Findings Of Fact This case concerns what is-called a "Turnkey Lease". The program was developed by the State of Florida in 1971. It encompasses a situation where by agencies seeking space for their operations may, after a specific need is determined that cannot be filled by existing adequate space, solicit competitive bids from developers for the provision of land and the construction of a building thereon sufficient to-meet the agency's needs, for lease specifically to the agency requesting it. The Bureau of Property Management within DGS was given the initial responsibility to develop the guidelines, promulgate the rules, and seek statutory authority for such a program. The Bureau's current role is to work with agencies requesting this program. The agency certifies the need to the Bureau in addition to the fact that there is no available existing space present. The Bureau then determines agency needs and gives the agency the authority to solicit the bids for the turnkey project. Once the bids are then received, evaluated, and a recommendation for an award is forwarded by the agency to DGS, DGS reviews the supporting documents required by the provision of the Florida Administrative Code and either concurs or does not concur in the recommendation. If DGS concurs, the submitting agency is notified and is permitted to then secure the lease. Once the lease has been entered into; it is then sent back to DGS for review and approval as to the conditions; and thereafter the plans and specifications for the building are also referred to DGS for review and approval as to the quality and adequacy as well as code compliance. Section 255.249 and Section 255.25, Florida Statutes, set forth the requirements for soliciting and awarding bids for lease space in an amount in excess of 2,500 square feet. This provision requires that an award of this nature be made to the lowest and best bidder, and DCS utilizes that standard in evaluating and determining whether or not it will concur with an agency's recommendation. In the instant case, DHRS advertised for bids for the construction of office space in Palatka, Florida for its District III facilities. Before seeking to solicit bids, the District III staff conducted a search for other possible existing space within a five mile radius of the downtown area and located no adequate facilities. Thereafter, a Certification of Need was processed for a solicitation of proposals and approval was granted by DGS to follow through with the solicitation. A preproposal conference was advertised and held on October 14, 1983, and after project review by those present at the conference, bid opening date was set for November 22, 1983. Thirty-two bid packages were distributed and twelve bidders submitted proposals. The public bid opening was held as scheduled at 2:00 p.m., on November 22, 1983, in Palatka, Florida by Robert E. Litza, Facilities Services Coordinator for DHRS District III. Of the bids submitted by the twelve bidders, the lowest hid was rejected because of the failure of the bidder to comply with the requirements of the bid package. Of the remaining eleven bids, the four lowest were evaluated with the understanding that additional higher bids would be evaluated if the four lowest bids were found to be unacceptable. Among the four bids considered were bids of Chuck Bundschu, Inc., Kenneth R. McGurn, one of the Intervenors (McGurn submitted five prices scheduled for his bid and of these, only one was considered); Elizabethan, Petitioner herein; and TSU. Only three bids are pertinent to the discussion here. They are #8-C (McGurn); #11 (Elizabethan); and #12 (TSU). In pertinent particulars, these bids provided as to rental costs: 8-C 11 12 1st yr $14.00/$220,808 $8.95/$ 61,916.10 S 7.16/$ 49,532.88 2nd yr 14.00/ 220,8088 8.95/ 141,159.40 7.35/ 115,924.20 3rd yr 14.00/ 220,808 8.95/ 141,159.40 7.62/ 120,182.64 4th yr 14.00/ 220,808 8.95/ 141,159.40 8.08/ 127,437.76 5th yr 14.00/ 220,808 8.95/ 141,159.40 8.33/ 131,380.76 6th vr 14.00/ 220,808 8.95/ 141,159.40 8.59/ 135,481.48 7th yr 14.00/ 220,808 8.95/ 141,159.40 8.86/ 139,739.92 8th yr 14.00/ 220,808 8.95/ 141,159.40 9.19/ 144,944.68 9th yr 14.00/ 220,808 8.95/ 141,159.40 9.58/ 151,095.76 10th yr 14.00/ 220,808 8.95/ 141,159.40 10.09/ 159,139.48 Renewal Option 1st yr3.00/47,316 9.93/ 156,615.96 10.51/ 165,763.72 2nd yr3.00/47.316 9.93/ 156,615.96 10.99/ 173,334.28 3rd yr3.00/47.316 9.93/ 156,615.96 11.48/ 181,062.56 4th yr3.00/47.316 9.93/ 156,615.96 11.99/ 189,106.28 5th yr3.00/47.316 9.93/ 156,615.96 12.51/ 197,307.72 Total Basic Overall Lease 1-15 yrs $1,971,500 $2,115,430.50 $2,181,434.12 Average Sq.Ft. for 15 yrs $8.60 $9.20 $9.58 A recommendation by the evaluation committee which met at DHRS District III, that McGurn's bid be selected, was forwarded to DGS in Tallahassee through the Director of DHRS's General Services in Tallahassee on December 22, 1983. The terms of the successful bid and the reasons for its being considered lowest and best are discussed below. The successful bid for the lease in question, lease number 590:8030, upon completion of the committee's evaluation was also evaluated by Ms. Goodman in the Bureau of Property Management of DGS. She also considered the McGurn bid to be the lowest and best of the eleven non-disqualified bids. In that regard, not only Mr. McGurn's bid but all of the twelve bids received were considered and reviewed not only at the local level but at DHRS and DGS headquarters as well. In her evaluation of the proposal and the bids, Ms. Goodman considered the documentation submitted by DHRS. This included a letter of recommendation supported by a synopsis of all proposals, the advertisement for bids, and any information pertinent to the site selection process. In determining the McGurn's bid was the lowest as to cost of all the bids, Ms. Goodman compared the average rate per square foot per year for each. This did not take into con- sideration pro-ration of costs per year, but strictly the average over the fifteen year probable term of the lease (ten years basic plus five year option). According to Ms. Goodman, this same method of calculating cost has been used in every lease involving a turnkey situation and in fact in every lease since 1958 - as long as she has been with DGS. This particular method, admittedly, is not set forth in any rule promulgated by DGS. However, the agencies are instructed by DGS to advertise and bidders to bid on an average square foot basis, the basis utilized by Ms. Goodman and her staff in analyzing the bids submitted. In that regard, the request for proposals does not, itself, indicate how the calculation of lowest cost would be made by DHRS and DGS but it does tell prospective bidders what information to submit. This procedure has been followed exclusively in situations like this for may years and many of the bidders here have bid before using this same system. All bidders are considered on the same footing in an evaluation. They are notified of what information will be considered along with that of all the other bidders. Further, anyone who inquires as to the basis for evaluation will be given a straight and complete answer as to the method to be used. Petitioner contends that McGurn's bid does not conform to either the normal bidding procedure followed by contractors in this type of procurement over the past years or to the normal bidding procedures adopted by Respondent, DHRS. It urges that the questioned bid is non-responsive and front-end loaded to the detriment of DHRS. With regard to the front-end loading objection, Mr. Taylor, testifying for Petitioner, attempted to indicate by graphic evidence that Elizabethan's bid, which he claims is not front-end loaded, is cheaper to the State than that of McGurn. Due to the large rental cost of the McGurn bid in the opening years of the lease, the State would have to borrow money to make the large rental payments; the interest cost of which, when added to the $3.00 cost in the option years, raises the cost considerably and makes the bid not the lowest. Though Mr. Taylor testified to this he failed to produce any independent evidence to support it. In addition, Taylor urges, under the McGurn schedule, McGurn would recoup his entire construction debt (approximately $423.00 plus interest) in the first four years of the lease: Comparing the two bids, it appears that the State would pay McGurn approximately $494,500.00 more than it would pay Elizabethan for the same period during the first seven years of the lease. Considering this, it is Taylor's belief that McGurn's profit after the fourth year is excessive. He contends also that when, after the tenth year, McGurn's rental rate drops to $3.00 per square foot for the remaining five years which constitutes the option period of the lease, the State could not afford to leave the low figure and as a result, the ten year lease is converted to a l5 year lease which is unresponsive. Further, the $3.00 figure for the last years, which would ostensibly show a loss to McGurn, is misleading in that there would be sufficient income from the advance profit garnered in years 5 to 10, when invested, to cover the soft costs and more in these later years. Admitting that because of its involvement in other turnkey projects in Florida, Elizabethan is aware of the State policy on cost evaluation, Taylor contends that while his bid does not violate State policy, McGurn's bid does because it would be fiscally irresponsible for the State to pay so much up front. This conclusion is his opinion, however, and not supported by any independent evidence. Both expert witnesses, Respondents Scott and Perry, who testified for the Intervenor, TSU, agree that the present value of money should be considered in evaluating rental costs. Their major point of difference is in the percentage of discount rate to be applied. Dr. Perry urges that use of the 10% rate mandated by the U. S. Government in its procurements of this nature. Dr. Scott, on the other hand, considers this to be too high and urges a rate in the area of 3% be used. The significance of this is that at the lower of the range spread, McGurn's bid is lowest. At the higher end, TSU's bid is lowest. From 5.7% up to below 6%, Petitioner's bid is lowest. Whichever would be appropriate, the State has not adopted the present value of money methodology and the policy followed by the State is not to consider that methodology in analyzing costs. State policy is to use only the average rental methodology. There is, in addition, no prohibition against front- end loaded bids encompassed within this policy. By the same token, there is nothing in the bid package issued to all prospective bidders that in any way stipulates the method of computing lease costs or prohibits from loaded bids. DGS zone rates, criteria stipulating the maximum agencies can send on rent without approval by DGS, are not part of the bid package and do not constitute a factor in determining whether a bid is conforming or not. These zone rates may be waived by DGS at the time the proposed award is submitted for DGS approval. In practice, within the memory of Joseph Lambert, HRS' Administrator of Facilities Services, who administers the Department's leasing program, he cannot recall DGS ever denying a DHRS request for waiver of the maximum zone rate in any case where it was pertinent. In this case, since the lease payments at-least in the second through tenth years-of the McGurn bid exceed the zone limits, the award would have to be approved by the Governor and Cabinet in addition to DGS. It has not yet been placed on the Cabinet agenda because of the protests filed. As was stated before, there are no rules governing the evaluation of bids for leases of this nature. Oral instructions given to each agency, when applied here, reveal that the McGurn bid, as was seen above, has an average cost of $8.86 per square foot per year. TSU's bid costs $9.58 per square foot per year, and Elizabethan's bid costs $9.29 per square foot per year. These same calculations are followed on all turnkey and non- turnkey leases in the State. The reason the State uses this process instead of the present value of money methodology is that it is easy. DGS statistics indicate that at least 50% of the landlords in the approximately $32,000,000 worth of leases presently existing with the State are "Mom and Pop" landlords. These people are not normally trained lease evaluators. By using the straight average rental rate method, there are no arbitrary variables. It has always worked because people can understand it and all agencies which lease property in the State follow this procedure. In the opinion of Ms. Goodman, the costs involved in utilizing the present value of money methodology would far outweigh the paper savings to be gained, notwithstanding the testimony of Dr. Perry to the contrary. With regard to the option issue, it was the position of DGS in reviewing the proposals that the very low $3.00 lease cost per square foot in the last five years (the option period) did not make the McGurn bid unresponsive. There were no limits imposed upon the bidders except that a five year option to a ten year lease be included. Were it not there, the bid would be unresponsive. DGS would issue approval for a ten year lease with a five year option but not a fifteen year lease. Ms. Goodman cannot recall a situation in which an option was not exercised by it if the need for the space continued though there have been some instances where option costs have been renegotiated.
Recommendation Based on the foregoing, it is, therefore; RECOMMENDED THAT DHRS License Number 590:8030 be awarded to Kenneth R. McGurn. RECOMMENDED this 5th day of September, 1984, in Tallahassee, Leon County, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkwav Tallahassee, Florida 32301 Filed with the Clerk of the Division of Administrative Hearings this 5th day of September, 1984. COPIES FURNISHED: David Pingree, Secretary Department of Health and Rehabilitative Services 1323 Winewood 8Oulevard Tallahassee, Florida 32301 Morgan Staines, Esquire 2204 East Fourth Street Santa Ana, California 92705 Thomas D. Watry, Esquire 1200 Carnegie Building 133 Carnegie Way Atlanta, Georgia 30303 Steven W. Huss, Esquire Department of Health and Rehabilitative Services 1317 Winewood boulevard Tallahassee, Florida 32301 Ronald W. Thomas, Executive Director Department of General Services 115 Larson Building Tallahassee, Florida 32301 Steven W. Huss Assistant General Counsel Department of Health and Rehabilitative Services 1317 Winewood Blvd. Tallahassee, Florida 32301 Gary J. Anton, Esquire P.O. Box 1019 Tallahassee, Florida 32302 Harden King, Agency Clerk Assistant General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building One, Suite 406 Tallahassee, Florida 32301
The Issue The issue in this case is whether, in making an award of a lease for office space, the Respondent acted according to the requirements of law.
Findings Of Fact In February, 1993, the Department of Labor and Employment Security ("Department") issued a Request for Proposal and Bid Submittal No. 540:0969 ("RFP") seeking to lease approximately 18,684 square feet of office space in Jacksonville, Florida, for a period of six years. The space was to house the Office of Disability Determinations ("ODD"), which processes disability claims and determines whether claimants are eligible for Social Security and Supplemental Income benefits. The office has minimal contact with the general public. The RFP provided that all bids were subject to conditions stated within the RFP. Bids not in compliance with RFP conditions were subject to rejection. RFP Article D, General Provisions, Paragraph 8 provides as follows: The Department reserves the right to reject any and all bid proposals for reasons which shall include but not be limited to the agency's budgetary constraints; waive any minor informality or technicality in bids' to accept that bid deemed to be the lowest and in the best interest of the state, and if necessary, to reinstate procedures for soliciting competitive proposals. A pre-bid conference was conducted by the Department on February 16, 1993. Representatives from the vendors involved in this proceeding attended the conference. Bids were opened on March 5, 1993. The Department received five responses, three of which were deemed to be responsive and which were evaluated. The remaining two responses were determined to be nonresponsive and were not evaluated. On or about March 10, 1993, based on the evaluations, the Department proposed to award the bid to Koger Properties, Inc. On or about March 17, 1993, the Department notified the vendors of the intended award. The Petitioners filed timely notices protesting the intended award. TOWNCENTRE PROPOSAL Paragraph 13 sets forth conditions to which a bidder must agree in order to be awarded a bid. Subsection "a" of the paragraph states, "[i]f successful, bidder agrees to enter into a lease agreement on the Department of General Services Standard Lease Agreement Form BCM 4054 (Attachment F - Do not complete)." The copy of the Department of General Services Standard Lease Agreement Form which was included in the RFP was a poorly reproduced copy. Article III of the Lease Agreement Form provides as follows: III HEATING, AIR CONDITIONING AND JANITOR SERVICES 1.a. The Lessor agrees to furnish to the Lessee heating and air conditioning equipment and maint(illegible) in satisfactory operating condition at all times for the leased premises during the term of the lease at the (illegible) of the Lessor. b. The Lessor agrees to maintain thermostats in the demised premises at 68 degrees Fahrenhe(illegible) the heating season and 78 degrees Fahrenheit during the cooling season; and certifies that boilers the(illegible) been calibrated to permit the most efficient operation. The Lessor agrees to furnish janitorial services and all necessary janitorial supplies for the leased (illegible) during the term of the lease at the expense of the Lessor. All services required above shall be provided during the Lessee's normal working hours, whic(illegible)marily from 7:30 a.m. to 5:30 p.m., Monday through Friday excluding state holidays. Also attached to the RFP was a copy of an addendum to the lease, also poorly reproduced. The addendum provides as follows: Article III, Paragraph III Addendum for Full Service Lease The lessor and lessee mutually agree that the described prem(illegible) leased in this lease agreement shall be available to the department (lessee) for its exclusive use twenty four (24) (illegible) per day, seven (7) days per week during the lease term. T(illegible) space to be leased by the department will be fully occupied during normal working hours from 7:30 a.m. to 5:30 p.m., Mo(illegible) through Friday, excluding holidays, Saturdays and Sundays, (illegible) may be fully or partially occupied during all other periods (illegible) time as necessary and required at the full discretion of th(illegible) department. Accordingly, services to be provided by the le(illegible) under the terms of the lease agreement, including electrici(illegible) other utilities, will be provided during all hours of occup(illegible) at no additional cost to the department (lessee). Although the copy of the lease agreement and addendum included in the RFP were poorly reproduced, it is clear that the addendum modifies the paragraph of the lease agreement related to provision of heating, air conditioning and janitorial services to require that HVAC services be provided throughout the premises during all hours of occupancy at no additional cost to the Department. The proposal submitted by Towncentre included an "Attachment Z" which states as follows: The following represent exceptions and/or clarifications to the terms of the Request for Proposal and Bid Submittal Form ("RFP") for the referenced Lease. Except as noted herein, Bidder shall comply fully with the terms of the RFP..." Item #7 of Attachment Z states as follows: The Building in which the space is offered is serviced by central heating, ventilating and air conditioning; therefore, no separate thermostats will be provided in the space other than in the computer room. However, the required temperature standards will be maintained and satisfied. The computer room HVAC shall be available 24 hours a day. Otherwise, after-hours HVAC is billed at $80 per hour. Attachment Z also included additional exceptions to the provisions of the RFP. Contrary to the requirements set forth in the addendum attached to the lease form included in the RFP, the Towncentre proposal included additional charges for after hours uses. The Department determined that the Towncentre proposal was nonresponsive and disqualified the proposal from further consideration. Because the Towncentre proposal includes HVAC charges which are specifically prohibited under the terms of the RFP, the Towncentre proposal is nonresponsive to the RFP. Towncentre asserts that other sections of the RFP indicate that, within the leased premises, only the computer room is required to be heated or cooled on a continuous basis. Vendors had an adequate opportunity to direct questions regarding the RFP to Department officials. There is no evidence that Towncentre sought clarification from the Department related to this matter prior to submitting the bid proposal. In the notification to Towncentre that the bid had been determined to be nonresponsive to the RFP, the Department identified the other exceptions as additional reasons for the determination of nonresponsiveness. At hearing Towncentre introduced no evidence related to the remaining items included within Attachment Z. BRYAN SIMPSON JR. FOR P.V. ASSOCIATES The Simpson bid was deemed to be responsive and was evaluated. The evaluations were performed by three Department employees, Dorea Sowinski, Albert Cherry, and Tom Mahar. On March 9, 1993, the evaluators visited the physical locations of the three responsive bids. (Although the bid had been declared nonresponsive, they also visited the Towncentre site, apparently as a courtesy.) The Simpson space is located in downtown Jacksonville. After completion of the site visits, the evaluators separately and independently completed their evaluation sheets. The evaluators awarded a total of 262 points to Koger Properties and 248 points to Simpson. Page 7 of the RFP sets forth the evaluation criteria which were considered in awarding evaluation points. The RFP stated as follows: The successful bid will be the one determined to be the lowest and best. All bids will be evaluated based on the award factors enumerated below: Rental, using Present Value methodology for basic term of lease (See D, General Provisions Items 3 and 4) applying the present value discount rate of 5.6 per cent. (Weighing: 35) Conformance of and susceptibility of the design of the space offered to efficient layout and good utilization and to the specific requirements contained in the Invitation to Bid. (Weighing: 20) The effect of environmental factors, including the physical characteristics of the building and the area surrounding it on the efficient and economical conduct of the Departmental operations planned for the requested space. (Weighing: 20) Offers providing contiguous space within preferred boundaries. (Weighing 5) Frequency and availability of satisfactory public transportation within one block of the offered space. (Weighing 15) Availability of adequate dining facilities within one mile of the offered space. (Weighing: 2) Proximity of offered space to the clients served by the Department at this facility. (Weighing: 3) Proximity of offered space to other Department activities as well as other public services. (Weighing: 0) TOTAL POINTS: 100 Simpson asserts that the evaluators acted improperly in awarding points in categories 3, 5, 6 and 7. Category 3 relates to the effect of environmental factors, including the physical characteristics of the building and the area surrounding it on the efficient and economical conduct of the Departmental operations planned for the requested space. Although Simpson asserts that category 3 is vague and ambiguous, there was no objection to the category prior to the submission of the bid responses and the announcement of the proposed lease award. Each evaluator could award up to 20 points in this category for a total of 60 available points. Koger was awarded 55 points. Simpson received 27 points. As to individual evaluators awards, Tom Mahar awarded Simpson five points, Albert Cherry awarded Simpson ten points, and Dorea Sowinski awarded Simpson 12 points. Based on the written memo dated March 10, 1993, identifying the reasons for the recommended bid award, two of the three evaluators considered the Koger space to be located in a safer area than the Simpson facility, and, at least in part, based their point awards on this factor. The two evaluators cite minimal anecdotal information in support of their opinions. The evaluators undertook no investigation related to safety issues and there are no facts to support their opinions. Their award of points for "environmental factors" is arbitrary. Category 5 relates to the frequency and availability of public transportation within one block of the offered space. Each evaluator could award up to 15 points in this category for a total of 45 available points. Both Koger and Simpson received the maximum 45 points. RFP Page Two, question 8 provides as follows: Public Transportation availability: BIDDER RESPONSE: (Check appropriate box) Taxi , Bus , Frequency of service closest bus stop . Both Koger and Simpson indicate service by taxi and bus. The Koger proposal indicates a frequency of service as "8 BUSES" and the closest bus stop as "IN FRONT OF BUILDING ON WOODCOCK DRIVE." Simpson indicates a frequency of service as "15 minutes" and the closest bus stop as "front of building." The Department asserts that the Koger level of transportation access, albeit less than that serving the Simpson site, is satisfactory and therefore entitled to an award of all points available. Simpson asserts that the greater availability of public transportation to the Simpson site should result, under the terms of the evaluation criteria, in Simpson receiving more points than the Koger site for this category. The evaluation criteria clearly requires consideration of both the frequency and availability of satisfactory public transportation. Simpson asserts that in considering the transportation category, the evaluators should have reviewed local public transportation schedules. Review of such schedules establishes that the Simpson site is served more frequently by public bus transportation than is the Koger site, and further establishes that the number of bus routes directly serving the Simpson property far exceeds the routes serving the Koger site. Simpson did not include the schedules in the RFP response. The Simpson site is also located nearby the downtown public transportation transfer station at which point many, perhaps all, local bus routes connect. Simpson did not denote the location of the transfer station in the RFP response While the evaluation committee is not required to consider the bus schedules in reviewing bid proposals, the evaluation committee failed to consider the substantially greater frequency and availability of public transportation to the Simpson site relative to the Koger site, as set forth in the respective RFPs. The Department's position is contrary to the specific criteria identified in the RFP. The award of equivalent points for transportation access to both Simpson and Koger is unsupported by fact or logic and is arbitrary. Category 6 relates to the availability of adequate dining facilities within one mile of the offered space. Each evaluator could award up to two points in this category for a total of six available. Koger was awarded six points. Simpson received one point. When the evaluators rated the adequacy of dining facilities, they considered only those dining facilities which were located within two blocks of the offered space. Such is contrary to the clear terms of the RFP. The Department offered no rationale for the decision to amend the RFP criteria after submission of the proposals. The Simpson RFP response states only that there are adequate dining facilities within walking distance of the offered facility. The Koger response states that there are "three (3) sandwich shops within walking distance in the Koger center and other numerous restaurants within one (1) mile." As to individual evaluators awards, Tom Mahar awarded Simpson one point, while both Albert Cherry and Dorea Sowinski awarded Simpson zero points. Mahar's award was based on his opinion, again based on alleged safety concerns, that employees would be hesitant to walk to nearby restaurants and that driving and parking presented a problem in the downtown location. Cherry voiced a similar opinion. As to alleged safety concerns, Mahar and Cherry again based their opinions on minimal anecdotal information, supported by neither fact nor logic. Neither evaluator undertook any factual analysis of the safety issues relative to the proposed site. Their award of points for this category is arbitrary. On the other hand, Sowinski did not see any restaurants close to the Simpson site during the site visit. In excess of 40 restaurants are located within one mile of the Simpson site. The restaurants provide a variety of dining options both as to expense and fare. Sowinski's failure to observe restaurants located across the street from the Simpson site is, although difficult to understand, apparently a simple mistake on her part. Category 7 relates to the proximity of offered space to the clients served by the Department at this facility. Each evaluator could award up to three points in this category for a total of nine available. Simpson offered no evidence that the determination of points awarded for category 7 was inappropriate.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Department of Labor and Employment Security enter a Final Order DISMISSING the protest filed by Towncentre Venture, and WITHDRAWING the proposed award of lease contract based on the Request for Proposal and Bid Submittal No. 540:0969. DONE and RECOMMENDED this 28th day of June, 1993, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of June, 1993. APPENDIX TO CASES NO. 93-2015BID and 93-2106BID The following constitute rulings on proposed findings of facts submitted by the parties. Petitioner Towncentre Venture Towncentre Venture's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 4. Rejected, second sentence is irrelevant. 5-7. Rejected, irrelevant. Taken as a whole, the RFP indicates that HVAC services are to be provided throughout the leased premises during all hours of occupancy at no additional cost to the Department. The evidence fails to establish that the vendors were confused about the terms of the RFP. There were apparently no related questions addressed to Department personnel during the pre-bid conference or at any time subsequent to the conference and prior to the bid opening. 10. Rejected. Not supported by the document cited which does not identify the attachment by letter. 13. Rejected, irrelevant. The standard form lease included in the RFP was a sample document. None of the blank spaces were completed. 16. Rejected, irrelevant. The attendees at the conference were provided an opportunity to inquire as to all matters. There were apparently no questions asked related to the RFP's requirement that HVAC services be provided throughout the facility during all hours of occupancy at no additional cost to the Department. 17-18, 20-21. Rejected, irrelevant. The terms of the RFP are clear. 19. Rejected, irrelevant. The terms of the addendum for full service lease clearly indicate that such HVAC services were to be provided at no additional charge, not just in the computer room, but throughout the entire leased facility. 22. Rejected. The Towncentre bid was nonresponsive to the terms of the RFP. Petitioner Bryan Simpson, Jr., for P. V. Associates P. V. Associates' proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 3. Rejected, not supported by the greater weight of the evidence which establishes that the RFP was issued seeking space for the Jacksonville Office of Disability Determinations. 4, 23, 24. Rejected, unnecessary. Respondent Department of Labor and Employment Security The Respondent's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 17. Rejected. The decision to award equivalent points for public transportation access fails to reflect the substantially greater access provided to the Simpson site and is arbitrary. 20-21. Rejected, not supported by greater weight of evidence which establishes no evidence that safety concerns were based on a reasonable evaluation of facts. There are no facts to support the conclusion that the Simpson location if less safe than the Koger site. COPIES FURNISHED: Shirley Gooding, Acting Secretary Suite 303, Hartman Building 2012 Capital Circle S.E. Tallahassee, Florida 32399-2152 Cecilia Renn Chief Legal Counsel Suite 307, Hartman Building 2012 Capital Circle, S.E. Tallahassee, Florida 32399-2152 Thomas M. Jenks, Esquire Pappas and Metcalf, P.A. 1 Independent Drive, Suite 3301 Jacksonville, Florida 32202 Nathan D. Goldman, Esquire Marcia Maria Morales, Esquire 200 Laura Street Post Office Box 240 Jacksonville, Florida 33202 Edward Dion, Esquire Assistant General Counsel Suite 307, Hartman Building 2012 Capital Circle S.E. Tallahassee, Florida 32399-2189
Findings Of Fact Petitioner is a dealer in heavy construction equipment and has been since its incorporation on August 1, 1946. Among petitioner's competitors are Dewind Machinery Company, Florida Equipment Company of Jacksonville, Florida- Georgia Tractor Company, Inc., Great Southern Equipment Company, Inc., Pilot Equipment Company, Inc., Ring Power Corporation and Joseph L. Rozier Machinery Company. Like its competitors, petitioner frequently leases equipment to its customers, giving them an option to purchase, rather than selling them the equipment outright. Petitioner's exhibit No. 1 reflects one such transaction. On April 19, 1973, petitioner quoted Houdaille Duval Wright Company (Houdaille) a purchase price of twenty-two thousand dollars ($22,000.00) plus sale's tax, and monthly rent of fourteen hundred dollars ($1,400.00) plus sales tax on a diesel powered, self-propelled vibratory roller. After negotiations between petitioner and Houdaille, the purchase price dropped to seventeen thousand dollars ($17,000.00), but the monthly rental remained unchanged. Houdaille agreed to lease the vibratory roller from petitioner on these terms. With respect to its option to purchase, Houdaille specified that: 100 percent of all rentals to apply towards purchase price of $17,000.00 less 10 percent discount on remaining outstanding balance at time of purchase. Interest to accrue at a rate 7 1/2 percent simple. Houdaille made lease payments for nine months, totaling twelve thousand six hundred dollars ($12,600.00), before electing to exercise its option to purchase. In calculating the amount of money Houdaille was to pay to close out the transaction, petitioner began by treating the payments Houdaille had made under the lease as if they had been payments made in repayment of a loan, outstanding for the period of the lease, in the amount of seventeen thousand dollars ($17,000.00), at 7 1/2 percent per annum. Petitioner allocated portions of each lease payment to principal and to interest, calculated on the declining principal balance, aggregating eleven thousand nine hundred ten dollars and fifty-four cents ($11,910.54) to principal, and six hundred eighty-nine dollars and fourty-six cents ($689.46) to interest. Petitioner then calculated the 10 percent discount by multiplying one tenth times the difference between the original price ($17,000.00) and the amount aggregated to principal ($11,910.54), which yielded five hundred eight dollars and ninety-five cents ($508.95). This figure was subtracted from the original contract price ($17,000.00) to ascertain the' discounted price ($16,491.05) against which the lease payments were credited in their entirety ($12,600.00), yielding the figure three thousand eight hundred ninety-one dollars and five cents ($3,891.05), on which petitioner calculated 4 percent sales tax. In addition, petitioner required Houdaille, in exercising its option to purchase, to pay six hundred eighty-nine dollars and forty-six cents ($689.46), the aggregate amount of lease payments petitioner had allocated to interest. In every respect pertinent to the dispute between petitioner and respondent, this transaction between petitioner and Houdaille is typical of the transactions on which contested portions of the tax assessments were based. The same is true of petitioner's lease and sale of a truck crane to Poston Bridge & Iron, Inc. (Poston), the transaction reflected in exhibit No. 2 (although petitioner's agreement with Poston did not involve a discount.) The terms of the lease purchase agreement, as stated on respondent's exhibit No. 2, were: Option Price $124,855.00 with 100 percent of paid rentals to apply to purchase price less interest at 8.5 percent simple. After making lease payments totalling twenty-six thousand dollars ($26,000.00), Poston exercised its option to purchase. At this point the lease payments were recast as installment sales payments, portions being allocated to principal and interest accordingly. Respondent collected sales tax on the amount of money Poston paid in exchange for title, after electing to purchase, less the aggregate amount of lease payments petitioner had allocated to interest. Petitioner has been entering into lease purchase agreements of this kind with various customers since 1946 or 1947, and, when customers exercised purchase options, petitioner ordinarily calculated sales tax in the manner it employed in connection with the sale of the vibratory roller to Houdaille, and the truck crane to Poston. In at least one instance, however, petitioner calculated sales tax as 4 percent of all the money a customer, Misener Marine Construction, Inc., paid when exercising its option to purchase a truck crane, including portions of lease payments petitioner had allocated to interest. On the lease payments themselves, petitioner regularly collected 4 percent sales tax which it regularly remitted to respondent. For federal income tax purposes, petitioner treated payments from customers under a lease purchase agreement as lease payments for every tax year in which the option to purchase was not exercised. For the tax year in which the option to purchase was exercised, the lease payments were treated as payments under an installment sale contract, for federal income tax purposes. When respondent audited petitioner's rentals for the period May 1, 1970, to April 30, 1973, and earlier when respondent performed a general audit of petitioner's books for the period July 1, 1959, to February 28, 1962, no mention was mace of petitioner's sales tax treatment of lease purchase agreements under which lessees had exercised purchase options. Before the audit which eventuated in the assessments now in controversy, however, the auditors were given a copy of a letter from L. N. Hansen to Thomas D. Aitken dated December 9, 1974. Mr. Hansen was formerly director of respondent's sales and use tax division. In the fall of 1974, he was one of a group or "board" of respondent's employees who considered questions arising under the tax laws and formulated policy for respondent. His letter to Mr. Aitken, which came in evidence as, petitioner's exhibit No. 5, was written on behalf of respondent after its substance was discussed at a meeting of respondent's policy group. It pertains to lease purchase agreements entered into by Joseph L. Rozier Machinery Co. (Rozier). Mr. Hansen's letter stated that Rozier was "not correct in reducing the taxable sales price by the rental payments and thereafter adding an interest charge which, if it was incurred at all, was incurred prior to the time of sale." Petitioner's exhibit No. 5, p. 1. The foregoing findings of fact should be read in conjunction with the statement required by Stucky's of Eastman, Georgia vs. Department of Transportation, 340 So.2d 119 (Fla. 1st DCA 1976), which appears as an appendix to the order.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That respondent abandon the uncollected portions of its deficiency assessments. DONE and ENTERED this 31st day of August, 1977, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 APPENDIX Petitioner's proposed findings of fact Nos. 1, 4-8, and 10 have been adopted, in substance, insofar as relevant. Petitioner's proposed finding of fact No. 2 is irrelevant insofar as it differs from petitioner's proposed finding of fact No. 7, and for that reason has not been adopted where it differs from petitioner's proposed finding of fact No. 7. Petitioner's proposed finding of fact No. 3 has not been adopted because it is not relevant. Petitioner's proposed finding of fact No. 9 has not been adopted because what motivated respondent's employees is not relevant and because it was not proven what would have happened "[b]ut for the Hansen letter." Petitioner's proposed findings of fact Nos. 11 and 12 have not been adopted because they are irrelevant. Petitioner's proposed finding of fact No. 13 has not been adopted as such because it is actually a proposed conclusion of law. The first paragraph of respondent's proposed findings of fact has been adopted, in substance, except that exercise of the purchase option may be said to relate back to the beginning of the contract. Significantly, respondent proposes as a finding of fact that the "amount termed 'Interest' . . . is payable for the use of the money during the rental/lease period." Paragraphs two through seven, nine and ten of respondent's proposed findings of fact have been adopted, in substance, insofar as relevant. The eighth paragraph of respondent's proposed findings of fact has not been adopted; it is actually a proposed conclusion of law. COPIES FURNISHED: Mr. Daniel S. Dearing, Esquire Post Office Box 1118 424 North Calhoun Street Tallahassee, Florida 32302 Ms. Patricia S. Turner, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304
Findings Of Fact The land encompassed within the mobile home park known as Mohawk Village was purchased by Winter Springs Mobile Home Corporation, a corporation owned and controlled by the Tanner family. The majority of the stock in Respondent is owned by the oldest son; another son is president of Respondent; and the father, L. William Tanner, served as "consultant" to the corporation. This tract was initially divided into some 700-odd lots which were being sold to the public in 1980 as mobile home sites. The land was purchased from North Orlando Sewer and Water Company, which agreed to provide sewer and water services to the subdivision and to have these facilities in place by January 1, 1981. Respondent never registered with the Petitioner in accordance with Chapter 498, Florida Statutes. North Orlando Sewer and Water Company failed to provide sewer service to this development and none of the home sites were available for occupancy January 1, 1981, as promised to buyers by Respondent. Without sewer service it became necessary to go to septic tanks and this required larger lots per mobile home site. The tract was replatted to provide 300-odd lots despite the previous sale of smaller lots to buyers. These buyers were advised their lots would have to be swapped and when some objected and demanded their money back, without success, Petitioner was made aware of the development and investigated. The investigation led to the entering of a Cease and Desist and Consent Order (Exhibit 1). Therein Petitioner essentially agreed to forego action against Respondent for prior violations of Chapter 498, which Respondent contended it was subject to; and Respondent agreed to cease all leasing until the site was ready for occupancy, to provide Petitioner with copies of all leases in effect, as well as copies of all future leases executed, to deposit funds received from buyers in escrow until after receipt of a certificate of occupancy, and to take necessary steps to ensure all future leases fall within the statutory exemptions set forth in Section 498.025(1)(g), Florida Statutes. L. William Tanner was paid a consulting fee by Respondent "in the ballpark of $100,000." In addition, he was to own the companies that provided utilities to the park (after default by North Orlando Sewer and Water Company), and furnished porches, decks, built walkways, roads, etc. Following the Consent Order funds were received payable to Tanner-controlled companies that were not deposited in the escrow account. These funds were not lease payments but came from the lessees for sewer and water hookups, porches, decks, etc. Mohawk Village received its first certificate of occupancy on 14 January 1982. Between 17 April 1981, when the Consent Order was entered, and 14 January 1982, lot leases were sold to Gould on 30 November 1981; to Herring on 12 September 1981; and to Roberts on 14 January 1982 (Exhibit 6). The sales to Gould and Herring were clearly during the period Respondent had consented not to sell leases. Exhibit 1 authorized Respondent to renegotiate and relocate current lessees to new mobile home sites under a plan to use alternate utility services from those initially to be provided by North Orlando Sewer and Water Company "if such plan is implemented at no additional cost to the individual lessees." Those who had bought leases under the original scheme agreed to pay $29 per month to lessor. Leases sold after the decision to use septic tanks where the number of lots was reduced from 700-odd to 300-odd, provided the lessees would pay the lessor $59 per month. Respondent advised the earlier lessees that they would have to pay $59 per month in lieu of $29. When they objected and demanded refunds of what they had paid, some of them were promised refunds but to date very few have received any refunds. Changing their rental fee from $29 to $59 violated the Consent Order. The only change in the lease before and after the execution of the Consent Order was the change of this monthly rental payment. Since the original lease did not qualify for exemption under Section 498.025(1)(g), Florida Statutes, the amended lease, which merely changed the monthly rental fee, did not qualify for exemption. Leases on these lots were sold at prices ranging from $1,000 to $7,000. At no time relevant hereto did Respondent hold a dealer's license to deal in or sell mobile homes (Exhibit 3) There was no valid reservation program established by Respondent pursuant to Section 498.024, Florida Statutes, nor did Respondent apply for or receive approval of a public offering statement for Mohawk Village (Exhibit 2). All leases sold provided, in addition to a habitable lot, that the seller would provide recreational facilities. Those leases sold in 1980 promised a lot on which the buyer could move his mobile-home by January 1, 1981. Not only was the deadline missed but also Respondent has provided no recreational facilities. One witness who sold her home and bought a mobile home could not move it to the site in accordance with the contract because of lack of utilities and was forced to acquire another residence. Although proper demand was made she has been refunded none of her purchase money. According to his testimony, L. William Tanner has developed about one hundred subdivisions throughout the United States since 1946. Some 20 such subdivisions have been developed by him in Florida. He is aware of the Florida statutes regulating the subdivision and sale of lands, and contends that the Mohawk Village subdivision is exempt because Petitioner does not have jurisdiction over 99-year leases. He further contends that the monthly rental payments of $29 or $59 for 99 years brings the price paid for the lots to more than $50,000, thereby exempting them from the provisions of Chapter 498. Prior to the commencement of this hearing, Mohawk Village was transferred to Gould, who had been involved in supplying mobile homes to lot purchasers in the park. According to Tanner's testimony "it was not much of a sale" with him insisting Gould and Mohician Valley (apparently the new name for the mobile home subdivision) acknowledging existing mortgage, the Consent Agreement with Petitioner, and the obligation to refund the monies. No documentary evidence was presented to show that Tanner or his immediate family does not continue to own controlling interest in this mobile home park.
Findings Of Fact Children's Medical Services (CMS) is a statewide program of the Department of Health and Rehabilitative Services which provides services for children who are suffering from medically debilitating or potentially medically debilitating conditions of a chronic nature. In Broward County, Respondent, District X of the Department of Health and Rehabilitative Services (District X), provides CMS services to approximately 4,000 children. The CMS Broward County Clinic is currently located in a leased facility. The lease expires in August, 1995. In the fall of 1994, District X determined that it would seek to lease a larger facility in the private sector to replace the existing leased facility. In November, 1993, Christopher Edghill, who was then the Facilities Manager for District X, prepared a Request for Prior Approval of Space (RNS), seeking approval from the Department of Management Services (DMS) for a new lease to house the CMS program in District X. The RNS stated that District X desired to enter into a ten-year turnkey lease for 19,233 square feet. District X desired to acquire the facility in the private sector through a competitive bidding process. The RNS also included a Letter of Agency Staffing as justification for the space requested and a certification that the district had sufficient funds available to pay for the leased space. Prior to submitting the RNS to DMS, Mr. Edghill did not inquire whether there was public space available in Broward County which would be suitable for housing the CMS program, and no evidence was presented to show that public space was available at that time. After submission of the RNS, District X amended the RNS to include an option to renew. The RNS was approved by DMS on December 3, 1993. In January, 1994, District X issued the solicitation document for bids for lease for CMS facility. The lease number assigned was 590:2490. A pre-bid conference was held on February 10, 1994. James F. Antonucci, a representative for Petitioner, Gulf Properties, Inc. (Gulf), attended the pre-bid conference. On April 4, 1994, Dr. Joni Letterman, who is the Medical Director of CMS for District X, was approached by Linda Bouffard and Rita Frantz concerning a needs assessment for a children's medical center in conjunction with North Broward Hospital District (NBHD). At that time the children's center was in its very early planning stages. The children's center was envisioned to be a combined maternal, obstetrical, pediatric, neonatal and full service children's hospital center with inpatient and outpatient services. On April 6, 1994, Gulf entered into an option agreement to purchase land for space to be utilized for Lease No. 590:2490 should Gulf be awarded the contract. Gulf and ANF Real Estate Group, Inc. (ANF) timely submitted responses to the solicitation by District X. The bids were opened on April 7, 1994. Gulf submitted one bid and ANF submitted two bids. Gulf's bid offered a full service lease at $16.79 per square foot for the first year for 19,800 square feet, plus or minus three percent. A bid evaluation committee of five (5) members was selected by District X. One of the evaluation committee members was Dr. Letterman. On April 20, 1994, the evaluation committee visited the sites proposed by the bidders. By letter dated April 22, 1994, Dr. Letterman notified Ms. Frantz and Ms. Bouffard that CMS was in the process of selecting a bidder for a ten year lease and that relocation of CMS as part of the children's center would not be possible. Sometime in late April or early May, 1994, Dr. Letterman was asked to join the Children's Initiative Committee, which was formed to expand on the concept of the children's center. Dr. Letterman attended her first committee meeting in early May, 1994. At that meeting the committee asked Dr. Letterman where CMS could fit into the children's center concept. Dr. Letterman explained that District X was in the midst of a competitive procurement process for a new CMS facility and did not know whether CMS could commit to relocating on the campus of Broward General Medical Center (BGMC). Mr. Will Trower, Chief Officer of BGMC, was present during the meeting but did not offer any space at that time relating to CMS for use while the children's center was being developed. By memorandum dated May 27, 1994, the evaluation committee notified the acting district administrator that Gulf received the highest rating and recommended that the lease be awarded to Gulf. By letter dated June 9, 1994, Dr. Letterman wrote to Mr. Trower, stating: For CMS to move forward toward the Children's Center concept and reject bids already submitted, the Department requires a written letter of commitment assuring CMS space and related needs will be met as well as a provision for an interim CMS site as of September 1, 1995, the date our current lease expires. Due to constraints related to the bid process, I must have this written confirmation by the close of business, Thursday, July 16, 1994. By letter dated June 13, 1994, Dr. Letterman advised Mr. Trower that the deadline for response was incorrect in her June 9, 1994 letter and should have read June 16, 1994. Mr. Trower responded by letter dated June 16, 1994, wherein he advised: As it relates to interim space for CMS, I can at this time commit to offering to meet with you to have you consider space that will be available this spring in our medical office tower adjacent to the hospital. Based on our previous discussion, I believe this space will be adequate in size and capability for an interim location of the CMS services. A lease agreement could be established which would meet your needs for relocation and provide an interim location until such time as the Children's Center is completed. BGMC offered a full service lease of 16,950 square feet for $14.50 per square foot. By memorandum dated June 20, 1994, Mr. Edghill recommended that the best decision would be to award the lease to Gulf. This recommendation was based on Trower's letter which indicated that the Board of Commissioners would have to approve the initiative to develop the children's center, on the effect that a delay could have regarding the bidders' options on the proposed sites, and on the likelihood of a protest by the bidders. By letter dated June 24, 1994, District X advised the bidders that authorization had been granted to award the lease to Gulf. A letter of intent to protest the award was timely filed by ANF on June 27, 1994, followed by a timely filed formal protest on July 9, 1994. On June 30, 1994, Gulf entered into an Agreement for Purchase and Sale of the property which was the subject of the April 6, 1994, option agreement. By memorandum dated August 17, 1994, the District X administrator advised James Towey, the Secretary of HRS, of possible options for resolving the CMS lease problem. Option I was to proceed with the competitive bid process through resolution of the ANF protest and sign a contract with Gulf Real Properties. Option 2 was to terminate the competitive bid process, request proposals from the North and South Broward Hospital Districts and award CMS lease space according to revised criteria. Option 3 was to award the lease to Gulf but alter the occupancy plan by replacing clinic-specific space with general office space and relocating other District programs to the site. The District would then award the clinic-specific space to a hospital entity. On August 26, 1994, ANF filed a Notice of Withdrawal of Formal Written Protest, advising District X that ANF was abandoning its requests for agency action regarding Lease No. 590:2490. On August 26, 1994, Gulf entered into an addendum to the purchase and sale agreement, whereby it was acknowledged that a protest had been filed by ANF concerning the bid award for the lease of the facility which Gulf intended to construct on the property and it was agreed that Gulf had until September 30, 1994, to resolve the protest and that if the protest was not resolved in favor of Gulf that Gulf could cancel the contract. By memorandum dated August 29, 1994, Secretary Towey advised the District X administrator to follow Option 2. His decision was based on his understanding that the District had incorrectly considered North Broward Hospital ("BGMC") not to be a governmental entity when it made its initial decision to award to Gulf and the move to North Broward Hospital would be in the best interests of their clients. By letter dated August 31, 1994, District X advised Gulf that ANF had withdrawn its protest and that District X was rejecting all bids because suitable space had been made available by governmental entities. The letter advised Gulf that it could request an administrative hearing within 30 days of receipt of the letter. The governmental entities referred to in the August 31, 1994 letter were North Broward Hospital and South Broward Hospital. At the end of June, 1994, Dr. Letterman toured the BGMC office space. She determined that the space offered by BGMC was adequate to meet the needs of the District for the CMS clinic. A large number of CMS' clients are located near the hospital. Co-location of CMS at BGMC would allow the sharing of certain areas such as the employee lounge, the medical library, and medical record storage, thus reducing the space that would be required for the CMS program. Additionally, CMS employees, such as economic eligibility employees could be outposted at the hospital, thereby eliminating office space at CMS. Currently BGMC provides services to the CMS clinic such as x-ray, laboratory, diagnostic, hearing testing, and sleep studies. Co-location of CMS and BGMC would eliminate the need to shuttle clients back and forth between the clinic and the hospital and thereby reduce the stress on the childrens' families and provide more efficient services. For example, co-location would eliminate the need for a child who was going to have outpatient surgery of having to go to the clinic for a pre-op exam, travel to another location for laboratory work, and then go to a different location for the surgery. Through co-location the services could be provided in one visit at one location. Co-location of CMS with BGMC should result in more efficient use of the physicians' time. For example the doctors would not have to travel back and forth from the clinic to the hospital. Patient records would be more accessible for use by the physicians because the records could be maintained in one location. In reviewing the proposals submitted by Gulf and ANF, Dr. Letterman had been concerned about the location of an emergency room near the proposed locations. The co-location of CMS and BGMC would result in an emergency room in a CMS approved hospital being in close proximity to the clinic. On August 31, 1994, Gulf sent a termination letter to the seller of the property, advising that District X had rejected all bids. Gulf and the seller of the property thereafter executed another addendum to the purchase contract effective September 15, 1994, which allowed the withdrawal of the termination letter and provided that the closing should take place no later than May 31, 1995. Gulf timely filed its Petition for Administrative Hearing on September 30, 1994. In 1975, DMS, formerly the Department of General Services, promulgated what is now numbered as Rule 60H-1.017, Florida Administrative Code. This rule deals with turnkey leases. The rule was amended once in 1986. Sometime during 1976 or 1977, management at DMS, relying on advice from legal counsel, determined that it did not have the authority to participate in the evaluation of proposals for turnkey leases of user agencies and decided to ignore Rule 60H-1.017, formerly Rule 13M-1.017. DMS did not repeal the rule and amended the rule in 1986. The DMS real property leasing manual as revised in 1986 contained the procedures for the procurement of turnkey leases as set forth in Rule 60H-1.017. In 1979, HRS promulgated Rule 10-8.007, Florida Administrative Code, dealing with turnkey leases. The rule has not been amended since its adoption. In 1993 or 1994, the Division of Facilities Management of DMS, loaned a staff person to HRS to assist in the revision of HRS Manual, Facilities Acquisition and Management, Procuring Leased Space. This manual provides that for the procurement of turnkey lease construction the District should refer to Section 60H-1.017, Florida Administrative Code, and the Department of Management Services' Real Property Lease Manual and consult with the office of general services of HRS. District X has not made a recommendation to DMS for the proposed award of the lease in issue. The Division of Facilities Management has not made an evaluation of the proposals. There has been no joint approval by the Department of Management Services and District X on the proposal submitted by Gulf Properties. Although Rules 60H-1.017 and 10.8.007 are still in existence, HRS has been following the procedures set forth in Rule 60H-1.015 at least since 1983. Essentially, HRS determines whether there is existing space available and requests approval from DMS to seek a turnkey lease if there is no existing space available. If DMS approves HRS to seek a turnkey lease, HRS advertises for proposals, reviews the proposals submitted, gives notice of an intended award, and sends documentation to DMS in order that DMS may review and approve the lease. In turnkey lease procurements, DMS has followed a procedure similar to that set forth in Rule 60H-1.015. DMS reviews the initial request from HRS to go out for a turnkey lease. If approved HRS proceeds to solicit and award a lease. DMS will give technical assistance to HRS during the procurment process if HRS requests. After HRS notifies the bidders of the intended award, it sends documentation to DMS for review and approval. DMS reviews the following things: floor plans and specifications; price; compliance of design with the standards of the Americans with Disabilities Act; appropriateness of the completion date of the project; availability of public transportation; parking facilities; and dining facilities as they relate to the turnkey lease location. If any of the criteria reviewed by DMS is inappropriate or fails to comply with the specifications or DMS standards, DMS will not let HRS go forward with the project until the deficiency is corrected. The bid solicitation document provides: Notification of bid award is final when either no protests are submitted or after all protests are resolved by an administrative hearing procedure. Subsequent protests at District Court level will not be grounds for delaying bid award. The solicitation document also states that HRS has the right to reject any and all bids.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered dismissing Gulf's bid protest and rejecting all bids for lease number 580:2490. DONE AND ENTERED this 15th day of August, 1995, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of August, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-5628BID To comply with the requirements of Section 120.59(2), Florida Statutes (1993), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. Paragraph 1: Accepted in substance. Paragraphs 2-5: Rejected as unnecessary detail. Paragraph 6: Accepted in substance. Paragraph 7: Rejected as unnecessary detail. Paragraph 8: Accepted in substance. Paragraph 9: Rejected as unnecessary detail. Paragraphs 10-15: Accepted in substance. Paragraphs 16-17: Rejected as unnecessary detail. Paragraph 18: Accepted in substance. Paragraph 19: The portion of the paragraph stating that Gulf has maintained control of the subject property since the time of initial option is rejected as not supported by the greater weight of the evidence. The remainder of the paragraph is accepted in substance. Paragraphs 20-21: Accepted in substance. Paragraph 22: The first sentence is rejected as unnecessary detail. The second sentence is accepted in substance. Paragraphs 23-25: Accepted in substance. Paragraph 26: The portion of the sentence which states the ITB required that the award letter be issued within 30 days is rejected as not supported by the greater weight of the evidence. The remainder is accepted in substance. Paragraph 27: Rejected as immaterial. Paragraph 28: Accepted in substance. Paragraph 29: Rejected as immaterial. Paragraphs 30-31: Accepted in substance. Paragraphs 32-33: Rejected as immaterial. Paragraph 34: The portion that states the notice of withdrawal was filed on August 26 is accepted. The remainder is rejected as unnecessary detail. Paragraph 35: Accepted in substance. Paragraph 36: Accepted in substance to the extent that the manual refers to Rule 60H-1.017 F.A.C. for the procedures for turnkey leases. Paragraph 37: Rejected as immaterial. Paragraph 38: Accepted in substance to the extent that he did follow the manual but not to the extent that the manual set forth the procedures for procuring a turnkey lease. Paragraph 39: Rejected as not supported by the greater weight of the evidence and as contrary to law. Paragraphs 40-41: Rejected as unnecessary. 27 Paragraph 42: Accepted in substance. 28. Paragraphs 43-44: Rejected as unnecessary. Paragraph 45: Accepted in substance. Paragraphs 46-47: Rejected as unnecessary detail. Paragraph 48: Accepted in substance. Paragraph 49: Rejected to the extent that the only government entity interested in providing space was Broward General. Paragraphs 50-51: Rejected as unnecessary. Paragraphs 52: Rejected as subordinate to the facts found. Paragraphs 53-59: Accepted in substance. Paragraphs 60-68: Rejected as irrelevant. Paragraph 69: Rejected as not supported by the greater weight of the evidence. Paragraphs 70-71: Accepted in substance. Paragraphs 72: Rejected as irrelevant as to whether she was qualified as an expert. Paragraph 73: Rejected as unnecessary detail. Paragraph 74: Accepted in substance. Paragraphs 75-81: Rejected as subordinate to the facts found. Paragraph 82: The first half of the sentence is rejected as unnecessary detail. The remainder of the sentence is accepted in substance. Paragraphs 83-90: Rejected as subordinate to the facts found. Paragraph 91: Rejected as constituting argument. Paragraphs 92-96: Rejected as subordinate to the facts found. Paragraph 97: Accepted as that has been the practice of HRS but rejected to the extent that it reflects what is required by Rule 60H-1.017. Paragraph 98: Rejected as not supported by the greater weight of the evidence and by the law. Paragraph 99: Rejected to the extent that it implies that DMS approval only means that the lease is effective for payment. Approval by DMS is required for a turnkey lease before the lease can be executed by the parties. Paragraph 100: Accepted to the extent that it means that DMS has not evaluated and given approval of the award. Supplement to Proposed Recommended Order Paragraphs 1-2: Rejected as unnecessary. Paragraph 3: Accepted in substance. Paragraph 4: Accepted in substance to the extent that HRS had the authority if it followed the procedures under 60H-1.017, and to the extent that the leases were eventually approved by DMS, HRS's premature notices of award were ratified. Paragraph 5: Accepted to the extent that it applies to the time periods before HRS issued a notice of award. Paragraph 6: Accepted in substance. Paragraphs 7-8: Rejected as unnecessary. Paragraph 9: The first sentence is accepted in substance as it pertains prior to HRS issuing a notice of award. It is clear that DMS did do some evaluation of the proposed awardee's proposal prior to DMS approving the lease. The second sentence is accepted in substance as to what actually happened but rejected as to what was stated in Rule 10-8.007 and HRS's interpretation as set forth in its leasing manual. Paragraphs 10-12: Accepted in substance. Paragraph 13: Accepted in substance to the extent that it refers to the time prior to an agency issuing a notice of intended award. Paragraphs 14-15: Accepted in substance. Paragraph 16: Accepted in substance to the extent that the procedures were consistent but that the procedures repudiated the procedures set forth in DMS's duly promulgated Rule 60H-1.017. Paragraph 17: Accepted in substance. Paragraph 18: Rejected as constituting a conclusion of law. Paragraph 19: Rejected as not supported by the greater weight of the evidence. Paragraph 20: Rejected as constituting a conclusion of law. Paragraph 21: Accepted to the extent that the District Administrator has authority to award when the appropriate rules have been followed. Paragraphs 22-23: Accepted in substance. Paragraph 24: Irrelevant since her current duties do not include procurement of turnkey leases and in the past she did not participate in the procurement of a turnkey lease. Paragraph 25: Accepted in substance. Respondent's Proposed Findings of Fact. Paragraphs 1-4: Accepted in substance. Paragraph 5: The first sentence is accepted in substance. The remainder is rejected as unnecessary detail. Paragraphs 6-9: Accepted in substance. Paragraphs 10-11: Rejected as subordinate to the facts found. Paragraph 12: The paragraph is accepted in substance as it relates to state-owned facilities but not as it relates to other governmental facilities. Paragraphs 13-14: Accepted in substance. Paragraph 15: Rejected as unnecessary detail. Paragraphs 16-17: Rejected as immaterial to the facts actually found. Paragraphs 18-19: Rejected as unnecessary detail. Paragraphs 20-51: Accepted in substance. Paragraph 52: Rejected to the extent that it implies that for this particular case it was the sole responsibility of District X to evaluate the proposals. Paragraphs 53: Rejected as unnecessary detail. Paragraphs 54-55: Accepted in substance. Paragraph 56: Rejected as immaterial. Paragraph 57: Accepted in substance. Paragraphs 58-59: Rejected as immaterial. Paragraph 60: Accepted in substance. Paragraph 61: Accepted in substance except as to the statement the pressure was passed on, which is rejected as not supported by competent substantial evidence. Paragraphs 62-66: Accepted in substance. Paragraph 67: Accepted in substance except as to the date. The notice was faxed to the District on August 26 and a hard copy was submitted on August 29. Paragraph 68: Rejected as not supported by the evidence. 23 Paragraph 69: Accepted in substance. Paragraph 70: Rejected as unnecessary. Paragraph 71: Accepted in substance. Paragraph 72: Rejected as constituting a conclusion of law. Paragraph 73: Rejected as unnecessary. Supplemental Proposed Findings of Fact Paragraphs 1-2: Accepted in substance. Paragraph 3: Accepted in substance to the extent that the evaluation by DMS and the user agency is not done simultaneously. Paragraphs 4-9: Accepted in substance. Paragraph 10: Accepted to the extent that in actual practice DMS assists when requested by the user agency prior to the issuance of the notice of award. Paragraphs 11-19: Accepted in substance. COPIES FURNISHED: Kim Tendrich, Esquire District 10 Legal Counsel Department of Health and Rehabilitative Services 201 West Broward Boulevard Suite 513 Fort Lauderdale, Florida 33301 William A. Frieder, Esquire Assistant General Counsel Building E, Suite 200 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Wilbur E. Brewton, Esquire I. Ed Pantaleon, Esquire Taylor, Brion, Buker & Greene 225 South Adams, Suite 250 Tallahassee, Florida 32301 Robert L. Powell, Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Kim Tucker General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
Findings Of Fact Sea Isles Condominium Association (Petitioner) is the riparian owner of lands at 25714 Hickory Boulevard, Bonita Springs, Florida 33923. The Petitioner's lands lie along the Broadway Channel connecting the Gulf of Mexico to Estero Bay. There are 84 upland units in the condominium. Some condominium residents without docking slips have requested that the Petitioner apply for expansion of the existing facility. The waters adjacent to Petitioner's upland property are located within the Estero Bay Aquatic Preserve (pursuant to Section 258.39(28), Florida Statutes) and are designated as Outstanding Florida Waters (OFW) by the Department of Environmental Regulation (DER). At some point in approximately 1982, the condominium developer sought approval for the construction of docking facilities. By letter of January 25, 1982, Richard P. Ludington, then Director of the Division of State Lands of the Department of Natural Resources (DNR), indicated that there was no objection to the proposed dock project. The parties to this case have jointly stipulated that the Ludington opinion was based on the fact that the proposed project was a private non-income producing facility (a lease therefore not being required) and was not in conflict with any existing rules. The DER issued permit number 36-42521-5E, dated February 9, 1982, and the U.S. Army Corps of Engineers issued general permit number SAJ-33, both approving and authorizing the construction of the docking facility. Although the water body had been designated as an aquatic preserve, there were no adopted administrative rules regulating such projects at the time of the initial dock construction. The approved sixteen slip docking facility was constructed along the margin of the shoreline in 1983 by the developer of the condominium. Due to extremely shallow water depths, only two of the slips were accessible. At some point thereafter, the Petitioner began efforts to remedy the unusable slip situation. Initially, the Petitioner desired to dredge the area, but was unable to secure approval to dredge from regulatory agencies. The Petitioner then began to consider additional solutions. The solution upon which the Petitioner decided was removal of the existing slips and construction of an extended boardwalk and dock located in navigable water. On March 28, 1985, the DNR notified the Petitioner that the project would require approval in the form of a submerged land lease from the Governor and Cabinet, sitting as the Board of Trustees of the Internal Improvement Trust Fund ("Board"). On August 20, 1985, the DER issued permit number 361011295, authorizing the removal of the existing structure and the construction of a 22 slip docking facility as proposed by the Petitioner. On behalf of the Board, the DNR reviews applications for leases of sovereignty submerged lands. In reviewing such requests, the DNR calculates the maximum amount of sovereignty submerged lands which may be preempted by a proposed facility. According to administrative rule, the area of sovereignty submerged land preempted by a private residential multi-slip docking facility may not exceed the total square footage equal to ten times the riparian waterfront footage of the affected waterbody. DNR's calculation of the affected shoreline indicated that the Petitioner's riparian waterfront measured 433 feet. Application of the 10:1 ratio would indicate that the area of sovereignty submerged land preempted by the proposed multi-slip docking facility could not exceed 4330 square feet. As early as 1986, a surveyor employed by the Petitioner believed the DNR shoreline calculation to be erroneous and determined the Petitioner's riparian shoreline to be 601 feet. After discussing the discrepancy between measurements, the DNR representative informed a representative of the Petitioner that Sea Isles could obtain a mean high waterline survey to determine the actual shoreline footage if it disagreed with the DNR calculation. Although there is testimony that a survey provided to the DNR established the mean high waterline, the greater weight of the evidence establishes that the survey was not identified as a mean high waterline survey, but as a safe upland line survey. No credible mean high waterline survey was provided to the DNR by the Petitioner at that time. Abutting the Petitioner's property to the south is a man-made channel which results in an unnatural extension of the shoreline. Such extensions are not included in computing the allowable square footage of sovereign submerged lands because the man-made shoreline does not abut sovereign submerged lands. It is unclear whether the calculations of shoreline were affected by this consideration. Despite the discrepancy, the Petitioner reduced the size of the requested docking facility to include a boardwalk and dock of ten slips totalling approximately 4300 square feet and extending 208 feet into the waterbody (approximately 35 percent of the waterbody's width). The length of the extension violates administrative rule provisions governing extension into a waterbody which are addressed elsewhere herein. On July 23, 1986, Lee County passed a resolution of approval for the proposed docking facility land lease and granted a variance to Lee County Ordinance 85-25. The resolution of approval contained additional requirements, included a provision restricting the approval to not more than ten slips. The Petitioner asserts that the determination of shoreline was incorrect and was the result of "mutual mistake". The evidence fails to establish that the Petitioner's acceptance of the DNR's shoreline determination was based upon "mutual mistake." The evidence establishes that the Petitioner's representatives were aware of the discrepancy. The fact that the Petitioner agreed to deed a 575 foot conservation easement to the Board (to offset the potential adverse impact on manatee habitat as discussed elsewhere herein) would suggest that the parties were aware that the 433 foot measurement was inaccurate. For whatever reason, the Petitioner agreed to the DNR shoreline and dock calculation which formed the basis for the lease approved by the Board. Prior to approval of the lease, the Board reviewed a written "public interest" assessment which indicates that the length of the boardwalk to the proposed docking facility exceeded standards set by administrative rules. Pursuant to rule, exceptions to length restrictions may be made only where the applicant demonstrates that such exception is necessary to insure reasonable riparian ingress and egress. The Petitioner apparently demonstrated that, given the location of the existing sand flat, such exception was necessary to provide ingress and egress. According to the written analysis, the proposed project adversely impacted the manatee habitat located in the aquatic preserve. The analysis states that 575 foot conservation easement to the Board would offset the potential adverse impact on manatee habitat. The Petitioner committed to the conservation easement in order to meet the public interest test required of all docking facilities within an aquatic preserve. Special lease condition paragraph 5 requires the Petitioner to record a conservation easement for approximately 575 linear feet of shoreline in perpetuity to run with the land. The provision requires that documentation of the recording of the easement be provided to the Board within thirty days of the Board action and prior to execution of the lease. The lease conditions clearly indicate that the Petitioner will not seek authority to expand the docking facility. Special lease condition paragraph 5 prohibits any additional docking facilities or any other such development along the lessee's shoreline. Review of proposed special lease condition paragraph 6 (as compared to the staff recommendation and a subsequent affidavit executed by the Petitioner's representative on June 6, 1987) indicates that the paragraph appears to contain a typographical error in deleting the word "not" from the condition. The greater weight of the evidence establishes that the Petitioner agreed not to request authorization to dredge the docking area or channel or to request additional expansion of the facility. On April 21, 1987, the Board, apparently acting against the staff recommendation, voted to grant to the Petitioner a submerged land lease for the construction of a ten slip facility. Representatives of the Petitioner appeared before the Board during consideration and approval of the lease. On June 6, 1987, a representative of the Petitioner executed an affidavit on behalf of the Petitioner which sets forth the language of special condition paragraph six as originally proposed. In the affidavit, the Petitioner's representative agrees not to apply for authorization to dredge the dock or access channel, or to request expansion of the facility. A deed of conservation easement dated October 21, 1985, and signed by a representative of the Petitioner, was attached to the materials submitted to the Board for the April 21, 1987 meeting. Contrary to the lease requirement, the attached deed of conservation easement was never recorded. In 1986 or 1987, a conservation easement was recorded by the Petitioner in favor of the Board, but the easement contained no legal description of the subject property. However, the recorded easement does prohibit additional docking facilities and waives the Petitioner's rights of ingress or egress related to any such additional facilities. In early 1991, the Petitioner requested approval to expand the existing dock from 10 to 14 slip. The expanded structure would preempt 5620 square feet of sovereign submerged land. On May 15, 1991, the DER granted approval of the four slip expansion. On November 27, 1991, the DNR, by letter signed by Michael E. Ashley, Chief of the Bureau of Submerged Lands and Preserves, denied the requested four slip expansion. The letter was prepared at the direction and with the approval of the Director of the Division of State Lands. Mr. Ashley cites two reasons for the denial. First, the request violated the terms of the existing lease which provides that there will be no expansion requested. Second, the Petitioner had failed to record the 575 foot conservation easement which was required by the terms of the original lease. The request for extension was not presented to the Governor and Cabinet for consideration, but was reviewed by the "agenda review committee" of the DNR. The committee includes the Deputy Director, two Deputy Assistant Executive Directors, the General Counsel, and the Cabinet Coordinator for the DNR. The committee reviews matters which are identified as potentially requiring Board action to resolve. Where issues exist related to existing sovereignty submerged land leases, the DNR attempts to resolve the matter without referral to the Board. The authority to conduct business in this manner has not been reduced to writing, but is based on verbal direction from the Board and from Cabinet assistants. Subsequent to the letter of denial issued by Mr. Ashley, the Petitioner on or about December 30, 1991, filed a conservation easement granting to the Board, a perpetual interest in a parcel of land lying ten feet landward of the Safe Upland Line as described in the deed recorded in the records of Lee County, Florida, (OR 2268, Page 0401) with the Clerk of Court for Lee County. The parcel of land identified in the deed runs along the shoreline for a distance of 601 feet. The easement provides for modification by the signed agreement of the parties. Because the Petitioner seeks to expand an existing lease, it is required to demonstrate an additional public benefit would result from approval of the request. The Petitioner has proposed to plant an area of mangroves in the shallow "sand bar" area located behind the existing slips. There is no additional public benefit related to the request. The evidence fails to establish that granting the request to expand the docking facility is in the public interest.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Board of Trustees of the Internal Improvement Trust Fund enter a Final Order denying the request of Sea Isles Condominium Association to modify the existing sovereignty submerged land lease to provide for four additional boat slips to their existing ten slip docking facility. DONE and RECOMMENDED this 15th day of April, 1993 in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of April, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-1077 The following constitute rulings on proposed findings of facts submitted by the parties. Petitioner The Petitioner's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 17. Rejected, not supported by the greater weight of credible and persuasive evidence. 19. Rejected as to comments by Miller, irrelevant. 20-21. Rejected, irrelevant. Rejected as to 6,010 square feet of permissible preemption. Based upon shoreline calculation which is not supported by the greater weight of credible and persuasive evidence. Rejected, irrelevant. The manatee information was required under the conditions of the existing lease, and do not constitute a benefit to be considered in addressing the request to modify the lease. Respondent The Respondent's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 16. Rejected, unnecessary. COPIES FURNISHED: The Board of Trustees of the Internal Improvement Trust Fund c/o Kenneth Plante, General Counsel Department of Natural Resources 3900 Commonwealth Boulevard Mail Station #10 Tallahassee, FL 32399-3000 Robert Routa, Esquire Post Office Drawer 6506 Tallahassee, Florida 32314-6506 L. Kathryn Funchess, Esquire Assistant General Counsel Department of Natural Resources 3900 Commonwealth Boulevard Mail Station #35 Tallahassee, Florida 32399-3000
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: The petitioner is a dentist and is also engaged in the business of leasing real property in Florida for commercial purposes. A tax auditor for the respondent, Mr. Eugene A. Soinski, notified petitioner that an audit of his books and records would be conducted to determine whether petitioner was remitting the appropriate amount of rental taxes to the respondent. At the time of the initial audit, Mr. Soinski was supplied with only bank deposit receipts and certain leases. The auditor had difficulty in determining which were mortgage payments and which were rental payments. Based upon the auditor's review of petitioner's deposit slips, lease agreements, a three-year audit prepared by petitioner and discussions with some of petitioner's tenants, as assessment for delinquent taxes was made. The initial assessment was reduced and the present dispute lies with the revised assessment dated October 2, 1978, in the amount of $5,316.35. In his amended petition for a hearing and at the hearing, petitioner alleged that no rent tax was due on three specific leases. Petitioner offered no evidence to refute the respondent's assessment on any other lease. All testimony and evidence adduced at the hearing was confined to the lease agreements between petitioner and three other businesses -- Suncoast Amusement, Product Movement Systems, Inc., and Staid, Inc. One of the three disputed items in the assessment concerned an agreement between petitioner and Suncoast Amusement, also referred to as Hot Foots. The lease agreement between Suncoast and petitioner was not made available at the hearing. According to the testimony of the petitioner, the tenant removed carpeting from the premises and installed new red carpeting in its stead. Certain other improvements were also made to the property. The petitioner testified that he received no actual benefit to the property from these improvements, and that the red carpet actually decreased the value of the property. The auditor, Mr. Soinski, remembered seeing the lease agreement and matching the rental payment amounts with the deposit receipts to arrive at the assessment. A copy of the first two pages of the "business lease" between petitioner and Product Movement Systems, Inc., was received into evidence as respondent's Exhibit 3. This agreement contains the stipulation that TWENTY-SECOND: Minimum of two room office, with air, will be built at tenant's expense and remain as part of the first years rent. According to petitioner, the tenant actually built eight to ten offices and this did not improve the real estate. It was, instead, a deterrent to future tenants, according to petitioner. A copy of the "business lease" between petitioner and Staid, Inc., was received into evidence as the respondent's Exhibit 2. The consideration for the agreement was a total rental of sixty thousand dollars, payable as follows: One thousand dollars per month in advance, plus 4 percent State tax. Two thousand dollars security deposit, receipt acknowledged. Also on the first of each month an amount equal to 1/60th of the total cost of all improvements of any kind, as approved by both parties, will be paid plus the above basic rent of $1,040. - per month. Also, the twenty-fourth stipulation and condition in said lease provides as follows . . . TWENTY-FOURTH: If during the life of this lease tenant has need of more space every effort will be made to provide some adjacent. If it is desirable to both parties a new building is necessary then such buildings will be to tenants specifications, the rent will be the total cost of such land and improvements including architect fee, cost of mortgage, paving, landscaping or any expense of any nature x 15 percent net, net. According to the petitioner, he made a loan to Staid, Inc., in the amount of $48,000.00 to enable Staid to pay for certain improvements to the property. This loan was to be repaid in installments of $800.00 per month for sixty months. It was petitioner's testimony that regardless of the wording contained in the lease agreement, the improvements were not considered a part of the rent, he derived no benefits from the improvements to the property, and part of the payment made by the tenant each month was for repayments of a loan, rather than rental on the property. It was the testimony of Mr. Soinski, the auditor, that the assessment of the three disputed leases was based on the total amount of rent paid by the tenants to the petitioner, which rent included any improvements to the property. Where lease documents were available, he utilized the amount of rent due from the face of the lease document. Where possible, he compared the lease documents with the petitioner's bank deposit slips. The revised notice of proposed assessment dated October 2, 1978, was received into evidence as the respondent's Exhibit 1. This document assesses a tax on rentals of real property in the amount of $4,215.40, a delinquent penalty in the amount of $210.79 and interest through October 2, 1978, in the amount of $890.16, for a total amount of $5,316.35.
Recommendation Based upon the findings of fact and conclusions of law recited above, it is RECOMMENDED that the proposed assessment dated October 2, 1978, in the amount of $5,316.35 be upheld and that the relief requested by petitioner be denied. DONE AND ENTERED this 3rd day of January 1980 in Tallahassee, Florida. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings 101 Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of January 1980. COPIES FURNISHED: James W. Hickman 203 River Bend Longwood, Florida Linda Procta Assistant Attorney General Department of Legal Affairs The Capitol LL04 Tallahassee, Florida 32301 =================================================================
Findings Of Fact The department hereby adopts and incorporates by reference the findings of fact set forth in the Recommended Order.
Conclusions This cause came on before me for the purpose of issuing a final agency order. The Hearing Officer assigned by the Division of Administrative Hearings (DOAH) in the above-styled case submitted a Recommended Order to the Department of Health and Rehabilitative Services (HRS). A copy of that Recommended Order is attached hereto. RULING ON EXCEPTIONS FILED BY PROCACCI In this proceeding the parties stipulated that the issues to be decided were: one, whether the department's decision to reject all bids was improper and; two, if rejection was improper, which bidder should be awarded the lease contract. (See Recommended Order, page 3 and 28.) In his exceptions, Procacci now seeks to disregard the second prong of the stipulation and asserts that only a review of the record - basis of the initial rejection decision is appropriate. This view is inconsistent with the nature of a Section 120.57, Florida Statutes, proceeding, a de novo, evidentiary hearing, which gives all substantially affected persons the opportunity to change the agency's mind.1 Capeletti brothers vs. State, 432 So. 2d 1359 (Fla. 1st DCA 1983). This bid protest proceeding commenced in June 1990, and by law the solicitation process was stopped. Section 120.53(5)(c), Florida Statutes. Competent, substantial evidence supports the Hearing Officer's recommendation that the Lima proposal be accepted. The exceptions are rejected.
