Conclusions Having reviewed the Administrative Complaint, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency has jurisdiction over the above-named Respondent pursuant to Chapter 408, Part I, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Administrative Complaint and Election of Rights form to the Respondent. (Ex. 1) The Election of Rights form advised of the right to an administrative hearing. 3. The parties have since entered into the attached Settlement Agreement. (Ex. 2) Based upon the foregoing, it is ORDERED: 1. The Settlement Agreement is adopted and incorporated by reference into this Final Order. The parties shall comply with the terms of the Settlement Agreement. 2. The Administrative Complaint is withdrawn. ORDERED at Tallahassee, Florida, on this 2 | day of Se fen Astr~ , 2012. het yy fey Pal | ahaa Agency for HealttrCare Administration Elizab Page 1 of 2 Filed September 24, 2012 2:25 PM Division of Administrative Hearings
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review, which shall be instituted by filing one copy of a notice of appeal with the Agency Clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the Agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE > 2012. persons by the method designated on this 2: fay of I CERTIFY that a true and correct-gapy of this Final Ordes was served on the below-named Richard Shoop, Agency Clerk” Agency for Health Care Administration 2727 Mahan Drive, MS 3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Barbara J. Staros Stacy Meyer Administrative Law Judge Senior Corporate Counsel Division of Administrative Hearings Brookdale Senior Living The DeSoto Building, 1230 Apalachee Parkway 6767 West Washington Street, Suite 2300 Tallahassee, Florida 32399-3060 Milwaukee, Wisconsin 53214 (Electronic Mail) (U.S. Mail) Bradford C. Herter Jan Mills Office of the General Counsel Facilities Intake Unit Agency for Health Care Administration (Electronic Mail) (Electronic Mail) Page 2 of 2
The Issue The issues to be considered were framed through challenges to the aforementioned rules as alleged invalid exercises of delegated legislative authority, and if held to be invalid that the rules constitute agency statements that violate Section 120.535, Florida Statutes. In particular Petitioner alleges that the rules are invalid exercises of delegated legislative authority for reason that: The Respondent failed to publish notice of its decision to modify the challenged rules after they had been proposed. Rules 25-22.056(1)(a) and (4)(b), Florida Administrative Code, deny parties the opportunity to file exceptions to any order or Hearing Officer's recommended order as allowed by Section 120.57(1)(b)4, Florida Statutes. Rules 22-25.056(1)(a) and (4)(b), Florida Administrative Code, are invalid exercises of delegated legislative authority in that they modify and contravene Sections 120.53(1)(c), 120.57(1)(b)4 and 6 and 120.58(1)(e), Florida Statutes, and are arbitrary and capricious. Concerning Section 120.53(1)(c), Florida Statutes, the challenged rules are alleged to be other than "rules of procedure appropriate for the presentation of argument." It is asserted that the possibility exists that the failure to accept a finding of fact could be considered as a waiver of objection on appeal in the setting where the rules are not procedures appropriate for presentation of argument. Therefore, the rules are alleged to be inappropriate. It is alleged that the rules violate Section 120.57(1)(b)4, Florida Statutes, specifically in that the rules do not allow parties the opportunity to file exceptions in the instance where two or more Public Service Commissioners conduct the formal proceeding, contrary to the referenced statutory provision which does not contain that limitation. Similarly, it is alleged that the rules violate Section 120.57(1)(b)6(e), Florida Statutes, by failing to provide the parties the opportunity to develop a record which includes exceptions, in that no opportunity to file exceptions is provided other than the instances where a hearing officer conducts the formal proceedings. It is alleged that Section 120.58(1)(e), Florida Statutes, is violated in that the challenged rules do not provide the parties the opportunity to file exceptions to the proposed order in those circumstances where a majority of those who are to render the final order have not heard the case or read the record, and where a decision adverse to a non-agency party is to be made, thus contravening the legal requirements set out in that statute. It is alleged that there is no logical rationale for limiting the statutory opportunity to file exceptions according to the number of Public Service Commissioners conducting the formal hearing, when considering the aforementioned statutes. It is alleged that Rule 25-22.056(1)(b), Florida Administrative Code, is vague in that it fails to establish adequate standards for agency decisions by not specifying what is meant by the right to file exceptions to a proposed order "within the time . . . designated by the hearing officer." Moreover, Rule 25-22.056(1)(b), Florida Administrative Code, when contrasted with Rule 25- 22.056(4)(b), Florida Administrative Code, is said to be inconsistent when describing the right to file exceptions to recommended orders. Rule 25-22.058, Florida Administrative Code, is alleged to limit oral argument in formal proceedings to only those instances when the Respondent exercises discretion to grant oral argument in contravention of Section 120.58(1)(e), Florida Statutes, which is alleged to grant a mandatory right of oral argument in instances where a majority of those who are to render the decision have not heard the case or read the record and a decision adverse to a party other than the agency is contemplated by a proposed order.
Findings Of Fact Rules Adoption On October 18, 1992, Respondent published notice of intent to adopt Rule 25-22.021, Florida Administrative Code, entitled Agenda Conference Participation. The publication was made in the Florida Administrative Weekly. On that same date, in the Florida Administrative Weekly, Respondent published notice of its intent to amend Rule 25-22.056, Florida Administrative Code, entitled Post Hearing Filings; to repeal Rule 25-22.057, Florida Administrative Code, entitled Recommended Order, Exceptions, Replies, Staff Recommendations; and to amend Rule 25-22.058, Florida Administrative Code, entitled Oral Argument. On November 12, 1992, Petitioner submitted timely written comments to the Respondent regarding the rule proposals. In these comments Petitioner expressed an interest in the right to file exceptions to opposing parties' proposed findings of fact and to file exceptions to Respondent's staff advisory memoranda provided to Commissioners. On February 16, 1993, Respondent considered the published rules and public comments and voted to adopt the rules with changes. On March 3, 1993, Respondent filed with the Secretary of State a certification of the adopted rule, rule amendments and rule repeal previously described. On March 4, 1993, Respondent issued an order memorializing the adoption process. That order was No. PSC-93-0337-FOF-OT, Notice of Adoption of Rule. This document set forth that the Respondent had adopted Rules 25-22.021 and 25- 22.056, Florida Administrative Code, with changes; that Rule 25-22.058, Florida Administrative Code, was adopted without change and that Rule 25-22.057, Florida Administrative Code, was repealed. Respondent did not publish additional notice in the Florida Administrative Weekly of the decision to change Rule 25-22.056, Florida Administrative Code. The Parties Petitioner is a public interest environmental law firm with an office in Tallahassee, Florida. It is a corporation authorized to do business in the state of Florida. Petitioner has been a party to Respondent's formal administrative proceedings and is presently a party to such proceedings. In the past, Petitioner has filed post-hearing pleadings following formal administrative proceedings conducted by Respondent. Respondent holds hearings pursuant to Section 120.57, Florida Statutes, and prepares orders in accordance with that provision. The Florida Public Service Commission has five members. The Chairman of the Florida Public Service Commission has the responsibility to assign cases for hearing. See Sections 350.01 and 350.125, Florida Statutes. The assignment of formal proceedings is to an individual Public Service Commissione; a hearing officer with the Division of Administrative Hearings upon referral to the Division of Administrative Hearings; and panels constituted of two or more Commissioners. See also Rule 25-22.0355, Florida Administrative Code. Upon Petition in accordance with Section 350.01(6), Florida Statutes, and by decision made by a majority of the commissioners some proceedings may be assigned to the full Florida Public Service Commission for consideration. Commissioners who have been assigned to a proceeding act in a quasi- judicial capacity and are called upon to find facts as well as determine applicable law and are charged with making the ultimate decision in that proceeding. Commissioners vote on the issues considered in the cases presented. The voting occurs at a public agenda conference. A vote sheet is maintained. Legal staff assist the Commission in preparing the final order than memorializes that vote. There are no preliminary drafts or recommended orders (proposed orders) circulated to the parties unless the hearing was conducted by a single Commissioner serving as a hearing officer. Dissents from the majority vote in proceedings conducted by panels of Commissioners may or may not be reflected through a written dissenting opinion shown at the end of the final order. The final order discusses issues, makes fact finding and draws legal conclusions, and also makes ruling on proposed findings of fact submitted by the parties. There is no requirement for review or signature on the final order by persons assigned to the proceedings. The final order is issued by the Director of the Division of Records and Reporting or a person supervised by that individual. Opportunity is not presented to file exceptions to the staff advisory recommendations or to final orders of the Commission. Exceptions may be filed to proposed or recommended orders drawn by a single Commissioner sitting as a hearing officer or directed to recommended orders issued by a hearing officer from the Division of Administrative Hearings. Commissioners assigned to a proceeding receive copies of post-hearing submissions. In cases which are heard by two or more Commissioners, a recommended order (proposed order) is not prepared. Instead, in each case the Commissioners have available a staff memorandum concerning the issues in the proceeding for use at the agenda conference where a decision is reached in the case. That decision is rendered as a written final order. Advisory memoranda presented to assigned Commissioners in the various proceedings include discussions of issues found in prehearing orders, statements by each party concerning their position on those issues, staff recommendations as to resolution of issues, and an analysis of evidence and argument presented in the hearings and in the post-hearing filings, with citations to hearing testimony and reference to hearing exhibits. At times the advisory memoranda may include more than one recommended disposition on issues if the staff members do not concur as to the appropriate recommendation. Staff members may not prepare an advisory memorandum if they have testified in the proceeding. The advisory staff memoranda are not controlling when the assigned Commissioners deliberate cases. Commissioners who have been assigned to a case have heard the testimony and had the opportunity to review prefiled testimony, the hearing transcripts, transcripts of any argument that was permitted, the briefs of the parties and any proposed findings of fact and conclusions of law, as well as any statement of position of the parties and the staff advisory memorandum before deciding a case. The format for final orders is described in Rule 25-22.059, Florida Administrative Code. After a final order has been entered an adversely affected party may request reconsideration of the final order or take appeal to the appropriate court. See Rule 25-22.060, Florida Administrative Code. A motion for reconsideration addresses the substance in the final order, whereas, corrections which deal with scrivener's errors are made by informal contact through correspondence directed to the Florida Public Service Commission. A motion for reconsideration need not be correctly styled to be considered. Motions for reconsideration are voted upon by the Commissioners assigned to the proceeding. Separate written advisory memoranda are prepared directed to the disposition of motions for reconsideration. The motion is voted upon by the Commissioners assigned to the proceeding. The order directed to the motion for reconsideration is drafted by the legal staff for the Commission. The vote by the individual Commissioners assigned to the proceeding in deciding whether to reconsider is memorialized in a manner similar to the vote on the final order decision previously reached. The Subject Rules Rule 25-22.056(1)(a), Florida Administrative Code, describes the post- hearing opportunities for parties to a proceeding where two or more Commissioners or the full Commission conducts a hearing pursuant to Section 120.57, Florida Statutes. By contrast Rule 25-22.056(1)(b), Florida Administrative Code, describes the opportunities for post hearing submissions following a hearing conducted pursuant to Section 120.57, Florida Statutes, in which a single Commissioner sits as a hearing officer. Rule 25-22.056(4)(b), Florida Administrative Code, describes the opportunity for excepting to the proposed order of a single Commissioner sitting as a hearing officer or the recommended order in cases heard before a Hearing Officer employed by and assigned by the Division of Administrative Hearings. Rule 25-22.058, Florida Administrative Code, describes opportunities for oral argument before the Florida Public Service Commission associated with Section 120.57, Florida Statutes, formal hearings.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following facts relevant to the issues presented for determination are found: At the first hearing on January 8, 1981, the petitioner and the respondent stipulated and agreed that an appropriate rate base for petitioner's water operations was $249,622, that an appropriate rate base for petitioner's sewer operations was $714,919, and that an appropriate overall rate of return on petitioner's net investment was 13.07 percent. The reopening of the hearing was occasioned by a dispute over the appropriate amount of contributions-in-aid-of- construction (CIAC) attributable to petitioner's sewer operations. The petitioner takes the position that $84,500 is the appropriate amount of CIAC and the respondent and intervenor are of the opinion that the appropriate amount of CIAC is $317,000. Thus, the prior stipulation with regard to the figures contained in petitioner's Exhibit 4 is dissolved and the appropriate rate bases are dependent upon a resolution of the disputes concerning CIAC and additional rate case expenses occasioned by the reopening of the hearing. Quality of Service. The fifteen customers who testified at the hearing were concerned primarily with the large increase in sewer rates requested by the petitioner. The majority of petitioner's customers are elderly, retired persons on fixed incomes. Other than one witness who did not like the taste of the water and two customers who complained of billing errors, there was no adverse testimony concerning the quality of water or sewer services provided by petitioner to its customers. The petitioner's water and treated sewage consistently meets the standards and regulations imposed by regulatory agencies. There are no corrective orders or citations outstanding against petitioner's water or sewer operations. Charge for Delinquent Accounts. The petitioner presently computes a late payment charge of five percent of the overdue balance on delinquent accounts. Its request to charge a $10.00 fee when delinquency in payment results in a termination of water service and a charge of $2.20 for processing a delinquent bill which does not result in a termination of service is based upon actual labor and mailing costs necessary to the performance of these functions. These charges are reasonable and comport with similar charges made by other utility companies. Monthly Versus Quarterly Billing Cycle. The petitioner is presently billing its customers on a quarterly basis and has requested approval to change to monthly billing. The additional expense associated with monthly, as opposed to quarterly, billing would amount to $22,626.00 annually, or approximately 64 cents per customer per bill. The working capital allowance formula of one-eighth operation end maintenance expense is based upon a 45-day lag period or monthly billing system. If petitioner continues to bill on a quarterly cycle, its working capital allowance should be increased. Meters do occasionally stop working, meter boxes and covers become broken and water lines can develop leaks. Billing on a monthly basis would allow the petitioner to determine on a more frequent basis when a meter or a water line becomes inoperable, thus assuring that customers are accurately billed and preventing hazardous conditions with possible liability on petitioner's behalf. On a quarterly billing system, a meter could be incorrectly functioning for 90 to 150 days before the utility becomes aware of it. Between 1978 and 1900, the petitioner replaced 405 meters. No evidence was offered as to the amount of water, and therefore revenue, lost as a result of the nonfunctioning meters. With the exception of those in Duval County, most water and sewer utilities bill their customers on a monthly basis. Rate Case Expenses. Prior to the close of the January 8, 1991, hearing, the petitioner and the respondent Public Service Commission stipulated that the appropriate amount of rate case expense was $57,900.00 and that said expense should be amortized over a three-year period. The only remaining issue is the appropriate amount of rate case expense resulting from the reopening of the hearing due to the dispute regarding CIAC, and the appropriate period of amortization as to those expenses. The petitioner has claimed additional rate case expenses attributable to the new hearing in the amount of $15,100.00, for a total rate case expense of $73,000.00. This $15,100.00 is made up of additional attorneys' fees in the amount of $9,000.00, additional fees to three certified public accountant firms in the amount of approximately $4,000.00 and additional printing costs and miscellaneous costs of approximately $2,000.00. These amounts constitute estimates based upon incurred and expected hours of professional time occasioned by the new hearing. The figures were prepared for the April 10 hearing and do net include expenses or time spent on the May 14, 1981 hearing. The subject application is the petitioner's first application for a rate increase. While the use of one accounting firm may have been more economical and efficient, the use of two independent accounting firms is not unusual in a utility's first rate case due to the necessity of gathering historical data, the preparation of the minimum filing requirements of the Public Service Commission and the expertise required in regulatory matters. The two independent consulting firms did not engage in duplications of effort. The reopening of the hearing to resolve the CIAC dispute also resulted in many hours of PSC staff time. The petitioner has gained an extended benefit from the legal and accounting work done in this first application for a rate increase, and rate case expenses in a future application should be lower as a result of the efforts devoted to the present rate increase request. A three-year period has been a normal and reasonable period of time between rate cases. Contributions-in-aid-of-construction. The petitioner provides water and sewer service to the Beverly Hills Subdivision, which was developed in several stages. Units 1, 2 and 3 have septic tanks and Units 4, 5 and 6 are connected to a centralized sewerage treatment plant. During the period of 1069 and 1970, the petitioner collected a premium of $500.00 for homes sold in Units 4 and 5. There was evidence that some purchasers of homes in Units 4 through 6 were charged a premium of $1,000.00. Since no evidence was adduced as to the number of $1,000.00 fees which were collected, it is assumed for computational purposes that all such fees collected were in the amount of $500.00. There premiums were printed on petitioner's promotional literature as "houses in sewer areas extra." On land sales contracts, the premiums were referred to as "land improvements," "sewers" or "Unit 4 or 5 improvements," and on the closing statements the premiums were referred to as "land improvement fee." This fee was separate from and in addition to the monthly or quarterly charge for day to day sewer service. The utility presented no evidence that there was any other reason for the collection of $500.00 for "improvements" in Units 4 through 6. The collected premiums for the years 1969 and 1970 in the amount of $84,500.00 were recorded on the petitioner's books as "sales -- sewer charge" and the petitioner reduced the plant account and revenues by this amount. Also, in 1969, a New York branch office collected $500.00 fees in the total amount of $14,500.00. This amount was recognized by petitioner as taxable income and was not credited to the plant account. While the petitioner does not concede that the $500.00 premiums collected in 1969 and 1970 actually constitute CIAC, it does not contest the inclusion of the $84,500.00 as CIAC since it did not pay federal income taxes on that amount in 1969 and 1980. In 1971, petitioner continued to collect $500.00 premiums for lots sold in Units 4 through 6 and treated them in the same manner as they were treated on its books and records in 1969 and 1970. The amount of $54,500.00 was collected as premiums in 1971. Subsequently, the Internal Revenue Service audited the petitioner's 1971 tax return and treated the $500.00 collections amounting to $54,500.00 as revenue subject to income tax liability. The petitioner continued to collect the $500.00 premiums from purchasers in Units 4 through 6 until 1974. Due to the Internal Revenue Service report or directive which classified the 1971 $500.00 premiums as revenues, the petitioner incurred federal income tax liability on the premiums collected from 1971 through 1974. In 1972, the books of the petitioner changed with respect to the treatment of the $500.00 premiums. Prior to that time, the funds were segregated and declared as reductions to plant. After that time, the funds were treated on the corporate books as revenues from the sale of homes and were placed in a separate corporate account. Funds from sources other than sewer premiums wore also deposited into that account and monies from that account were used for such things as engineering services, sewer plant construction, roads, advertising, repairs, storm drainage and materials. Promotional materials, contracts of sale and closing statements, as well as customer testimony, indicate that petitioner consistently characterized the $500.00 fees for Units 4 through 6 as a charge for the sewer service available in those Units. The only difference between the homes in Units 1 through 3 and the homes in Units 4 through 6 was the presence of the sewer system in the latter as opposed to septic tanks in the former. Between 1969 and 1974, the petitioner sold 634 homes which included the $500.00 (or in some instances $1,000.00) premium for sewer service. Assuming a $500.00 fee from each purchaser, the total premiums collected amount to $317,000.00. The petitioner paid federal income taxes on all such $500.00 fees collected with the exception of the $84,500.00 collected in 1969 and 1970. Due to the three-year statute of limitations on refunds, the petitioner cannot now recover or recoup the taxes paid on that income. The imputation of CIAC to funds which petitioner has treated in the past for Internal Revenue purposes as income will substantially reduce petitioner's future sewer rate base and will reduce the petitioner's cash flow potential. If CIAC is imputed to these $500.00 premiums, it is estimated that the petitioner's sewer operation would offer revenue reductions in the approximate amount of $25,000.00 per year. Prior to December of 1973, no governmental agency regulated petitioner's water and sewer rates. The petitioner came under the jurisdiction of the Florida Public Service Commission in December of 1973. Although the petitioner did not produce the revenue agent's report which allegedly required the $500.00 fees to be reported as income, the testimony of petitioner's expert witness was that only a regulated utility could report tax-free Contributions- in-aid-of-construction. For federal income tax purposes, the CIAC of an unregulated utility was treated as ordinary taxable income. The assets represented by such funds can be depreciated for income tax purposes.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the issues in dispute between the parties be resolved as follows: The quality of service provided by the petitioner to its water and sewer customers be found adequate; A delinquent account charge he set at $10.00 if service must be disconnected and $2.20 if only a delinquent notice must be mailed; The petitioner's request to change from a quarterly to a monthly billing cycle be granted; Rate case expenses in the amount of $73,000.00 be approved, said amount to be amortized over a three-year period; and The $500.00 premiums collected between 1969 and 1974, in the total amount of $317,000.00, be treated as contributions-in-aid-of-construction and the petitioner's sewer rate base be accordingly reduced. Respectfully submitted and entered this 14th day of July, 1981, in Tallahassee, Florida. DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of July, 1981. COPIES FURNISHED: R.M.C. Rose and Martin Friedman 1020 East Lafayette Street Tallahassee, Florida 32301 Marta M. Suarez-Murias and Paul Sexton, Staff Counsel Florida Public Service Commission 101 East Gaines Street Tallahassee, Florida 32301 Suzanne Brownless and Steven Burgess Office of Public Counsel Room 4, Holland Building Tallahassee, Florida 32301 Steve Tribble, Clerk Florida Public Service Commission 101 East Gaines Street Tallahassee, Florida 32301 Charles E. Lertora, Jr. Beverly Hills Civic Association, Inc. Post Office Box 23 Beverly Hills, Florida 32665
Findings Of Fact The following findings of fact are based upon stipulations entered into and adopted by the parties on December 15, 1986, January 9, 1987, and January 12, 1987, which were confirmed by all parties at the final hearing: The League is a wholly owned instrumentality of its member cities. The League is charged in its bylaws to work for the general improvement of municipal government and its effective administration in this state. Further, it is charged with representing its membership on statewide issues affecting municipal government. The City is a municipal corporation organized and existing under the laws of the State of Florida. The City has five (5) "local law" municipal retirement funds, including three (3) police plans and two (2) firefighter plans, all of which receive excise tax revenue from the tax fund established in Chapters 175 and 185, Florida Statutes. The Department has responsibility for administering Chapters 175 and 185, Florida Statutes (1986). On November 7, 1986, the Department published notice in the Florida Administrative Weekly of its intent to adopt rules to implement Chapters 175 and 185, Florida Statutes, pertaining to municipal firefighter and police pension funds and to provide for interpretations, standards, applications, enforcement and administration thereof. The published notice stated there would be a public hearing on December 2, 1986, and the public hearing was held on that date. On November 26, 1986, the League filed its petition for administrative determination of the invalidity of certain of the proposed rules. The League represents over 390 cities throughout the State of Florida. As part of their municipal administration, many of these cities maintain firefighter pension funds that receive premium tax pursuant to Chapter 175, Florida Statutes, and police officer pension funds that receive premium tax pursuant to Chapter 185. A number of these cities maintain "local law plans" as defined by proposed rules 4-14.028 and 4-54.019; a number of the League's member cities maintain "chapter plans" as defined by the same proposed rules. Such plans are required by the proposed rules to meet certain standards which affect the cities' responsibilities in relation to said plans. Thus, the League, which is required to work for the effective administration of municipal government, is substantially affected by the proposed rules. The City is a substantially affected party pursuant to Section 120.54(4)(a),(d), Florida Statutes. All cities operating pension plans which receive funds pursuant to Chapter 175 and Chapter 185 have a duty to adequately fund said plans annually to meet the normal costs of the plan as well as fund any actuarial deficiency over a 40 year period. A number of local law plans presently have procedures and provisions which vary from the procedures and provisions in those sections of Chapters 175 and 185 which are addressed by proposed rules 4-54.024, 4-54.035, 4-54.036, 4- 54.037, 4-54.039, 4-54.040, 4-54.041, 4-54.044 and 4-54.047. The Department has copies of all pension plans which receive funds pursuant to Chapters 175 and 185 in their possession. Case No. 86-4722RP involves a challenge to certain proposed rule amendments to Chapter 4-54, Florida Administrative Code. Case No. 86-4723RP involves a challenge to certain proposed rule amendments to Chapter 4-14, Florida Administrative Code. Many of the proposed rule amendments to Chapters 4-14 and 4-54, Florida Administrative Code, which are being challenged are substantially similar. The statutory authority relied on for corresponding, similar proposed rule amendments in Chapters 4-14 and 4-54 are substantially similar, and the legal issues involved in the challenge to those corresponding proposed rules are identical. As a result of the public hearing held by the Department on December 2, 1986, the Department has agreed and stipulated to modify and/or withdraw certain proposed amendments to Chapter 4-54 which follow, as well as corresponding proposed amendments to Chapter 4-14, and in consideration thereof the Petitioners have agreed to withdraw their objections thereto: 4-54.018 Scope. These rules apply to all municipal firefighters in this State who participate in a pension fund which receives money from the premium tax provided for in ss. 175.101-175.131, Florida Statutes, as well as all municipal firefighter pension boards and municipalities having a municipal fire- fighter pension fund or system which receives state excise tax revenue from the tax fund established in Chapter 175, Florida Statutes, except as otherwise provided herein. The Department shall withdraw subsections (2) and (3) and renumber subsection (4) of proposed rule 4-54.023. The Department shall withdraw subsection (8) and renumber subsections (9), (10) and (11) of proposed rule 4-54.048. The Department shall withdraw subsection (3) of proposed rule 4-54.031. The League agrees to withdraw its challenge to proposed rule 4-54.032, but said withdrawal shall not prejudice its right to later challenge said rule pursuant to Sec. 120.56, Florida Statutes. The City did not object to this proposed rule. The Department shall amend subsection (2)(a) of proposed rule 4-54.024, Florida Administrative Code, to read: 4-54.024(2) A "professionally qualified" consultant means a consultant who meets the following minimum criteria: (a) he must offer his services on a "hard dollar" or flat fee as opposed to or in addition to a commission type basis. The League shall withdraw its objections to proposed rule 4-54.038. The City did not object to this proposed rule. 4-54.020 Minimum Standards Except as otherwise provided herein and Chapter 175, Florida Statutes, Chapter 175, excluding Section 175.351, Florida Statutes, provides minimum standards for (a)(line through original) all chapter funds. and (b) for all local law funds established on or after October 1, 1986. (line through original) Except as otherwise herein and in Chapter 175, Florida Statutes, Section 175.351, Florida Statutes, provides minimum standards for all local law funds. (established prior to October 4, 1986.(line through original) 4-54.029(4) The Department of Insurance shall withhold distribution of Chapter 175 tax revenues as allocated to a Chapter Fund or Local Law Fund which is not in compliance with the applicable requirements of Chapter 175 or Section 175.351. (or these rules.(line through original) 17. The application of Sections 175.071(5), 175.121, 175.162, 175.171, 175.181, 175.191, 175.231, 175.251, 175.261 and 175.333, Florida Statutes, will have an economic impact as defined in Section 120.54, Florida Statutes, (actuarial or administrative costs) on a number of local law municipal pension funds and those municipalities (including the City) that are not presently complying with these sections. The impact of these applications is ascertainable within an identifiable range. The issue of whether these statutory sections, and resulting economic impact, are made applicable to these funds by the provisions of Chapter 175, Florida Statutes, or by the proposed changes to Chapter 4-54, Florida Administrative Code, is not resolved by stipulation or agreement of the parties. During the hearing and also subsequent thereto, the parties further stipulated that: There is a difference in benefits available under the City's pension plans for firefighters enacted by special act and ordinance, and benefits available under a Chapter 175, Florida Statutes, plan. In their respective proposed final orders, Petitioners have listed the proposed rules which remain at issue, following stipulations and voluntary dismissals. (See League proposed finding of fact 23 and City proposed conclusion of law 4.) Proposed rules at issue are: Rule Chapter 4-54 Rule Chapter 4-14 4-54.024(3) 4-14.033(3) 4-54.027 4-14.036 4-54.029(2) 4-14.037(2) 4-54.033(2) 4-14.040(2) 4-54.034 4-14.041 4-54.035 None 4-54.036 4-14.042 4-54.037 4-14.043 4-54.039 4-14.045 4-54.040 4-14.046 4-54.041 4-14.047 4-54.045 4-14.051 4-54.047 None 4-54.048(3)(5)(6)(7)(10) 4-14.053(3)(5)(6)(7)(10) 4-54.049 4-14.054 The following findings of fact are based upon the evidence presented at final hearing: Based on the testimony of Dr. John J. Fenstermaker, who was accepted as an expert in English grammar and sentence structure, the phrase "approved by a majority of the firefighters" found in Section 175.351(13), Florida Statutes, modifies the nouns "board of trustees of the pension fund" and "official pension committee", instead of the verb in the sentence. However, the phrase does not mean that a majority of firefighters must approve the membership of the board of trustees or official pension committee. Rather, it means that a majority must approve action by the board of trustees or committee relative to the placement or use of certain income. A reasonable construction of the statute is that majority approval is required for the board of trustees or committee to act, but not that the make-up or membership of these bodies must be approved each time they propose to place or use certain income from the premium tax referred to in said statute. Proposed rule 4-54.048(7), Florida Administrative Code, is therefore authorized by, consistent with, and implements Section 175.351(13), Florida Statutes. The City's firefighter and law enforcement pension plans have received distributions of state premium tax funds pursuant to Chapters 175 and 185, Florida Statutes, for the last five years. The provisions of the City's local plans are very similar. Actuarial valuations of the City's firefighter and law enforcement pension plans are performed by the City's actuary as required by Chapter 112, Part VII, Florida Statutes. The City's local pension plan for firefighters does not presently apply or conform to the requirements of: Section 175.071(5), Florida Statutes, which requires the board of trustees to retain an independent consultant professionally qualified to evaluate the performance of professional money managers at least once every three years; Section 175.171, Florida Statutes, which deals with optional forms of retirement income; Section 175.181, Florida Statutes, which concerns the designation of beneficiaries; Section 175.191, Florida Statutes, dealing with disability benefits; and Section 175.261, Florida Statutes, regarding reports to Respondent. The Department promulgated an Economic Impact Statement in connection with the proposed rules in Chapter 4-54 which states, in pertinent part, that: Pursuant to Section 120.54(2), Florida Statutes, the State of Florida, Department of Insurance has considered the economic impact associated with the implementation of proposed Rule Chapter 4-54 which relates to municipal firefighters' pension funds. Chapter 175, Florida Statutes, was amended by Chapter 86-41, Laws of Florida, generally effective on October 1, 1986 with some exceptions. The amendments of Chapter 175, Florida Statutes, contained in Chapter 86-41, Laws of Florida, had and will have an economic impact upon the Department, the municipalities receiving state excise tax funds provided for in Chapter 175, Florida Statutes, and the firefighters' pension boards of trustees and pension funds. That economic impact was addressed fully in the legislation and enactment of Chapter 86-41, Laws of Florida. These rules, which augment, interpret, and provide for definitions, application and enforcement of Chapter 175, Florida Statutes, as amended by Chapter 86-41, Laws of Florida, will have no additional impact or nominal additional impact on those entities affected by Chapter 86-41, Laws of Florida. * * * 2. An Estimate of the Cost or Economic Benefit to all Persons Directly Affected by the Proposed Action. Insurance Companies: None. Insurance Agents: None. General Public: None. Municipalities: None, except for minor interest cost if a violation of 175.131, Florida Statutes occurs. Firefighter Pension Boards: None. * * * 5. A statement of the Data and Methods Used in Making Each of the Above Estimates. METHODOLOGY Costs and benefits of the proposed rule are estimated on marginal basis, i.e., additional costs or benefits over and above those associated with normal operations of the affected entity. The relevant costs or benefits to any economic impact are the net additions associated with implementation of the action. DATA The data used in calculating costs and benefits are derived from Departmental experience and statistics. The estimated cost to the agency for implementing the proposed changes was made by responsible agency staff personnel. The Department's Economic Impact Statement for proposed rule Chapter 4-14 is substantially similar to the above. It is clear from the Notice published by the Department, as well as its Economic Impact Statement, that the proposed rules which are here at issue implement Chapters 175 and 185, as amended by Chapters 86-41 and 86-42, Laws of Florida, respectively.
The Issue The issues in this case are whether Petitioner was properly enrolled in the Florida Retirement System (FRS) Hybrid Option Plan (Hybrid Option) in 2002, and whether he should be retroactively re-enrolled in the Florida 1 All statutory references are to the 2019 version of the Florida Statutes, except where indicated otherwise. Retirement System Pension Plan (Pension Plan) without having to pay a “buy-in” amount.
Findings Of Fact Mr. Marinak began employment with the Marion County Public School System, an FRS-participating employer, in 1989. At that time, the Pension Plan was the only retirement program available for eligible employees, and, thus, Petitioner was enrolled in the Pension Plan. The Pension Plan is administered by the Florida Division of Retirement (Division of Retirement), which is housed within the Department of Management Services. The Pension Plan is a defined benefit plan; the benefit is formula-based. The formula used for calculating a pension plan benefit is based on total years of service at the time of retirement, membership class, and average final compensation. Mr. Marinak has been continuously employed by an FRS-participating employer from 1989 to present. In 2002, the FRS Investment Plan (Investment Plan) became available to employees participating in FRS. The Investment Plan is administered by Respondent. The Investment Plan is a defined contribution plan; the benefit is based on gains and losses due to market performance. Mr. Marinak was provided a choice window of September 1, 2002, through November 30, 2002, to remain in the Pension Plan or switch to the Investment Plan. The parties stipulate that the Plan Choice Administrator at the time, now doing business as Voya, has records indicating Mr. Marinak elected the Hybrid Option by means of a telephone call on November 27, 2002. Voya no longer has a recording of the call. SBA does not have a recording of the telephone call either. The Hybrid Option is as its name indicates—it is a hybrid of the Pension Plan and the Investment Plan. When the Investment Plan was introduced in 2002, Pension Plan participants, with at least five years of service, could elect to enroll in the Investment Plan with a zero balance. With the election of the Hybrid Option, retirement funds from all years of service prior to the election remain in the Pension Plan; everything from the election forward is administered under the Investment Plan. Hybrid Option participants will receive the resulting defined benefit from the Pension Plan (earned prior to the election) upon retirement, plus the benefits from the investments in the Investment Plan after the election. The Pension Plan portion of the Hybrid Option remains with, and continues to be administered by, the Division of Retirement. The Investment Plan portion is administered by Respondent. Mr. Marinak disputes electing to enter the Hybrid Option. He credibly testified that he did not desire to transfer to the Investment Plan and has no recollection of authorizing such a transfer. Beginning at least as early as 2005, Respondent sent or otherwise made available to Mr. Marinak quarterly “FRS Investment Plan” statements. Mr. Marinak testified that he received these statements, but did not know what they meant. The earliest FRS Investment Plan statement documented by Respondent as having been sent to Mr. Marinak covered the period of January 1, 2005, to March 31, 2005. Mr. Marinak did not inquire about the statement or file a complaint with Respondent after receiving this statement. Beginning at least as early as 2008, the Department of Management Services sent or otherwise made available to Mr. Marinak annual “FRS Pension Plan – Hybrid Option” statements. These statements were sent to Mr. Marinak’s address of record at the time the statements were mailed. Mr. Marinak testified that the addresses where the statements were sent were, indeed, his addresses. Since the transfer in 2002, Mr. Marinak has updated his beneficiary designations for both the Pension Plan and Investment Plan portions of his Hybrid Option. In November 2008, Mr. Marinak communicated by e-mail with personnel at the Division of Retirement about the status of the Pension Plan and the years of service used to calculate his benefits. In December 2008, in response to his inquiry, the Division of Retirement prepared and provided to Mr. Marinak an Estimate of Retirement Benefit. The “Comments” section of the Estimate of Retirement Benefit stated as follows: This estimate is based on retirement at 30 years of service. It represents your 13.40 years of service in the Florida Retirement Pension Plan (8/1989 through 11/2002). You will have to terminate all employment with FRS employer to receive this benefit. You have an additional 6.00 years in the Hybrid Investment Plan through 11/2008; the years in the Hybrid Option are not used in calculating your monthly retirement benefit from the pension plan, which is why they are not reflected in your Member Annual Statement. Mr. Marinak did not inquire about the comment or file a complaint after receiving the Estimate of Retirement Benefit.2 Mr. Marinak testified that he saw the comment, but not being an expert in retirement financing, he did not comprehend what it meant. Mr. Marinak did not present documentary evidence or an audio recording demonstrating that he did not elect to transfer from the Pension Plan to the Hybrid Option. In early 2019, Mr. Marinak, nearing retirement, reviewed his retirement account and recognized that he was enrolled in the Hybrid Option. He contacted the Division of Retirement for guidance on how to switch back into the Pension Plan. The Division of Retirement informed Mr. Marinak that he may utilize a one-time “second election” to move back into the Pension Plan, but must pay a sum of approximately $160,000 as a “buy-in” amount to do so. This sum is derived from an actuarial calculation conducted by the Division of Retirement.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the State Board of Administration enter a final order dismissing Petitioner’s Florida Retirement System Investment Plan Petition for Hearing. DONE AND ENTERED this 27th day of July, 2020, in Tallahassee, Leon County, Florida. S JODI-ANN V. LIVINGSTONE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 27th day of July, 2020. COPIES FURNISHED: Ruth E. Vafek, Esquire Ausley McMullen 123 South Calhoun Street Tallahassee, Florida 32301 (eServed) Herbert M. Hill Law Office of Herbert M. Hill, P.A. Post Office Box 2431 Orlando, Florida 32802 (eServed) Robert John Marinak 16531 Swan View Circle Odessa, Florida 33556 (eServed) Ash Williams, Executive Director and Chief Investment Officer State Board of Administration 1801 Hermitage Boulevard, Suite 100 Post Office Box 13300 Tallahassee, Florida 32317-3300
The Issue Whether the Petitioner should be permitted to return his retirement contributions and be reinstated in the Florida Retirement System so that he can apply for disability benefits from the Florida Retirement System.
Findings Of Fact Petitioner is a thirty-four year old man, having left high school in the eleventh grade in order to get married, but later took the GED test to qualify as a high school graduate. Some years later he was informed by an Ophthalmologist that he had fallen into the bracket of being legally blind, a status which categorizes a person who has ten percent (10%) or less vision. Petitioner can and does read. He worked for a bakery which entailed work with machinery and required extensive reading, but was advised by the ophthalmologist to find a job where he would not be required to work with machinery and which did not require extensive reading. Petitioner began participating in the State and County Officers and Employees Retirement System on July 1, 1969, when he became a partner in a blind vending stand. He elected to become a member of the Florida Retirement System on December 1, 1970. Petitioner attended two (2) agency meetings at which retirement was discussed. He stated that he had changed from the State and County Officers and Employees Retirement System (Chapter 122, Florida Statutes) to the Florida Retirement System (Chapter 121, Florida Statutes), and was prompted to make the change because a senior partner in the business who had been there for many years said that it was a good idea for him and for the younger partner to sign into the new system. He stated that there probably was a discussion relative to the merits of the new retirement system but that he did not remember anything about it. He did, however, sign the card to change retirement systems. On June 1, 1971, Petitioner suffered some type of injury to his back which was subsequently diagnosed as a sprain. Petitioner received medical treatment and returned to work where he continued to work for the Bureau of Blind Services for approximately three years, resigning November 11, 1974. On March 5, 1975, Petitioner obtained a lump sum as a settlement for this disputed claim under the Florida Workmen's Compensation Act. Petitioner went on leave February 5, 1974, after supplying his supervisor, Mr. Eurgil G. Crawford, Administrative Vending Stand Section, Bureau of Blind Services, with a letter from the physician stating that Petitioner had a "nervous condition." In a letter of October 10, 1974, Mr. Crawford advised Petitioner to either return to work or to contact them if it was not possible. He also stated that the Petitioner would have sixty (60) days in which he might come back to work if he so desired, but that after that time his position would have to be filled permanently by another employee. Petitioner had had some employment problems with the other two (2) members of the three (3) man working team. The problems involved the work at the stand, cleanliness and the lifting necessary to operate the stand. He stated that he and the other two (2) members just could not get together as far as working as a team was concerned. After termination of employment, which was voluntary on the part of Petitioner, Petitioner contacted the supervisor, Mr. Crawford, and asked whether he was entitled to benefits he had contributed and was told that he was. Thereupon, Mr. Crawford sent him the necessary forms to apply for a refund. A refund was made after Petitioner had signed the proper forms and returned them to Mr. Crawford. Two (2) state warrants were issued to Petitioner, one on December 19, 1974, and a subsequent one to close out his account. Petitioner did not work after leaving the Blind Services and has not attempted to find work but receives disability benefits from Social Security based on a 15 percent permanent partial disability rating. He stated that "I have come up with a couple of not so advantageous jobs, you know, its a possibility of getting hurt and one thing and another, I haven't done anything." Subsequently, Petitioner requested information from the Respondent and, after receiving literature from them in 1976, tendered a sum of money equal to the refund he had received so he could apply for disability retirement benefits. The tender of the repayment of his contributions was denied. Petitioner applied for this administrative hearing. Petitioner contends: That he was unaware of a choice to apply for a disability rating when he signed the waiver to obtain a refund. That the supervisor owed Petitioner a special duty to inform him of the possibility of applying for disability benefits before requesting a return of his contributions. Respondent contends: That Petitioner was present at meetings at which the retirement system was discussed; he had information that caused him to transfer to the Florida Retirement System; that he knew of eligibility requirements under the Florida Retirement System and that requirements for eligibility were written in a booklet he had obtained from an employee of the retirement system and that he testified he knew of the five year eligibility requirement. That Petitioner voluntarily signed the waiver, that he had due notice and that the tender of the refund was properly denied.
Recommendation Deny the Petition. DONE and ORDERED this 18th day of April, 1978, in Tallahassee, Florida. DELPHENE C. STRICKLAND Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: David A. Townsend, Esquire Albritton, Sessums & Di Dio 100 Madison Avenue, Suite 301 Tampa, Florida 33602 Stephen S. Mathues, Esquire Assistant Division Attorney Division of Retirement Department of Administration Cedars Executive Center Tallahassee, Florida
The Issue The issue is whether Respondent should pay Petitioner's attorney's fees and costs, and, if so, the amount.
Findings Of Fact Mayor Osborne was the Mayor of Beverly Beach, Florida, during 1999 through 2001. Dr. Milanick was a dentist who owned property immediately north of Beverly Beach, Florida. Dr. Milanick desired that the property be annexed into the town and initiated annexation proceedings before the City of Beverly Beach. Mayor Osborne did not facilitate the requested annexation during the time he served as Mayor of Beverly Beach. Dr. Milanick alleged to the Commission that Mayor Osborne opposed the annexation for personal, financial gain. In order to defend himself against these false allegations, Mayor Osborne retained Robert J. Riggio, Esquire, of the Riggio and Mitchell firm of Daytona Beach. The Original Award of Attorney's Fees An award of attorney's fees and costs in favor of Mayor Osborne was recommended in Division of Administrative Hearings Case No. 04-4110E. The Recommended Order stated that the amount of attorney's fees and costs for Mayor Osborne to defend against Dr. Milanick's allegations was $4,976.00. The Commission did not address the amount of attorney's fees and costs in its Final Order, but instead held that Mayor Osborne was not entitled to any award. Subsequently, the Fifth District Court of Appeal found the Commission's Final Order to be erroneous and remanded the matter ". . . for entry of an order making the awards recommended by the ALJ." A Mandate with regard to the Fifth District Court of Appeal issued April 11, 2007. The award recommended by the ALJ was, as stated above, $4,976.00, and that amount should be awarded by the Commission in a Final Order. Appellate Attorney's Fees Mayor Osborne filed a Motion for Petitioner's Appellate Attorneys' Fees and Costs before the Commission on May 10, 2007, noting the Fifth District Court of Appeal, in its Order dated February 16, 2007, stated that, "Appellant's Motion For Attorney's Fees, filed May 16, 2006, is granted and the above- styled cause is hereby remanded to the Commission . . . to determine and assess reasonable attorney's fees for this appeal." The Fifth District Court of Appeal addressed only attorney's fees. However, because Mayor Osborne's Motion sought both attorney's fees and costs, and because the Commission sent that Motion without special directions to the Division of Administrative Hearings for resolution, it is found that the Administrative Law Judge has jurisdiction to recommend awards of both attorney's fees and costs expended in prosecuting the appeal. David C. Robinson, an attorney in Daytona Beach, Florida, testified as an expert on attorney's fees in Volusia County, Florida. He has practiced law in Daytona Beach for 26 years and has testified in other attorney's fees cases. He is familiar with the fees charged by attorneys in the Daytona Beach and Volusia County area. He knows Attorney Robert Riggio, of Daytona Beach, Volusia County, and Attorney Martin Pedata, of Deland, a town that is also located in Volusia County. Mr. Robinson is found to be an expert on the subject of reasonable attorney's fees and costs in Volusia County. Mr. Robinson reviewed the bills and records relating to the fees charged to Mayor Osborne as to the appellate filings made by Mr. Riggio. In doing so he considered the Lodestar approach as described in Florida Patients Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985). Mr. Robinson opined that the services performed by Mr. Riggio in the appellate proceeding were provided in a manner that an attorney would be reasonably expected to provide. He reviewed the hourly rate charged by Mr. Riggio and stated that the reasonable rate should be $250.00 per hour, but that Mr. Riggio only charged $150.00 per hour. Mr. Riggio's law firm, Riggio and Mitchell, billed Mayor Osborne for 95 hours. A small portion of the work was accomplished by his partner Jerome D. Mitchell. Other work in the amount of 9.4 hours was billed for paralegal work at $40.00 per hour. The 95 hours of attorney work was billed at $150.00 per hour for a total of $14,250.00, and the paralegal work totaled $376.00. Costs amounted to $859.70. This resulted in a total of $14,626.00 for fees and $859.70 in costs. Mayor Osborne paid these charges in full. Mr. Robinson opined that the rate charged and hours expended by Mr. Riggio in the appellate proceeding were appropriate, as were the costs incurred. His testimony is found to be credible. As a result of Mr. Riggio's efforts, Mayor Osborne prevailed in the appeal. It is found that Dr. Milanick caused Mayor Osborne to pay attorney's fees and costs in the amount of $15,485.70. Proving Entitlement to Fees and Costs Subsequent to Dr. Milanick's allegations of misconduct before the Commission, and after an investigation, the Commission, in a Public Report dated September 8, 2004, dismissed the complaint on a finding of no probable cause in the case of Mayor Osborne. Pursuant to Subsection 112.317(8), Florida Statutes, Mayor Osborne was entitled to be reimbursed for the attorney's fees and costs associated with defending himself against Dr. Milanick's allegations. Because Dr. Milanick did not voluntarily remit the fees and costs expended, a hearing was required. A hearing was held in this matter in Daytona Beach, Florida, on May 11, 2005. The hearing in Division of Administrative Hearings Case No. 04-4110FE, lasted an entire day. Prior to the hearing, Mayor Osborne engaged the services of Attorney Martin Pedata in addition to those provided by Mr. Riggio. The agreement for representation by Mr. Pedata was reduced to writing on April 6, 2005. The agreement provided that Mayor Osborne would pay Mr. Pedata $250.00 per hour for his services and $75.00 per hour for paralegal services. Mr. Robinson reviewed the bills and records relating to the fees charged to Mayor Osborne for the preparation for and the conduct of the hearing of May 11, 2005. Mr. Robinson stated that the hourly rate of $250.00 was a reasonable one for the type of services provided by Mr. Pedata. He stated that the number of hours expended by Mr. Riggio and Mr. Pedata in connection with this hearing was reasonable. In analyzing this claim he used the Lodestar approach set forth in Rowe. Mr. Riggio and his partner Mr. Mitchell, expended 160.6 hours proving entitlement to fees and costs. Mr. Pedata, as lead attorney in the entitlement case, expended 107 hours. In addition, 54.2 paralegal hours were expended in proving the entitlement case. These hours include the time up to the filing of the appeal with the Fifth District Court of Appeal. These hours also include the time spent before the Commission. As a result of the efforts of Mr. Riggio and Mr. Pedata, Mayor Osborne prevailed in the entitlement hearing, which resulted in a Recommended Order in his favor. Mayor Osborne paid Mr. Riggio and Mr. Pedata a total of $50,840.00 for their services in proving entitlement to attorney's fees. He also paid $2,168.00 for paralegal services. Total costs amounted to $3,764.73, which Mayor Osborne paid. The total fees and costs to Mayor Osborne was $56,772.73. Mr. Robinson opined that the rate charged and hours expended by Mr. Riggio in the appellate proceeding were appropriate, as were the costs incurred. His testimony is found to be credible. It is found that Dr. Milanick was responsible for Mayor Osborne having to pay attorney's fees and costs in the amount of $56,772.73. Additional fees and costs Mr. Riggio presented Mayor Osborne with an invoice in the amount of $2,370.00 for the cost of the current proceeding. However, the Administrative Law Judge is without jurisdiction to address this claim in this proceeding.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission on Ethics award attorney's fees and costs as follows: The original award of attorney's fees in the amount of $4,976.00. Attorney's fees and costs for appellate attorney's fees and costs in the amount of $15,485.70. Attorney's fees and costs for proving entitlement to fees and costs in the amount of $56,772.73. DONE AND ENTERED this 14th day of November, 2007, in Tallahassee, Leon County, Florida. S HARRY L. HOOPER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 14th day of November, 2007. COPIES FURNISHED: Robert J. Riggio, Esquire Riggio & Mitchell, P.A. 400 South Palmetto Avenue Daytona Beach, Florida 32114 Kaye Starling Florida Commission on Ethics Post Office Drawer 15709 Tallahassee, Florida 32317-5709 Dr. Alexander J. Milanick 7250 A1A South St. Augustine Shores, Florida 32080 Phillip C. Claypool, Executive Director and General Counsel Commission on Ethics 3600 Maclay Boulevard, South, Suite 201 Post Office Drawer 15709 Tallahassee, Florida 32317-5709 James Peterson, Esquire Linzie Bogan, Esquire Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050
The Issue The issue to be determined is whether Petitioners are entitled to an award of reasonable prevailing party attorney’s fees and costs stemming from a prior consolidated action before ALJ F. Scott Boyd, DOAH Case Nos. 16-3298 and 16-3302, pursuant to section 185.05, Florida Statutes. Before the final hearing, the parties stipulated to an amount of reasonable prevailing party attorney’s fees and costs if the undersigned determines that Petitioners are entitled to an award of reasonable prevailing party attorney’s fees and costs stemming from that prior action before ALJ Boyd.
Findings Of Fact The City of Coral Springs is a municipality in Broward County, Florida. It exercises broad power pursuant to article VIII, section 2 of the Florida Constitution, and the Municipal Home Rule Powers Act, chapter 166, Florida Statutes. The City Commission of the City of Coral Springs (“Commission”) may create other offices, boards, or commissions to administer the affairs of the city and may grant them powers and duties. The Commission has adopted the Coral Springs Police Officers’ Pension Plan (“the Plan”), which is amended from time to time by ordinance and is set forth in sections 13-5 through 13-17 of the Code of Ordinances of the City of Coral Springs. The Plan is administered by the City of Coral Springs Police Officers’ Pension Fund Board of Trustees (“Board”), the powers of which are set forth in sections 13-13 through 13-15 of the Code of Ordinances of the City of Coral Springs. The Plan is a local-law defined pension plan created pursuant to chapter 185. In February 2016, the Board adopted a policy to allow for the suspension of pension benefits of members who were charged with crimes specified at section 112.3173, Florida Statutes, and whose benefit payments had equaled or exceeded their contributions to the Plan. The Williamses are retired police officers whose pension benefits had fully vested at the time of the enactment of the aforementioned suspension policy. In February 2016, the Board sought to suspend Petitioners’ benefits under the newly-adopted policy because Petitioners had been charged with crimes specified in section 112.3173 and the benefit payments made to them had exceeded their contributions to the plan. Petitioners requested a formal hearing to challenge the authority of the Board to adopt the suspension policy. Petitioners’ benefits were never suspended at any time during the pendency of this suspension matter. The Board contracted with DOAH to conduct the formal hearing under the authority of section 120.65(6), Florida Statutes. DOAH assigned ALJ Boyd to the prior consolidated action, who issued pre-hearing instructions requiring a statement of all issues. The issue of attorney’s fees was not included by the parties. ALJ Boyd conducted the formal hearing on September 30, 2016, and October 10, 2016. On November 18, 2016, ALJ Boyd issued a Recommended Order finding that the Board did not have the authority to adopt the policy nor apply it to Petitioners. The Recommended Order made no mention of awarding attorney’s fees or costs. Nether Petitioners nor the Board filed exceptions to the Recommended Order. Petitioners raised the issue of fees in a letter to the Board dated December 2, 2016. Counsel for Petitioners appeared at a hearing held before the Board in December 2016 and sought fees as set forth in the December 2, 2016, letter. The Board adopted ALJ Boyd’s Recommended Order in toto on January 3, 2017. The Board also denied Petitioners’ request for a hearing regarding an award of attorney’s fees. On January 13, 2017, Petitioners sought an award of attorney’s fees by filing with DOAH a Verified Motion for Prevailing Party Attorney’s Fees and Costs. On March 1, 2017, ALJ Boyd entered an Order dismissing Petitioners’ motion for fees, stating he lacked jurisdiction to hear the issue of fees. That Order was not appealed. Prior to the final hearing in this matter, Petitioners successfully petitioned the Seventeenth Judicial Circuit Court to compel the Board to grant them a hearing on entitlement to the fees and to quash the Order denying fees for violation of due process. Petitioners then successfully defended an appeal of that Order by the Board to the Fourth District Court of Appeal and a motion for rehearing thereon. Petitioners are not seeking fees for these extraordinary writ actions as these efforts do not fall under chapters 185 or 120. The parties stipulated that “the Williamses prevailed in challenging the Board’s authority to create a policy suspending the benefits.” The Board never applied its proposed suspension policy to Petitioners. Petitioners continue to receive their benefits to this day. Criminal charges against Petitioners remained pending at the time of the hearing in this matter. Petitioners are only seeking entitlement here to an attorney’s fee and costs award for their successful challenge of the suspension policy.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Board enter a final order denying Petitioners’ request for prevailing party attorney’s fees and costs. DONE AND ENTERED this 19th day of February, 2021, in Tallahassee, Leon County, Florida. S ROBERT S. COHEN Administrative Law Judge 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 www.doah.state.fl.us COPIES FURNISHED: Filed with the Clerk of the Division of Administrative Hearings this 19th day of February, 2021. Brandon J. Hechtman, Esquire Wicker, Smith, O’Hara, McCoy & Ford, P.A. 2800 Ponce de Leon Boulevard, Suite 800 Coral Gables, Florida 33134 Pedro Herrera, Esquire Sugarman & Susskind, P.A. 100 Miracle Mile, Suite 300 Coral Gables, Florida 33134 Bonni Spatara Jensen, Esquire Klausner, Kaufman, Jensen & Levinson 7080 Northwest 4th Street Plantation, Florida 33317 Kenneth R. Harrison, Esquire Sugarman & Susskind, P.A. 100 Miracle Mile, Suite 300 Coral Gables, Florida 33134 Gina Orlando, Administrator City of Coral Springs Police Officers’ Pension Fund 9551 West Sample Road Coral Springs, Florida 33065
Findings Of Fact The Petitioner, Linda S. Powell, began her original employment associated with Orange County on February 19, 1975. The period from February 19, 1975, to July 1, 1980, is 5 years, 4.4 months. In order to be entitled to disability benefits under the Florida Retirement System (FRS), Ms. Powell must have completed five years of creditable service with the County on or before July 1, 1980. The period from February 19, 1975, through September 7, 1975, equals approximately 6.4 months. It is this 6.4 months which is at issue in this case because the Respondent, Department of Administration, Division of Retirement, maintains that Ms. Powell was ineligible for creditable service because she was a temporary CETA employee. If the 6.4 months of CETA employment is deducted from the 5 years 4.4 months of total service before July 1, 1980, Ms. Powell has 4 years 10 months of creditable service, 2 months short of the 5-year requirement. Ms. Powell began employment with the Orange County Board of County Commissioners on February 19, 1975, as a keypunch operator under the CETA Program. At this time, and for several months prior to her beginning employment, Orange County had been operating under a federally subsidized program known as the Comprehensive Education and Training Act (CETA), which was operated by Orange County under two separate programs known as Title I and Title II. Title I was an on-the-job training program which provided employment positions to individuals in addition to the regular employment positions already maintained by the County. These individuals were brought on the regular payroll of the County and were given full benefits, including retirement and social security. Approximately 20 to 25 individuals took part in this program. In the latter part of 1974, the CETA Title II program was begun by the County. This program was for certain identifiable population groups of unemployment within the County. Individuals hired under Title II were put on the regular County payroll, and the County would submit a bill to CETA for payment of the individual's salary and benefit, which included retirement (FRS) and social security. In February 1975, the CETA Title VI program was implemented by Act of Congress. Title VI was a federal emergency employment measure designed to get people into productive job situations and to provide an immediate salary payment. In implementing Title VI, the County determined that no fringe benefits, including social security and retirement, would be paid for these individuals, since this method would allow approximately 20 percent more individuals to be hired in the program. The County determined that individuals in the Title VI program were to be temporary employees of the County. Individuals were further notified on the first day of employment during an orientation session that they were temporary employees and would receive no fringe benefits. Petitioner signed a statement on her first day of employment that she understood that she was placed in a federally funded program and had no assurance of continued employment at the end of the funding for such program. (Respondent's Exhibit 1). CETA Title VI funds were placed in a special, separate bank account by the County, and from this account the County would pay salary to Title VI individuals and other bills such as equipment and supplies purchased. This account was not a regular payroll account. Upon payment of Title VI individuals, the County would then invoice the federal CETA office for the salaries paid and receive reimbursement. Employees who worked under Title VI performed work in nonprofit agencies, such as United Nay, as well as work for the County. Petitioner continued to be an employee under CETA Title VI from February 19, 1975, to September 7, 1975, at which time she was transferred from CETA Title VI to CETA Title II and placed in a regularly established position. (Respondent's Exhibit 2). At this time, an employment history file was begun on the Petitioner, and said file reflected a service date of September 7, 1975. In addition, an "employee change notice" was completed on Petitioner, signifying a transfer from CETA Title VI to permanent status. (Respondent's Exhibit 3). The County began payment of retirement contributions on Ms. Powell in September 1975, as reflected by the certification of earnings provided by the County to Respondent. Ms. Powell filed an application for disability retirement benefits on April 5, 1983. (Petitioner's Exhibit 1).
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Linda S. Powell be denied service credit for her employment under CETA from February 19, 1975, to September 7, 1975. Said service is not creditable under the Florida Retirement System. DONE and ENTERED this 9th day of May, 1984, in Tallahassee, Leon County, Florida. Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division Administrative Hearings this 9th day of May, 1984. COPIES FURNISHED: Terry C. Young, Esquire 109 East Church Street, Suite 301 Post Office Box 2631 Orlando, Florida 32802 Stanley M. Danek, Esquire Division of Retirement 2639 North Monroe Street, Suite 207-C, Box 81 Tallahassee, Florida 32303 Nevin G. Smith, Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32301
