08-001717RU Florida Association For Child Care Management, Inc. vs. Early Learning Coalition Of Duval And Agency For Workforce Innovation Status: Closed DOAH Final Order on Tuesday, August 26, 2008.

Summary: Petitioner`s challenge to Guiding Stars program implemented by Early Learning Coalition of Duval is dismissed because Petitioner did not demonstrate standing; ELC of Duval is not a state agency and Guiding Stars program is not a statement by AWI.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA ASSOCIATION FOR )

CHILD CARE MANAGEMENT, INC., )

)

Petitioner, )

)

vs. ) Case No. 08-1717RU

)

EARLY LEARNING COALITION )

OF DUVAL AND AGENCY FOR )

WORKFORCE INNOVATION, )

)

Respondents. )

)

FINAL ORDER

On July 9, 2008, a hearing was held in Tallahassee, Florida,

pursuant to the authority granted in Sections 120.56, 120.569 and

120.57(1), Florida Statutes. The case was considered by Lisa

Shearer Nelson, Administrative Law Judge.

APPEARANCES

For Petitioner: Brian Newman, Esquire

Cynthia Tunnicliff, Esquire

Pennington, Moore, Wilkinson,

Bell & Dunbar, P.A.

215 South Monroe Street, Second Floor

Post Office Box 10095

Tallahassee, Florida 32302-2095

For Respondent Agency for Workforce Innovation:

Thomas Barnhart, Esquire

Garnett Chisenhall, Esquire

Department of Legal Affairs

The Capitol, Plaza Level One

Tallahassee, Florida 32399-1050

For Respondent Early Learning Coalition of Duval:

William E. Williams, Esquire

Amy W. Schrader, Esquire

GrayRobinson, P.A.

301 South Bronough Street, Suite 600

Post Office Box 11189

Tallahassee, Florida 32302-3189

STATEMENT OF THE ISSUE

Whether the Early Learning Coalition of Duval (ELC of Duval)

is a state agency as defined in Section 120.52, Florida Statutes,

and whether the quality improvement rating system identified in

Petitioner's Amended Petition is an agency statement that

constitutes an unadopted rule in violation of Section

120.54(1)(a), Florida Statutes.

PRELIMINARY STATEMENT

This case originated with a Petition for Administrative

Determination of the Invalidity of Agency Statements Defined as a

Rule filed April 8, 2008. On April 10, 2008, the matter was

assigned to the undersigned and on April 11, 2008, a Notice of

Hearing issued scheduling a hearing for May 9, 2008. On

April 29, 2008, the parties filed an Agreed Motion for

Continuance and on April 30, 2008, the case was rescheduled for

June 27, 2008.

Motions for Summary Final Order were filed by the

Respondents ELC of Duval and the Agency for Workforce Innovation

(AWI or the Agency) on June 6, 2008, and June 11, 2008,

respectively. The Agency also filed a Motion to Continue Final

Hearing and Stay Further Proceedings on June 11, 2008, based on

notice of rule development workshops. However, the text of rules

scheduled for rule development were not published with the

notice, and at the motion hearing convened to hear argument on

all three motions, counsel for the Agency could not represent

that the rule development would address the statement alleged in

these proceedings to be an unadopted rule. By Order dated

June 24, 2008, all three motions were denied.

On June 26, 2008, ELC of Duval filed an Agreed Motion for

Continuance based upon the illness of counsel, and the matter was

rescheduled for July 9, 2008. On June 27, 2008, Petitioner filed

a Motion for Leave to File Amended Petition, which was granted.

The case proceeded to hearing on the Amended Petition for

Administrative Determination of the Invalidity of Agency

Statements Defined as Rules.

At hearing, the parties presented Joint Exhibits numbered

1-9, which were the depositions of Gayle Grimes, Carol Moore,

Edward Bell, Brittany Birken, Angel Carro, Michele DeMonaco, Matt

Moore, Padma Rajan and Susan Main, and the exhibits to these

depositions. Petitioner presented the testimony of Gayle Grimes,

and Petitioner's Exhibits numbered 1-11 were admitted.

Respondent ELC of Duval presented the testimony of Susan Main,

and Respondent's Exhibits numbered 1-8, 10-12 and 15-17 were

admitted into evidence. Respondent AWI presented the testimony

of Brittany Birken. At the close of the Petitioner's case, AWI

moved for dismissal of the proceedings based upon the failure to

prove standing. Ruling was reserved and the issue of standing

will be addressed in the Findings of Fact and Conclusions of Law

below.

The proceedings were recorded and the transcript was filed

with the Division on July 23, 2008. All parties timely filed

Proposed Final Orders on August 4, 2008. These submissions have

been carefully considered in the preparation of this Final Order.

All references to Florida Statutes are to the 2007 edition unless

otherwise indicated.

FINDINGS OF FACT

1. Petitioner, Florida Association for Child Care

Management, Inc. (FACCM) is a Florida not-for-profit corporation

which serves as a trade organization of private child care

facilities.

2. Respondent, AWI, is the state agency that has the

authority and obligations relating to school readiness programs

as set forth in Section 411.01, Florida Statutes, and applicable

federal law.

3. Respondent, ELC of Duval, is an early learning coalition

as that term is applied in Section 411.01, Florida Statutes.

The School Readiness Act

4. The Florida Legislature passed the School Readiness Act

in 1999. The Act, codified at Section 411.01, Florida Statutes,

required the creation of local school readiness coalitions with

the goal of ensuring that children are eager to learn and ready

to succeed when they enter kindergarten. The Act is directed

toward at-risk children in the State.

5. The following portions of Section 411.01, Florida

Statutes, provide part of the framework for the school readiness

programs in Florida:

(2)(a) . . . Each school readiness program

shall provide the elements necessary to

prepare at-risk children for school,

including health screening and referral and

an appropriate educational program.

* * *

(d) It is the intent of the Legislature that

the administrative staff at the state level

for school readiness programs be kept to the

minimum necessary to administer the duties of

the Agency for Workforce Innovation, as the

school readiness programs are to be

regionally designed, operated, and managed,

with the Agency for Workforce Innovation

developing school readiness program

performance standards and outcome measures

and approving and reviewing early learning

coalitions and school readiness plans.

* * *

(g) It is the intent of the Legislature that

the federal child care income tax credit be

preserved for school readiness programs.

6. The administration of the school readiness programs was

moved to AWI in 2001. The Agency now oversees the coalitions

operating school readiness programs throughout the state, and is

considered, for purposes of the administration of the federal

Child Care and Development Fund, 45 C.F.R. parts 98 and 99, the

lead agency for the State of Florida.

7. The Agency's responsibilities with respect to school

readiness programs include coordinating birth-to-kindergarten

services for eligible children, as well as the programmatic,

administrative and fiscal standards for all public providers of

school readiness programs; providing leadership for school

readiness through early learning coalitions; responsibility for

prudent use of all public and private funds in accordance with

all legal and contractual requirements; providing final approval

and periodic review of early learning coalitions and school

readiness plans; providing technical assistance to early learning

coalitions; and developing and adopting performance standards and

outcome measures for school readiness programs, which must

address age-appropriate progress of children regarding school

readiness skills and must be integrated with performance

standards adopted by the Department of Education in the Voluntary

Prekindergarten Education Program. See generally § 411.01(4),

Fla. Stat.

8. The Legislature has granted authority to the Agency to

adopt rules with respect to the preparation and implementation of

the school readiness system, the collection of data, the approval

of early learning coalitions and school readiness plans, the

provision of a method by which more than one county may be served

by an early learning coalition, the award of incentives to early

learning coalitions and the issuance of waivers.

9. As of the date of hearing in this case, there are no

rules adopted by the Agency regarding the approval of school

readiness plans or performance standards and outcome measures for

school readiness programs.

Early Learning Coalitions and School Readiness Plans

10. Services for at-risk children are furnished through

child-care providers such as pre-schools. School readiness

programs provide, through early learning coalitions, tuition

vouchers to the parents of eligible children, and the parents use

the vouchers to enroll their children with a provider. Priority

for participation is afforded to children served by the Family

Safety Program Office of the Department of Children and Family

Services or a community-based lead agency under Chapter 39,

Florida Statutes, and for whom child care is needed to minimize

the risk of further abuse, neglect or abandonment.

11. Section 411.01, Florida Statutes, authorizes a series

of early learning coalitions throughout Florida to administer

school readiness programs at the local level. The law

contemplates 30 or fewer coalitions to be established, and

requires that each one serve at least 2,000 children based upon

the average of all children served per month through the program

during the previous 12 months. Multi-county coalitions generally

are established when a learning coalition would serve fewer than

2,000 children as described above.

12. At present, there are 31 early learning coalitions in

the State of Florida. 1/ There are 12 coalitions that serve more

than one county. Respondent ELC of Duval operates only in Duval

County. It does not have the authority to act outside the bounds

of Duval County, and has no rulemaking authority.

13. Whether an early learning coalition serves one county

or multiple counties, it is composed of 18-35 members, with the

chair and two other members being appointed by the governor. In

addition, each early learning coalition must include a Department

of Children and Family Services district administrator or

designee; a district superintendent of schools or designee; a

regional workforce board executive director or designee; a county

health department director or designee; a children's services

council or juvenile welfare board chair or executive director, if

applicable; an agency head of a local licensing agency as defined

in Section 401.302, Florida Statutes, if applicable; a president

of a community college or designee; a member appointed by a board

of county commissioners; a central agency administrator, where

applicable; a Head Start director; a representative of private

child-care providers, including family day care homes; a

representative of faith-based child-care providers; and a

representative of programs for children with disabilities under

the federal Individuals with Disabilities Act. The last five

categories of members are non-voting members.

14. ELC of Duval was incorporated as a not-for-profit

corporation in 2000. It provides school readiness services

pursuant to a grant agreement entered into with the AWI and is

considered an independent contractor.

15. Under the grant agreement and in accordance with the

provisions of Section 411.01, ELC of Duval must submit a school

readiness plan detailing how the coalition will meet state and

federal requirements for school readiness programs, including the

implementation of quality initiatives. The AWI may suspend or

terminate its agreement with the ELC of Duval, as it can with any

early learning coalition, if it fails to comply with the terms

and conditions of the grant agreement. The grant agreement

provides in pertinent part:

In the Coalition's performance of its duties

and responsibilities under the Agreement,

it is mutually understood and agreed that

the Coalition is at all times acting and

performing as an independent contractor and

not a division or subpart of the [Agency].

The [Agency] shall neither have nor exercise

any control or direction over the methods

by which the Coalition shall perform its

functions other than as provided herein

and in law. Nothing in the Agreement is

intended to or shall be deemed to constitute

a partnership or joint venture between

the parties.

16. Early learning centers operating in Duval County are

not required to participate in any program or receive any funding

from ELC of Duval to legally operate as an early learning center

in Duval County. In fact, Section 411.01(4)(g), Florida

Statutes, prohibits the Agency from imposing requirements on a

child care or early childhood education provider that does not

deliver services under a school readiness program or receive

state or federal funds pursuant to Section 411.01.

17. Participation in school readiness programs is

voluntary.

18. Payments for school readiness services are made by a

transfer of funds from the ELC of Duval to legally operating

school readiness providers that have entered into a negotiated

service agreement with the coalition. In other words, while

participation is voluntary, early learning centers wishing to

participate must sign a contract saying that they will abide by

certain minimal quality standards. There is, however, no

requirement that any early learning center accept children

requiring subsidies to pay for attendance as a condition of

operating an early learning center in Duval County.

19. There are between 500 and 600 preschools in Duval

County, including family childcare homes. Of those,

approximately 315 have contracts with the ELC of Duval to accept

school readiness children.

20. Approximately 7,500 children in Duval County receive

school readiness subsidies. There are approximately 2,000

additional children on a waiting list for school readiness

subsidies.

21. One of ELC of Duval's obligations, under both its grant

agreement and the terms of Section 411.01, is to submit a plan

for implementing its school readiness program to the AWI for

approval. The plan must demonstrate how the program will ensure

that each 3 and 4-year-old in a publicly funded school readiness

program receives scheduled activities and instruction designed to

enhance the age-related appropriate progress of the children in

performing the performance standards adopted by the Agency.

22. The plan must also include a single point of entry and

unified waiting list, which is part of a statewide information

system established by the Agency. The plan must include

developmentally appropriate curriculum designed to enhance the

progress of the child; a character development program to develop

basic values; an age-appropriate assessment of each child's

development; a pretest administered when children enter the

program and a posttest when they leave; an appropriate staff-to-

children ratio; a healthy and safe environment; and a resource

and referral network to assist parents in making an informed

choice of a learning center for their children.

23. An early learning coalition may not implement its

school readiness plan until the Agency has approved it. Plans

must also be reviewed by the Agency at least annually. The early

learning coalition must review and revise the plans as necessary,

at least biennially. 2/ Revisions to the plan cannot be

implemented until approved by the Agency. § 411.01(5)(d), Fla.

Stat.

24. The Agency has been given the authority to adopt rules

related to the approval of early learning coalitions and school

readiness plans. It has been directed to adopt criteria for the

adoption of school readiness plans consistent with the

performance standards and outcome measures adopted by the Agency

and must require each approved plan to include certain minimum

standards related to a sliding fee scale based upon ability to

pay; a choice of settings and locations to be provided to

parents; instructional staff with certain delineated training;

specific eligibility priorities; performance standards and

outcome measures; payment rates adopted by the early learning

coalition and approved by AWI; certain delineated system support

services and direct enhancement services to families and

children; the early learning coalition's business organization;

and strategies to meet the needs of unique populations, such as

migrant workers.

25. In the absence of a rule, AWI has provided to the early

learning coalitions a "guidance document" for submitting their

school readiness plans, entitled the Early Learning Coalition

Guidance and Instruction Workbook (Workbook). This Workbook was

developed at least by 2006. The Workbook was used by ELC of

Duval in preparing its plan for approval by AWI.

26. The ELC of Duval submitted its school readiness plan on

July 22, 2006. This plan was approved by the Agency. ELC of

Duval submitted amendments to the 2006 plan in early 2008.

These amendments were approved by the Agency via letter dated

March 6, 2008.

Funding for Early Learning Programs

27. In addition to the program components outlined above,

both AWI and early learning coalitions must be mindful of the

spending allocations outlined in federal regulations. School

readiness programs administered by the early learning coalitions

are funded by a combination of state and local funds. The

federal portion of the school readiness funding comes from the

Child Care and Development Fund (CCDF) administered by the

Department of Health and Human Services (HHS). 45 C.F.R. § 98.50

describes the required funding allocations for child care

services related to school readiness programs:

§ 98.50 Child Care Services.

(a) Of the funds remaining after applying

the provisions of paragraphs (c), (d) and (e)

of this section the Lead Agency shall spend a

substantial portion to provide child care

services to low-income working families.

* * *

(c) Of the aggregate amount of funds

expended (i.e., Discretionary, Mandatory, and

Federal and State Share of Matching Funds),

no less than four percent shall be used for

activities to improve the quality of child

care as described at §98.51.

(d) Of the aggregate amount of funds

expended (i.e., Discretionary, Mandatory, and

Federal and State share of Matching Funds),

no more than five percent may be used for

administrative activities as described in

§ 98.52.

(e) Not less than 70 percent of the

Mandatory and Matching Funds shall be used to

meet the child care needs of families who:

(1) Are receiving assistance under a State

program under Part A of title IV of the

Social Security Act,

(2) Are attempting through work activities

to transition off such assistance program,

and

(3) Are at risk of becoming dependent on

such assistance program.

28. 45 C.F.R. § 98.51 further describes quality activities:

(a) No less than four percent of the

aggregate funds expended by the Lead Agency

for a fiscal year, including the amounts

expended in the State pursuant to §98.53(b),

shall be expended for quality activities.

(1) These activities may include but are

not limited to:

(i) Activities designed to provide

comprehensive consumer education to

parents and the public;

(ii) Activities that increase parental

choice; and

(iii) Activities designed to improve

the quality and availability of child care,

including, but not limited to those

described in paragraph (2) of this section.

(2) Activities to improve the quality of

child care services may include, but are not

limited to:

(i) Operating directly or providing

financial assistance to organizations

(including private non-profit organizations,

public organizations, and units of general

purpose local government) for the

development, establishment, expansion,

operation and coordination of resource and

referral programs specifically related to

child care;

(ii) Making grants or providing loans to

child care providers to assist such providers

in meeting applicable State, local, and

tribal child care standards, including

applicable health and safety requirements,

pursuant to §§ 98.40 and 98.41;

(iii) Improving the monitoring of compliance

with, and enforcement of, applicable State,

local and tribal requirements, pursuant to

§§98.40 and 98.41;

(iv) Providing training and technical

assistance in areas appropriate to the

provision of child care services, such as

training in health and safety, nutrition,

first aid, the recognition of communicable

diseases, child abuse detection and

prevention, and care of children with special

needs;

(v) Improving salaries and other

compensation (such as fringe benefits) for

full-and part-time staff who provide child

care services for which assistance is

provided under this part; and

(vi) Any other activities that are

consistent with the intent of this section.

Development of the Quality Rating Improvement System

29. In 2002, the ELC of Duval began discussions on how to

best improve its school readiness program through the expenditure

of "quality activity" funds contemplated by 45 C.F.R. §98.51. In

September 2002, it began work on a quality rating system for

school readiness programs operating in Duval County. The purpose

of the quality rating system was to assist early learning centers

providing school readiness services through contracts with ELC of

Duval in improving their programs and to assist parents in

selecting quality care for their children.

30. The quality rating system was developed through two

pilot programs. The initial pilot program involved 14 volunteer

early learning centers. The second year pilot program, which

began in 2005 and lasted until 2007, involved 100 centers.

Participants for this portion of the pilot were taken from sites

located in the boundaries of elementary schools where 75 percent

or more of the children were on free or reduced lunch programs,

and the site indicated a willingness to participate. The quality

rating system was fully implemented in November 2007 and

currently has 96 early learning centers participating in Guiding

Stars. Seventy-two of the 100 centers in the second year pilot

have graduated or exited the program. As will be discussed more

fully below, the name of the program was changed in early 2008 to

the Quality Rating Improvement System (QRIS).

31. Phase I of the current program is called "Quality

Connections." This phase involves an environmental assessment of

the early learning center based upon rating scales referred to as

ITERS (Infant/Toddler Environmental Rating Scale) and ECERS

(Early Childhood Environmental Rating Scale). The purpose of

this phase is to determine the environmental needs of the

provider and to determine whether the provider is ready for Phase

II, which is known as the "Guiding Stars." Notably, assessment

using ITERS and ECERS is required of all providers accepting

school readiness children, and is not a requirement unique to the

QRIS.

32. There are presently 110 school readiness providers in

Phase I. These providers receive grants from the ELC of Duval

for books, materials, and equipment as indicated in the ITERS and

ECERS assessments.

33. If a participant receives a score of three (out of

five) on the environmental assessments, then they are eligible to

participate in Guiding Stars. Phase II is the portion of the

QRIS that has 96 participants. However, Phase II envisions a

two-year window of participation, and not all participants start

on the same schedule. There was no testimony presented that any

early learning center had completed Phase I and was denied

entrance in Phase II for want of a slot.

34. Based on the assessment in Phase I, the ELC of Duval

assists the provider by supplying technical assistance support

for up to two years. Technical assistance can include classroom

assessments by trained evaluators, development of an action plan

to address areas identified as needing improvement, training for

staff members, educational stipends and scholarships, and wage

incentives.

35. Once the provider has had an opportunity to improve any

shortcomings identified in the initial assessment, it is

evaluated by a team of early learning professionals based on

factors such as: a) the quality of a provider's facility; b) the

quality of the educational environment at the provider's

facility; c) the ratio of staff to children; d) the

qualifications of the provider's staff members; e) the quality of

the curriculum; and f) parental/family involvement with the

children's learning and development.

36. After the evaluation team has completed its assessment,

a provider receives one to five stars, and each star represents

an increasing level of quality.

37. Once a child-care provider has received a star rating,

it is considered to be an "exited" provider and receives a

maintenance support plan which may include, but is not limited to

quarterly contacts by the Guiding Stars program manager; on-site

training opportunities and technical assistance for directors and

teachers; educational scholarships for the professional

development and continuing education of staff members;

recognition through the Child Care Resource and Referral Network

and the Northeast Florida Early Care and Education Guide;

curriculum support; staff training; mini-grants to enhance

program development; and wage incentives for staff.

38. A significant amount of evidence was presented

regarding the funding of the Guiding Stars program. In

compliance with the federal requirements in 45 C.F.R. § 98.50,

ELC of Duval allocates approximately 80 percent of its funds for

child care slots (as opposed to the 70 percent required for this

purpose). ELC of Duval devotes approximately 9 percent to

quality enhancement activities, including the Guiding Stars

program. The funding for services provided to exited centers

comes from a combination of state, federal and private sources.

39. While "quality dollars" from CCDF are used to finance

the program, the majority of the funding (approximately $3.5

million) comes from the Mayor of Jacksonville's Early Literacy

Initiative. The Guiding Stars program also receives significant

funding from private sources, including the Rice Foundation and

Blue Cross-Blue Shield.

40. Early learning centers that participate in ELC of

Duval's school readiness program are qualified to participate in

the Guiding Stars program, but are not required to do so. There

is no cost to early learning centers that accept children

attending school readiness programs under tuition subsidies to

participate in the Guiding Stars programs. Every early learning

center who has a signed provider agreement with ELC of Duval

receives the same amount of subsidy per eligible child whether or

not they participate in the Guiding Stars program.

41. Information regarding the rating received by

participants in the program is available to parents seeking

placement for their children. Reference to the Guiding Stars

ratings is a way for parents to assess the provider's commitment

to quality, and the program is featured in some of ELC of Duval's

promotional materials.

42. Description of quality activities and services is

required in an early learning coalition's school readiness plan

submitted to and approved by AWI. Reference to ELC of Duval's

QRIS is included in "Section 5: Quality Activities and Services.

The ELC of Duval could not have implemented the QRIS program

unless some description of the program was included in the school

readiness plan.

43. The school readiness plan submitted by the Early

Learning Coalition of Duval in 2006 did not contain documentation

on the Guiding Stars Program itself. It did reference the

program under the following categories in the School Readiness

Plan (consistent with the format required by the Early Learning

Coalition Guidance and Instruction Workbook): 1.92 (Evaluation

Plan); 2.5 (Collaboration and Coordination of Services with Other

Entities); and 3.4 (Parent Involvement and Skill Building). More

substantial information is provided in Section 5 (Quality

Activities and Services). When ELC of Duval decided to change

the description of the program from a quality rating system to a

quality rating improvement system, it submitted amendments to its

school readiness plan to reflect the change. These amendments

are included in the submission referred to in paragraph 26,

above.

44. The ELC of Duval's plan amendment likewise did not

incorporate the actual workings or substance of the QRIS. It did

not submit the material identified as an agency statement

attached to the Amended Petition in this case.

45. Brittany Birken, Director of the Office of Early

Learning for the AWI, did not review the QRIS or Guiding Stars

program as a part of the review of ELC of Duval's early learning

readiness plan. On behalf of the Agency, she reviewed ELC of

Duval's school readiness plan to make sure that it complied with

federal and state law requirements that at least four percent of

identified funding was being spent on appropriate quality

activities. AWI determined that the wage incentives, technical

assistance and professional development proposed through the QRIS

were consistent with federal requirements for quality activities.

46. AWI approved the ELC of Duval's school readiness plan.

It did not approve the QRIS or endorse it.

Standing

47. The Florida Association for Child Care Management is a

not-for-profit corporation that functions as a trade association

for approximately 2,500 private child-care providers in Florida.

It monitors legislation and provides lobbying services on behalf

its members before both the executive and legislative branch.

Ninety-three of its members are in the Duval county area. There

was no indication of how many members receive children using

vouchers via the school readiness program. However, thirty-three

members participate in the Guiding Stars program. Two of the

board members for FACCM own preschools in Duval County. In the

one meeting called to discuss the challenge to the Guiding Stars

program, approximately 20 to 25 members attended. There was no

evidence presented to indicate how many of those in attendance

supported the challenge in this case.

48. With regard to its standing to initiate the challenge

in this proceeding, FACCM alleged that a substantial number of

FACCM members are substantially affected by the QRIS, which they

claim is an unadopted rule, because only providers who

participate in the Guiding Stars program are entitled to the

benefits of the program; the star ratings are publicized as an

indication of the quality of a program, and providers face

increased costs to achieve higher star ratings.

49. The Executive Director for FACCM testified that FACCM

members are substantially affected by Guiding Stars because a)

the funding of the Guiding Stars program reduces the funding that

would otherwise be available for school readiness programs

operated by FACCM members; b) providers who do not participate in

the program are denied positive public promotion by ELC of Duval,

mini-grants, educational scholarships and wage incentives for

staff; c) the Guiding Stars program imposes additional regulatory

costs on FACCM members; d) some providers are not eligible to

participate in the Guiding Stars program even though they operate

school readiness programs in Duval County; and e) the Guiding

Stars program determines the level of benefits a participating

member may receive.

50. Only one child care program owner testified regarding

participation (or lack thereof) in the program. Carol Moore is

the owner/director of the Learning Tree Schools of Jacksonville.

There are two locations: Fort Caroline and Hidden Hills. Both

schools are in the Arlington area of Jacksonville. The Fort

Caroline School has 160 preschool children, with 22 of them

receiving subsidies. Hidden Hills has 80 preschool children,

with 4 children receiving subsidies.

51. At the time of hearing, both schools were at full

enrollment with a wait list of about a year.

52. Ms. Moore testified that she was visited by

representatives from ELC of Duval in November or December 2007

regarding possible participation in the Guiding Stars program.

She testified that sometime soon after the visit she was informed

that only one of two schools could be accepted into the program.

However, she could not identify who made this statement, when it

was made or any reason provided for such a statement. Ms. Moore

admitted that she never formally applied to participate in the

program and never received any type of rejection in writing. She

also indicated that things have changed since the time ELC of

Duval representatives visited her program.

53. Ms. Moore was only interested in being in the program

if she could obtain a five-star rating. To do so, she claimed

that she might be required to purchase an additional piece of

playground equipment, although the type and price was not

identified. Once again, she did not identify who told her such

equipment would be required, and no documentation was produced.

Indeed, Ms. Moore admitted that there was no regulatory cost to

participate in the program, but "if you wanted to be a five-star

school, yes, it's going to cost you some money."

54. Ms. Moore has not suffered a decrease in enrollment or

any other financial harm resulting from the existence of the

program. As a program receiving subsidies for care, her schools

are already assessed in terms of ITERS and ECERS, and her program

is accredited as a Gold Seal Program through the Department of

Children and Families.

55. No other FACCM member was identified whose program had

been denied participation in the Guiding Stars or who had

suffered additional costs as a result of the program. The more

credible evidence indicates that no provider accepting school

readiness children has been denied access to participate in the

Guiding Stars program. The program has sufficient capacity to

serve current provider requests and ELC of Duval is attempting to

recruit additional programs to participate. The ELC of Duval

advertises the existence of the program encouraging additional

child-care providers to enroll.

56. Susan Main, the Executive Director for ELC of Duval,

testified that she was unsure whether the program could

accommodate all 315 child care programs accepting early readiness

children if all of the programs wanted to participate in the

program, and to do so would dilute the resources each program

would receive. However, she believed that ELC of Duval would, in

that instance, seek additional funding for the program.

57. The more credible evidence indicates that the Guiding

Stars program does not necessarily reduce the funding available

for subsidies to school readiness children. ELC of Duval already

exceeds the required level of funding for this component by ten

percent. Much of the funding for Guiding Stars does not come

from the funds received through AWI. There is no credible

evidence from any witness in a decision to participate in

decision-making that, absent the Guiding Stars program, funding

would divert to providing additional subsidies.

58. The more credible evidence indicates that providers who

do not participate in the program choose not to participate. It

cannot be said that they are denied promotion by ELC of Duval

when they have declined participation in the program.

59. Participation in the Guiding Stars program does not

result in additional regulatory costs. The more credible

evidence indicates that participation in the program results in

additional funding being available to a child-care provider for

improvements in the quality of its program.

60. No credible evidence was presented indicating that

there are programs that are not eligible for participation in the

program. As noted above, the more credible evidence is that no

program has been denied participation.

61. Finally, Guiding Stars benefits are determined on a

case by case basis, depending on the needs of the individual

providers and the level of funding available.

62. Petitioner has not established that it is substantially

affected by the implementation of the Guiding Stars program by

the ELC of Duval.

CONCLUSIONS OF LAW

63. The Division of Administrative Hearings has

jurisdiction over the subject matter and the parties to this

action in accordance with Sections 120.56, 120.569 and 120.57(1),

Florida Statutes.

64. In this case, there are three preliminary issues that

must be resolved in order for Petitioner to prevail. First,

Petitioner must demonstrate that it has standing to bring this

challenge to the Guiding Stars program. Second, Petitioner must

demonstrate that the statements identified in the Amended

Petition are agency statements. To do so, Petitioner must

demonstrate that, as to ELC of Duval, that ELC of Duval is a

state agency as that term is contemplated in Section 120.52,

Florida Statutes. Finally, as to AWI, Petitioner must

demonstrate that the statements identified in the Amended

Petition were approved by AWI.

65. Should Petitioner overcome these initial hurdles,

Petitioner has the burden of demonstrating by a preponderance of

the evidence that the agency statement is a rule as defined by

The burden then shifts to the agency (or agencies) to prove that

rulemaking is not practicable or feasible. Id.

Standing

66. Petitioner is a professional or trade association

seeking relief on behalf of its members.

To meet the requirements of section

120.56(1), an association must demonstrate

that a substantial number of its members,

although not necessarily a majority, are

'substantially affected' by the challenged

rule. Further, the subject matter of the

rule must be within the association's general

scope of interest and activity, and the

relief requested must be of the type

appropriate for a trade association to

receive on behalf of its members.

NAACP v. Florida Board of Regents , 863 So. 2d 294, 298 (Fla.

2003). To demonstrate that its members are "substantially

affected," Petitioner must establish: a) a real and sufficiently

immediate injury in fact; and that b) the alleged interest is

arguably within the zone of interest to be protected or

regulated. Jacoby v. Florida Board of Medicine , 917 So. 2d 358

(Fla. 1st DCA 2005); Florida Board of Medicine v. Florida Academy

of Cosmetic Surgery , 808 So. 2d 243 (Fla. 1st DCA 2002),

superseded on other grounds , Department of Health v. Merritt , 919

So. 2d 561 (Fla. 1st DCA 2006).

67. The injury contemplated by this standard must be

sufficiently real and immediate, as opposed to perceived injury

based upon pure speculation or conjecture. Ward v. Board of

Trustees of the Internal Improvement Fund , 651 So. 2d 1236, 1237

(Fla. 4th DCA 1995). Examples of a real and sufficient injury in

fact are where a challenged rule has a direct and immediate

effect on one's right to earn a living or where it has the effect

of directly regulating professional conduct of persons within a

particular occupation. Id.

68. Petitioner has not met this burden. The evidence

presented indicates that 93 of Petitioner's members are in the

Duval County area. However, the parties have not identified how

many of those 93 members accept at-risk children and receive the

subsidies provided pursuant to Section 411.01. However many of

those members there may be, 33 of FACCM's members have elected to

participate in the Guiding Stars program. There is no evidence

that any of those members who have elected to participate believe

that they are injured by their participation.

69. Of the FACCM's 2,500 members, only 20-25 expressed an

interest in the instant challenge sufficient to attend a meeting

about it. Of those, there is no indication how many were in

favor of the challenge to the Guiding Star's program. Even

assuming that all of those who attended the meeting were in favor

of the challenge, one percent of Petitioner's membership does not

amount to a "substantial number" of its members.

70. Nor has Petitioner demonstrated a substantial injury.

The program is voluntary. No provider's authorization to provide

child care services or to accept school readiness children is

affected by their election to participate or not participate in

the program. No credible evidence was presented to demonstrate

that additional costs are imposed to participate in the program,

or that FACCM members would be ineligible to participate.

71. Moreover, the evidence suggesting that dollars now

spent on the Guiding Stars program would be spent on subsidies

for additional children to enter the school readiness program is,

at this point, speculative. The ELC of Duval already spends ten

percent over and above the federal requirements for school

readiness subsidies. At least five of the nine percent currently

spent on quality activities, such as Guiding Stars, is reserved

by federal regulation for that purpose. In other words, if

Guiding Stars were not in existence, at least five percent would

have to be spent on some other quality activity. There was no

evidence presented that funds were diverted from providing

subsidies in order to implement the Guiding Stars program. It is

just as likely that funds now used for quality activities would

continue to be used for quality activities in another form.

72. Based on the totality of evidence presented, Petitioner

has not demonstrated standing in this proceeding because it has

not demonstrated that a substantial number of its members have

been substantially affected by the statements at issue in this

case.

ELC of Duval is Not a State Agency

73. Even assuming that Petitioner has standing to bring the

challenge in this case, it must show that the statement at issue

is an agency statement. Section 120.52(15), Florida Statutes,

defines a "rule" as "each agency statement of general

applicability that implements, interprets, or prescribes law or

policy or describes the procedure or practice requirements of an

agency. . . ." (Emphasis supplied.) With respect to ELC of

Duval, the preliminary issue to be decided is whether ELC of

Duval is a state agency as contemplated by Chapter 120, Florida

Statutes.

74. An "agency," for the purposes of Chapter 120, Florida

Statutes, is defined in Section 120.52(1), Florida Statutes:

(a) The Governor in the exercise of all

executive powers other than those derived

from the constitution.

(b) Each:

1. State officer and state department, and

each departmental unit described in s.20.04.

2. Authority, including a regional water

supply authority.

3. Board, including the Board of Governors

of the State University System and a state

university board of trustees when acting

pursuant to statutory authority derived from

the Legislature.

4. Commission, including the Commission on

Ethics and the Fish and Wildlife Conservation

Commission when acting pursuant to statutory

authority derived from the Legislature.

5. Regional planning agency.

6. Multi-county special district with a

majority of its governing board comprised of

nonelected persons.

7. Educational units.

8. Entity described in chapters 163, 373,

380, and 582 and s. 186.504.

(c) Each other unit of government in the

state, including counties and municipalities,

to the extent they are expressly made subject

to this act by general or special law or

existing judicial decisions.

This definition does not include any legal

entity or agency created in whole or in part

pursuant to chapter 361, part II, any

metropolitan planning organization created

pursuant to s. 339.175, any separate legal or

administrative entity created pursuant to

s.339.175 of which a metropolitan planning

organization is a member, an expressway

authority pursuant to chapter 348 or

transportation authority under chapter 349,

any legal or administrative entity created by

an interlocal agreement pursuant to s.

163.01(7), unless any party to such agreement

is otherwise an agency as defined in this

subjection, or any multicounty special

district with a majority of its governing

board comprised of elected persons; however,

this definition shall include a regional

water supply authority.

75. Early learning coalitions are not contained in this

list. Petitioner asserts that ELC of Duval is a state agency

because it is a board. However, an examination of Section 411.01

does not reveal any use of the term "board" in discussing early

learning coalitions. 3/ Not a single reference to the coalitions

as a board is found.

76. The ELC of Duval also does not meet the definition of

an agency under the tests developed pursuant to case-law. There

are two accepted tests for determining whether an entity meets

the definition of "agency" under Chapter 120, Florida Statutes,

where it has not otherwise been specifically so designated. One

test is whether the entity performs traditional governmental

functions. Florida Department of Insurance v. Florida

Association of Insurance Agents , 813 So. 2d 981, 983 (Fla. 1st

DCA 2002). The second is whether the entity exercises its

authority in more than one county. Orlando-Orange County

Expressway Authority v. Hubbard Construction Co. , 682 So. 2d 566,

567-568 (Fla. 5th DCA 1996). ELC of Duval asserts that an entity

must meet both tests while Petitioner asserts that an entity can

qualify under either one.

77. Most cases speak in terms of one or the other,

presumably because only one of the two is at issue in a

particular case. In this case, neither test supports

Petitioner's position. Mae Volen Senior Center, Inc. v. Area

Agency on Aging , 978 So. 2d 191, 194 (Fla. 4th DCA 2008), speaks

in terms of both tests. The Fourth District found that area

agencies on aging, which are referred to as "boards" in Section

20.41(7), Florida Statutes, were agencies for the purposes of

determining whether the Division of Administrative Hearings had

jurisdiction to hear a bid protest involving a AAA and a lead

agency with whom it contracted. In making this determination,

the Court stated:

Because the legislature designated the area

agencies on aging as "boards" performing the

programmatic and funding requirements of the

DOEA, as well as the fact that they exercise

multi-county authority and perform

essentially government functions in

authorizing the spending of public funds and

contracting with lead agencies, we conclude

that the DOAH has authority to hear this bid

protest.

78. Here, not only are the early learning coalitions not

referred to as boards in Section 411.01, but the functions

performed are not traditional government functions. Early

learning coalitions are expressly excluded from the public school

system. § 411.01(2)(f), Fla. Stat. They act only after given

permission to do so, and act at the direction of AWI. Like the

Bradford Union Guidance Clinic, Inc., in Vey v. Bradford Union

Guidance Clinic, Inc. , 399 So. 2d 1137 (Fla. 1st DCA 1981), the

ELC of Duval is a private entity that acts pursuant to an

independent contractor agreement. In that agreement, AWI and ELC

of Duval have agreed, long before this challenge was instituted,

that "the Coalition is at all times acting and performing as an

independent contractor and not a division or subpart of the

[Agency]. The [Agency] shall neither have nor exercise any

control or direction over the methods by which the Coalition

shall perform its functions other than as provided herein and in

law." As the Court stated in Vey , "a private entity which

contracted to provide services for a state agency does not

thereby become a state agency itself." 399 So. 2d at 1139.

Moreover, the fact that coalition members and employees are

governed by Section 768.28 for purposes of tort liability (see

Section 411.01(5)(a)11., Florida Statutes), is likewise not

dispositive. Rubenstein v. Sarasota County Public Hospital , 498

So. 2d 1012 (Fla. 2d DCA 1986), notes that Section 768.28

envisions a much broader definition of "agency" than does Chapter

120.

79. Likewise, the ELC does not meet the multi-county factor

for determining whether an entity is an agency because it does

not operate outside the confines of Duval County. It is clear

that Section 411.01 authorizes early learning coalitions to

operate in more than one county where necessary to serve a

minimum of 2,000 children. The fact is, however, that ELC of

Duval, the respondent in this case, does not.

80. Petitioner has argued that it would be irrational for

some early learning coalitions to escape agency status while some

others who serve more than one county could be accorded agency

status. The more sensible approach, however, is to recognize

that the Legislature did not express any intent for any of the

early learning coalitions to be considered state agencies. As

stated earlier, the coalitions are consistently referred to in

Section 411.01 as coalitions, and not as boards. Moreover, the

Legislature expressly stated that "it is the intent of the

Legislature that the administrative staff at the state level for

school readiness programs be kept to the minimum . . . as the

school readiness programs are to be regionally designed,

operated, and managed . . . ." § 411.01(1)(d), Fla. Stat. To

consider the coalitions to be state agencies runs contrary to the

Legislature's stated intent that administrative staff at the

state level be minimized. It would serve to increase, rather

than minimize, the state-level administration of the program, and

detract from the purpose of designing locally-oriented programs.

The Legislature's allowance for single or multi-county existence

is consistent with its intent that these coalitions are not state

agencies. Because the ELC of Duval is not an "agency" as

contemplated by Chapter 120, Florida Statutes, the Guiding Stars

program is not an agency statement of ELC of Duval.

The Statement is Not a Statement of AWI

81. Finally, even though ELC of Duval does not meet the

definition of an "agency," Petitioner may still prevail if it can

demonstrate that the statement at issue in this proceeding, i.e. ,

the QRIS or Guiding Stars program, is a statement of AWI by

virtue of its approval of the statement.

82. Petitioner states, "it is undisputed that AWI approved

the ELC of Duval's Plan and plan amendment that identifies the

implementation of the QRIS program. " (Emphasis supplied).

However, while the QRIS is clearly mentioned in the ELC of

Duval's school readiness plan, the actual QRIS is not included in

the plan. If the AWI did not review the plan itself, it cannot

be said to have approved it, and has not adopted the plan as its

own. Moreover, Petitioner's argument would mean that the school

readiness plans themselves become rules by virtue of AWI's

approval of them. This position is simply not supported by the

requirements of either Section 411.01 or Chapter 120, Florida

Statutes.

83. Finally, the QRIS simply does not meet the definition

of a rule. As stated above, Section 120.52(15), Florida

Statutes, defines a rule to be:

Each agency statement of general

applicability that implements, interprets,

or prescribes law or policy or describes

the procedure or practice requirements

of an agency . . . .

An agency statement or policy is a rule if its effect requires

compliance, creates certain rights while adversely affecting

others, or otherwise has the direct and consistent effect of law.

Jenkins v. State , 855 So. 2d 1219, 1225 (Fla. 1st DCA 2003);

Department of Revenue v. Novoa , 745 So. 2d 378, 380 (Fla. 1st DCA

1999); Department of Transportation v. Blackhawk Quarry Company

of Florida, Inc. , 528 So. 2d 447, 449 (Fla. 5th DCA 1988). An

agency statement is not a statement of general applicability, and

thus not a rule, where it is only applicable in "certain

circumstances." Department of Highway Safety & Motor Vehicles v.

Schluter , 705 So. 2d 81, 82 (Fla. 1st DCA 1997).

84. The Petitioner has not demonstrated that the QRIS is a

statement of general applicability. It applies only in Duval

County, as opposed to statewide. 4/

85. Moreover, the QRIS does not require compliance, but

rather gives early learning centers the option of participating.

It creates no rights, as the right to operate as an early

learning provider is separate from participation in the program.

Likewise, no right has been adversely affected. The benefits

accorded to participants is determined on a case-by-case basis,

based on the needs of the participant and the funding

availability at the time of participation. In short, the QRIS

simply does not meet the definition of a rule.

CONCLUSION

In view of the foregoing findings of fact and conclusions of

law, it is hereby:

ORDERED:

That the petition by the Florida Association for Child Care

Management, Inc., be dismissed for lack of standing; that Early

Learning Coalition of Duval County is not a state agency for the

purposes of Chapter 120, Florida Statutes; and that the QRIS,

otherwise known as the Guiding Stars program, is not a rule as

defined by Section 120.52(15), Florida Statutes.

DONE AND ORDERED this 26th day of August, 2008, in

Tallahassee, Leon County, Florida.

S

LISA SHEARER NELSON

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 26th day of August, 2008.

ENDNOTES

1/ Section 411.01(5)(a)3., Florida Statutes, provides that the

early learning coalitions in Sarasota, Osceola, and Santa Rosa

Counties that were in operation on January 1, 2005, are not

counted within the 30-coalition limit established in Section

411.01(5)(a)1.

2/ Testimony at hearing indicated that a new plan must be

submitted every three years and upon each amendment to the

previously approved plan. However, Subsections 411.01(5)(d)2.

and 6. refer to annual and biennial review.

3/ See , e.g. , § 411.01(5)(a)1. ("The Agency . . . shall adopt

procedures for merging early learning coalitions, . . . and for

the early termination of the terms of coalition members. . . .");

of at least 18 members but not more than 35 members ."); and

§411.01(5)(a)6. ("Each learning coalition must include the

following members"). (Emphasis supplied.)

4/ Petitioner places great reliance on the fact that on at least

one occasion, a bill to establish a statewide quality rating

system has been introduced and has failed to pass. This reliance

is misplaced. The fact that the Legislature has not chosen to

implement such a rating system statewide does not mean that it is

not appropriate for an individual county. Once again, Section

411.01(1)(d) envisions school readiness plans being "regionally

designed, operated and managed." This legislative intent endorses

the use of methods that might work well in one area but not in

another. ELC of Duval's actions seem consistent with this

directive.

COPIES FURNISHED:

Brian Newman, Esquire

Cynthia S. Tunnicliff, Esquire

Pennington, Moore, Wilkinson,

Bell & Dunbar, P.A.

215 South Monroe Street, Second Floor

Post Office Box 10095

Tallahassee, Florida 32302-2095

Thomas Barnhart, Esquire

Garnett Chisenhall, Esquire

Department of Legal Affairs

The Capitol, Plaza Level One

Tallahassee, Florida 32399-1050

William E. Williams, Esquire

Amy W. Schrader, Esquire

GrayRobinson, P.A.

301 South Bronough Street, Suite 600

Tallahassee, Florida 32302

Scott Boyd, Acting Executive

Director and General Counsel

Joint Administrative Procedures Committee

Holland Building, Room 120

Tallahassee, Florida 32399-1300

Liz Cloud, Chief

Bureau of Administrative Code

The Elliott Building, Room 201

Tallahassee, Florida 32399-0250

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is entitled

to judicial review pursuant to Section 120.68, Florida Statutes.

Review proceedings are governed by the Florida Rules of Appellate

Procedure. Such proceedings are commenced by filing the original

notice of appeal with the Clerk of the Division of Administrative

Hearings and a copy, accompanied by filing fees prescribed by

law, with the District Court of Appeal, First District, or with

the District Court of Appeal in the Appellate District where the

party resides. The notice of appeal must be filed within 30 days

of rendition of the order to be reviewed.