05-004702 In Re: Petition For Rule Creation - Kendall Creek Community Development District vs. * Status: Closed Recommended Order on Friday, April 28, 2006.

Summary: The petition to establish the proposed District meets the applicable factors set forth in Section 190.005, Florida Statutes.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

IN RE: PETITION FOR RULE )

CREATION - KENDALL CREEK ) Case No. 05 - 4702

COMMUNITY DEVELOPMENT DISTRICT )

)

REPORT TO THE FLORIDA LAND AND WATER ADJUDICATORY COMMISSION

Pursuant to Section 190.005(1)(d), Florida Statutes, a

local public hearing was held on February 20, 2006, at 10:30

a.m., in the Alzacar Room, City Hall, St. Augustine, Florida,

before Suzanne F. Hood, Administrative Law Judge with the

Divisio n of Administrative Hearings, for the purpose of taking

testimony and public comment and receiving exhibits on the

Petition of The St. Joe Company (Petitioner) to establish the

Kendall Creek Community Development District (District/proposed

District). Thi s report is prepared and submitted to the Florida

Land and Water Adjudicatory Commission (Commission) pursuant to

Section 190.005, Florida Statutes.

APPEARANCES

For Petitioner: Jonathan T. Johnson, Esquire

Wesley S. Haber, Esquire

Hopping Green & Sams, P.A.

Post Office Box 6526

Tallahassee, Florida 32314

Public Attendee: Ellen A. Whitmer, pro se

1178 Natures Hammock Road, South

Fruit Cove, Florida 32259

STATEMENT OF THE ISSUE

The sole issue is whether the Petition to establish the

District meets the applicable factors set forth in Section

190.005, Florida Statutes.

PRELIMINARY STATEMENT

Petitioner filed the Peti tion to establish the District

with the Secretary of the Commission on or about December 15,

2005. Prior to this time, Petitioner provided for delivery of a

copy of the Petition and its attachments, along with the

requisite filing fee, to St. Johns County , Florida. A copy of

the Petition, including its attachments, was received into

evidence as Petitioner’s Composite Exhibit A.

On or about December 21, 2005, the Secretary of the

Commission certified that the Petition contained all required

elements and forwarded the Petition to the Division of

Administrative Hearings for the purpose of holding the public

hearing required under Section 190.005(1)(d), Florida Statutes.

A copy of the Secretary’s certification as to the completeness

of the Petition and ref erral to the Division of Administrative

Hearings was received into evidence as Petitioner’s Exhibit E.

The local public hearing was scheduled in St. Johns County

Florida, for Monday, February 20, 2006, at 10:30 a.m.

Petitioner published notice of the h earing in accordance with

Section 190.005(1)(d), Florida Statutes. The Proof of

Publication of the Notice of Local Public Hearing was received

into evidence as Petitioner's Composite Exhibit B.

The land to be included within the proposed District is

loca ted entirely within the unincorporated limits of St. Johns

County. Section 190.005(1)(c), Florida Statutes, provides that

the county has the option to hold a public hearing within 45

days of the filing of the Petition. This matter was taken to

the St. Jo hns County Commission by county staff and the St.

Johns County Commission voted not to hold such a hearing.

At the local public hearing on February 20, 2006,

Petitioner presented the pre - filed and live testimony of Nick

Cassala, VP/Project Manager, St. J oe Company - North Florida

Region; Donald Smith, an expert in local and regional

comprehensive planning; Lee Alford, with the firm of England,

Thims & Miller, Inc., an expert in civil engineering; Henry H.

Fishkind, with the firm Fishkind & Associates, an ex pert in the

field of economics and financial analysis, and James A. Perry,

with the firm of Government Management Services, LLC, an expert

in special district government operation and establishment.

Petitioner offered Petitioner's Exhibits A through N, w hich

were received into evidence at the hearing. A list of all of

Petitioner’s exhibits is attached to this report as Exhibit “A.”

Ellen A. Whitmer attended the hearing and provided oral

comments as a member of the public. Mike Veazey and Eleanor

Aver y, who are affiliated with Petitioner, also attended the

hearing but did not provide testimony or oral comments on the

record.

Petitioner caused a transcript of the local public hearing

to be prepared by a court reporter who is affiliated with

Executive Reporters, 1113 Blackstone Boulevard, Jacksonville,

Florida 32202. The transcript, which was filed with the

Division of Administrative Hearings on March 29, 2006, is being

transmitted to the Commission along with this report.

OVERVIEW

1. Petitioner is seeking the adoption of a rule by the

Commission to establish the District, which is proposed to

consist of approximately 4,086.6 acres. The proposed District

is located entirely within the unincorporated limits of St.

Johns County, Florida. There are n o out - parcels within the area

to be included in the District.

2. The estimated cost of the infrastructure facilities and

services, which are presently expected to be provided to the

lands within the proposed District, was included in the

Petition.

3 . The sole purpose of this proceeding was to consider the

establishment of the District as proposed by Petitioner.

Matters relating to land use approvals, land use changes, the

highest and best use of the property proposed to be included in

the District, and environmental permitting matters, are not

within the scope of this proceeding. See § 190.002, Fla. Stat.

SUMMARY OF EVIDENCE AND TESTIMONY

A. Whether all statements contained within the Petition

have been found to be true and correct.

4. Petition er's Composite Exhibit A was identified for the

record as a copy of the Petition and its attachments as filed

with the Commission.

5. Mr. Cassala testified that he had reviewed the contents

of the Petition, and to the best of his knowledge, there were n o

necessary changes to it. Mr. Cassala also testified that he

approved the Petition’s findings. Mr. Cassala generally

described the attachments to the Petition. Finally, Mr. Cassala

testified that the contents of the Petition and its attachments,

admitt ed into evidence as Petitioner's Composite Exhibit A, are

true and correct to the best of his knowledge.

6. Mr. Alford, a witness qualified as an expert in the

filed of civil engineering, testified that he had assisted with

the preparation of Petition E xhibits 1, and 4 - 8. Mr. Alford

generally described the services and facilities the District is

expected to provide. Mr. Alford testified that the attachments

to the Petition contained reasonable estimated construction

costs based on his experience.

7. Mr. Fishkind, a witness qualified as an expert in

economic and financial analysis, testified that his firm had

prepared Exhibit 9 to the Petition, the Statement of Estimated

Regulatory Costs. Mr. Fishkind also testified that the

Statement of Estimated Re gulatory Costs, as corrected and

submitted as Attachment 9 to Petitioner's Composite Exhibit A,

complied with the requirements of Section 120.541(2)(f), Florida

Statutes.

8. Mr. Cassala testified that the Petition included true

and correct written cons ents to establish the proposed District

from 100 percent of the owners of the real property located

within the lands to be included in the proposed District.

9. Mr. Cassala testified the Petition included the names

of the Board of Supervisors of the pr oposed District. The five

persons designated to serve as the initial Board of Supervisors

are William Petkoski, Scott Parr, Michael Veazy, Harry Waldron,

and Michael Davis. Mr. Cassala testified that he does not know

Harold Waldron personally. However, Mr. Perry testified that he

personally knows Mr. Waldron and that Mr. Waldron is a Florida

resident and U.S. citizen. All of the individuals identified

for the Board of Supervisors are citizens of the United States

and reside in Florida.

10. The Petit ion and its applicable exhibits, as corrected

at the hearing, are true and correct.

B. Whether the establishment of the District is

inconsistent with any applicable element or portion of the State

Comprehensive Plan or of the effective local government

c omprehensive plan.

11. Mr. Smith, a witness qualified as an expert in the

field of local and regional comprehensive planning, reviewed the

proposed District in light of the requirements of the State

Comprehensive Plan, Chapter 187, Florida Statutes.

12. Mr. Smith testified that he reviewed the Petition and

that the establishment of the proposed District is not

inconsistent with the State Comprehensive Plan found in Chapter

187, Florida Statutes.

13. According to Mr. Smith, two subjects of the Sta te

Comprehensive Plan apply directly to the establishment of the

proposed District, as do the policies supporting those subjects.

14. Mr. Smith testified that Subject 16 [sic] 1 , Land Use,

recognizes the importance of enhancing the quality of life in

Flo rida by ensuring that future development is located in areas

that have the fiscal ability and service capacity to accommodate

growth. The proposed District will have the fiscal ability to

provide services and facilities to the population in the

designated growth area and help provide infrastructure in an

area which can accommodate development in a fiscally responsible

manner.

15. Mr. Smith testified that Subject 26 [sic] 2 , Plan

Implementation, requires that systematic planning shall be

incorporated int o all levels of government throughout the state.

This goal encourages intergovernmental coordination. The

proposed District is consistent with this element of the State

Comprehensive Plan because the proposed District will

systematically plan for the con struction, operation and

maintenance of the public improvements and the community

facilities authorized under Chapter 190, Florida Statutes,

subject to and not inconsistent with the local government

comprehensive plan and land development regulations.

Add itionally, the District meetings are publicly advertised and

open to the public so that all District property owners and

residents can be involved in planning for improvements.

16. Mr. Smith testified he reviewed the relevant portions

of the effective local comprehensive plan in light of the

establishment of the proposed District. Specifically, he

testified that he reviewed the St. Johns County local

comprehensive plan. Mr. Smith opined that the establishment of

the proposed District is not inconsiste nt with the St. Johns

County local comprehensive plan. Mr. Smith testified that the

County has already found the development of Kendall Creek to be

consistent, or at least not inconsistent, with the local

comprehensive plan.

17. Mr. Smith identified ce rtain aspects of the St. Johns

County local comprehensive plan that would be furthered upon the

establishment of the proposed District. First, Goal H.1

requires the orderly and efficient provision of infrastructure

facilities and services such as sanitary sewer, potable water,

drainage, roads, utilities, recreation and open space. The

proposed District furthers this provision because it will

provide these types of improvements in an efficient and cost -

effective manner to the lands within the boundaries of the

proposed District.

18. Second, Policy F.1.3.10 requires that DRIs, PUDs, and

other large developments shall provide for the dedication of

parks and open space. Goal H.1 requires that the County ensure

the orderly and efficient provision of the inf rastructure

facilities and services such as roads, utilities, recreation,

and drainage. The community development district (CDD) will

serve as an alternative provider of these infrastructure systems

and services to meet the needs of the lands within its

b oundaries.

19. Third Objective H.1.7 requires the County to manage

fiscal resources in a manner sufficient to ensure the provision

of needed infrastructure. Once established, the proposed

District would provide the required infrastructure within its

bo undaries without reducing the fiscal resources of the County

or decreasing the County’s bonding limits.

20. Fourth. Objective G.1.5 directs the County to work

cooperatively with other units of government to address issues

and concerns. Mechanisms, such as interlocal agreements, can

ensure that the proposed District and the County work together

and coordinate the construction, maintenance and management of

the required improvements.

21. Based on the evidence in the record, the proposed

District will n ot be inconsistent with any applicable element or

portion of the state or local comprehensive plans.

C. Whether the area of land within the proposed District

is of sufficient size, is sufficiently compact, and is

sufficiently contiguous to be developab le as one functional

interrelated community .

22. Testimony on this factor was provided by Messrs.

Alford, Fishkind, Smith, and Perry. The lands that comprise the

proposed District will consist of approximately 4,086.6 acres,

located entirely within the unincorporated limits of St. Johns

County, Florida.

23. All of the land in the proposed District is part of an

approved DRI and Planned Unit Development (the “PUD”).

24. Mr. Alford testified that the proposed District is of

sufficient size, compac tness and contiguity to be developed as a

functionally interrelated community. He also testified that the

necessary infrastructure can be provided by the proposed

District in a cost effective manner based on the specific design

of the community. Finally, he testified that the use of one

overall development plan will ensure proposed improvements are

provided in an efficient, functional and integrated manner.

25. The size of the District as proposed is approximately

4,086.6 acres. Mr. Perry testified t hat this is a sufficient

size to constitute a functionally interrelated community. He

also testified that the quality of compactness, contiguity, and

size relate directly to whether an area can be one functionally

interrelated community, and from the stan dpoint of this

provision, the proposed District will be able to successfully

maximize the delivery of the infrastructure improvements to the

land.

26. Mr. Smith testified that the proposed District has

sufficient land area, and is sufficiently compact and contiguous

to be developed with infrastructure improvements as one

functionally interrelated community. Mr. Smith stated that the

area to be included within the proposed District can be expected

to succeed as a functional, interrelated community from a

planning perspective because the characteristics of the land

ensures that services and facilities will not be hampered by

significant barriers or spatial problems. Mr. Smith opined that

from a planning perspective, the relatively small nature of the

Dis trict, its planned community character, and the proposed

limited services and facilities make for a good match. Overall,

Mr. Smith testified that the foregoing represented a CDD of

sufficient size, sufficient compactness and sufficient

contiguity to serve as one functionally, interrelated community.

27. From engineering, economic, management and planning

perspectives, the area of land to be included in the proposed

District is of sufficient size, is sufficiently compact, and is

sufficiently contiguous to be developed as a single functionally

interrelated community.

D. Whether the proposed District is the best alternative

available for delivering community development services and

facilities to the area that will be served by the proposed

District.

28. It is presently intended that the proposed District

will participate in the construction or provision of certain

infrastructure improvements as outlined in the Petition.

29. Installation and maintenance of infrastructure systems

and services by the proposed District are expected to be paid

through the imposition of special assessments, which will be

borne only by property owners within the proposed District that

benefit from the infrastructure systems. Use of such

assessments will ensure that the r eal property benefiting from

proposed District services is the same property which pays for

them.

30. Mr. Perry identified two types of alternatives to the

establishment of the proposed District for the purpose of

installation and maintenance of infras tructure systems. First,

St. Johns County might provide facilities and services from its

general fund. Second, facilities and services might be provided

by some private means, with maintenance delegated to a property

owners' association (POA) or a home o wners' association (HOA).

31. The proposed District will be governed by and managed

by its own board, thereby allowing greater focus on the needs of

the District and its facilities and services.

32. The proposed District will construct certain

infr astructure and community facilities which will be needed by

the property owners and residents of the project. The revenue

that will repay the bonds issued to meet the construction costs

will come from special assessments imposed on the benefiting

property .

33. The District has the advantage of being a unit of

local government, which has access to the tax exempt bond

market. Additionally, the proposed District is a long - term,

stable, perpetual entity capable of funding, constructing, and

in some cases maintaining facilities over the lifetime of the

facilities.

34. From planning, economic, engineering, and management

perspectives, the proposed District is the best alternative

available for delivering community development services and

facilities to t he area that will be served by the District.

E. Whether the community development services and

facilities of the proposed district will be incompatible with

the capacity and uses of existing local and regional community

development services and facilit ies.

35. The services and facilities proposed to be provided by

the District are not incompatible with uses and existing local

and regional facilities and services. The District's facilities

and services within the proposed boundaries will not duplicat e

any existing regional services or facilities which are provided

to the lands within the District by another entity. None of the

proposed services or facilities are presently being provided by

another entity for the lands to be included within the Distri ct.

36. Therefore, the community development services and

facilities of the proposed District will not be incompatible

with the capacity and uses of existing local and regional

community development services and facilities.

F. Whether the area that will be served by the District is

amenable to separate special - District government.

37. As cited previously, from planning, economics,

engineering, and special district management perspectives, the

area of land to be included in the proposed District is of

sufficient size, is sufficiently compact, and is sufficiently

contiguous to be developed and become a functionally

interrelated community. The community to be included in the

District has a need for basic infrastructure systems to be

provided.

38. From planning, engineering, economic and management

perspectives, the area that will be served by the proposed

District is amenable to separate special - district government.

G. Other requirements imposed by statute or rule.

39. Chapter 190, Florida St atutes, and Rule Chapter 42 - 1,

Florida Administrative Code, impose specific requirements

regarding the Petition and other information to be submitted to

the Commission.

Elements of the Petition

40. The Commission has certified that the Petition meets

al l of the requirements of Section 190.005(1)(a), Florida

Statutes.

Statement of Estimated Regulatory Costs (SERC)

41. The SERC contains an estimate of the costs and

benefits to all persons directly affected by the proposed rule

to establish the proposed District -- the State of Florida and its

citizens, the County and its citizens, Petitioner, and

consumers.

42. Beyond administrative costs related to rule adoption,

the State and its citizens will only incur minimal costs from

establishing the District. These costs are related to the

incremental costs to various agencies of reviewing one

additional local government report. The proposed District will

require no subsidies from the State.

43. Administrative costs incurred by St. Johns County

related to rule adoption should be minimal and are offset by the

required filing fee of $15,000. Benefits to the county will

include improved planning and coordination of development,

without incurring any administrative or maintenance burden for

facilities and serv ices within the proposed District except for

those it chooses to accept.

44. Consumers will pay non - ad valorem or special

assessments for the District facilities. Location within the

District is voluntary. Generally, District financing will be

less e xpensive than maintenance through a property owners'

association or capital improvements financed through developer

loans. Benefits to consumers in the area within the District

will include a higher level of public services and amenities

than might otherw ise be available, completion of District -

sponsored improvements to the area on a timely basis, and a

larger share of direct control over community development

services and facilities within the area.

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

Petition to include a SERC, which meets the requirements of

Section 120.541, Florida Statutes. The Commission has already

certified the sufficiency of the Petition. The Petition

contains a SERC which meets all requirements of Section 120.541,

Florid a Statutes.

Other Requirements

46. Petitioner has complied with the provisions of Section

190.005(1)(b)1., Florida Statutes, in that St. Johns County was

paid the requisite filing fee of $15,000.

47. Section 190.005(1)(d), Florida Statutes, requires

Petitioner to publish notice of the local public hearing in a

newspaper of general circulation in St. Johns County for four

consecutive weeks prior to the hearing. The notice was

published in The St. Augustine Record , a newspaper of general

paid circulati on in St. Johns County, for four consecutive

weeks, on January 25, 2006, February 1, 2006, February 8, 2006,

and February 15, 2006.

Local Government Support

For Establishment of the District

48. Pursuant to the requirements of Section 190.005(1)(b),

Fl orida Statutes, Petitioner filed a copy of the Petition and

the $15,000 filing fee with St. Johns County prior to filing the

Petition with the Commission.

49. The St. Johns County Commission did not hold a public

hearing on the establishment of the Dis trict as permitted by

Section 190.005(1)(c), Florida Statutes.

Public Comment Regarding the Establishment of the District

50. Only one member of the public, Ellen A. Whitmer,

commented during the public hearing. Many of Ms. Whitmer’s

comments expresse d her personal disagreement with the provisions

of Chapter 190, Florida Statutes. The validity of Chapter 190,

Florida Statutes, and Ms. Whitmer’s disagreement therewith, are

not relevant as to whether or not the Petition meets the

applicable factors set forth in Section 190.005, Florida

Statutes.

51. However, several of the issues raised by Ms. Whitmer

were addressed at the hearing. For example, it was explained

that the decision for the development to have its utilities

serviced by Jacksonville Electri c Authority (JEA), as opposed to

St. Johns County, was a decision made by St. Johns County and

JEA and had nothing to do with Petitioner.

52. There was also an explanation of the structure under

which bond funds are held after bonds are issued. Specifi cally,

it was explained that the funds are held in trust and cannot be

disbursed without a requisition approved by the District’s

engineer. Such a requisition certifies that the disbursement is

part of the District’s capital improvement plan.

53. It i s worth noting that none of Ms. Whitmer’s comments

directly addressed any of the factors set forth in Section

190.005, Florida Statutes. It is also worth noting that

Ms. Whitmer does not live on the property that would make up the

proposed District.

COM PARISON OF INFORMATION IN RECORD TO APPLICABLE LAW

54. This proceeding is governed by Chapter 190, Florida

Statutes.

55. The proceeding was properly noticed pursuant to

Section 190.005, Florida Statutes, by publication of an

advertisement in a newspaper of general paid circulation in

St. Johns County and of general interest and readership once

each week for the four consecutive weeks immediately prior to

the hearing.

56. Petitioner has met the requirements of Section

190.005, Florida Statutes, regarding the submission of the

Petition and satisfaction of filing fee requirements.

57. Petitioner has met the burden of establishing that the

Petition meets the relevant statutory factors set forth in

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

58. All portio ns of the Petition and other submittals have

been completed and filed as required by law.

59. All statements contained within the Petition, as

corrected at the hearing, are true and correct.

60. The establishment of the proposed District is not

inconsist ent with any applicable element or portion of the State

Comprehensive Plan or the St. Johns County Comprehensive Plan.

61. 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.

62. The proposed District is the best alternative

available for delivering community development services and

facilities to the area that will be served by the District.

63. The community development services and facilities of

the proposed District will not be incompatible with the capacity

and uses of existing local and regional community development

services and facilities.

64. The area to be served by the proposed District is

amenable to a separate special district government.

CONCLUSION

Based upon the record of this proceeding, the Petition

meets all statutory requirements, and there appears to be no

reason not to grant the Petition and establish the proposed

District pursuant to Chapter 190, Flor ida Statutes.

REPORT SUBMITTED this 2 8 th day of April, 2006, in

Tallahassee, Leon County, Florida.

S

SUZANNE F. HOOD

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apal achee 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 2 8 th day of April, 2006.

ENDNOTES

1/ The correct subjec t number for Land Use is Subject 15;

however, the content of Mr. Smith's testimony remains accurate.

2/ The correct subject number for Plan Implementation is Subject

25; however, the content of Mr. Smith's testimony remains

accurate.

COPIES FURNISHED :

Ellen A. Whitmer

1178 Natures Hammock Road, South

Fruit Cove, Florida 32259

Jonathan T. Johnson, Esquire

Hopping, Green, & Sams, P.A.

Post Office Box 6526

Tallahassee, Florida 32314

Barbara Leighty, Clerk

Growth Management and Strategic

Plannin g

The Capitol, Room 1802

Tallahassee, Florida 32399 - 0001

Raquel Rodriguez, General Counsel

Office of the Governor

The Capitol, Suite 209

Tallahassee, Florida 32399 - 1001

Michael P. Hansen, Secretary

Florida Land and Water

Adjudicatory Commission

The C apitol, Suite 1802

Tallahassee, Florida 32399 - 0001

Exhibit “A”

List of Petitioner’s Exhibits

Exhibit A Petition to Establish the Kendall Creek Community

Development District

Exhibit B Proofs of Public ation

Exhibit C FLWAC Notice of Hearing

Exhibit D Prefiled Testimony of Nick Cassala

Exhibit E FLWAC Acknowledgement Letter

Exhibit F Department of Community Affairs Sufficiency of

Petition

Exhibit G Land Use Approvals – DRI, PUD

Exhibit H Prefiled testimony of Donald Smith

Exhibit I Florida State Comprehensive Plan

Exhibit J Resume of Lee Alford

Exhibit K Prefiled Testimony of Lee Alford

Exhibit L Resume of Henry H. Fishkind

Exhibit M Prefiled Test imony of Henry H. Fishkind

Exhibit N Prefiled Testimony of James A. Perry