07-001674 In Re: Petition To Establish The Three Creeks Community Development District vs. * Status: Closed Recommended Order on Thursday, June 28, 2007.

Summary: Petition to establish the community development district met all requirements with the possible exception of not addressing state subsidies for insuring beachfront and coastal property.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

IN RE: PETITION TO ESTABLISH )

THE THREE CREEKS COMMUNITY ) Case No. 07 - 1674

DEVELOPMENT DISTRICT )

_____________________________ _ )

ADMINISTRATIVE LAW JUDGE'S REPORT TO

THE FLORIDA LAND AND WA TER ADJUDICATORY COMMISSION

On June 1, 2007 , a local public hearing under S ection

190.0 05(1)(d), Florida Statutes (2006 ), 1 was conducted by J.

Lawrence Johnston, Administrative Law Judge (ALJ) of the

Division of Administrative Hearings (DOAH). The hearin g was

held at the County Administrative Office, Board Room, 1000 Cecil

G. Costin Senior Boulevard, Port St. Joe , Florida.

APPEARANCES

For Petitioner: Brian A. Crumbaker, Esquire

Hopping Green & Sams, P.A.

Post Office Box 6526

Tallahassee, F lorida 32314 - 6526

STATEMENT OF THE ISSUE

The issue before the Florida Land and Water Adjudicatory

Commission (FLWAC) in this proceeding is whether the Petition to

Establish the Three Creeks Community Development Distri ct

(Petition) meets the criteria set forth in Chapter 190, Florida

Statutes, and Chapter 42 - 1, Florida Administrative Code. The

local public hearing was for the purpose of gathering

information in anticipation of quasi - legislative rulemaking by

FLWAC.

PRE LIMINARY STATEMENT

The St. Joe Company (Petitioner) filed the Petition with

the Secretary of FLWAC on March 30, 2007. It requested that

FLWAC adopt a rule to establish a community development

district, to be called the Three C reeks Community Development

Dis trict (District) , on certain property in the City of Port St.

Joe (City ) . Prior to the filing of the Petition , the Petitioner

provided for delivery of the Petition and its attachments, along

with the requisite filing fee, to the City and Gulf County

(C ounty ).

On April 11, 2007, the Secretary of FLWAC forwarded the

Petition to DOAH for the purpose of holding the public hearing

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

Petitioner then published notice of the local public hearing in

accor dance with Section 190.005(1)(d), Florida Statutes.

The land to be included within the proposed District is

located entirely within the limits of the City. Section

190.005(1)(c), Florida Statutes, provides that the County and

the municipality containin g all or a portion of the lands within

the proposed District ha ve the option to hold a public hearing

within forty - five days of the filing of a petition. The City

and County held optional public hearings but took no action

either in favor or against the e stablishment of the proposed

District.

The local public hearing before the ALJ was held on Friday,

June 1, 2007, at 10:00 a.m. , at the County Administrative

Office, Board Room, 1000 Cecil G. Costin Senior Boulevard, Port

St. Joe, Florida. On May 30, 200 7, Petitioner pre - filed the

written testimony of its witnesses: Joe Rentfro, Vice President

and Project Manager for the WindMark Beach development project

for the St. Joe Company ; Michal Szymonowicz, Director of

Financial Services for Wrathell, Hart, Hunt & Associate s, LLC;

Stephen A. Means P.E., Senior Vice President and Managing

Principal in the Panama City Beach office of Wilson Miller, Inc.;

and Tom Beck, Regional Manager, Development Planning and

Approvals, for the N orth Florida offices of Wilson Miller , Inc.

No live testimony was given at the hearing , and n o members of

the public appeared at the hearing. 2

During the hearing, a copy of the Petition including

attachments was received into evidence as Composite Hearing

Exhibit A. The proofs of publicati on providing notice were

received into evidence as Hearing Exhibit B. The pre - filed

testimony and affidavits of Rentfro , Szymonowicz, Means, and

Beck were received into evidence as Composite Hearing Exhibit C .

A c onsent and joinder for the Culpeppers' pr operty was received

into evidence as Hearing Exhibit D.

The T ranscript of the local public hearing was filed with

DOAH on June 18, 2007. Petitioner filed a Proposed Report of

Findings and Conclusions on June 18, 2007.

SUMMARY OF THE RECORD

A. Petition and Related Matters

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

FLWAC to establish Three Creeks Community Development D istrict .

The District is proposed to consist of approximately 1,812.999

acres located on the Gulf of Mexico within the inc orporated

limits of the City . Petition Exhibit 1 is a map of the

District's proposed location, and Exhibit 2 describes the metes

and bounds of the external boundaries of the District.

2. The Petition states that t here are no parcels within

the external b oundaries of the proposed District that are to be

excluded from the District.

3. Petition Exhibit 3 names three owners of property

within the boundaries of the proposed District : St. Joe Home

Building, L.P. ; St. Joe Timberland Company of Delaware, L.L.C . ;

and David A. and Elaine D. Freni . All three gave written

consent to the establishment of the District. Petition Exhibit

D is written consent to the establishment of the District by

landowners Ray V. and Kelli Q. Culpepper. Together, these

exhibits es tablish consent of all of the landowners within the

boundaries of the proposed District.

4. The Petition names the five persons designated to be

the initial members of the Board of Supervisors of the proposed

District. Matt Fleck, Joe Rentfro, Brian Unde rwood,

Mercedes Pineiro, and Dave Harrelson are all listed at the same

address: 301 East First Street, Port St. Joe, Florida 32456.

The Petition states that they are all residents of the State of

Florida and citizens of the United States of America.

5. The Petition states that the name of the proposed

District will be "Three Creeks Community Development District."

6. Future land uses are depicted o n Petition Exhibit 4.

7. Petition Exhibit 5 shows a map of the pre - development

jurisdictional wetlands and the existing sanitary sewer and

water distribution systems for lands within the proposed

District.

8. Petition Exhibit 6 describes the type of facilities the

Petitioner expects the District to finance, construct, acquire,

and install, as well as the anti cipated owner and entity

responsible for maintenance. Petition Exhibit 7 identifies the

estimated costs of constructing those facilities. The Petition

states : "Actual construction timetables and expenditures will

likely vary, due in part to the effects of future changes in the

economic conditions upon costs such as labor, services,

materials, interest rates and market conditions."

9. Petition Exhibit 9 is the statement of estimated

regulatory costs (SERC), which was prepared in accordance with

the requi rements of Section 120.541, Florida Sta t utes.

10. The SERC states that consumers purchasing property

within the District will pay non - ad valorem or special

assessments for certain facilities. Locating within the

District is voluntary. Generally, Distri ct financing will be

less expensive than maintenance through a property owners'

association or capital improvements financed through developer

loans.

11 . The SERC contains an estimate of the costs and

benefits to all persons directly affected by the pro posed rule

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

citizens ; the City and County and their citizens ; the

Petitioner ; and consumers. Benefits to consumers in the area

within the community development district will include a higher

level of public services and amenities than might otherwise 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.

12 . Be yond 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.

13 . Administrative costs incurred by the City and County

related to rule adoption will be modest. These modest costs are

offset by the $15,000 filing fee required to accompany the

Petition to both the City and the County.

14 . T he SERC states that the proposed District will

require no subsidies from the State and that b enefits will

include improved planning and coordination of development, which

is difficult to quantify but nonetheless substantial.

15 . The SERC makes no mention of the possibi lity that the

State and its citizens may be required to subsidize the cost of

insuring beachfront and coa stal property in the District. Such

subsidies, if required, would be paid regardless whether the

proposed development proceeds as a community developm ent

district or in some other form . However, it is possible that

establishment of the District would facilitate development that

would not proceed without it.

1 6 . Petition Exhibit 9 identifies Brian A. Crumbaker,

Esq uire, and Joseph A. Brown, Esq uire , as authorized agents for

the Petitioner.

1 7 . The Petition alleges that prior to filing with FLWAC,

copies were sent to the City and County, along with the required

filing fee of $15,000 to each local government, in accordance

with Section 190.005(1)(b), F lorida Statues.

1 8 . The Petition alleges that it should be granted

according to the factors listed in Section 190.005(1)(e),

Florida Statutes.

1 9 . The Petition meets all of the requirements of Section

190.005(1)(a), Florida Statutes.

B. Additional Infor mation

20 . Section 190.005(1)(d), Florida Statutes, requires the

Petitioner to publish notice of the local public hearing in a

newspaper of general circulatio n in Gulf County for four

consecutive weeks prior to the hearing. The notice was

published in a newspaper of general paid circulation in Gulf

County ( The Star) for four consecutive weeks, on May 3, 10 , 17,

and May 24 , 2007 .

SUMMARY OF EVIDENCE AND TESTIMONY

A. Factor 1: Whether all statements contained within the

Petition have been found to be true and correct.

21 . Petitioner's Composite Exhibit A consists of the

Petition and its attachments as filed with the Commission.

Mr. Rentfro testified in his pre - filed written testimony that he

had reviewed the contents of the Petition and approved its

find ings. Mr. Rentfro generally described certain of the

exhibits to the Petition. Mr. Rentfro also indicated that

Petition Exhibit 3 should be supplemented with an additional

consent. The supplemental consent was received into evidence at

the hearing as Ex hibit D. Mr. Rentfro testified that Petition

Exhibit 3, as supplemented, was a true and correct copy of the

consent and joinder of the owners of 1 00 percent of the lands to

be included within the proposed District. Finally, Mr. Rentfro

testified that the Petition and all its exhibits, as

supplemented , were true and correct to the best of his

knowledge.

2 2 . Mr. Means testified in his pre - filed written testimony

that he had reviewed and helped compile some of the Petition

exhibits. Mr. Means generally des cribed those Petition exhibits

that he had reviewed, testified that he was unaware of any

change or correction required at the time of the hearing, and

that the Petition exhibits he had reviewed were true and

correct. Mr. Means additionally described the services and

facilities that the proposed District is expected to provide.

2 3 . Mr. Szymonowicz testified in his pre - filed written

testimony that he had prepared Petition Exhibit 8, the Statement

of Estimated Regulatory Costs. Mr. Szymonowicz also testif ied

that the SERC as submitted was true and correct to the best of

his knowledge.

2 4 . As stated in paragraph 15 , supra , the SERC makes no

mention of the possibility that the State and its citizens may

be required to subsidize the cost of insuring beachf ront and

coastal property in the District. Such subsidies, if required,

would be paid regardless whether the proposed development

proceeds as a community development district or in some other

form. However, it is possible that establishment of the

Distri ct would facilitate development that would not proceed

without it. With this possible exception, t he Petition and its

exhibits are true and correct.

B. Factor 2: Whether the establishment of the District is

inconsistent with any applicable element or p ortion of the State

Comprehensive Plan or of the effective local government

comprehensive plan.

2 5 . The State Comprehensive Plan “provides long - range

policy guidance for the orderly social, economic and physical

growth of the State” by way of 25 subjec ts, and numerous goals

and policies. The evidence was that, f rom a planning

perspective, three subjects of the State Comprehensive Plan

apply directly to the establishment of the proposed District as

do the policies supporting those subjects.

2 6 . Subje ct 15 of the State Comprehensive Plan, Land Use,

recognizes the importance of locating development in areas with

the fiscal ability and service capacity to accommodate growth.

2 7 . Mr. Beck reviewed the proposed District in light of

the requirements of t he State Comprehensive Plan, Chapter 187,

Florida Statutes. He stated that t he proposed District will

have the fiscal ability to provide services and facilities and

will help provide infrastructure in a fiscally responsible

manner in an area which can acc ommodate development within a

designated growth area in the City.

2 8 . Policy 1 under Subject 15 promotes efficient

development activities in areas which will have the capacity to

service new populations and commerce. Mr. Beck stated that t he

proposed Di strict will be a vehicle to provide high quality

services in an efficient and focused manner over the long term.

2 9 . Subject 17 of the State Comprehensive Plan, Public

Facilities, promotes efficient and orderly financing of new

facilities and particularl y provides in Policy 3 that the cost

of new public facilities should be allocated to existing and

future residents on the basis of benefits received and in Policy

6 provides that fiscally sound and cost - effective techniques for

financing public facilities should be encouraged. Mr. Beck

testified that the District will further these goals and related

policies.

30 . Subject 25 of the State Comprehensive Plan, Plan

Implementation, provides that systematic planning shall be

integrated into all levels of gove rnment, with emphasis on

intergovernmental coordination and citizen involvement.

Mr. Beck testified that t he proposed District is consistent with

this element of the State Comprehensive Plan because the

proposed District will systematically plan for the c onstruction,

operation , and maintenance of the public improvements and

community facilities authorized under Chapter 190, Florida

Statutes, subject to, and not inconsistent with, the local

government comprehensive plan and land development regulations.

Ad ditionally, the District meetings are publicly advertised and

are open to the public so that all District property owners and

residents can be involved in planning for improvements.

31 . Mr. Beck also testified with regard to several

relevant policies un der Subject 25, including Policy 2, 3 and 6.

Policy 2 seeks to ensure operational authority in each level of

government for the implementation of the policy directives in

the State Comprehensive Plan, and in accord therewith, Chapter

190, Florida Statutes, provides the proposed District with

operational authority to deliver basic community services and

capital infrastructure. Policy 3 seeks to provide effective

monitoring, incentive, and enforcement capabilities to ensure

that regulatory programs are met, and under Section 189.415(2),

Florida Statutes, the District will have to submit public

facilities reports with the local general purpose government.

Policy 6 encourages citizen participation in all levels of

policy development, planning and operations . U nder Chapter 190,

Florida Statutes, the District is required to eventually

transition to a resident - elected Board of Supervisors ;

regardless of the method of election, the Board of Supervisors

must convene meetings in accordance with Florida’s government -

in - the - sunshine laws.

3 2 . Mr. Beck also reviewed the proposed District in light

of the requirements of the City 's Comprehensive Plan. Mr. Beck

stated that under Chapter 190, Florida Statutes, the District is

prohibited from acting inconsistently with t he local government

comprehensive plan and identified certain elements of the City 's

Comprehensive Plan that would relate to and be consistent with

the establishment of the District.

33. The evidence did not mention or discuss Policy (b)3.

under Subject 8 , Coastal and Marine Resources, which states:

"Avoid expenditure of state funds that subsidize development in

high - hazard coastal areas."

3 4 . Based on the pre - filed testimony and exhibits in the

record, the proposed District will not be inconsistent w ith any

applicable element or portion of the State Comprehensive Plan ,

with the possible exception of Policy (b)3. under Subject 8,

Coastal and Marine Resources, assuming the proposed development

is in the coastal high - hazard area .

3 5 . Based on the pre - filed testimony and evidence in the

record, the proposed District will not be inconsistent with any

applicable element or portion of the City 's Comprehensive Plan.

C. Factor 3: Whether 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.

3 6 . The proposed District will include approximately

1,812.999 acres located within the incorporated limits of the

City. From engineerin g, financial , and 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 as a single functionally interrelated

community.

3 7 . B ased on the pre - filed testimony and evidence in the

record, Petitioner has demonstrated that the proposed District

will be of sufficient size, sufficiently compact, and

sufficiently contiguous to be developed as a single functionally

interrelated community.

D. F actor 4: 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.

3 8 . It is intended that the District will construct or

provide certain infrastructure i mprovements as outlined in the

P etition.

3 9 . Installation and maintenance of infrastructure systems

and services by the proposed District is expected to be paid

through the imposition of special assessments. Use of such

assessme nts will ensure that the real property benefiting from

District services is the same property which pays for them.

40 . Mr. Szymonowicz and Mr. Beck testified in their pre -

filed written testimony that from a financial, management , and

planning perspectiv e, the proposed District is the best and most

practical alternative to provide the proposed improvements to

accommodate the planned development within the lands to be

included within the District.

41 . Three alternatives to the use of the proposed Distric t

were identified. First, the City could provide the facilities

and services. Second, facilities and services could be provided

by the developer of the lands within the District. The third

alternative identified is a property or homeowner’s association

( “POA” or “HOA”).

42 . The proposed District is preferable to the City as

provider of the proposed facilities and services because, while

both are capable of acting as stable entities capable of

qualifying for low - cost financing long term , the use of the

District restricts the costs and burdens of providing the

improvements to the District and the property owner s within the

District that will directly benefit from the improvements.

4 3 . The proposed District is preferable to the developer

as provider of the proposed facilities and services because the

developer is not a perpetual entity that would ensure long - term

maintenance and management of the proposed facilities and

services. Also, the developer, as a private entity, is not

subject to the same safeg uards as the proposed District , which

is a public entity. For instance, there is a difference with

regard to competitive bidding of construction contracts and

public acc ess to meetings and documents. The developer would

also be restricted to private fina ncing and would lack access to

the low - cost financing options available to the District.

4 4 . The proposed District is preferable to a POA or HOA

because, although a POA or HOA could provide long - term

maintenance, they both lack access to the low - cost fin ancing

available to the District in the municipal bond market and they

are not subject to the safeguards imposed on th e District as a

public entity.

4 5 . Only a community development district combines two

important qualities for the benefit of the planned development.

First, the District will be a stable entity capable of providing

the proposed services and facilities long - term through low - cost

financing available as a public entity, which w ill restrict the

cost of the facilities and services to only those directly

benefiting from the p roposed services and facilities. Second,

the District allow s the property owners and eventually residents

to control the Board and thereby the timing and extent of

facility and service improvements and maintenance.

4 6 . The Petitioner has demonstrated that 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.

E. Factor 5: Whether the community development service s and

facilities of the proposed District will be incompatible with

the capacity and uses of existing local and regional community

development services and facilities.

4 7 . The services and facilities proposed to be provided by

the District are not incomp atible with uses and existing local

and regional facilities and services. The District's facilities

and services will not duplicate any existing regional services

or facilities. None of the proposed services or facilities are

presently being provided by another entity for the lands to be

included within the District.

4 8 . T he 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

servi ces and facilities.

F. Factor 6: Whether the area that will be served by the

District is amenable to separate special - district government.

4 9 . Subject to the discussion on the other factors , from

an engineering, financial , and management perspective, th e 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 need fo r

certain basic infrastructure systems , and the proposed District

provides for an efficient mechanism to oversee the installation

of these improvements. The area that will be served by the

District is amenable to separate special - district government.

AP PLICABLE LAW

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

Florida Statutes, and Chapter 42 - 1, Florida Administrative Code.

51 . Section 190.005(1) , Florida Statutes, provides that

the exclusive method for establishing a community development

d istrict with a size of 1,000 acres or more shall be by rule

adopted by FLWAC.

52 . The evidence indicates that the proceeding was

properly noticed pursuant to Section 190.005 (1)(d) , Florida

Statutes, by publication of an advertisement in a newspaper of

ge neral paid circulation in Gulf County and of general interest

and readership once each week for the four consecutive weeks

immediately prior to the hearing.

5 3 . The evidence indicates that Petitioner has met the

requirements of Section 190.005 (1)(d) , Flor ida Statutes,

regarding the submission of the Petition and filing fee

requirements.

5 4 . The Petitioner bears the burden of establishing that

the petition meets the relevant statutory criteria set forth in

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

5 5 . All portions of the Petition and other submittals have

been completed and filed as required by law.

5 6 . Except for the possibility discussed in paragraph 15 ,

supra , that the SERC omits mention of the possibility that the

State and its citizens may be required to subsidize the cost of

insuring beachfront and coastal property in the District , the

evidence indicates that a ll statements contained within the

Petition as corrected and supplemented at the hearing are true

and correct.

5 7 . The evidence indicates that the establishment of the

District is not inconsistent with any applicable element or

portion of the State Comprehensive Plan (with the possible

exception of Policy (b)3. under Subject 8, Coastal and Marine

Resources, cited in paragraphs 33 - 34 , supra ) or w ith the

effective City Comprehensive Plan.

5 8 . The evidence indicates 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 commu nity.

5 9 . The evidence indicates that 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.

60 . The evidence indicates that the community deve lopment

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.

61 . The evidence indicates that the area to be served by

the propose d District is amenable to separate special district

government.

CONCLUSION

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

"shall consider the entire record of the local hearing, the

transcript of the hearing, resolutions adopted by local genera l -

purpose governments," and the factors listed in that

subparagraph. Based on the record evidence, the Petition

appears to meet all statutory requirements, and there appears to

be no compelling reason not to grant the Petition and establish

the proposed T hree Creeks Community Development District by

rule , except possibly the failure to address the possibility

that the State and its citizens may be required to subsidize the

cost of insuring beachfront and coastal property in the

District .

DONE AND ENTERED this 28th day of June, 2007, in

Tallahassee, Leon County, Florida.

S

J. LAWRENCE JOHNSTON

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 323 99 - 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 28th day of June, 2007.

ENDNOTES

1/ All references are to Florida Statutes (2006).

2/ One me mber of the public arrived late to the hearing and

asked questions of the Petitioner's attorney after the hearing

had concluded. This person appeared satisfied with the answers

given by the attorney and declined to file written comments

post - hearing, as a llowed by Florida Administrative Code Rule 42 -

1.012(3) .

COPIES FURNISHED

Jerry McDaniel, Director

Florida Land and Water

Adjudicatory Com m ission

The Capitol, Room 1802

Tallahassee, Florida 32399 - 1001

Paul C. Huck, Jr., General Counsel

Office of the G overnor

The Capitol, Room 209

Tallahassee, Florida 32399 - 1001

Barbara Leighty, Clerk

Growth Management and Strategic

Planning

The Capitol, Room 1802

Tallahassee, Florida 32399 - 0001

Shaw P. Stiller, General Counsel

Department of Community Affairs

2555 Shumard Oak Boulevard

Suite 325

Tallahassee, Florida 32399 - 2160

Brian A. Crumbaker, Esquire

Hopping, Green & Sams, P.A.

Post Office Box 6526

Tallahassee, Florida 32314 - 6526