93-003645 In Re: Circle Square Woods Community Development District vs. * Status: Closed Recommended Order on Wednesday, June 15, 1994.

Summary: Petitioner proved existence of all six factors necessary for the establish- ment of Circle Square Woods Community Development District under Section 190.005(1)(e), Florida Statutes.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

In re: Petition for a rule )

establishing a community )

development district known ) CASE NO. 93-3645

as Circle Square Woods in )

Marion County, Florida. )

_________________________________)

REPORT AND CONCLUSIONS

Preliminary Matters

As envisioned by Section 190.005(1)(d), Florida Statutes, and Rule 42-

1.012, Florida Administrative Code, a local public hearing was conducted on May

5, 1994 before David M. Maloney, Hearing Officer. The hearing was held in the

County Administration Building, 601 S.E. 25th Avenue, Ocala, Florida, commencing

at 9:00 a.m. A copy of the Hearing officer's Second Notice of Local Public

Hearing is included in the record.

In the course of these proceedings On Top of the World, Inc. was

represented by Michael J. Glazer, of Macfarlane Ausley Ferguson & McMullen, 227

S. Calhoun Street, Tallahassee, Florida 32301; Landis V. Curry, Jr., of Ayres,

Cluster, Curry, McCall & Briggs, P.A., 21 N.E. First Avenue, Ocala, Florida

32678; Vincent L. Nuccio, Jr., of Macfarlane Ausley Ferguson & McMullen, 111

Madison Street, Tampa, Florida 33601; and Charles A. Simmons, of Schreiber,

Simmons, MacKnight & Tweedy, 520 Madison Avenue, New York, New York 10022.

At the local public hearing the Petitioner, On Top Of The World, Inc.,

presented witnesses and exhibits to support its request for recognition of the

proposed Circle Square Woods Community Development District. Public comment was

also received. In the transcript of the local public hearing, provided with

this Report and Conclusions, the court reporter has set forth an index

identifying the page at which examination of the various witnesses commenced.

Witnesses for the Petitioner were: Kenneth D. Colen, President of On Top of the

World, Inc., 8700 S.W. 99th Street, Ocala, Florida 34481; Gary L. Moyer, 10300

N.W. 11 Manor, Coral Springs, Florida 33071, manager of special purpose taxing

districts, including community development districts. Mr. Moyer was accepted as

an expert in community development district management and other forms of

special district management; David M. Mechanik, an attorney with Macfarlane

Ausley Ferguson & McMullen, 111 Madison Street, 2300 First Florida Tower, Tampa,

Florida 33602; Lee Mills, President of Mills Engineering Company, P. O. Box

778, Bronson, Florida 32621, licensed as a land surveyor and civil engineer.

Mr. Mills was accepted as an expert in land surveying and civil engineering;

William J. Rizzetta, President of Rizzetta & Company, Inc., 2701 W. Busch

Boulevard, Tampa, Florida 33618, which provides financial consulting to the

real estate industry including community development districts. Mr. Rizzetta

was accepted as an expert in preparation of economic impact statements for

community development districts; and, Avis M. Craig-Ayotte who is employed as a

Principal of Henigar & Ray, Inc., 640 E. Highway 44, Crystal River, Florida

34429, and is a Private Planning Department Manager within the Community Design

Division of Henigar & Ray in Crystal River, Florida providing planning services

primarily within Marion and Citrus Counties. Ms. Craig-Ayotte was accepted as

an expert in land use planning. In addition to the testimony at hearing,

prepared testimony was submitted by Kenneth D. Colen (PT 1-20), Gary L. Moyer

(PT 21-45), David M. Mechanik (PT 46-53), Lee Mills (PT 54-72), William J.

Rizzetta (PT 73-88) and Avis M. Craig-Ayotte (PT 89-132). That prepared

testimony is submitted with this Report and Conclusions.

Public comment at the local public hearing was received from Gus LaSala.

The exhibits submitted by the Petitioner are: Exhibit A, Amended Petition

to Establish Circle Square Woods Community Development District; Exhibit B,

January 20, 1994 letter to David K. Coburn forwarding copies of the Amended

Petition; Exhibit C, Florida Land and Water Adjudicatory Commission Notice of

Receipt of Petition; Exhibit D, copy of check in the amount of $15,000 to the

Marion County Commission; Exhibit E, February 3, 1994 letter to Sharyn Smith,

Division of Administrative Hearings forwarding the Amended Petition for

assignment to a Hearing Officer; Exhibit F, Notice of Receipt of Petition filed

in Volume 20, Number 11, Florida Administrative Weekly, March 18, 1994; Exhibit

G, March 23, 1994 letter to David K. Coburn forwarding a copy of the Notice of

Local Hearing; Exhibit H, ad from the Ocala Star Banner, including proof of

publication; Exhibit I, Second Notice of Local Public Hearing; Exhibit J,

Chapter 190, Florida Statutes (1993); Exhibit K, Chapter 42-1, Florida

Administrative Code; Exhibit L, Chapter 187, Florida Statutes (1993); Exhibit M,

Section 120.54, Florida Statutes (1993); Exhibit N, February 16, 1994 letter to

David K. Coburn from Withlacoochee Regional Planning Council commenting on the

Amended Petition; Exhibit O, Certified Copy of the Resolution of the Board of

County Commissioners of Marion County Expressing its Support of the Amended

Petition dated March 23, 1994; Exhibit P, Chart regarding districts managed by

Gary Moyer; Exhibit Q, March 12, 1993 letter to On Top of the World, Inc.

regarding review of the Vesting Application; Exhibit R, Final Order dated

December 5, 1983 In Re: On Top of the World, Central, a proposed development of

regional impact in Marion County, Florida, Case No. 83-3283; Exhibit S, March

1994 letter to David K. Coburn from the Department of Community Affairs; Exhibit

T, April 22, 1994 letter to J. Alex Magee, Florida Department of Community

Affairs regarding summary of vested rights; Exhibit U, Company Profile, Rizzetta

& Company; Exhibit V, Resume of Avis M. Craig-Ayotte, AICP; Exhibit W, Circle

Square Woods Boundary Map; and Exhibit X, Circle Square Woods Development Map.

Exhibits A-V were submitted with the prepared testimony. Exhibits W and X were

submitted at the public hearing.

Throughout this Report, the following abbreviations will be used:

"CDD" means community development distr

"CSW" means Circle Square Woods.

"FLWAC" means the Florida Land and Water Adjudicatory Commission.

"OTOW" means On Top Of The World, Inc..

References to the prepared testimony will be "PT ____."

References to the transcript of the testimony at the public hearing will be

"T ____."

References to exhibits submitted at the public hearing will be "Exhibit

____."

The Process

1. On or about June 14, 1993, OTOW filed a Petition with the Florida Land

and Water Adjudicatory Commission to promulgate a rule to establish the proposed

Circle Square Woods Community Development District. As required by Section

190.005(1)(b)1, Petitioner submitted a $15,000 filing fee to Marion County. See

Exhibit D.

2. The original Petition was superseded by an Amended Petition filed on or

about January 20, 1994 with FLWAC. See Exhibits A & B. FLWAC prepared a Notice

of Receipt of the Amended Petition which included a Notice of the public hearing

scheduled for May 5, 1994. See Exhibit C.

3. This proposed CDD is located in Marion County and is not in or adjacent

to any cities. The property within the external boundaries of the proposed

district is approximately 2,489 acres. PT 3-4.

4. Infrastructure needs which would be addressed by the CDD would include

surface water management, roads, drainage, water distribution and waste water

treatment. The Amended Petition includes a location map; a map of the proposed

district showing current and proposed major trunk water mains and sewer

interceptors and outfalls; a metes and bounds description of the external

boundaries of the district; written consent to the establishment of the

community development district from On Top Of The World, Inc. which is the owner

of 100 percent of the real property to be included in the district; designation

of five persons to be the initial members of the Board of Supervisors, all of

whom are residents of the State of Florida and citizens of the United States; an

indication of the proposed name of the district; a proposed timetable for

construction of district services and the estimated costs of construction; a

designation of the future general distribution, location and extent of public

and private uses of land proposed for the area within the district by the future

land use plan element of the effective local government comprehensive plan; and

an economic impact statement prepared in accordance with the requirements of

Section 120.54(2), Florida Statutes. See Exhibit A.

5. After receiving the Amended Petition, the Secretary of FLWAC conducted

the review which is required by Rule 42-1.009(1), Florida Administrative Code.

The Amended Petition was transmitted to the Director of the Division of

Administrative Hearings for assignment to a hearing officer to conduct a local

public hearing. This action took place on February 3, 1994. Through the letter

of transmittal, the Secretary of FLWAC, by his designee, Teresa B. Tinker,

certified that all required elements, as defined in Section 190.005(1)(a),

Florida Statutes, are contained in the Amended Petition. The Secretary called

upon the Division Director to see that the public hearing contemplated by

Section 190.005(1)(d), Florida Statutes, was conducted.

6. Charles C. Adams was initially assigned to conduct the local public

hearing and render this Report and Conclusions. The matter was later reassigned

to David M. Maloney, Hearing Officer, who conducted the local public hearing and

rendered this Report and Conclusions.

7. Pursuant to Rule 42-1.010, Florida Administrative Code, FLWAC caused

the publication in Volume 20, No. 11, Florida Administrative Weekly (March 18,

1994), of its Notice of Receipt of the Amended Petition which sets forth a

summary of the contents of the Amended Petition and general description of the

land area affected; a summary and estimate of the economic impact of the

proposed rule on the Agency; the time, date and place of the scheduled local

public hearing; and a reference to where the full text of the Petition might be

obtained. See Exhibit F.

8. Copies of the Notice of Public Hearing were provided by the Petitioner

to FLWAC, the Department of Community Affairs and various Marion County

officials. See Exhibit G.

9. Following the publication of the Notice of Receipt of the Amended

Petition, Petitioners caused to be published in the Ocala Star Banner, a

newspaper of general paid circulation in Marion County and a newspaper of

general interest and readership in the community, a notice of the local hearing.

This publication was called for in Section 190.005(1)(d), Florida Statutes, and

Rule 42-1.011, Florida Administrative Code. The newspaper publication occurred

on April 8, 15, 22 and 29, 1994. The format of the notices published in the

newspaper complies with the requirements of Rule 42-1.011, Florida

Administrative Code. Petitioner provided copies of each of the advertisements

and proof of publication from the Ocala Star Banner. See Exhibit H.

10. On May 5, 1994, the local public hearing was conducted in accordance

with Section 190.005(1)(d), Florida Statutes, and Rule 42-1.012, Florida

Administrative Code.

11. The Withlacoochee Regional Planning Council, while not a government

with jurisdiction over the CDD, reviewed the Amended Petition, "as to its

consistency with the Comprehensive Regional Policy Plan." Finding establishment

of the CDD to adequately address Regional Policies 5.1.1.7 and 5.1.1.9 as to

"affordable housing needs," and development of public, private and user sectors

of the housing market to address the problems of housing availability and

affordability, respectively, the Council's comments supported establishment of

the CDD. Exhibit N.

12. The Amended Petition was also reviewed by the Florida Department of

Community Affairs. The Department commented that it did not believe the

establishment of the CDD to be incompatible with the Marion County Comprehensive

Plan even though the plan had not been found to be in compliance with Local

Government Comprehensive Planning and Land Development Regulation Act. The

comment was made because none of the lands with which the Department believed

the County to be out of compliance were within the proposed boundaries of the

CDD. The Department found the proposed CDD to meet the requirements for its

establishment in Section 190.005(1)(e), Florida Statutes. But the Department

was unable initially to evaluate the effect the establishment of the CDD would

have on the performance of its duties because of a number of uncertainties. See

Exhibit S. These uncertainties were promptly addressed by attorneys for

petitioner. See Exhibit T. David M. Mechanick, attorney for petitioner,

testified that he spoke with Department personnel and his explanations, both

written and verbal, were satisfactory to the Department. 45-47. Mr.

Mechanick's conclusion is bolstered by the lack of further objection in the

record from the Department and the Department's lack of participation at the

final hearing. In any event, the Department's concerns do not appear to relate

to any of the six criteria contained in Section 190.005(1)(e), Florida Statutes,

for the establishment of the CDD. Most importantly, the Department did not find

that establishment created any inconsistency with any applicable element or

portion of the state comprehensive plan or of the effective local government

comprehensive plan.

13. On March 23, 1994, the Board of County Commissioners of Marion County

conducted a public hearing pursuant to the provisions of Section 190.005(1)(c),

Florida Statutes, regarding the proposed district. Following the public

hearing, the Board, by resolution, expressed to FLWAC its support of the

establishment of the Circle Square Woods Community Development District.

Exhibit O.

Petitioner's Witnesses

14. Kenneth D. Colen is President of Petitioner, On Top Of The World, Inc.

He has been with OTOW since 1976 and served as its President since 1985. Among

his many responsibilities, he has been intimately involved in the planning,

financing, staffing and overall management of the development. He has been

directly responsible for the infrastructure improvements for that portion of

OTOW which is developed. PT 1-2; T 32-33.

15. OTOW is approximately 12,900 acres located southwest of the city of

Ocala in Marion County, west of State Road 200 and North of County Road 484.

Ultimately, it is expected that OTOW will construct approximately 36,000

residential units and as much as 490 acres of commercial property. PT 1-2; T

33-34.

16. The proposed district encompasses a tract of approximately 2,489 acres

which is a part of the OTOW property. The CDD will be an independent unit of

special purpose government authorized under Chapter 190, Florida Statutes. The

district, as contemplated, will have all powers set forth in Chapter 190

including the power to manage and finance basic infrastructure and services set

forth in that Chapter. The CDD will serve predominantly residential land uses

although approximately 200 acres is authorized for commercial use. PT 3-4.

17. Mr. Colen described Exhibit X which is a chart showing the proposed

district. The chart shows the golf course, commercial areas and areas under

development. References are also made to the water treatment plant and

wastewater treatment plant. T 34-36; Exhibit X.

18. It was Mr. Colen who directed the filing of the Amended Petition to

Establish the Circle Square Woods Community Development District. He had

several reasons for pursuing this project. The level of development covers an

area of land that is approximately six times greater than that which is

currently developed at OTOW and will entail approximately four times as many

units. The best mechanism for funding the infrastructure that will be necessary

is the CDD. Additionally, Mr. Colen believes there is an efficiency of

operation that the CDD brings as well as a level of stability for the future,

even in the absence of the developer. T 37-38, 80-81.

19. Mr. Colen identified the Amended Petition and all of the exhibits

attached thereto. PT 4-11.

20. Mr. Colen described an area designated as the "developed area" which

is the currently developed portion of OTOW. It is an area of approximately 395

acres which is essentially a peninsula in the district. The developed area is

not included in the proposed CDD because it is presently developed and already

has the requisite infrastructure. There are approximately 1,900 residences in

the developed area. PT 6; T 37.

21. All of the property in the proposed district is owned by On Top Of The

World, Inc. and OTOW has consented to the establishment of the CDD. PT 6-7;

Exhibit A-4.

22. Mr. Colen described Exhibit A-2, which is a map of the proposed

district showing major trunk water mains, sewer interceptors and outfalls in

existence or proposed in the future. It also shows the golf course, existing and

proposed wastewater treatment plants, lift stations, water mains, etc. PT 5.

Mr. Colen also discussed Exhibit A-5, which is a proposed timetable for

construction of district services and the estimated costs of constructing those

services. This exhibit was based on available data and is submitted in a good

faith attempt to illustrate the anticipated timetable for construction and

estimated costs. PT 7-10. Based on the information presented by Mr. Colen and

Lee Mills, the engineer, Exhibit A-5 appears to be a reasonable proposed

timetable for construction and estimate of costs.

23. The exclusion of the developed area will not affect the district's

ability to provide infrastructure in a cost effective manner. PT 14-15.

24. Mr. Colen also properly identified Exhibits B-O, W and X. PT 11-20.

25. The initial Board of Supervisors for the district are: LaVanna Smith,

Philip Faranda, Blaise Bonnaventure, Cynthia K. Ziegler and Morris Dittman.

Each of these individuals are residents of the State of Florida and citizens of

the United States. PT 13; Exhibit A.

26. Mr. Colen indicated that the property will be developed to contain

varying types of land uses so that it will provide housing, employment

opportunities, shopping, services, recreation and other opportunities. As such,

Mr. Colen believes the district will be a functional interrelated community. PT

15; T 38-39.

27. Mr. Colen discussed various alternatives that were considered with

regard to creation of the CDD. A CDD has the ability to obtain long term tax

exempt financing which has a cost advantage over any other form of financing

available to a private developer. This financing allows the district to

minimize its interest expense resulting in a lower cost for infrastructure.

Thus, a CDD is more advantageous than the development of infrastructure by a

private developer. Additionally, the CDD provides greater continuity than is

provided by a private development company. PT 16-17; T 39.

28. Mr. Colen also considered whether Marion County would develop this

infrastructure. However, Marion County has made it clear that it is not in a

position to provide these community services and facilities and, in fact, has

required as an element of the development of a regional impact that affects a

portion of the property, that such services be provided by an entity other than

Marion County. PT 16-17; T 39.

29. Mr. Colen also indicated that there are no local roads, bridges or

street lights that would be inconsistent with facilities to be constructed by

the district. PT 17.

30. Likewise, there are no existing regional roads, transportation

systems, water supply, or sewer services and facilities that would be

inconsistent with those proposed by the district. PT 17-18.

31. Mr. Colen identified the letter from the Withlacoochee Regional

Planning Council that he received indicating that the proposed CDD will

adequately address some of their policies. PT 19; T 40; Exhibit N.

32. Mr. Colen was also in attendance at the hearing held by the Board of

County Commissioners of Marion County on March 23, 1994 at which they voted 5-0

to adopt a resolution favoring the creation of this district. PT 19-20; T 40;

Exhibit O.

33. Mr. Colen's prepared testimony and testimony at the local public

hearing is accepted.

34. Gary L. Moyer is a manager of special purpose taxing districts and was

accepted as an expert in community development district management and other

forms of special district management. T 22.

35. Mr. Moyer described his extensive experience in managing special

purpose taxing districts including 46 CDDs. His firm provides services that

include planning, financing, staffing, purchasing, reporting and

intergovernmental coordination functions for these districts. PT 21-24.

36. Mr. Moyer was also involved in the drafting of Chapter 190, Florida

Statutes. PT 34; T 22.

37. A listing of the various districts served by Mr. Moyer and the types

of infrastructure services provided by each district is included as Exhibit P.

38. Mr. Moyer described a uniform community development district as a unit

of local special purpose government created pursuant to Chapter 190, Florida

Statutes, which is vested with limited powers to provide for the installation

and maintenance of infrastructure facilities to coincide with the development of

property within the boundaries of the district. These powers include water

management, water supply and sewer, roads, street lighting, bridges and, when

authorized by the local general purpose government, may also include parks and

recreation, fire prevention and control, security, mosquito control, school

building, and waste collection and disposal. The governance of these districts

is in accordance with the detailed provisions of Chapter 190, Florida Statutes,

as well as various other provisions of Florida law dealing with accountability,

disclosure, rulemaking, procurement of goods and services, etc. Mr. Moyer

described how a CDD is subject to various checks and balances and political

accountability similar to those which apply to city and county governments.

These include the Public Records Law and the Government-In-The-Sunshine Law.

The district is also required to competitively bid its purchases as well as use

the competitive process for hiring certain professionals. PT 26-29; T 22-23.

39. There are also a number of reports to be filed with state agencies

such as the Auditor General, State Comptroller, Department of Community Affairs,

local general purpose government and Division of Bond Finance. PT 30.

40. A CDD does not avoid zoning and land use laws. It must be consistent

and in compliance with local ordinances and development codes and regulations.

PT 28; T 23-24.

41. Community Development Districts, as special districts, however, are

not encumbered, as are cities and counties, with such burdens and

responsibilities as police protection, social services and various other

political pressures. CDDS are specialized units of government. They provide

community infrastructure and services to a defined district. There are various

limitations that safeguard the general public and the residents. PT 30-32.

42. In Mr. Moyer's experience, the CDDs typically have very good working

relationships with the applicable general purpose government as well as

landowners, developers and residents within a district. PT 32-34.

43. CDDs also have a financial function. In particular, the Legislature

has granted districts several ways to finance infrastructure. Most common is

the use of special assessment revenue bonds. Chapter 190 identifies processes

for establishing these assessments so that the cost is allocated to the

benefited properties. CDDs can also use general obligation debt but its use has

not been very common. Financing available to CDDs is typically more preferable

than is available to private development. As a unit of local government, a CDD

can access the tax free municipal bond market. T 24-25.

44. Mr. Moyer is familiar with the Amended Petition and has reviewed it in

relationship to various factors set forth in Section 190.005(1)(e), Florida

Statutes. PT 35-36.

45. Mr. Moyer believes that approval of the Amended Petition would

specifically be consistent with the State Comprehensive Plan goal dealing with

governmental efficiency found in Section 187.201(21), Florida Statutes, because

of the economic benefits that flow from long term efficient management. PT 36-

40; T 27.

46. Mr. Moyer also reviewed the proposed district in relation to Section

190.005(1)(e)3. From his perspective, a "functional interrelated community" has

two components: (a) from a planning perspective, he views that term as relating

to the use of the land to provide for residential, business and recreational

opportunities; (b) the second perspective is from a service delivery

standpoint which can be judged based upon the cost to provide district services.

PT 40-41.

47. Mr. Moyer believes this proposed district is of sufficient size, is

sufficiently contiguous and is sufficiently compact to be developed as a

functional interrelated community. PT 41-42; T 27-28.

48. Mr. Moyer also examined other alternatives to a CDD including private

sector development utilizing private funds and general purpose government

utilizing special assessment or general funds. In his opinion, the

establishment of the CDD is the best alternative. Private development does not

involve all of the various protections inherent in a CDD. Additionally, the

type of financing available is typically far more preferable than available to a

private party. The general purpose government is not a good option in this case

because the county government is not prepared to provide these facilities and

services to the property encompassed by the CDD. PT 42-43; T 28-30.

49. Mr. Moyer also looked at whether the area to be served by the district

is amenable to separate special district government. In his view, the proposed

Circle Square Woods CDD satisfies that criterion. PT 43-45; T 30.

50. From his perspective, the Amended Petition satisfies the criteria for

establishing a community development district. T 30.

51. Mr. Moyer's prepared testimony and testimony at the local public

hearing is accepted.

52. Testimony was presented by David M. Mechanik of the Tampa office of

Macfarlane Ausley Ferguson & McMullen. Mr. Mechanik is head of the firm's land

use department and has represented OTOW with regard to development of regional

impact, comprehensive planning and zoning issues since 1982. PT 46-47; T 43-44.

53. Mr. Mechanik had reviewed the Amended Petition and stated that the

information contained therein was true and correct with a minor clarification

made at the public hearing regarding the Marion County Comprehensive Plan. PT

47; T 42-43.

54. Mr. Mechanik specifically described the designation of the future

general distribution, location and extent of public and private uses of land

proposed for the area within the district by the future land use plan element of

the effective local government comprehensive plan for Marion County. He

indicated that the area within the proposed district is designated as:

"Commercial," "Low Density Residential," "Rural Land," "Development of Regional

Impact," "Urban Expansion," and "Medium Density Residential." PT 48-49; T 43.

55. By letter dated March 12, 1993, the Zoning Director for the Division

of Zoning of the Marion County Department of Community Development summarized

data and findings of fact relative to the vested status of Circle Square Woods

under Section 380.06, Florida Statutes. The Zoning Director concluded that

Circle Square Woods has vested development rights which makes it exempt from the

concurrency requirements of the Marion County Land Development Code. Exhibit Q.

56. Mr. Mechanik also explained that a portion of the property has

received a Chapter 380, Florida Statutes, Development Order. PT 51-52; T 44;

Exhibit Q.

57. Mr. Mechanik indicated that the vested portion of the OTOW property

consists of 12,899 acres. The 2,489 acres contained within the CDD are vested

from the requirements of the Comprehensive Plan including the portion subject to

a development of regional impact order. Of the total acreage within the CDD,

2,283 acres are designated for residential use and 206 acres are designated for

commercial use. This land is approved for 7,804 dwelling units. PT 49-51.

58. Mr. Mechanik's prepared testimony and testimony at the local public

hearing are accepted.

59. Lee Mills testified at the local public hearing and through prepared

testimony. Mr. Mills is the President of Mills Engineering Company which

provides civil engineering and land surveying services. Mr. Mills is both a

land surveyor and civil engineer and was accepted as an expert witness in both

of those areas. PT 54-56; T 50. Mills Engineering Company has provided

services to OTOW since 1985. PT 57; T 50.

60. Mr. Mills indicated that the Amended Petition and its attachments are

true and correct. PT 57. Mills Engineering was specifically involved with the

preparation of several exhibits to the Amended Petition including Exhibit 2, the

Master Service Plan; Exhibit 3 which is a metes and bounds description of the

Circle Square Woods Community Development District boundary and the sketch that

accompanies that description; and Exhibit 5 which is the infrastructure time

table and estimated costs. PT 58.

61. The metes and bounds description describes the outside boundary of the

property by distance and direction. It is based on the recorded subdivision

plat of Circle Square Woods, certain leases and declarations, and various

surveys of the property. The description was prepared in accordance with the

applicable Florida Administrative Code Rule and in accordance with generally

accepted land surveying standards. Exhibit 3 to the Amended Petition

constitutes an accurate metes and bounds description of the property to be

encompassed in the proposed Circle Square Woods Community Development District.

PT 58-60; T 51.

62. Mr. Mills also described Exhibit 2 to the Amended Petition which is a

Master Service Plan. This diagram shows district boundaries, water wells, water

mains, lift stations, and waste water trunk lines. The golf course property is

also indicated. Exhibit 2 is a map of the proposed district showing current and

proposed major trunk water mains and sewer interceptors and outfalls in

existence. PT 60-62; T 51-52.

63. Mr. Mills also discussed the infrastructure time table and estimated

cost contained in Exhibit 5 to the Amended Petition. This document is a

preliminary cost estimate of the anticipated roads, stormwater, water treatment

and wastewater aspects of the CDD as projected to be constructed in the period

of 1994 to 1999. The table includes various quantities and costs related to the

construction of those items. A number of the cost estimates were based on work

that was actually underway at OTOW at the time the table was prepared. PT 62.

64. Roads were divided into arterial and interior roads. The category of

"stormwater" is for anticipated drainage facilities. The category of "water"

relates to drinking water and is sized based on anticipated density. PT 63.

65. In the category of "wastewater," there is an estimate for two

treatment plants. PT 62-63.

66. This exhibit represents a reasonable preliminary projection of roads,

stormwater, water treatment and wastewater services for the CDD and the

associated costs. PT 63-64; T 52.

67. Mr. Mills also discussed the criterion relating to whether the land

within the proposed district is of sufficient size, is sufficiently compact and

is sufficiently contiguous to be developable as one functional interrelated

community. While there is no specific engineering definition, from his

perspective, a functional interrelated community involves various engineering

functions such as access, bridges and roads, drainage of stormwater, potable

water, wastewater disposal and disposal of solid waste. These functions should

be coordinated in a total package to function efficiently. PT 64-65.

68. Mr. Mills believes the area of land is of sufficient size at 2,489

acres to be developable as a functional interrelated community. He also

believes it is sufficiently compact and contiguous for that same purpose. There

are no specific features that would impede the coordinated development of

infrastructure. Neither the "developed area" nor any other portion of the

property present any unusual conditions that would require special consideration

in the engineering of various systems, facilities and services required for the

development of the community. PT 65-68; T 52-53.

69. Mr. Mills also examined the question of whether the district is the

best alternative available for delivering community development services and

facilities to the area to be served by the district. He confirmed that Marion

County, other than with regard to major roadways, does not have any plans to

provide the type of infrastructure services that would be developed by the

district. Mr. Mills believes the CDD was preferable to having either the county

or private developer responsible for these infrastructure services. PT 68-70.

70. Mr. Mills also indicated that the community development services and

facilities of the district will not be incompatible with capacity and uses of

existing local and regional community development services and facilities

because such services simply don't exist. PT 70-71; T 53.

71. Finally, Mr. Mills believes that, from an engineering perspective, the

area to be served by the district is amenable to separate special district

government based primarily on his review of the other factors discussed above.

PT 71-72.

72. Mr. Mills' prepared testimony and his testimony at the local public

hearing are accepted.

73. William J. Rizzetta is the President of Rizzetta and Company, a

financial consulting firm, which provides services to the real estate industry,

including community development districts. Among other responsibilities, Mr.

Rizzetta's firm conducts economic and financial feasibility studies for

districts and prepares economic impact statements relating to these entities. PT

73-74; T 54. He also serves as the manager of several CDDs. T 55-56. Mr.

Rizzetta was accepted as an expert in the preparation of economic impact

statements for community development districts. T 56.

74. In preparing his analysis, Mr. Rizzetta has utilized the guidelines

set forth in Section 120.54(2)(c), Florida Statutes. PT 76. This analysis

includes an examination of: (1) an estimate of costs to the agency responsible

for approving the district including the cost of paperwork; (2) the economic

impacts on all persons directly affected by the proposed district; (3) the

impact of the action on competition and the open market for employment; (4) an

analysis of the impact on small business; (5) a comparison of the probable costs

and benefits of the rule versus the costs and benefits of not adopting the rule;

(6) a determination of whether less costly methods exist for achieving the

purpose where reasonable alternative methods exist; (7) a description of

reasonable alternative methods that were considered and (8) a statement of the

data and methodology used in making the estimates required. T 57; Exhibit A-7.

75. With regard to the estimate of cost to the agency and other state or

local government entities, these costs are minimal. The one time cost incurred

by Marion County to review the Petition is more than offset by the $15,000

filing fee submitted by the Petitioner. Additionally, future costs relating to

services provided by local government are offset by fees for those services. PT

77-78; T 58-59.

76. In looking at the costs and benefits to persons directly affected by

the district, Mr. Rizzetta looked at four categories: (1) residents of the state

of Florida; (2) residents of Marion County; (3) current property owners and (4)

future property owners and residents. Residents of the state of Florida

residing outside of Marion County will receive a benefit from the creation of

the district because the district will facilitate the acquisition and

construction of infrastructure which, in turn, facilitates private development

thereby stimulating economic activity. PT 79; T 60; Exhibit A-7.

77. Residents of Marion County other than those living in the district are

benefitted because they will not be forced to bear the cost of infrastructure

constructed within the district. These residents will also benefit from the

stimulus to the construction industry. PT 79; Exhibit A-7. Some specific

consideration was given to the current residents of OTOW who do not live within

the proposed district. These individuals will not be forced to bear the cost of

infrastructure. It is also important to note that these residents will continue

to be governed and protected by contracts pursuant to the existing covenants,

restrictions, easements, charges and liens and the Articles of Incorporation and

Bylaws of OTOW and its owners' association. PT 80; T 60.

78. The current property owner (OTOW) is responsible for all of the costs

associated with the preparation and processing of this Amended Petition.

However, while there are costs associated with the process and the operation of

the district, the benefits are significant in the form of financing available

through the district that are not otherwise available to the current property

owner. PT 81-82; Exhibit A-7; T 60-61.

79. Future property owners and residents within the district will be

subject to various taxes, assessments and charges imposed to fund the facilities

and services provided by the district. However, the availability of tax exempt

financing should result in a net benefit to future property owners and residents

through reduced costs of infrastructure. Additionally, through the

establishment of a CDD, it is ultimately the residents who will control the

district through its board of supervisors. PT 82; T 61; Exhibit A-7.

80. Mr. Rizzetta indicated that he did not believe the proposed CDD would

have any adverse affect on competition or the open market for employment. PT

83; Exhibit A-7.

81. Likewise, the creation of the proposed district should not have any

negative impact on small business. Because a CDD is primarily a financing and

management mechanism, it does not discriminate in terms of the size of a

business which can locate within its boundaries. Exhibit A-7.

82. Mr. Rizzetta also examined the probable costs and benefits of the

proposed rule when compared to the probable costs and benefits of not adopting

the rule. In making this analysis, it was always assumed that the property

within the CDD would be developed. The costs associated with adoption of the

rule include the one time administrative costs along with the costs of filing

various reports and obtaining services from officials such as the property

appraiser and tax collector. These costs are relatively minor and are offset by

various fees for these services. Additionally, current and future property

owners and residents will pay taxes, assessments and charges for their share of

infrastructure. However, greater costs would likely be incurred through

alternative conventional financing mechanisms. On the benefit side, the

district provides an efficient and economical mechanism for financing and

managing infrastructure and will fill a gap not met by Marion County. The

district also provides future property owners with greater input in the

operation of the district. PT 83-85; Exhibit A-7.

83. Mr. Rizzetta examined whether less costly or less intrusive methods

exist for achieving the purpose of the proposed rule and also whether there are

any reasonable alternative methods for achieving the purpose of the proposed

rule. His conclusion was that the CDD was the least costly and least intrusive

method for achieving the purpose of the rule which is the subject of the

hearing. In conducting that analysis, he considered the overall costs and

benefits as summarized in the Economic Impact Statement, fairness to all parties

reflected by the proposed rule, the ability to provide infrastructure and

services within a reasonable timeframe and the potential for achieving the

anticipated benefits. He specifically looked at the alternatives of private

conventional financing which is typically more costly and not always readily

available and relying on Marion County which, as described by Mr. Rizzetta and

other witnesses, is an alternative that is simply not practically available at

this time. PT 85-86; T 62; Exhibit A-7.

84. Finally, in preparing the Economic Impact Statement, Mr. Rizzetta

outlined the data and methodology used in making the estimates required by

Section 120.54. PT 87; Exhibit A-7.

85. The Economic Impact Statement satisfies the requirements of Section

120.54(2)(c), Florida Statutes.

86. Mr. Rizzetta also examined the proposed district in relation to the

section of the State Comprehensive Plan pertaining to the economy. He does not

believe creation of the district would be inconsistent with that section. PT

87.

87. Also, based on his preparation of the Economic Impact Statement and

his experience managing CDDs, he believes the proposed district is of sufficient

size, is sufficiently compact and is sufficiently contiguous to be developable

as one functional interrelated community. PT 87.

88. Mr. Rizzetta believes the establishment of the CDD is the best

alternative available for delivering community development services and

facilities to the area to be served by the district. PT 88.

89. Finally, he also believes the area to be served by the district is

amenable to separate special district government. PT 88.

90. Based on Mr. Rizzetta's experience in preparing economic impact

statements and in managing CDDs, he believes that it is appropriate to establish

the Circle Square Woods Community Development District. T 62-63.

91. Mr. Rizzetta's prepared testimony and testimony at hearing are

accepted.

92. Avis M. Craig-Ayotte is a principal with the firm of Henigar & Ray in

its Crystal River office. Henigar & Ray is a national consulting firm offering

planning, engineering, environmental sciences and surveying services. She is a

certified planner with extensive experience, particularly in Marion and Citrus

Counties. PT 89-92; Exhibit V. She was accepted as an expert in land use

planning. T 65.

93. Ms. Craig-Ayotte described two demonstrative exhibits which were

aerial photos of the land covered by the proposed CDD. One document was a

composite of pictures taken between 1985 and 1989. The other was from 1992.

These aerial photos show the development of the OTOW property, particularly in

the "developed area." While this case does not involve development issues per

se, it is important to recognize the extent of the growth in the area because

the CDD provides the vehicle for supporting the infrastructure necessary for

additional development. T 66-67.

94. Ms. Craig-Ayotte is familiar with Chapter 190, Florida Statutes,

relating to community development districts as well as the State Comprehensive

Plan, the Comprehensive Regional Policy Plan adopted by the Withlacoochee

Regional Planning Council and the Marion County Comprehensive Plan. PT 92-94.

95. With regard to the Withlacoochee Regional Planning Council Plan, she

does not believe that establishment of the Circle Square Woods CDD would be

inconsistent with any aspect of that Plan. PT 93-94; T 73-75.

96. Ms. Craig-Ayotte noted that a local government's comprehensive plan is

a document which contains the statements of a local government's long range

goals for its future growth and development. The term "infrastructure" is used

to describe certain basic facilities and services necessary to meet the common

needs of a community such as roads, sewer systems, potable water, stormwater

management and solid waste. The term "vested" refers to a property owner's

right to continue developing even when that development may not be in compliance

with current or new regulations. PT 96-97.

97. Ms. Craig-Ayotte is familiar with the Amended Petition and the area in

which the proposed district is to be located. From her perspective, the

statements in the Amended Petition are true and correct with the one

clarification made by Mr. Mechanik at the public hearing. PT 98; T 64.

98. Ms. Craig-Ayotte examined the Amended Petition to determine whether

the proposed district would be inconsistent with any applicable section, element

or portion of the State Comprehensive Plan found in Section 187.201, Florida

Statutes. In particular, she looked at goal 4 relating to the elderly, goal 6

relating to health, goal 8 relating to water resources, goal 16 relating to land

use, goal 18 relating to public facilities, goal 20 relating to transportation,

goal 21 relating to governmental efficiency and goal 26 relating to plan

implementation. PT 100. 99. Goal 4 contained in Section 187.201 relates to

the elderly. The district will provide infrastructure to OTOW which is a

project which has been and will continue to be marketed to an older population.

By improving and providing the basic infrastructure needs, which includes roads,

transportation for the elderly will be benefitted. PT 10-101.

100. Subsection 6 relating to health includes a policy that every Florida

resident has a right to breathe clean air, drink pure water and eat nutritious

food. Approval of the district is consistent with this goal by providing a high

quality central potable water service to residents of the district. Because

Marion County does not provide central services of this type, the district will

help ensure that residents have pure water to drink. PT 101-102.

101. With regard to land use, the stated goal looks to accommodate growth

in an environmentally acceptable manner. Specific policies encourage efficient

development, encourage the protection of water supplies that enhance the

livability and character of urban areas. Ms. Craig-Ayotte emphasized that it

must be remembered that the land within the district is vested for development

and the CDD is one of the most efficient means to finance infrastructure for

this type of urban development. This district is located in one of the fastest

growing areas in Marion County. Adequate utilities are one of the basic needs

to enhance the livability of the urban area and are necessary to support new

population and commercial development. PT 102-104.

102. Goal 18 of the State Comprehensive Plan relates to "public

facilities." Relevant policies under this goal include the allocation of costs

of new facilities on the basis of benefits received by existing and future

residents; creating a partnership among government and the private sector;

encouraging local governmental financial self-sufficiency; identifying and

implementing innovative and fiscally sound and cost-effective techniques for

financing public facilities; and using stable revenue sources which are also

responsible for growth for financing public facilities. Establishment of this

CDD is consistent with all of these policies in that costs are allocated to the

users of services; the district provides the kind of partnership contemplated by

the State Comprehensive Plan; and the district provides a cost-effective

alternative to other forms of financing for the development of this

infrastructure. The CDD also provides stability for the infrastructure

maintenance and is consistent with this goal. PT 104-108.

103. Goal 20 relates to transportation. The district provides a mechanism

for building and maintaining roads and associated drainage. The district

ensures that the infrastructure will be in place at or before the time the

development occurs and well into the future. PT 108.

104. With regard to goal 21 pertaining to governmental efficiency, the

state goal and policies relate to cooperation among all levels of government;

allowing the creation of independent special districts; eliminating needless

duplication of governmental activities; encouraging competitive bidding in the

contracting process; and encouraging joint venture solutions to mutual problems.

Marion County has a very limited service delivery system and is seriously

constrained in its ability to construct and maintain infrastructure. The

County's existing revenue sources are unusually low. A CDD provides for the

creation of infrastructure without cost to the county taxpayers. The CDD also

has limited powers thereby eliminating unnecessary proliferation and

duplication. Also, as a governmental unit, the district will be subject to the

Sunshine Laws and competitive bidding requirements. PT 109-113.

105. Goal 26 relating to "plan implementation" has an emphasis on

improving intergovernmental coordination and maximizing citizen involvement.

The CDD furthers this goal and several of its associated policies because it

operates under an elected representative system of government through a board of

supervisors. The CDD is a governmental entity subject to various safeguards

found in Florida law. The CDD mechanism also provides for greater citizen

involvement and accountability. The limited nature of the powers given to CDDs

ensure focus and performance regarding those functions. The district is a

specific means to accomplish service delivery to the development thereby making

possible orderly and economically sound planning for growth. PT 113-116.

106. Ms. Craig-Ayotte opined that creation and establishment of the Circle

Square Woods Community Development District is not inconsistent with the State

Comprehensive Plan or any of its goals or policies. In fact, she believes the

establishment of this district would further many of those stated goals and

policies. PT 100, 116; T 69-71.

107. Ms. Craig-Ayotte also reviewed the Amended Petition in relationship

to the Marion County Comprehensive Plan. In particular, she reviewed relevant

elements related to future land use, housing and the provision of financing of

infrastructure. In her view, the establishment of the proposed district is not

inconsistent with the Marion County Comprehensive Plan. In fact, establishment

of the district is consistent with various elements of that plan because the CDD

will provide the infrastructure necessary for a development that is already

vested and will occur. The CDD will specifically provide the funding mechanism

to construct, operate and maintain the infrastructure before or concurrent with

the development of the community. PT 116-121; T 71-73.

108. Ms. Craig-Ayotte provided testimony and input on whether the district

is of sufficient size, is sufficiently compact and sufficiently contiguous to be

developable as one functional interrelated community. She considers a community

to be a combination of people, activities and systems within a specific

geographic location. A community contains a mixture of interrelated uses

providing people places to work, live, socialize, communicate and pursue leisure

activities. A community is functionally interrelated by the juxtaposition of

the various uses within the community and the absence of barriers which prohibit

access to some of the uses. PT 121-122.

109. She believes the district is of sufficient size at 2,489 acres to

operate as a functional interrelated community. There is adequate land to

accommodate all of the planned activities. PT 122-123.

110. The term "compact" as used by a land planner, refers to a

concentration of land within a given area such that no undeveloped pockets or

enclaves exist or are created which are inaccessible. It also means that all

elements of the community are close to each other. She believes the proposed

district is sufficiently compact to satisfy the statute. The "developed area"

is not a problem because it is served by central water and sewer infrastructure

which can run through rather than having to run around that area. PT 123-124.

111. With regard to the area being "sufficiently contiguous," she believes

that term means that there should be no major barriers or divisions of the

property such that residents are prevented from fully associating with each

other. Once again, the developed area does not mean the property is not

contiguous. In fact, the factors which would allow residents to fully associate

are already in place in the existing OTOW community and will be enhanced by the

expansion of development onto the district's land. PT 125-126.

112. In sum, she believes the area upon which the proposed Circle Square

Woods District is to be established is of sufficient size, is sufficiently

compact and is sufficiently contiguous to be developable as one functional

interrelated community. T 75.

113. Ms. Craig-Ayotte also examined whether the district is the best

alternative available for delivering community development services and

facilities to the area to be served. In particular, she looked at Marion County

as an option but rejected that as an alternative because Marion County has no

services and no plans for providing these services to OTOW. PT 127-129.

114. Another alternative she examined would be for infrastructure to be

provided through private means such as the developer or a homeowners

association. She indicated that privately financed infrastructure is more

costly and does not bring with it the stability associated with a CDD. The

district also has safeguards such as competitive bidding, public scrutiny,

accountability, etc. The CDD is focused and operates for the benefit of a

select constituency, unlike a typical general government such as a county or

city. She believes that a district is the best alternative for the future

residents. PT 127-129; T 76-77.

115. The fifth of the six factors to be considered by FLWAC in

determining whether to grant or deny a petition for the establishment of a CDD

addresses the question of whether the community development services and

facilities of the district will be incompatible with the capacity and uses of

existing local and regional community development services and facilities.

Section 190.005(1)(e)5., F.S. Ms. Craig-Ayotte noted that the only services

that exist are privately owned and operated by an affiliate of OTOW. There are

no public utilities available in reasonable proximity. Therefore, establishment

of the CDD would not be incompatible with the capacity and uses of existing

local and regional community development services and facilities. PT 129-131; T

67-68, 77.

116. Finally, as to the question of whether the area to be served by the

district is amenable to separate special district government, she pointed out

that the CDD has limited powers as specifically set forth in Chapter 190. By

examining the other factors set forth in the statute as described above, she

concludes that the area to be served by the Circle Square Woods Community

Development District is amenable to separate special district government. PT

131-132; T 77-78.

117. Ms. Craig-Ayotte's prepared testimony and testimony at the local

public hearing are accepted.

Public Participation

118. The only member of the public who spoke was Mr. Gus LaSala, a

resident of OTOW (in the "developed area"). Mr. LaSala stated he thought

establishment of a CDD would avoid problems such as those experienced at another

development. T 79-80.

CONCLUSIONS

The Amended Petition contains all of the elements required by Section

190.005(1)(a), Florida Statutes, and Rule 42-1.008, Florida Administrative Code.

Having considered the record in this cause, it is concluded pursuant to Section

190.005(1)(e) 1 through 6, Florida Statutes:

1. That all statements contained within the petition have been found to be

true and correct.

2. That the creation of this district is not inconsistent with any

applicable element or portion of the State Comprehensive Plan or the effective

local government comprehensive plan.

3. That the area of land within the proposed district is of sufficient

size, is sufficiently compact and is sufficiently contiguous to be developable

as one functional interrelated community.

4. That the district is the best alternative available for delivering

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

the district.

5. That the community development services and facilities of the district

will not be incompatible with the capacity and uses of existing local and

regional community development services and facilities.

6. That the area that will be served by the district is amenable to

separate special district government.

DONE AND ENTERED this 15th day of June, 1994 in Tallahassee, Florida.

___________________________________

DAVID M. MALONEY, Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 15th day of June, 1994.

COPIES FURNISHED:

Michael J. Glazer

Macfarlane Ausley Ferguson & McMullen

Post Office Box 391

227 South Calhoun Street

Tallahassee, Florida 32302

Landis V. Curry, Jr.

Ayers, Cluster, Curry McCall

& Briggs, P.A.

21 Northeast First Avenue

Ocala, Florida 32678

Vincent L. Nuccio, Jr.

Macfarlane Ausley Ferguson & McMullen

111 Madison Street, Suite 2300

Tampa, Florida 33602

Charles A. Simmons

Schreiber, Simmons,

Mac Knight & Tweedy

520 Madison Avenue

New York, New York 10022

Dan R. Stengle, General Counsel

Department of Community Affairs

2740 Centerview Drive

Tallahassee, Florida 32399

David K. Coburn, Secretary

Florida Land & Water

Adjudicatory Commission

Office of The Governor,

Office of Planning and Budgeting

Room 1601, The Capitol

Tallahassee, Florida 32399-0001

Linda Loomis Shelley, Secretary

State of Florida,

Department of Community Affairs

2740 Centerview Drive

Tallahassee, Florida 32399-2100