09-002893 In Re: Petition To Merge The Seven Oaks Community Development District 1 And The Seven Oaks Community Development District Ii vs. * Status: Closed Recommended Order on Wednesday, September 30, 2009.

Summary: The Petition to merge two existing Community Development Districts appeared to satisfy all statutory and rule criteria.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

IN RE: AMENDED PETITION TO )

MERGE THE SEVEN OAKS COMMUNITY )

DEVELOPMENT DISTRICT I AND THE ) Case No. 09-2893

SEVEN OAKS COMMUNITY )

DEVELOPMENT DISTRICT II )

______________________________ )

ADMINISTRATIVE LAW JUDGE'S REPORT TO THE FLORIDA LAND

AND WATER ADJUDICATORY COMMISSION

Pursuant to notice, a local public hearing was held in this

matter in Wesley Chapel, Florida, on July 16, 2009, before

Donald R. Alexander, an Administrative Law Judge of the Division

of Administrative Hearings.

APPEARANCES

For Petitioners: Tracy J. Robin, Esquire

Straley & Robin

100 East Madison Street, Suite 300

Tampa, Florida 33602-4703

STATEMENT OF THE ISSUE

The issue is whether the Amended Petition to Merge the

Seven Oaks Community Development District I and the Seven Oaks

Community Development District II (Amended Petition) meets the

applicable criteria set forth in Chapter 190, Florida Statutes

(2008), 1 and Florida Administrative Code Rule Chapter 42-1. 2 The

purpose of the hearing was to gather information in anticipation

of quasi-legislative rulemaking by the Florida Land and Water

Adjudicatory Commission (Commission).

PRELIMINARY STATEMENT

On June 16, 2008, Petitioners, Seven Oaks Community

Development District I (District I) and Seven Oaks Community

Development District II (District II), two existing community

development districts, filed their Petition with the Secretary

of the Commission seeking to merge the two entities into a new

community development district known as Seven Oaks Community

Development District. 3 Prior to that time, a copy of the

Petition and exhibits, along with the requisite filing fee, was

filed with Pasco County (County), where the new district will be

located. The County did not elect to have a local hearing.

After a Notice of Insufficiency and Request for Additional

Information was issued by the Commission on August 1, 2008, a

first, second, and third set of Supplemental Exhibits were

submitted by Petitioners on August 27, 2008, January 21, 2009,

and April 6, 2009, respectively. On May 5, 2009, the Secretary

of the Commission certified that the Petition contained all

required elements and forwarded it to the Division of

Administrative Hearings for the purpose of holding the local

public hearing required under Section 190.005(1)(d), Florida

Statutes.

The local public hearing was held on July 16, 2009, in

Wesley Chapel, Florida. Notice of the public hearing was

published in accordance with Section 190.005(1)(d), Florida

Statutes. On July 9, 2009, Petitioners pre-filed the testimony

of their three witnesses.

On July 16, 2009, Petitioners filed an Amended Petition,

which amended their original request by asking that in lieu of

establishing a new district, that District II be merged into

District I, with District I becoming the surviving district.

The Amended Petition further requested that the name of the

surviving district be changed from Seven Oaks Community

Development District I to Seven Oaks Community Development

District. This change was authorized by an amendment to

Section 190.046(3), Florida Statutes, which became effective on

July 1, 2009, and provided the option, when merging two

districts, of creating a new district or for one of the two

merged districts to be the surviving district. See Ch. 2009-

142, Laws of Fla. Prior to the change in the law, the only

option available when merging two districts was to create a new

district. At the hearing, counsel represented that copies of

the Amended Petition were being "overnighted" that day to both

the Commission and the County. Attached to the Amended Petition

are Petition Exhibits A through J, some of which duplicate other

exhibits received in evidence.

At the local public hearing, Petitioners presented the

testimony of William P. Bahlke, a professional engineer with

Heidt & Associates, Inc., who serves as project engineer and was

accepted as an expert; William E. Parsons, vice-chair of the

Board of Supervisors of Districts I and II; and John H. McKay,

Director of Planning and Compliance with Rizzetta & Company,

Inc., and accepted as an expert. No members of the public

appeared at the hearing.

Besides the information submitted to the Commission in

response to the Notice of Insufficiency and Request for

Additional Information during the preliminary review process,

Petitioners offered Hearing Exhibits 1 through 9, which were

received into evidence. Exhibit 1 is the Third Amended Merger

Agreement dated July 15, 2009; Exhibit 2 is Resolution No. 2009-

13 adopted by District I on July 15, 2009, which approved the

Third Amended Merger Agreement; Exhibit 3 is Resolution No.

2009-15 adopted by District II on July 15, 2009, which approved

the Third Amended Merger Agreement; Exhibit 4 is a Summary of

Bond Issues for both Districts I and II, which totaled

$36,315,000 as of May 2, 2009; Exhibit 5 is the affidavit and

pre-filed testimony of John H. McKay; Exhibit 6 is the affidavit

and pre-filed testimony with attachments of William Parsons;

Exhibit 6 is the affidavit and pre-filed testimony of William P.

Bahlke; Exhibit 8 is the Notice of Filing Affidavit of

Publication of the local public hearing in the St. Petersburg

Times , Pasco County Edition , on June 18 and 25 and July 2 and 9,

2009; and Exhibit 9 is a copy of House Bill 821, which is

engrossed in Chapter 2009-142, Laws of Florida. Petitioners

also offered into evidence the Amended Petition, with attached

Exhibits A through J, and requested that it be marked as Hearing

Exhibit 5. While the Transcript (page 21) correctly reflects

that Exhibit 5 is the affidavit and prefiled testimony of

witness McKay, the list of exhibits prepared by the court

reporter on page 2 of the Transcript identifies Exhibit 5 as the

Amended Petition. To avoid confusion, the Amended Petition,

with attachments, has been numbered as Hearing Exhibit 10.

At the local hearing, Petitioners' counsel represented that

an incorrect notice had been initially published by the

Commission in the Florida Administrative Weekly . Therefore, a

new notice was published by the Commission on July 17, 2009.

Because of this, at counsel's request, the record in this case

was kept open for an additional thirty days, or until August 16,

2009. (Normally, the record would have been kept open for ten

days after the close of the hearing. See Fla. Admin. Code R.

42-1.012(3).) No written communications were filed by any

person in response to the second notice.

The Transcript of the local public hearing was filed on

August 21, 2009. On the same date, Petitioners filed a proposed

Report to the Florida Land and Water Adjudicatory Commission,

which has been considered in the preparation of this Report.

SUMMARY OF THE RECORD

A. Petition Contents and Related Matters

1 . Petitioners are seeking the adoption of a rule by the

Commission to merge Districts I and II, which will consist of

approximately 1,773.422 acres located entirely within the

unincorporated part of the County. See Amended Petition Exhibit

A. The merged District is located just north of the

Hillsborough-Pasco County boundary line. Its southern boundary

intersects and/or adjoins State Road 56, its western boundary

adjoins Intrastate Highway 75, and its eastern boundary adjoins

County Road 581. The nearest community appears to be Wesley

Chapel.

2. The metes and bounds description and sketch of the

external boundaries of the surviving district are found in

Amended Petition Exhibit B. There are four parcels within the

proposed surviving district which are to be excluded and are

owned by other entities: (a) Withlacoochee Electric

Cooperative, Inc.; (b) Tampa Bay Regional Water Supply

Authority; (c) the County Facilities Management Department; and

(d) the District School Board of the County.

3. Amended Petition Exhibits C-1, C-2, and C-3 are true

and correct copies of the Third Amended Merger Agreement, the

District I resolution approving the merger, and the District II

resolution approving the merger, respectively. (These three

exhibits duplicate Hearing Exhibits 1 through 3.)

4. Amended Petition Exhibit D indicates that the five

persons designated to serve as initial members of the Board of

Supervisors are Jeffrey Rosenberg, William Parsons, Susan Jurik,

Stephen Wheeler, and John Christenson, and that each member is a

resident of the State of Florida and a citizen of the United

States.

5. Amended Petition Exhibit E describes the major water,

wastewater, and reuse trunk lines within the proposed District.

Because the capital infrastructure of Districts I and II is

completely built out, there is no additional construction

planned in the surviving district. Amended Petition Exhibits F-

1 through F-4 are the Engineer's Reports dated October 2001,

July 30, 2002, March 3, 2003, and October 7, 2004, respectively,

which reflect the timetables and costs involved when the

existing infrastructure facilities were constructed. Amended

Petition Exhibit F-5 is the proposed infrastructure plan.

6. Amended Petition Exhibit G is the relevant portion of

the Future Land Use Map of the County's Comprehensive Plan and

shows the general distribution, location, and extent of the

public and private land uses within the surviving district. It

also includes a description of each land use category within the

merged District.

7. Amended Petition Exhibit H is the Statement of

Estimated Regulatory Costs (SERC), which indicates that it was

prepared in accordance with Section 120.541, Florida Statutes.

8. Amended Petition Exhibit I is a copy of a letter dated

July 8, 2009, prepared by Akerman Senterfitt, bond counsel for

Districts I and II, who represents that the merger will not

adversely affect the terms and conditions of the outstanding

bonds or other interests of the bondholders therein.

9. Amended Petition Exhibit J (which duplicates Hearing

Exhibit 4) is a summary of the outstanding bond issues by the

two districts, which totaled around $36,315,000 as of May 2,

2009.

10. The Amended Petition identifies Jeffrey Rosenberg,

3434 Colwell Avenue, Suite 200, Tampa, Florida 33614, who is

Chairman of the Board of Supervisors of Districts I and II, as

the authorized agent for Petitioners. Also identified as agents

are Mark K. Straley, Esquire, and John M. Vericker, Esquire,

Straley & Robin, 100 East Madison Street, Suite 300, Tampa,

Florida 33602.

11. The Amended Petition alleges that merger of the

boundaries of the two Districts should be approved and that the

surviving district will comport with all requirements of the

law.

12. The sole purpose of this proceeding was to consider

the merger of Districts I and II, as proposed by Petitioners.

Because Section 190.005, Florida Statutes, contains the

statutory criteria to be considered, a summary of the evidence

relating to each enumerated section of the statute is set forth

in the following part of this Report.

SUMMARY OF EVIDENCE AND TESTIMONY

A. Whether all statements contained within the Amended

Petition have been found to be true and correct.

13. Petitioners' Exhibit 10 consists of the Amended

Petition and attached Exhibits A-J, as filed with the

Commission. William Parsons serves as Vice-Chairman of the

Board of Supervisors for both Districts. He testified that

Exhibits C-1 and C-2 are true and correct to the best of his

knowledge. He added that the merger will result in the

increased efficiency of the operation and/or maintenance of

certain infrastructure to better serve the residents of

Districts I and II.

14. Mr. McKay is a certified public accountant whose firm

serves as financial advisor and manager for more than 130

community development districts around the State. Besides

preparing the SERC, which is Exhibit H to the Amended Petition,

the witness reviewed the Petition and all attached exhibits. To

the best of his knowledge and belief, all matters contained in

the Amended Petition and attached exhibits were true and

correct.

15. Finally, Mr. Bahlke, a professional engineer, oversees

the design and construction of infrastructure necessary for land

development, including community development districts.

Mr. Bahlke testified that to the best of his knowledge and

belief, Amended Petition Exhibits A, B, E, and G were true and

correct.

16. The testimony is that the Amended Petition and its

exhibits are true and correct.

B. Whether the merger of the two Districts is inconsistent

with any applicable element or portion of the State

Comprehensive Plan or of the effective local government

comprehensive plan.

17. Mr. Balhke testified that he reviewed the County's

Comprehensive Plan and the State Comprehensive Plan and that the

merged District will not be inconsistent with any provision

therein.

18. The testimony is that the merged District will not be

inconsistent with any applicable element or portion of the State

Comprehensive Plan or the County Plan.

C. Whether the area of land within the surviving District

is of sufficient size, is sufficiently compact, and is

sufficiently contiguous to be developable as one functional

interrelated community.

19. According to Mr. Bahlke, the area of land to be

included in the merged District is of sufficient size, is

sufficiently compact, and is sufficiently contiguous to be

developed as a single functionally interrelated community.

Mr. McKay also testified that the surviving district will

satisfy this criterion.

20. The testimony was that Petitioners have demonstrated

that the merged District will be of sufficient size, is

sufficiently compact, and is sufficiently contiguous to be

developed as a single functionally interrelated community.

D. Whether the merger of the two Districts is the best

alternative available for delivering community development

services and facilities to the area that will be served by the

merged District.

21. Mr. McKay testified that the merged District is the

best alternative available to provide the community development

services and facilities to be provided by the merged district.

22. The testimony and exhibits are that Petitioners have

demonstrated that the merged District is the best alternative

available for delivering community development services and

facilities to the area that will be served by the proposed

District.

E. Whether the community development services and

facilities of the merged District will be incompatible with the

capacity and uses of existing local and regional community

development services and facilities.

23. Mr. Bahlke testified that facilities and services to

be provided by the surviving district will not be incompatible

with the capacity and uses of existing local and regional

community development services and facilities. Mr. McKay

offered similar testimony.

24. The testimony is that the merged District will be

compatible with the capacity and uses of the existing local and

regional community development services and facilities.

F. Whether the area that will be served by the merged

District is amenable to separate special-district government.

25. Witness McKay indicated that from an economic

perspective, the land area within the merged District is well-

suited to the provision of the proposed services and facilities

and that the size, compactness, and contiguity of the merged

District make it amenable to separate special district

governance.

26. The testimony is that the area that will be served by

the merged District is amenable to separate special-district

government.

G. Other Requirements Imposed by Statute or Rule

27. Chapter 190, Florida Statutes, and Chapter 42-1 impose

specific requirements regarding the petition and other

information to be submitted to the Commission.

a. Elements of the Petition

28. The Commission has certified that the original

Petition meets all of the requirements of Sections 190.046(3),

and 190.005(1)(a), Florida Statutes. Counsel has represented

that the Amended Petition was provided to the Commission and

satisfies all requirements of the law.

b. Statement of the Estimated Regulatory Costs

29. According to Mr. McKay, who prepared the SERC, which

is found in Amended Petition Exhibit H, it contains an estimate

of the costs and benefits to all persons directly affected by

the proposed rule to establish the District -- the State of

Florida and its citizens, the County and its citizens,

Petitioner, and current and future property owners.

30. The SERC indicates that beyond administrative costs

related to rule adoption, the State and its citizens will only

incur minimal costs from merging the two districts; that these

costs are related to the incremental costs to various agencies

of reviewing additional local government reports filed annually;

that the surviving district will require no subsidies from the

State; and that the benefits will include the possibility of

increased sales tax revenues, a positive impact on property

values and ad valorem taxes, and impact fee and development

permit revenues, all of which are difficult to quantify but

potentially substantial.

31. The SERC also states that there will be no

administrative costs incurred by the County related to rule

adoption. If there are any one-time costs in reviewing the

Amended Petition, they will be offset by the $15,000.00 filing

fee submitted to the County.

32. Section 190.005(1)(a), Florida Statutes, requires the

petition to include a SERC that meets the requirements of

Section 120.541, Florida Statutes. As noted above, the Amended

Petition contains a SERC and appears to meet all requirements of

that statute.

c. Other Requirements

33. The Amended Petition represents that Petitioners have

complied with the provisions of Section 190.005(1)(b)1., Florida

Statutes, in that the County was provided copies of the Amended

Petition and was paid the requisite filing fee.

34. Section 190.005(1)(d), Florida Statutes, requires a

petitioner to publish notice of the local public hearing in a

newspaper of general circulation in the County for four

consecutive weeks prior to the hearing. Hearing Exhibit 8

reflects that a notice was published in the St. Petersburg

Times, Pasco County Edition , a newspaper of general paid

circulation in the County, for four consecutive weeks on June 18

and 25 and July 2 and 9, 2009.

35. No public comment was received during the local

hearing and no comments were filed by any person during the

thirty-day period after the hearing.

APPLICABLE LAW

A. Generally

36. This proceeding is governed by Chapters 120 and 190,

Florida Statutes, and Chapter 42-1.

37. Section 190.046(3), Florida Statutes (2009), provides

the means of merging the boundaries of a community development

district pursuant to Section 190.005, Florida Statutes. It

states as follows:

(3) The district may merge with other

community development districts upon filing

a petition for merger, which petition shall

include the elements set forth in s.

190.005(1) and which shall be evaluated

using the criteria set forth in s.

190.005(1)(e). The filing fee shall be as

set forth in s. 190.005(1)(b). In addition,

the petition shall state whether a new

district is to be established or whether one

district shall be the surviving district.

The district may merge with any other

special districts upon filing a petition for

establishment of a community development

district pursuant to s. 190.005. The

government formed by a merger involving a

community development district pursuant to

this section shall assume all indebtedness

of, and receive title to, all property owned

by the preexisting special districts, and

the rights of creditors and liens upon

property shall not be impaired by such

merger. Any claim existing or action or

proceeding pending by or against any

district that is a party to the merger may

be continued as if the merger had not

occurred, or the surviving district may be

substituted in the proceeding for the

district that ceased to exist. Prior to

filing the petition, the districts seeking

to merge shall enter into a merger agreement

and shall provide for the proper allocation

of the indebtedness so assumed and the

manner in which such debts shall be retired.

The approval of the merger agreement and the

petition by the board of supervisors of the

district shall constitute consent of the

landowners of the district.

38. Section 190.046(3), Florida Statutes (2009), requires

that a petition to merge be filed containing the same elements

found in Section 190.005(1)(a), Florida Statutes. They include

a metes and bounds description of the area to be served; written

consent to the merger; a designation of five persons to be the

initial members of the board of supervisors; the proposed name

of the district; a map of the major infrastructure; the proposed

timetable for construction, if any; the designation of the

future general distribution, location, and extent of public and

private uses of land proposed for the area; and a SERC. The

Amended Petition includes all of the required elements.

B. Procedural Requirements

39. Section 190.046(3), Florida Statutes (2009),

incorporates the procedures in Section 190.005(1), Florida

Statutes, that must be followed by a petitioner.

40. Section 190.005(1)(a), requires that the petition be

filed with the Commission. On June 16, 2008, and July 17, 2009,

the original Petition and Amended Petition, respectively, were

filed with the Commission.

41. Section 190.005(1)(b), Florida Statutes, requires that

a petitioner provide a copy of the petition and the requisite

$15,000.00 filing fee to the county in which the merger will

occur. Petitioners submitted copies of the original Petition,

Amended Petition, and the appropriate filing fee to the County.

42. Section 190.005(1)(c), Florida Statutes, requires that

the county in which the merged districts are located to conduct

a hearing within forty-five days of the filing of the petition.

The County did not choose to hold a public hearing.

43. Section 190.005(1)(d), Florida Statutes, requires a

local public hearing to be conducted by a hearing officer

[administrative law judge]. A local public hearing was

conducted in Wesley Chapel, Florida, on July 16, 2009.

44. Section 190.005(1)(d), also requires that a petitioner

publish notice of the local public hearing once a week for four

consecutive weeks immediately prior to the hearing in a

newspaper of general circulation in the county. The appropriate

notice was published. See paragraph 34, supra .

45. Rule 42-1.010 requires that a Notice of Receipt of

Petition be published in the Florida Administrative Weekly .

Such a notice was published on July 17, 2009.

46. Petitioners have complied with all procedural

requirements.

C. Factors to be Considered for Granting or Denying

Petition

47. Petitioners bear the burden of establishing that the

Amended Petition meets the relevant statutory criteria set forth

in Section 190.005(1)(e), Florida Statutes.

48. The evidence was that all statements contained within

the Amended Petition are true and correct. § 190.005(1)(e)1.,

Fla. Stat.

49. The evidence was that the merger of Districts I and II

is not inconsistent with any applicable element or portion of

the State Comprehensive Plan or the effective County

Comprehensive Plan. § 190.005(1)(e)2., Fla. Stat.

50. The evidence was that the area of land within the

merged District is of sufficient size, is sufficiently compact,

and is sufficiently contiguous to be developable as one

functional interrelated community. § 190.005(1)(e)3., Fla.

Stat.

51. The evidence was that the merged District is the best

alternative available for delivering community development

services and facilities to the area that will be served by the

District. § 190.005(1)(e)4., Fla. Stat.

52. The evidence was that the community development

services and facilities of the merged District will not be

incompatible with the capacity and uses of existing local and

regional community development services and facilities.

§ 190.005(1)(e)5., Fla. Stat.

53. The evidence was that the area to be served by the

merged District is amenable to separate special district

government. § 190.005(1)(e)6., Fla. Stat.

CONCLUSION

Section 190.005(1)(e), Florida Statutes, states that the

Commission "shall consider the entire record of the local

hearing, resolutions adopted by the local general-purpose

governments," and the factors listed in subparagraphs 1. through

6. of that statute. Based on the record evidence, the Amended

Petition appears to meet all statutory requirements, and there

appears to be no reason not to grant the Amended Petition to

Merge Seven Oaks Community Development District I and Seven Oaks

Community Development District II, with District I becoming the

surviving district with the name Seven Oaks Community

Development District, as requested by Petitioners. For purposes

of drafting a rule, a copy of the metes and bounds description

of the surviving District is found in Amended Petition Exhibit

B.

DONE AND ENTERED this 30th day of September, 2009, in

Tallahassee, Leon County, Florida.

S

DONALD R. ALEXANDER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 30th day of September, 2009.

ENDNOTES

1/ Unless otherwise noted, all references are to the 2008

version of the Florida Statutes.

2/ All references are to the current version of the Florida

Administrative Code.

3/ District I was established by County Ordinance No. 01-03

under the name of Saddlebrook Village Community Development

District. By County Ordinance No. 01-22, the name was changed

to Seven Oaks Community Development District I. District II was

established by County Ordinance No. 02-23, as amended by County

Ordinance No. 04-40.

COPIES FURNISHED:

Jerry McDaniel, Director

Florida Land and Water

Adjudicatory Commission

The Capitol, Room 1802

Tallahassee, Florida 32399-0001

Barbara Leighty, Clerk

Florida Land and Water

Adjudicatory Commission

Office of Policy and Budget

The Capitol, Room 1801

Tallahassee, Florida 32399-0001

Rob Wheeler, General Counsel

Office of the Governor

The Capitol, Room 209

Tallahassee, Florida 32399-0001

Tracy J. Robin, Esquire

Straley & Robin

100 East Madison Street, Suite 300

Tampa, Florida 33602-4703

Shaw P. Stiller, General Counsel

Department of Community Affairs

2555 Shumard Oak Boulevard

Tallahassee, Florida 32399-2100