaling up to approximately $15.5 million to selected applicants proposing to construct such projects in accordance with the specifications of the RFA, FHFC's generally applicable standards, and all other governing laws. Applications were due on February 3, 2015. Applicants were required to make a commitment to serve one of several populations: Family, Elderly, or Homeless. Under the selection process that the RFA prescribes, only one project targeted for either the Family or Elderly population in Duval County will be selected for funding. The dispute in this case arises from FHFC's preliminary decision regarding the award of credits for the Duval County development intended to serve the Family or Elderly demographic. Petitioner Houston Street Manor Limited Partnership ("Houston Street") and Intervenor Powers Avenue Senior Apartments, Ltd., d/b/a Pine Grove Senior Apartments ("Pine Grove") each timely submitted an application proposing to build affordable housing for elderly residents in Duval County, making them direct competitors for the sole award available for such a project. The RFA provided that applications would be evaluated and scored by a committee, with the scoring to be based on "Mandatory Items" and "Point Items" identified in a table included in the RFA. Upon completing its evaluation, the committee was required to list the eligible applications in order from highest total score to lowest total score, and to make a recommendation to FHFC's Board of Directors. In theory, the award should go to the applicant with the highest score. Because of the likelihood, however, that multiple applications will get perfect scores——as it happened, all 49 of the eligible applications in the Family or Elderly Demographic Commitment category received the maximum score of 23 points——the RFA established a sequence of six tiebreakers, the sixth being a lottery, with the award falling to the application having the lowest, randomly assigned lottery number. Knowledgeable developers understood that, in practice, most of the successful applications would be lottery winners owing their selection largely to luck. It is therefore not surprising that all eight eligible applications proposing to serve the Family or Elderly population in Duval County received the full 23 points. None of the first five tiebreakers separated these applications, which forced a lottery. Pine Grove had the lowest lottery number (14), followed by Houston Street Manor (25). Thus, Pine Grove was chosen for preliminary funding, as FHFC announced on May 8, 2015. The RFA specifies two Point Items in the Family or Elderly Demographic Commitment category. One Point Item is "Local Government Contributions," for which a maximum of 5.0 points could be awarded. The other is "Proximity to Transit and Community Services," which was worth a maximum of 18 "proximity points." To be considered eligible for funding, an applicant needed to receive at least 10.25 proximity points, including a minimum of 2.0 points for Transit Services.1/ Significantly, an applicant who earned 12.25 or more proximity points would be given the maximum Total Proximity Score of 18. Thus, to be eligible an applicant needed to qualify for a Transit Service Score of at least 2.0 plus win 8.25 additional proximity points; to be competitive, however, it had to win at least 10.25 additional proximity points, to "bump up" to 18. During the evaluation and scoring, Pine Grove received a Transit Service Score of 5.0, which, together with the 9.5 proximity points that Pine Grove earned for its proximity to other community services, gave Pine Grove a raw score of 14.5 and, consequently, a Total Proximity Score of 18——the maximum. Pine Grove's Transit Service Score, however, was based upon a representation of material fact that——it is undisputed——was not correct. To understand the problem requires a more detailed explanation of the Transit Services criteria. The RFA required an applicant to select one——and only one——Transit Service upon which its Transit Service Score would be based. The category of Transit Services comprises five specifically defined services divided into three subgroups as follows: (1) Private Transportation — 2 points; (2) Public Bus Stop – maximum 2 points; and (3) Public Bus Transfer Stop; Public Bus Rapid Transit Stop; or Public Rail Station — maximum 6 points. The services relevant to this case are Public Bus Stop and Public Bus Transfer Stop. The RFA defines Public Bus Stop in relevant part as follows: Public Bus Stop means a fixed location at which passengers may access one or two routes of public transportation via buses. The Public Bus Stop must service at least one bus route with scheduled stops at least hourly during the times of 7am to 9am and also during the times of 4pm to 6pm Monday through Friday, excluding holidays, on a year-round basis. RFA at 21. The pertinent provisions of the definition of Public Bus Transfer Stop provide as follows: Public Bus Transfer Stop means a fixed location at which passengers may access at least three routes of public transportation via buses. Each qualifying route must have a scheduled stop at the Public Bus Transfer Stop at least hourly during the times of 7am to 9am and also during the times of 4pm to 6pm Monday through Friday, excluding holidays, on a year-round basis. This would include both bus stations (i.e., hubs) and bus stops with multiple routes. RFA at 21. The number of proximity points that would be awarded for a Public Bus Stop or a Public Bus Transfer Stop, if an applicant chose one or the other as the sole service upon which its Transit Service Score would be based, was not committed to the discretion of the evaluators. Rather, the RFA prescribes the precise number of points to be assigned, based on an objective criterion, namely the distance in miles between the proposed development and the particular service. Thus, a Public Bus Stop would be scored as follows: RFA at 24. A Public Bus Transfer Stop, in contrast, would be awarded points pursuant to the following schedule: RFA at 25. The RFA required applicants to attach to their applications a Surveyor Certification Form completed and signed by a licensed surveyor. On this form, the surveyor must state the latitude and longitude coordinates for, among other things, the selected Transit Service, e.g., Public Bus Stop or Public Bus Transfer Stop, together with the distance in miles between such service and the proposed development. By signing the form, the surveyor declares, under penalties of perjury, "that the foregoing statement is true and correct." RFA at 86. Pine Grove submitted a Surveyor Certification Form which identified a Public Bus Transfer Stop as its Transit Service: Joint Ex. 3 at 52 of 101. Because the distance between this service and the proposed development was stated to be 0.55 miles, Pine Grove received 5.0 proximity points pursuant to the schedule reproduced above. The site whose coordinates are shown in Pine Grove's Surveyor Certification Form is, in fact, a bus stop, which the Jacksonville Transportation Authority ("JTA") refers to as Stop #4203. But, as the parties have stipulated, only two routes serve Stop #4203 during the morning and afternoon rush hours. Consequently, contrary to the representation in Pine Grove's application, Stop #4203 is not a Public Bus Transfer Stop as that term is defined in the RFA, but a less-prized Public Bus Stop. Houston Street raised this issue as a protest ground in its formal petition challenging the proposed award to Pine Grove. During discovery, Pine Grove confessed error and admitted that Stop #4203 is only a Public Bus Stop, not a Public Bus Transfer Stop. Thereafter, FHFC announced that it would side with Houston Street in arguing that Pine Grove's application must be rejected as ineligible since Stop #4203, as a Public Bus Stop greater than 0.30 miles from the proposed development, earns just 0.0 points under the applicable scoring schedule——2.0 points less than the Required Minimum Transit Service Score of 2.0. Pine Grove would be dead in the water at this point but for an unlikely, yet undisputed, factual twist. It turns out that JTA Stop #1397, which is located 0.48 miles from Pine Grove's proposed development, happens to qualify as a Public Bus Transfer Stop. Had Pine Grove identified Stop #1397 as its Transit Service, it legitimately would have been entitled to 5.5 points. In other words, Pine Grove could have offered an actual Public Bus Transfer Stop that is closer to its proposed development than Stop #4203 (and thus more valuable in terms of proximity points), but instead it identified a Public Bus Stop—— which it misrepresented as a Public Bus Transfer Stop——that was worth less in proximity points than Stop #1397 even if it truly were a Public Bus Transfer Stop, and is worthless as the Public Bus Stop it truly is. Houston Street and FHFC have framed their objection to Pine Grove's application in terms of responsiveness, contending that Pine Grove's failure to identify a Transit Service eligible for at least the Required Minimum Transit Service Score is a material deviation that the agency cannot waive. This has opened the door to Pine Grove's argument that falsely describing Stop #4203 in its Surveyor Certification Form as a Public Bus Transfer Stop worth 5.0 proximity points should be deemed a minor irregularity given the existence of Stop #1397, which everyone agrees is a Public Bus Transfer Stop that would have been worth 5.5 proximity points to Pine Grove, had Pine Grove relied upon Stop #1397. Pine Grove's position is part "no competitive advantage" (as indeed citing Stop #4203 was not advantageous in light of the superior alternative) and part "no harm, no foul." Before examining the questions of whether Pine Grove's designating Stop #4203 as its Transit Service was a deviation from the specifications and, if so, whether such a lack of responsiveness should be considered a material deviation or a minor irregularity, the undersigned wants to mention a point that the parties have not raised, but which nevertheless warrants consideration. Preliminarily, though, the undersigned stresses that no allegation was made, no evidence was received, and no finding is being made that Pine Grove intended to deceive FHFC by holding out Stop #4203 as a Public Bus Transfer Stop. Rather, although there is no direct evidence in the record, the logical and reasonable inference based on the circumstances is that Pine Grove simply made an unfortunate and costly mistake in failing timely to discover that Stop #4203 does not qualify as a Public Bus Transfer Stop, as Pine Grove honestly had believed. That said, by identifying Stop #4203 in its Surveyor Certification Form as a Public Bus Transfer Stop, Pine Grove unequivocally represented that the material facts concerning this particular stop satisfied the RFA's definition of a Public Bus Transfer Stop——and they did not. Not to put too fine a point on it, the representation that Stop #4203 is a Public Bus Transfer Stop was a false statement of material fact——objective fact at that, not ultimate fact involving the exercise of discretion or judgment, and not opinion. To be sure, this material misrepresentation was not intentionally false. But it was false. Like all applicants, Pine Grove was required to submit with its application a fully executed Applicant Certification and Acknowledgment Form. Among the statements therein whose truth Pine Grove confirmed is the following: In eliciting information from third parties required by and/or included in this application, the Applicant has provided such parties information that accurately describes the Development as proposed in this Application. The Applicant has reviewed the third party information included in this Application and/or provided during the credit underwriting process and the information provided by any such party is based upon, and accurate with respect to, the Development as proposed in this Application. Joint Ex. 3 at 26 of 101 (emphasis added). In signing this form, Pine Grove's agent "declare[d] and certif[ied] that [he] ha[d] read the foregoing and that the information is true, correct, and complete." As is now known, a third party (Pine Grove's surveyor) provided information about Stop #4203 that was not accurate with respect to the proposed development. Pine Grove's submission of third party information that contained a false statement of material fact (i.e., that Stop #4203 is a Public Bus Transfer Stop located 0.55 miles from the proposed development) was a deviation from the RFA's specifications, including the provisions of the Applicant Certification and Acknowledgment Form set forth above. The undersigned is inclined to believe that a false statement of material fact in a bid or similar response to a public solicitation should almost always be deemed a material deviation. Agencies reasonably and justifiably rely upon the statements of fact contained in such documents, and therefore the disincentives to making factual misstatements, even innocently, should be strong and consistently applied. Here, however, as mentioned, no party has urged that Pine Grove's application be deemed nonresponsive for misrepresenting the true nature of Stop #4203, and therefore the undersigned will not recommend that the case be decided on this basis. Nevertheless, it should be stated that to treat Pine Grove's application as having accurately identified Stop #4203 as a Public Bus Stop, which is the premise behind Houston Street and FHFC's position, is to waive the material misrepresentation in Pine Grove's Surveyor Certification Form——a significant, and arguably unduly generous, threshold concession to Pine Grove. Once the misrepresentation is overlooked, it is not obvious that a deviation exists that would make Pine Grove's application nonresponsive. Bus Stop #4203 meets the RFA's definition of a Public Bus Stop worth up to 2.0 points. Thus, it is an Eligible Service that does not depart from the specifications for a Public Bus Stop. Pine Grove's application was not "nonresponsive" for identifying a Public Bus Stop as its Transit Service. Located at a distance of 0.55 miles from the proposed development, Bus Stop #4203 was entitled to a score of 0.0 according to the RFA's scoring schedule, which requires that 0.0 points be awarded to a Public Bus Stop that is farther than 0.30 miles from the proposed development. That Bus Stop #4203 must be awarded no points does not, of itself, make Pine Grove's application nonresponsive; it just means that the application will receive fewer points than the maximum available for this item. The RFA pointedly does not state that reliance upon a Public Bus Stop located more than 0.30 miles from the proposed development will result in a finding of noncompliance, and it strongly implies otherwise by instructing that distant Public Bus Stops shall be given a score, albeit a score of zero. Pine Grove's application was not "nonresponsive" merely for identifying a faraway Public Bus Stop as its Transit Service. Because Bus Stop #4203 could be awarded no more than 0.0 points, however, Pine Grove's application fails to earn the Required Minimum Transit Service Score of 2.0, which makes it ineligible to be considered for funding. Being found ineligible for funding due to a low score is different from being deemed nonresponsive to the specifications. To be sure, in this instance the effect is the same, either way. But still, it is at best debatable whether there is any deviation here that FHFC could waive as a minor irregularity, even if it wanted to. Putting aside that technicality, the irreducible problem for Pine Grove is that, to remain in line for the award, it must receive at least 2.75 proximity points for its Transit Service. Pine Grove needs a Transit Service Score of 2.75 to get a raw score of 12.25 and hence an adjusted Total Proximity Score of 18. Without a Total Proximity Score of 18, Pine Grove will not have a perfect overall score of 23, and without a perfect overall score, Pine Grove is out of the lottery. Pine Grove's irreducible problem is insoluble because a Public Bus Stop such as Stop #4203 cannot receive more than 2.0 points, and Pine Grove needs 2.75. Therefore, even if FHFC could deem Pine Grove's reliance upon a Public Bus Stop that is situated beyond the 0.30-mile limit a "minor irregularity"; and even if FHFC could then award Pine Grove the full 2.0 points for Stop #4203, these extraordinary (and probably impermissible) steps still would be insufficient to keep Pine Grove in first place for preliminary funding. Obviously FHFC could not award Pine Grove more than the maximum score of 2.0 points for a "nonresponsive" distant Public Bus Stop. The only way for Pine Grove to hold on to its preliminary funding would be for FHFC to treat Stop #4203 as a Public Bus Transfer Stop even though, pursuant to the unambiguous specifications of the RFA, it is a Public Bus Stop. This, it seems to the undersigned, would not be a matter of waiving a "minor irregularity," but instead would amount to pretending that one clearly defined Transit Service (Public Bus Stop) is another clearly defined Transit Service (Public Bus Transfer Stop), for the sole purpose of raising an applicant's score above that which the RFA plainly requires. Such agency conduct would be both clearly erroneous and contrary to competition——in short, impermissible. Pine Grove has a point when it asserts that the existence of Stop #1397 means that its proposed development actually would be located close to adequate transportation services——a fact that is undisputed——and therefore that the needs behind the Transit Services component of the proximity criteria would be fulfilled notwithstanding Pine Grove's misplaced reliance upon Stop #4203. Rejecting Pine Grove's application for lack of a nearby Transit Service while knowing that a nearby Transit Service exists does seem somewhat unfair. This sense of unfairness is ameliorated in part, however, by the recognition that Pine Grove's preliminary selection was, after all, the result of the "luck of the draw"——not qualitative superiority over other applicants. It is eliminated by the recognition that to accept Pine Grove's application as the winner would require FHFC to give Pine Grove a Transit Service Score to which it clearly is not entitled——in effect handing out "bonus points" ultimately explicable, if with a wink and a nod, only as an impermissible tribute to Stop #1397.2/ In sum, Pine Grove's application was technically responsive to the RFA. Unbeknownst to Pine Grove and FHFC, however, Pine Grove's application contained a material misrepresentation——namely that Stop #4203 is a Public Bus Transfer Stop——upon which FHFC reasonably relied in giving Pine Grove a Transit Service Score of 5.0, which, under the RFA's unambiguous scoring schedule, was the correct score to give for a Public Bus Transfer stop located 0.55 miles from the proposed development. As everyone now agrees, Stop #4203 is not a Public Bus Transfer Stop, but a Public Bus Stop——an Eligible Service, without question, but one which, under the RFA's scoring schedule, earns just 0.0 points. Adjusting Pine Grove's Transit Service Score to 0.0, as must be done after forgiving and correcting the misrepresentation, makes Pine Grove's application ineligible for further consideration for failure to achieve the Required Minimum Transit Score of 2.0. Even if eligible, however, Pine Grove necessarily would be out of the running, for with a Transit Service Score of 0.0 (ignoring eligibility), Pine Grove's overall score falls short of the perfect 23 that seven other competitors achieved. If Pine Grove is eliminated from consideration, as the undersigned will recommend, the next applicant in line is Houston Street, holder of the second lowest lottery number. Pine Grove asserts that Houston Street's application is nonresponsive for two reasons: (1) failure to demonstrate site control and (2) failure to prove its ability to proceed. These issues will be taken up in turn. "Evidence of Site Control" is an unscored Mandatory Item. The RFA instructs that the "Applicant must demonstrate site control by providing, as Attachment 14 to Exhibit A, the documentation required . . . below. If the proposed Development consists of Scattered Sites, site control must be demonstrated for all of the Scattered Sites." RFA at 31. As relevant to this case, the document necessary to establish site control is an "Eligible Contract," which is an instrument defined in pertinent part as follows: For purposes of the RFA, an eligible contract is one that has a term that does not expire before July 31, 2015 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 July 31, 2015; specifically states that the buyer's remedy for default on the part of the seller includes or is specific performance; and the buyer MUST be the Applicant unless an assignment of the eligible contract which assigns all of the buyer's rights, title and interests in the eligible contract to the Applicant, is provided. RFA at 31. Houston Street's proposed development would be located on property comprising two contiguous parcels, each of which Houston Street has under contract to purchase. Houston Street provided both contracts as evidence of site control, attaching them to its application as instructed. One of the two parcels is 0.09 acres owned by Kesher Investments, LLC ("Kesher"), for which Houston Street has agreed to pay $750,000. Based on the Real Estate Purchase Agreement supplied as evidence of site control, the Kesher parcel remained on the market as of the date Houston Street submitted its application to FHFC. Paragraph 18 of the contract provides: RIGHT OF FIRST REFUSAL. It is understood that Purchaser is planning to apply for housing tax credits from the FHFC. Seller shall continue to market the property until FHFC approved or denies Purchasers application for tax credits, bonds or other similar financing. If any other written purchase offer for Property is submitted and deemed acceptable to Seller, the offer shall be presented to Purchaser and Purchaser shall have ten (10) days in which to match the terms of written offer or terminate this Agreement and receive a full refund of the Deposit and neither party shall have any further obligations under this Agreement. Only exception to this First Right of Refusal is if such submitted written offer is from an entity that would be a competitor for FHFC tax credits, bonds or other type of similar financing then that offer will be deemed unacceptable. Joint Ex. 2 at 65 of 111. The Real Estate Purchase Agreement requires the parties to close on the Kesher parcel "no later than August 31st, 2015, unless the closing date is extended." Joint Ex. 2 at 59 of 111. The agreement provides extension options, as follows: Purchaser shall have the right to extend the closing for the payment of Two Thousand Five Hundred Dollars ($2,500) per 30 day ("Extension Period") for Four (4) Extension Periods. The extension fee(s) shall be released to Seller by the Escrow Agent immediately upon notice from Purchaser to Seller to extend the contract. Payment of extension fee(s) to be deducted from the Earnest Money Deposit. All extension fee(s) released to Seller through Escrow Agent shall be non-refundable, but applicable to the purchase price, and shall be deemed to be liquidated damages in the event this transaction does not close and is earned as such by Seller. Joint Ex. 2 at 59 of 111. The other parcel is owned by Downtown Station, LLC. It is 0.50 acres, and Houston Street has agreed to purchase the property for $975,000. Like the Kesher parcel, this half-acre piece of land remained on the market as of the date Houston Street submitted its application, according to a provision of the Real Estate Purchase Agreement which provides as follows: Continued Marketing/Right of First Refusal. It is agreed that Seller herein, shall continue to market the subject Property and entertain any and all offers to purchase the said Property by others. Should Seller receive an offer to purchase the subject property from any other person or entity, with terms and conditions acceptable to Seller, Seller shall provide Purchaser herein notice of same. Purchaser shall have ten (10) days from notice of the foregoing that it wishes to purchase the subject property on the same terms and conditions as offered by another buyer. If Purchaser herein does not agree to purchase the subject property in accordance with said terms and conditions, then Seller shall have the right to proceed to sell the subject property to the subsequent buyer and this Agreement shall be null and void, at which time any and all deposits placed by Purchaser herein shall be returned to Purchaser. Joint Ex. 2 at 80 of 111. Closing on the Downtown Station parcel is to occur "no later than August 31st, 2015, unless the closing date is extended." Joint Ex. 2 at 74 of 111. The purchase and sale agreement gives the buyer four successive options to extend the closing date for 30-day periods, respectively, upon payment of $2,500 for each extension, pursuant to a provision which is identical to the one in the Kesher agreement, quoted above. Pine Grove argues that Houston Street has failed to demonstrate site control because the properties it has under contract are still for sale, and because exercising a right of first refusal could require Houston Street to meet conditions besides the payment of additional monies. Pine Grove's position first raises the question of whether both of the agreements Houston Street provided with its application satisfy the definition of an "Eligible Contract." If this question were answered in the negative, then Houston Street's application would be nonresponsive because the submission of an Eligible Contract is necessary to demonstrate site control. If the answer were affirmative, however, a second question would arise, and that is whether an Eligible Contract is sufficient to demonstrate site control. If so, then Houston Street's application would be responsive. If not, then it would be necessary to scrutinize the terms and conditions of the Eligible Contracts to ascertain whether they demonstrate site control or (as Pine Grove maintains) a lack thereof. The contracts that Houston Street submitted satisfy the plain and literal meaning of the language used in the RFA to define an Eligible Contract. Neither agreement expires before July 31, 2015, and in any event both agreements contain extension options which Houston Street can exercise solely by paying additional monies. The other requirements of the relevant definition, e.g., the availability of specific performance as a buyer's remedy, are met. Therefore, Houston's Street's application is responsive to the specifications mandating that an Eligible Contract be provided as evidence of site control. The foregoing determination gives rise to the question of whether an Eligible Contract is sufficient to establish site control. On this point, the RFA is ambiguous. The provisions dealing with site control reasonably could be understood as directing that the submission of an Eligible Contract is both necessary and sufficient to establish the requisite degree of control over the proposed development site. Under this interpretation, the inquiry into Houston Street's site control ends, for Houston Street provided FHFC with Eligible Contracts relating to the parcels it hopes to develop. Alternatively, the RFA's site control provisions reasonably could be read as directing that the submission of an Eligible Contract is necessary, but not sufficient, to prove the requisite degree of site control. Pine Grove has offered evidence showing that, in past cycles, FHFC has examined the terms and conditions of "Qualified Contracts" (the substantial equivalent of Eligible Contracts under the RFA) to determine the existence of site control, and found the site-control evidence to be insufficient. This suggests that providing the necessary contract does not necessarily demonstrate site control. Indeed, Pine Grove asserts that under FHFC's previous interpretations of "site control," Houston Street's documentation should be found wanting. In one earlier instance, FHFC expressed concern over a Qualified Contract that was subject to a right of first refusal belonging to a third party. In other words, by exercising its right of first refusal, a third party over whom the applicant had no control could purchase the proposed development site, and the applicant had no contractual means of stopping such a sale, which would deprive the applicant of the subject site. In another past instance, FHFC found fault with a provision in a Qualified Contract which gave the seller the right (until a certain date) to sell the property to a third party but did not grant the applicant a right of first refusal. Here then, once again, a third party over whom the applicant had no control could purchase the proposed development site, and the applicant had no contractual means of stopping such a sale, which would deprive the applicant of the subject site. Despite some superficial similarities, Houston Street's situation is distinguishable from these historical situations because Houston Street, as a holder of first-refusal rights, possesses a measure of control over the potential sale(s) of the development site(s) to a third party or parties that the previous applicants lacked. Unlike them, Houston Street has at its disposal contractual means of stopping another person from buying the subject parcel(s). The decision whether to meet the terms and conditions of a competing offer is Houston Street's to make; therefore, Houston Street controls its own destiny with regard to the purchase of the proposed development site. Consequently, assuming that an Eligible Contract is not sufficient under the RFA to prove site control, but instead must be examined to ascertain whether site control exists, the undersigned determines that Houston Street's sellers' continued marketing of the parcels comprising the development site subject to Houston Street's rights of first refusal is not inconsistent with Houston Street's retention of adequate control over its acquisition of the site. In short, it is determined, as a matter of ultimate fact, that Houston Street has demonstrated site control adequately for purposes of the RFA. At the very least, it is determined that FHFC's determination to the same effect was not clearly erroneous.3/ The RFA requires that an applicant provide documentation establishing its "Ability to Proceed," including the following items: Status of Site Plan Approval. The Applicant must provide, as Attachment 7 to Exhibit A, the properly completed and executed Florida Housing Finance Corporation Local Government Verification of Status of Site Plan Approval for Multifamily Developments form (Form Rev. 11-14). Appropriate Zoning. The Applicant must provide, as Attachment 8 to Exhibit A, the applicable properly completed and executed verification form: (a) Florida Housing Finance Corporation Local Government Verification that Development is Consistent with Zoning and Land Use Regulations form (Form Rev. 11-14) or (b) Florida Housing Finance Corporation Local Government Verification that Permits are not Required for this Development form (Form Rev. 11-14). RFA at 60. Attachment 7 relates to the status of the project's site plan approval. The form directs the person who signs it to mark one of three alternative statements to signify which is applicable to the proposed development. On the form attached to Houston Street's application, the following statement was selected: ? The above-referenced Development is (a) new construction, or (b) rehabilitation with new construction, or (c) rehabilitation, without new construction, that requires additional site plan approval or similar process, and (i) this jurisdiction provides either preliminary site plan approval or conceptual site plan approval which has been issued, or (ii) site plan approval is required for the new construction work and/or the rehabilitation work; however, this jurisdiction provides neither preliminary site plan approval nor conceptual site plan approval, nor is any other similar process provided prior to issuing final site plan approval. Although there is no preliminary or conceptual site plan approval process and the final site plan approval has not yet been issued, the site plan, in the zoning designation stated above, has been reviewed. The necessary approval and/or review was performed on or before the submission deadline for the above referenced FHFC Request for Proposal/Application by the appropriate City/County legally authorized body; e.g. council, commission, board, department, division, etc., responsible for such approval process. Joint Ex. 2 at 39 of 111. The Local Government Verification of Status of Site Plan Approval must be "signed by the applicable City's or County's Director of Planning and Zoning, chief appointed official (staff) responsible for determination of issues related to site plan approval, City Manager, or County Manager/Administrator/Coordinator." Houston Street's form was signed by Folks Huxford, Chief of the Current Planning Division for the City of Jacksonville. By signing the form, Mr. Huxford certified that he had the authority "to verify status of site plan approval as specified above and . . . that the information stated above is true and correct." Mr. Huxford was an acceptable signatory. Pine Grove asserts that Houston Street did not obtain the conceptual site plan approval for which local law allegedly provides, and therefore that Houston Street's Local Government Verification of Status of Site Plan Approval form is incorrect and, accordingly, nonresponsive. Pine Grove bases its argument on certain provisions of the Jacksonville, Florida, Code of Ordinances, about whose meaning Pine Grove disagrees with Mr. Huxford, and on the fact that no conceptual site plan approval had been issued for Houston Street's proposed development. A good place to start in evaluating Pine Grove's position is with a look at the site-plan status form's purpose. It is clear from the language of the form that what FHFC wants, in a nutshell, is an authoritative statement from the local government advising that the local government either has approved, or is currently unaware of grounds for disapproving, the proposed development's site plan. The relevance of this statement lies not so much in its being correct, per se, but in the fact that it was made by a person in authority whose word carries the weight of a governmental pronouncement. Put another way, the statement is correct if made by an official with the authority to utter the statement on behalf of the local government; it is a verbal act, a kind of approval in itself. FHFC might, of course, deem a fully executed site-plan status form nonresponsive for a number of reasons. If it were determined that the person who signed the form lacked the requisite authority to speak for the government; if the statement were tainted by fraud, illegality, or corruption; or if the signatory withdrew his certification, for example, FHFC likely would reject the certification. No such grounds were established in this case, or anything similar. Instead, Pine Grove contends that Mr. Huxford simply erred, that he should not have signed the Local Government Verification of Status of Site Plan Approval. Pine Grove makes a reasonable, or at least plausible, case to this effect. The fatal flaw in Pine Grove's argument, however, is that the decision whether to grant or deny this particular form of (preliminary) local governmental approval to Houston Street's site plan must be made by the local government having jurisdiction over the proposed development, i.e, the City of Jacksonville——not by Pine Grove, Houston Street, FHFC, or the undersigned. Mr. Huxford was empowered to make the statement for the city. He made it. No compelling reason has been shown here to disturb FHFC's acceptance of Mr. Huxford's certification as a valid expression of the City of Jacksonville's favorable opinion, as of the application submission deadline, regarding Houston Street's site plan. Attachment 8 relates to local zoning and land use regulations and requires a local official to confirm the following representations: The proposed number of units and intended use are consistent with current land use regulations and the referenced zoning designation or, if the Development consists of rehabilitation, the intended use is allowed as a legally non-conforming use. To the best of my knowledge, there are no additional land use regulation hearings or approvals required to obtain the zoning classification or density described herein. Assuming compliance with the applicable land use regulations, there are no known conditions which would preclude construction or rehabilitation (as the case may be) of the referenced Development on the proposed site. Joint Ex. 2 at 41 of 111. Mr. Huxford signed Houston Street's form, verifying that the proposed development is consistent with the City of Jacksonville's "local land use regulations and the [applicable] zoning designation." Mr. Huxford had the authority to make this statement on the city's behalf. Pine Grove claims that Houston Street's Local Government Verification That Development Is Consistent With Zoning and Land Use Regulations form is incorrect and nonresponsive because Houston Street has not yet obtained all the necessary land use approvals, including the allegedly available conceptual site plan approval mentioned previously. Pine Grove's argument in this regard is identical to its objection to Houston Street's site-plan status form, which was rejected above. For the reasons previously given, therefore, it is found that FHFC did not err in accepting Mr. Huxford's verification of consistency with local zoning and land use regulations as a valid expression of the City of Jacksonville's position on these matters in relation to Houston Street's proposed project. Thus, it is determined, as matters of ultimate fact, that Houston Street's application satisfied the RFA's specifications pertaining to Evidence of Site Control and Ability to Proceed, and that FHFC made no mistakes in deeming the application compliant with these requirements.
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 rescinding the preliminary award to Pine Grove and designating Houston Street as the recipient of the tax credits being made available for the development in the "Family or Elderly Demographic Commitment" category to be built in Duval County. DONE AND ENTERED this 18th day of August, 2015, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 18th day of August, 2015.
The Issue The issue is whether Jonathan A. Mantay, violated the Florida Code of Ethics for Public Officers and Employees.
Findings Of Fact Pursuant to Article II, Section 8, Florida Constitution, and Section 112.320, the Commission is empowered to serve as the guardian of the standards of conduct for the officers and employees of the state. Pursuant to Sections 112.324 and 112.317, the Commission is empowered to conduct investigations and to issue a Final Order and Public Report recommending penalties for violations of the Code of Ethics for Public Officers and Employees (Code of Ethics). Respondent Mantay is subject to the Code of Ethics. Mr. Mantay, during times pertinent, was County Manager of Bay County, Florida, and is a reporting individual, as that term is used in the Code of Ethics, and is required to file annual financial disclosures with the Bay County Supervisor of Elections, as provided by Section 112.3145(2)(c). In 2001, Mr. Mantay left his position and moved to metropolitan Portland, Oregon. On or about August 31, 1999, the Bay County Commission was addressing the problem of inmate overcrowding in its county correctional facilities, which were operated by CCA. On or about that time, the county correctional facility exceeded capacity by about 352 inmates. The Bay County Commissioners decided to address the issue. The Bay County Commission directed Mr. Mantay and his staff to study the problem and to recommend courses of action. As a result of the study, two possible courses of action were recommended. One possible course of action was the adoption of the "Lifeline" program operated by CCA in Nashville, Tennessee, which CCA claimed would reduce recidivism by teaching inmates life skills and addressing drug abuse, among other things. CCA's corporate headquarters is located in Nashville. The other possible course of action was to emulate the program operated by Sheriff Joe Arpaio, of Maricopa County, Arizona. Sheriff Arpaio's program consists of housing inmates in tents that are sufficiently primitive that inmates, after having had the tenting experience, avoid repeating it either by not committing crimes in Maricopa County, or by committing them elsewhere. In order to evaluate the two courses of action, the Bay County Commission decided that three commissioners and certain staff should travel to the two sites and evaluate the programs. Mr. Mantay, Chief of Emergency Services Majka, Jr., and County Attorney Zimmerman, were among those who were designated to travel to Nashville and Phoenix. Mr. Mantay was not involved in planning the trip. He relied on the County Attorney's Office to coordinate the event. County Attorney Zimmerman called Mr. Wiggins on February 6, 2000, and inquired if CCA would pay for the airline tickets to Nashville. Mr. Zimmerman told Mr. Wiggins, when he asked CCA to pay for the trip, that having CCA pay the airfare, ". . . was the County's preferred way of doing things, and, in fact, that's when he recounted the story of the County taking some trips to New York and maybe some other places." Mr. Wiggins was not authorized by CCA to approve the payment of travel expenses for customers or others. He forwarded County Attorney Zimmerman's request to James Ball, his supervisor. Subsequently, Mr. Wiggins happened upon the CEO of CCA, a Dr. Crants, while walking about the Nashville headquarters of CCA. Dr. Crants directed Mr. Wiggins to fund the trip. Ultimately, as a result of these conversations, CCA paid Trade Winds Travel, Inc., of Panama City, Florida, for the cost of the air travel for the entire Bay County contingent to Nashville, and thence to Phoenix, and back to Panama City. The evidence is not conclusive as to whether it was the intent of CCA to fund the trip beyond Nashville, but they paid for the cost of the airfare for the entire trip. The request for the payment and the request to visit CCA in Nashville was driven by Bay County's needs, not by the needs of CCA. Bay County was one of CCA's most valued customers, however, and CCA was motivated to respond to their request. This was especially true because one of CCA's first contracts to provide correctional services was with Bay County. County Attorney Zimmerman's "marching orders" for many years was that if there was an opportunity to require a third party to pay an expense, then the third party should pay rather than Bay County. That policy is reflected in a variety of Bay County ordinances including the requirement that developers pay for the cost of permitting. The third party payor policy was also reflected in a 1997 trip where Westinghouse was required by the County Commissioners to pay for the commissioners' and County staff's trip to Vancouver, B.C., and Long Island, New York, to evaluate the transfer of the resource recovery facility to another vendor. This was the trip that County Attorney Zimmerman discussed with Mr. Wiggins. This policy was set forth in a letter by County Attorney Zimmerman dated October 30, 1997, which informed the County Commissioners that all expenses in connection with their travel, and with the travel of staff, would be funded by Westinghouse. He further stated that, "[it] is our opinion that the payment of these necessary expenses are not 'gifts,' as that term is defined in State law." Prior to the trip to Nashville, Mr. Mantay had a discussion with County Attorney Zimmerman with regard to whether the fact-finding trip would be "legal." One of the reasons he asked that question was that County Commissioners would be traveling together and he was concerned about "sunshine" issues. County Attorney Zimmerman said that the trip was legal. Mr. Mantay also recognized that this trip, like the trip to New York and British Columbia, was different from attending a seminar alone. Mr. Mantay received his airline ticket when a courier from Trade Winds Travel brought it to him, along with an invoice that he sent to Mr. Zimmerman. On Thursday, February 24, 2000, Messrs. Zimmerman, Majka, and Mantay, traveled with Bay County Commissioners Danny Sparks, Richard Stewart, and Carol Atkinson, and a television reporter, Carmen Coursey, by commercial air, to Nashville, Tennessee. On Saturday, February 26, 2000, they traveled to Phoenix, Arizona, and they returned to Panama City on Tuesday, February 29, 2000. The trip was authorized by the Bay County Commission subsequent to several public discussions concerning the need for an on-site visit to Nashville and Phoenix. There was a legitimate public purpose for the trip. Channel 13 television news reporter, Carmen Coursey accompanied the officials. It is clear that there was nothing about the trip that was accomplished sub rosa. The airfare was paid by CCA directly to Trade Winds Travel, Inc. CCA did not ask for or receive reimbursement from either Bay County or the travelers. The cost of Mr. Mantay's airfare for the entire trip was $1,257. Mr. Mantay did not learn that CCA paid for the airfare until 2003 when he was notified of the ethics investigation. Mr. Mantay at the time of the trip had no reason to contemplate the cost. After learning that CCA paid the tariff, he also learned that the cost of the trip exceeded $100. Upon arrival in Nashville, Mr. Mantay, and the other travelers were greeted by Mr. Wiggins, who transported them to the Downtown Courtyard Marriott Hotel in a van. The cost of the transportation was paid by CCA, and CCA neither asked for nor received reimbursement from Bay County or the travelers. The value was not established. Mr. Mantay did not know who paid for the ground transportation. The travelers ate the evening meal, February 24, 2000, as a group. Someone paid for Mr. Mantay's dinner, but the record does not indicate that CCA paid for it. On Friday, February 25, 2000, Mr. Mantay and the other travelers toured the Davidson County (Tennessee) Correctional Facility from 9:00 a.m. until noon. They ate lunch at the CCA corporate headquarters provided by CCA. That afternoon they met with Mr. Wiggins and other representatives of CCA. They discussed the possibility of CCA providing "Lifeline" and "Chances" programs operated by CCA, to Bay County. That evening, at CCA's expense, Mr. Mantay and the other travelers were transported to a dinner that was paid for by CCA. The cost of the transportation and dinner was paid by CCA, and CCA neither asked for nor received reimbursement from Bay County or the travelers. Mr. Mantay was not aware of either the cost of the dinner or who paid for it. Mr. Mantay and the other travelers stayed two nights at the Marriott at a cost of $224.24. The cost of the hotel was paid by CCA, and CCA neither asked for nor received reimbursement from Bay County or the travelers. Mr. Mantay learned after checking out from the Marriott, on February 26, 2000, when he attempted to pay a personal telephone bill, that CCA had paid the hotel bill, but there is no evidence of record that he knew the amount, or that it was an amount more than $100. No evidence was adduced proving that Mr. Mantay reasonably believed at that time that it was of a value of more than $100. Mr. Mantay paid cash for his personal telephone call during the check-out process. On Saturday, February 26, 2000, Mr. Mantay and the other travelers departed for Phoenix by air and observed Sheriff Arpaio's program the following Monday morning. They also toured the Phoenix Fire Department. The travelers, with the exception of County Attorney Zimmerman, stayed at the San Carlos Hotel. Mr. Mantay 's hotel bill in Phoenix was paid with a credit card issued to him by Bay County. On Tuesday February 29, 2000, they all returned to Panama City. Bay County originally contracted with CCA to operate their detention facilities on September 3, 1985. This contract had a term of 20 years; however, it was amended on September 16, 1996, to reflect an expiration date of September 24, 1999. Other extensions followed. An amendment dated June 18, 2000, provided that "CCA shall operate the 'Lifeline Program' through September 1, 2001." On May 15, 2001, the contract was extended to September 30, 2006. Mr. Mantay did not derive any person financial benefit as a result of CCA paying the lodging expenses in Nashville or as a result of CCA paying for his airfare. At no time has he attempted to reimburse CCA for the cost of the trip. Mr. Mantay did not receive per diem or any amount in excess of the actual cost of the trip. The entity receiving a benefit from the trip was Bay County. Mr. Mantay had a County credit card in his possession but by County policy he was not allowed to charge meals on it. He did, as noted, use it to pay the hotel bill in Phoenix. His usual practice, when traveling on behalf of the County, is to obtain receipts and file an expense report at the conclusion of the trip. He would thereafter be reimbursed for his travel expenses. He did not file an expense report subsequent to this travel. It is found as a fact that the cost of the airfare to Nashville and back to Panama City and the cost of the hotel in Nashville totaled more than $100 and Mr. Mantay became aware that the cost, when aggregated, was more than $100. Mr. Mantay could not have learned this, however, until more than three years after the trip because that is when he learned that CCA had paid for the airfare. It was not uncommon for Mr. Wiggins and other CCA officials to appear before the Bay County Commissioners on behalf of CCA, or to otherwise interact with representatives of CCA. Brad Wiggins was a lobbyist, as that term is defined in Section 112.3148(1)(b)1., and others interacted with Bay County on behalf of CCA and they were lobbyists also. During times relevant, Bay County did not maintain a lobbyist registration system.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission on Ethics issue a Final Order and Public Report finding that Jonathan A. Mantay did not violate Section 112.3148(4), Florida Statutes, and dismissing the complaint filed against him. DONE AND ENTERED this 17th day of August, 2006, in Tallahassee, Leon County, Florida. S HARRY L. HOOPER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 17th day of August, 2006. COPIES FURNISHED: Linzie F. Bogan, Esquire Advocate for the Florida Commission on Ethics Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050 Albert T. Gimbel, Esquire E. Gary Early, Esquire Messer, Caparello & Self, P.A. Post Office Box 1876 Tallahassee, Florida 32302-1876 Kaye Starling, Agency Clerk Florida Commission on Ethics Post Office Drawer 15709 Tallahassee, Florida 32317-5709 Bonnie J. Williams, Executive Director Florida Commission on Ethics Post Office Drawer 15709 Tallahassee, Florida 32319-5709 Philip C. Claypool, General Counsel Florida Commission on Ethics Post Office Drawer 15709 Tallahassee, Florida 32319-5709
Findings Of Fact This cause comes on for consideration based on the petition filed by Ralph Pinkerton and Lillian S. Pinkerton, which challenges the determination made by the Department of Revenue of the State of Florida, that the Petitioner, Ralph Pinkerton is the holder of an account receivable from the corporation, known as Pinkerton-Hays Lumber Co., Inc., a Florida corporation, in the calendar years 1974, 1975 and 1976. The petition further challenges the determination by the Department of Revenue of the State of Florida that the taxpayers Ralph and Lillian Pinkerton are liable for intangible taxes for the calendar years 1974, 1975 and 1976, in addition to the liability shown on their tax returns for those years. Respondent's Composite Exhibit number 5, admitted into evidence, contains copies of the intangible tax returns of the Petitioners together with the intangible tax audit and input document for those subject years, as prepared by the Respondent. These audits form the basis for the Respondent's claim to additional intangible taxes. The general statutory authority asserted is section 199.232, F.S., and section 199.052(8), F.S. This intangible tax audit for the three years in question, and subsequent assessment is premised specifically on the Respondent's claim that the Petitioners are subject to an annual one mill tax on the interest income of the alleged account receivable. The Respondent claims that such an account receivable is taxable under the terms of Section 199.023(1)(d) and Section 199.122(5), F.S. The Respondent continued to claim this theory of taxation until the date of the hearing. At the hearing, the Respondent suggested a second or alternative theory of taxation. That theory was that the Petitioner, Ralph Pinkerton, had made a "gift" to the Pinkerton-Hays Lumber Co., Inc., in the form of a shareholder's contribution to capital. This contribution, according to the Respondent, then becomes the shareholder's equity in the form of capital surplus, which would be subject to tax based upon the value of that equity effective January 1 of each calendar year. This holding, by the Respondent's alternative claim of taxation would be taxable under Section 199.023(1)(b) and Section 199.122(3), F.S. The Petitioners object to either theory of taxation. They object to the initial theory or taxation under the "account receivable concept" based upon the argument that in substance and actuality the transaction which fostered the funds involved in the alleged account receivable involved a loan from Monticello Production Credit Association to Pinkerton-Hays Lumber Co., Inc., and according to the Petitioners they are not liable for Florida intangible personal property taxes on that transaction. The Petitioners object to the "gift" theory of taxation upon the preceding ground, and upon the ground that they were not duly noticed of any alternative theory of taxation prior to the hearing and should not be called upon to address such a theory. For reasons stated in the conclusions of law section of this recommended order the Respondent is allowed to advance the "gift" theory of taxation in the course of this proceeding. The transaction referred to in the synopsis of the position of the parties, is a loan made from the Monticello Production Credit Association to Ralph Pinkerton. (The Monticello Production Credit Association is now known as the Big Bend Production Credit Association.) The written note entered into between the Petitioner Ralph Pinkerton and the Credit Association can be found in Respondent's Exhibit number 1, admitted" into evidence. Briefly, the terms are that Ralph Pinkerton will pay $64,000.00 per year beginning May 1, 1973 and ending May 1, 1979 and interest will be determined in accordance with the terms of the note. The total amount of the loan is $448,000.00, subject to appropriate deductions of the lending institution. It is the stated contention that the proceeds of that loan were to be used as financial assistance to operate the Pinkerton-Hays Lumber Co., Inc., which is a sawmill operation. Pinkerton further states that the reason that he approached the Production Credit Association was because he was unable to borrow money from local banks to finance the lumber company's business, due to the poor collateral position of a sawmill. The Monticello Production Credit Association was only allowed to loan money to individuals, and this is why Ralph Pinkerton claims that the Pinkerton- Hays Lumber Co., Inc., was not obligated on the note, in its name. Intangible personal property taxes were paid on the aforementioned note from Pinkerton to the Monticello Production Credit Association, and those taxes constitute the sole amount of intangible personal property taxes that have been paid to the Respondent under the terms and conditions of the loan obligation and events that transpired subsequent to the loan. Other features of the loan, include a vote by the stockholders and directors of Majet, Inc., to mortgage and put up as security 2,956 acres of land in Taylor and Madison counties, Florida for the loan from Monticello Production Credit Association to Ralph Pinkerton. A condition to this pledge of security was that Pinkerton-Hays Lumber Co., Inc., be willing to guarantee the said mortgage. The minutes of this Board of Directors meeting which occurred on May 18, 1972 is a part of Petitioner's Composite Exhibit "E", admitted into evidence. In fact, the land was mortgaged as security for the loan. (The Majet Corporation has 100 shares of common stock outstanding, 1 share of which is owned by Ralph Pinkerton; 97 shares are owned by Pinkerton-Hays Lumber Company Inc.; 1 share is owned by John H. Parker, Jr., and 1 share is owned by Byron Butler. Pinkerton-Hays Lumber Co., Inc., has 50 shares of stock and Ralph Pinkerton owns 48 of those shares. Lillian Pinkerton owns 1 share of stock in Pinkerton-Hays Lumber Company, Inc.) On the same date that Majet's, Inc., stockholders and directors met; the stockholders and directors of Pinkerton-Hays Lumber Company, Inc., met and as reflected in the minutes of the meeting which is part of Composite Exhibit "E", admitted into evidence; discussion was entered into on the subject of the loan from the Monticello Production Credit Association to Ralph Pinkerton. The amount stated in the meeting was $400,000.00. It was also stated in the minutes that the Monticello Production Credit Association desired and insisted as a condition of the loan that Pinkerton-Hays Lumber Company, Inc., guarantee the payment of said loan. In reality, as shown by the stipulation filed by the parties after the conclusion of the hearing, (which stipulation is made a part of this record), the Monticello Production Credit Association relied upon this statement in the corporate minutes of Pinkerton-Hays Lumber Company, Inc., dated May 18, 1972, as constituting a guarantee for the loan previously described up to the amount of $400,000.00. However, there was no insistance that this guarantee be made and the Monticello Production Credit Association indicated that such guarantee is not normally required, and in the case of the loan in question will be considered as a circumstance in the borrower's favor, according to the Association. The proceeds of the loan were taken by Ralph Pinkerton and placed into a special bank account in the name of Ralph Pinkerton and Pinkerton-Hays Lumber Company, Inc. No note or other obligation was signed indicating a loan from Pinkerton to the corporation. The proceeds were however, carried on the corporation's books as a liability. It was shown as a liability in the sense of being reported as a loan from the Monticello Production Credit Association to the Pinkerton-Hays Lumber Company, Inc. The corporation's books and intangible tax returns for the years 1974, 1975 and 1976, which returns are found in Composite Exhibit number 6, admitted into evidence, do not indicate any form of loan from a stockholder to the corporation. Nonetheless, the company used the proceeds of the loan and Ralph Pinkerton made no use of those proceeds, in his individual capacity. In the year 1974 when the payment to Big Bend Production Credit Association came due, Pinkerton-Hays paid Ralph Pinkerton and he in turn paid Big Bend Production Credit Association. These payments were by separate drafts. In 1975 and 1976, Ralph Pinkerton paid Big Bend Production Credit Association when the annual payment came due and in turn was paid by Pinkerton-Hays for the amount of the loan due in that year, without the benefit of any interest which had accrued between the time that Pinkerton had paid the Association and Pinkerton-Hays had paid him. The individual Income tax returns of Ralph and Lillian Pinkerton for the years 1974, 1975 and 1976 found consecutively as Respondent's Exhibits number 2, number 3, and number 4, admitted into evidence, reflect the interest paid by Ralph Pinkerton to Big Bend Production Credit Association and the interest income received from Pinkerton-Hays Lumber Company, Inc., for those three years. It is he alleged interest income which the Respondent seeks to place an intangible tax against for the years 1974, 1975 and 1976. Under these facts the Petitioners assert that there has been only one transaction in which Ralph Pinkerton acted to borrow money in his Individual name for the benefit of Pinkerton-Hays Lumber Company, Inc. Furthermore, they state that it is only because of the special circumstances that Pinkerton-Hays did not enter into its own loan agreement. The Petitioners go on to assert that the Pinkerton-Hays carried the loan on its books and records as a loan directly from the Production Credit Association, and because of this no debtor account as payable to Ralph Pinkerton exist. The loan proceeds by their view have been used by Pinkerton-Hays and not by Ralph Pinkerton individually. Under this circumstance the Petitioners are of the persuasion that Ralph Pinkerton acted as an accommodation maker for Pinkerton-Hays and they offer as authority the case of Coast National Bank v. Bloom, 174 A. 576, 578, 579; 113 N.J. law 597; 95 A.L.R. 528. For further authority they cite, Section 673.415(5), F.S. which states: "An accommodation party is not liable to the party accommodated, and if he pays the instrument has the right of recourse on the instrument against such party." Under the Petitioners' view since he is an accommodation maker, Ralph Pinkerton has not made a loan to the corporation. Finally, because the intangible tax was paid on the recording of the note from Ralph Pinkerton to Monticello Production Credit Association, to the Petitioners this is a non-reoccurring tax. No further tax is due, by their rationale. As stated before the Respondent's theory of taxation resides under alternative theories of treating the loan proceeds as an account receivable or gift. The Respondent perceives the treatment of the loan proceeds as a two step transaction, whereas the Petitioner treats the matter as a loan from Monticello Production Credit Association to Pinkerton-Hays Lumber Company, Inc., from the Respondent's point of view the first step of the transaction is the loan made from Monticello Production Association to Ralph Pinkerton and the second step is the loan or gift from Ralph Pinkerton to Pinkerton-Hays Lumber Company, Inc. To the Respondent, there is no accommodation maker because Section 673.401(1), F.S., reads that: "No person is liable on an instrument unless his signature appears thereon." therefore Ralph Pinkerton is the sole obligor on the note. In addition says the Respondent, Section 673.415(1), F.S., states: "An accommodation party is one who signs the instrument in any capacity for the purpose of lending his name to another party to it." On that basis, under the argument of the Respondent, Ralph Pinkerton can not be an accommodation maker, unless the company also is the maker of the note. Examining the "conduit" position of Ralph Pinkerton, the Respondent argues that the Petitioners appear to be attempting to act as the alter ego of the corporation and to "pierce the corporate veil" in an inverted sense. By the Respondent's view point, you can note disregard the existance of Ralph Pinkerton as an entity and the existance of Pinkerton-Hays Lumber Company, Inc., as an entity. As an individual entity, Ralph Pinkerton is responsible for the actions of his individual existance to include the payment of intangible taxes on property owned, whether they be in the form of accounts receivable or equity in stock, according to the Department of Revenue. For this proposition, the Respondent cites the cases of Marks v. Green, 122 So.2d 491 (Fla. 1st D.C.A. 1960); Moline Properties, Inc. v. Comm'r of Internal Revenue, 319 U.S. 436 (1943) and Dept. of Revenue v. DeMaria, 338 So.2d 838 (Fla. 1976). In considering the arguments of both parties, and in view of the underlying facts, it is apparent that there are two separate transactions. The first transaction involves a loan from Monticello Production Credit Association to Ralph Pinkerton, solely. This created a liability on the part of Ralph Pinkerton to Monticello Production Credit Association. In spite of the action that Pinkerton-Hays Lumber Company, Inc., stockholders and directors took and the fact that Pinkerton-Hays Lumber Company Inc., owns 97 out of 100 shares of the stock of Majet, Inc., which gave the security on the loan; Pinkerton-Hays Lumber Company, Inc., is not legally responsible for the repayment of the loan. Moreover, even though the loan proceeds were used for the benefit of Pinkerton- Hays, there was no legal obligation to use the money for those purposes. Ralph Pinkerton could have used the proceeds for any purpose desired. Under the circumstances, he placed the money into an account in his name and that of Pinkerton-Hays and in effect loaned those proceeds to the lumber company in the years 1974, 1975 and 1976 in return for payment of principle and interest. By his action he has not acted as an accommodation maker within the meaning of Section 673, F.S., but had made a loan to Pinkerton-Hays. This loan was a separate and distinct transaction from the loan from Production Credit Association to Ralph Pinkerton. The facts which show that the money was tendered to Pinkerton-Hays from the account of Ralph Pinkerton and Pinkerton- Hays, and that subsequent repayment was made in the subject years in the amount of principle and interest, negates the alternative "gift" theory advanced by the Respondent. To be a gift, Ralph Pinkerton would have had to advance the proceeds of the loan to Pinkerton-Hays; continued to be obligated to the lender, Production Credit Association, and not received any payment from Pinkerton-Hays in like amounts to his obligation to the lender. This is not what occurred in view of the facts, as evidenced by the clear treatment of the interest income received by Ralph and Lillian Pinkerton from Pinkerton-Hays, that is reflected in their income tax returns for the years 1974, 1975 and 1976. Therefore Ralph and Lillian Pinkerton are liable for payment of intangible taxes in the years 1974, 1975 and 1976 in accordance with Section 199.023,(1)(d) and Section 199.122(5), F.S.
Recommendation It is recommended that the Petitioners, Ralph and Lillian Pinkerton, be required to pay the intangible taxes as assessed for the years 1974, 1975 and 1976 reflected in the tax audit of August 24, 1977 which is part of Respondent's Composite Exhibit number 5. DONE AND ENTERED this 20th day of September, 1977, in Tallahassee, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Horace R. Drew, Jr., Esquire 1120 Florida Title Building Jacksonville, Florida 32202 David K. Miller, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304
The Issue The issue is whether Petitioner should terminate Respondent's employment with the Lee County School District for just cause.
Findings Of Fact Petitioner is the acting superintendent of schools for the Lee County School District. References to "Petitioner" shall include Petitioner's predecessors and the Lee County School Board. Petitioner originally hired Respondent as a school bus driver in September 1974. Respondent worked in this capacity for Petitioner for the ensuing 23 years, except for the 1988-89 school year. During the time in question, Respondent worked under an annual contract ending June 30, 1997. During the one-year period ending June 30, 1997, Petitioner entered into a contract with Child Care of Southwest Florida, Inc. (Child Care) for the use of school property, including school buses. The purpose of the contract is to establish a program under which Child Care transports and supervises schoolchildren in after-school and summertime daycare programs. Under the contract, Petitioner provides Respondent with school buses and bus drivers. The contract prohibits the operation of the buses by anyone other than drivers "assigned by [Petitioner]." The contract provides that Petitioner shall charge Child Care for the actual costs of operating the buses, the "drivers' hourly salary," and an additional mileage fee. The contract imposes on Child Care the responsibility of carrying motor vehicle liability insurance for Child Care and Petitioner. The contract requires that Child Care "observe all rules and regulations promulgated by the School Board for its operation of school buses." Petitioner's rules prohibit bus drivers from carrying firearms while on Petitioner's property. The employment contract between the parties also requires Respondent to abide by all state and local laws and rules. Petitioner assigned Respondent as one of the bus drivers under the Child Care contract for the Christmas break in December 1996. On the morning of December 30, 1996, Respondent carried a loaded .22-caliber pistol onto one of Petitioner's school buses. The pistol was in Respondent's jacket, which he placed beside the driver's seat. Respondent then drove his normal route, picking up children and transporting them to Petitioner's public school that, under the contract, Child Care was operating while school was not in session. After finishing his morning route, Respondent left the bus at the public school with the loaded pistol still inside the jacket beside the driver's seat. Late in the afternoon of the same day, Respondent reboarded the bus, allowed the schoolchildren to reenter the bus, and drove his normal route. The loaded pistol remained in the jacket on the bus throughout the afternoon route. Although not charged with the personal use of Petitioner's property, Respondent did not return the school bus after he completed his afternoon route. Instead, he transported his own children to the residence of his estranged wife where Respondent threatened the woman with the pistol. After threatening the woman, Respondent drove the school bus, while still armed with the loaded pistol, to Petitioner's bus lot, where Respondent parked the bus and was apprehended by police, who found the loaded pistol beside the driver's seat, but no longer in a jacket. Respondent knew throughout the day of December 30, 1996, that he was in possession of a loaded firearm while operating Petitioner's school bus.
Recommendation It is RECOMMENDED that the Lee County School Board enter a final order terminating the employment contract of Respondent. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 24th day of June, 1997. ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 24th day of June, 1997. COPIES FURNISHED: John M. Hament Kevin J. Hubbart Kunkel Miller and Hament 1800 Second Street, Suite 970 Sarasota, Florida 34236 Harry A. Blair Harry A. Blair, P.A. 2138-40 Hoople Street Fort Myers, Florida 33901 Jack Taylor, Acting Superintendent Lee County Public Schools 2055 Central Avenue Fort Myers, Florida 33901-3988
