10-007940 In Re: Petition To Merge The Main Street Community Development District And The Rivers Edge Community Development District vs. * Status: Closed Recommended Order on Friday, December 10, 2010.

Summary: Report on proposal to merge two community development districts. No reason not to grant.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

IN RE: PETITION TO MERGE THE )

MAIN STREET COMMUNITY )

DEVELOPMENT DISTRICT AND THE ) Case No. 10 - 7940

RIVERS EDGE COMMUNITY )

DEVELOPMENT DISTRICT )

_______________________________ )

ADMINISTRATIVE LAW JUDGE'S REPORT TO THE

FLORIDA LAND AND WATER ADJUDICATORY COMMISSION

O n October 26, 2010, a local public hearing was conducted

before J. Lawrence Johnston, an Administrative Law Judge of the

Division of Administrative Hearings (ÐDOAHÑ), at the Airport

Conference Center, 4730 Casa Cola Way, St. Augustine, Florida .

APPEARANCES

For Petitioners Rivers Edge Community Development District

and Main Street Community Development District:

Tucker F. Mackie, Esquire

Jonathan T. Johnson, Esquire

Hopping Green & Sams, P.A.

119 S. Monroe Street, Suite 300

Tallahassee, Florida 32301 - 1591

STATEMENT OF THE ISSUE

The issue before the Florida Land and Water Adjudicatory

Commission (ÐCommissionÑ) in this proceeding is whether to grant

the Petition of the Rivers Edge Community Development District

and the Main Street Communi ty Development District (ÐPetitionÑ),

to merge the boundaries of the Rivers Edge Community Development

District (ÐRivers EdgeÑ) and the Main Street Community

Development District (ÐMain StreetÑ) (collectively, the

ÐDistrictsÑ or ÐPetitionersÑ). Under Sect ion 190.005(1)(d),

Florida Statutes, the local public hearing was conducted for the

purpose of taking testimony and public comment and receiving

exhibits. This Report of the public hearing and the hearing

record is made for the consideration of the Commis sion in its

determination whether to adopt a rule to merge the DistrictsÓ

boundaries.

PRELIMINARY STATEMENT

The Petition was filed by the Petitioners on July 30, 2010.

The Petition seeks to merge Rivers Edge 1 and Main Street into one

community developmen t district (ÐMerged DistrictÑ). If merged,

the proposed Merged District will consist of approximately

4,176.5 acres located in unincorporated St. Johns County. The

Petition includes nine (9) exhibits.

The Commission referred the Petition to DOAH on Aug ust 16,

2010, to conduct a local public hearing. St. Johns County did

not elect to hold an optional local hearing on the Petition and

has not objected to the merger.

SUMMARY OF RECORD

A. Petition Contents and Related Matters

1. The Petition was submitted to St. Johns County along

with a check in the amount of $5,532 on July 19, 2010. The

Petition was filed with the Commission on July 30, 2010.

2. Petition Exhibit 1 is the Rivers Edge and Main Street

resolutions authorizing the merger of the Districts and

approving a merger agreement, designated as Resolution No. 2010 -

07 and 2010 - 06, respectively.

3. Petition Exhibit 2 is the Limited Offering Memorandum

associated with the Main Street Community Development District

Capital Imp rovement Revenue Bonds, Series 2008A and 2008B.

4. Petition Exhibit 3 sets forth the general loca tion of

the existing Districts . Main Street currently covers

approximately 90 acres of land located entirely within St. Johns

County. Rivers Edge currently covers approximately 4,086 acres

of land located e ntirely within St. Johns County .

5. Petition Exhibit 4 is the current metes and bounds

descriptions of the external bounda ries of the existing

Districts.

6. Petition Exhibit 5 is a legal description of the lands

within the proposed Merged District.

7. Petition Exhibit 6 designates the existing and future

general distribution, location and extent of public and private

uses for the proposed Merged District.

8. Petition Exhibit 7 is a map of the propose d Merged

District showing the current major trunk water mains, s ewer

interceptors and outfalls .

9. Pet ition Exhibit 8 is the estimate of construction

costs and timetable for the Master Infrastructure that the

proposed Merged District may provide.

10. P etition Exhibit 9 is the Statement of Estimated

Regulatory Costs (ÐSERCÑ) prepared in accordance with the

requirements of Section 120.541, Florida Statutes.

11. The Petition alleges that merger of the boundaries of

the Districts should be granted for the following reasons:

a. As with the existing Districts, the

surviving district, and all land uses and

services planned within the surviving

district, are not inconsistent with

applicable elements or portions of the

adopted State Comprehensive Plan or the

effective local Comprehensive Plan.

b. As with the existing Districts, the area

of land within the surviving district will

continue to be of sufficient size,

sufficiently compact, and sufficiently

contiguous to be developable as one

functionally rela ted community.

c. As with the existing Districts, the

surviving district will continue to prevent

the general body of taxpayers in St. Johns

County from bearing the burden for

installation of the infrastructure and the

maintenance of the above - described

facilities within the surviving district.

The surviving district will continue to be

the best alternative for delivering

community development services and

facilities within the applicable district

boundaries without imposing an additional

burden on the g eneral population of the

local general - purpose government. The

surviving district will continue to allow

for a more efficient use of resources as

well as providing the opportunity for new

growth to pay for itself.

d. The community development services and

facilities of the surviving district will

not be incompatible with the capacity and

use of existing local and regional community

development services and facilities. In

addition, the surviving district will serve

as a perpetual entity capable of makin g

reasonable provisions for the operation and

maintenance of the services and facilities

for the district lands.

e. As with the existing Districts, the area

of land that will lie in the boundaries of

the surviving district is amenable to

separate special district government.

B. Summary of the Local Public Hearing Held on

October 26, 2010 in St. Johns County

12. The local public hearing on the Petition was noticed

and held on October 26, 2010, at 9:00 a.m., at the Airport

Conference Center, 4730 Ca sa Cola Way, St. Augustine, Florida .

N otice of the public hearing was advertised on September 28,

October 5, October 12 , and October 19, 2010, in The St.

Augustine Record , a newspaper of general paid circulation in St.

Johns County, and of general interest and readership in the

community, not one of limited subject matter, pursuant to

Chapter 50, Florida Statutes . The published notice gave the

time and place for the hearings, a description of the area to be

included within the Merged District, including a map showing the

lands of the proposed Merged District and other relevant

information. The advertisement was published as a display

advertisement, not in the portion of the n ewspaper where legal

notices and classified advertisements appear.

13. The Petition, including its exhibits, was marked as

Hearing Composite Exhibit A and admitted into the record.

14. The Revised SERC was marked as Hearing Exhibit B and

admitted into the record. The SERC was revised at the request

of St. Johns County. On Page 7, Table 2, the first line item

now indicates that included within the improvements described

are landscape improvements .

1 5. Petitioners pre sented the following witnesses a t the

hearing: John Grueter, Chairman of Rivers Edge and Main Street;

James Perry, District Manager and Financial Advisor for the

Districts, with Governmental Management Services, LLC;

Michael Kennedy, District Engineer for the Districts, with

WilsonMille r, Inc.; and David Tillis, Planner for the Districts,

with WilsonM iller, Inc .

16 . The Pre - Filed Written Testimony of the witnesses was

received as Hearing Exhibits C, D, E, and F.

1 7. Teresa Bishop, Director of Long Range Planning for St.

Johns County attended the public hearing; however, she did not

wish to provide any comment .

1 8. No members of the public prov ided comment at the

hearing. No public comment was filed after the local public

hearing.

( i ) Evidence Overview

19. T he Districts were intended to function as a single,

inter - related community; however , two Districts were initially

created to meet the differing level of service needs that would

exist due to the fact that Rivers Edge was anticipated to be

predominantly residential; wh ereas Main Street was anticipated

to be primarily commercial. The conceptual development plan has

now changed such that the lands within the District are

anticipated to be utilized in a mixed - use capacity. Petitioners

are seeking to merge the Districts b ecause it would be more cost

effective and efficient to have one district.

2 0. Rivers Edge Resolution No. 2010 - 07 and Mai n Street

Resolution No. 2010 - 06 state the preference of Rivers Edge to

remain as the surviving entity (the ÐSurviving DistrictÑ). Th e

Main Street board members recognize that their individual tenure

as supervisors will come to an end. Having Rivers Edge survive

will be less disruptive and confusing.

2 1. F ive persons designated in the Petition to serve as

the Board of Supervisors of the Merged District are

John Grueter, Chris Kuhn, Rose Bock, Harry Waldron, and

Phillip Jones. They are the current board members of Rivers

Edge.

( ii ) Engineering Perspective

2 2. T he capital facilities being provided by the Districts

will not change because of the merger. The proposed Merged

District will continue to provide drainage, transportation,

utility, landscape, recreation , a nd neighborhood infrastructure.

2 3. T he cost es timates in Petition Exhibit 8 were based on

current construction contracts in place and underway and by

using plans and preliminary infrastructure layouts for future

costs based on pricing they have seen in the area.

2 4. Main Street and Rivers Edge have entered into

interlocal agreements to avoid duplication of construction

activities and disconnection between projects . However, the

Engineer for the District s is required to provide construction

updates, requisitions, and other communications to both Boar ds.

While this ar rangement has worked, it is not the most efficient

or cost effective. Given the state of development and

construction, having one distri ct, Rivers Edge, is preferable .

25. C onstruction costs for the proposed facilities for the

Merged D istrict are reasonable based on an analysis of the

proposed improvements and historical costs of similar

improvements.

26. The p roposed Merged District is of sufficient size,

compactness , and contiguity to be developed as a functional

interrelated commun ity. Th e RiverTown Project, a Development of

Regional Impact, is intended to operate and develop as one

large, multi - use project. Currently, the Districts function

reasonably well because of a series of interlocal agreements to

ensure there would not be duplicative construction activities or

any disconnection between projects. T he area to be served is

sufficiently contiguous and compact to be served by one

district . G iven the state of development and construction, it

is preferable for Rivers Edge to be the Surviving District.

27. T he proposed Merged District is the best available

alternative for delivering community services and facilities to

the areas that will be served by the proposed Merged District.

H aving one surviving District provide the servic es to the land

will reduce duplication and potential inconsistency or

disconnect in the construction and ultimate m aintenance of

infrastructure. While two districts can work, the best

alternative is to merge the Districts and have Rivers Edge

survive.

28. T he services and facilities provided by the proposed

Merged District are not incompatible with the capacities and

uses of existing local and regional community facilities and

services. The Districts are already providing needed and

required public in frastructure which is fully consistent with

the existing capacity and facilities in the area. The proposed

merger will not change the facilities being provided and is not

inconsistent with existing facilities.

29. T he area being included within the pro posed Merged

District is amenable to being served by a separate special

district government. The area is presently being served by the

Districts. Having one separate special district government will

serve the area well by streamlining the process for get ting

District board approval , and it also will allow the long - term

maintenance of infrastructure to be provided by a single entity

focused on the entire community.

( iii ) Consistency with Comprehensive Plans

3 0. T he proposed Merged District is not incons istent with

any portion or element of the State Comprehensive Plan. The

proposed merger promotes Subject 20 Î Governmental Efficiency.

Subject 20 advocates the elimination of needless duplication of

governmental activities. A merger in this instance wou ld

eliminate the inherent duplication of having two entities serve

one project. In addition, Subject 17 Î Public Facilities - has

a goal to finance new facilities in a timely, orderly and

efficient manner. A Merged District will provide the needed

public transportation and other infrastructure in a more orderly

and efficient manner.

3 1. T he proposed Merged District is not inconsistent with

any applicable element or portion of the St. Johns County

Comprehensive Plan. Goal H.1 of the Capital Improvements

Element states that the County is to ensure the orderly and

efficient provisions of infrastructure facilities and services.

The Merged District will continue to serve as an alternative

provider of these infrastructure systems and services to meet

the needs of t he lands within its boundaries .

( iv ) SERC and Related Matters

32. The SERC attached to the Petition as Petition Exhibit

9 finds no negative impact on any person or entity as a result

of the proposed merger.

33. T here will be no adverse impact on the outstanding

bonds. Main Street has issued $33,025,000 in Capital

Improvement Revenue Bonds in two series, 2008A and 2008B.

34. Main Street has never defaulted or experienced a delay

with respect to meeting its debt service obligations under the

Indentu re .

35. The bonds will continue to be secured by the

assessments on the lands within each District. Rivers Edge, as

the Merged District, will certify the assessments on the land

for collection and enforce collection , as necessary . The

security for the bonds does not change , and the merger should

have no adverse impact on the terms and conditions of the Main

Street bonds outstanding under the Indenture or the interests of

the holders of the bonds.

36. T he proposed Mer ged District is expected to be

financially viable and feasible. T he Surviving District will be

able to reduce total administrative costs, streamline its

operations , and be an overall economic benefit to the residents

and landowners of the Merged District.

37. T he proposed Merged District is the best available

alternative for providing development services and facilities to

the area to be served. The Merged Distric t should be able to

construct or acquire certain infrastructure and community

facilities in a more efficient way with only one board making

decisions. This should result in a lower cost per acre or per

unit cost than with two independent districts.

38. T he debt assessments on the properties will not change

after the merger. The assessments on the land within the Merged

District will continue to secure Main StreetÓs debt and the

assessments. It is expected that operation and maintenance

assessments will be lower than they otherwise would have been if

the Districts are merged.

39. T he land within the proposed Merged District is

amenable to being served by a separate special district

government. A Merged District will be a more efficient

mechanism to ov ersee the installation of capital improvements.

40. The purpose of the merge r is to become a more

effective and more efficient local unit of special - purpose

government.

41. T here are several benefits from merger for the current

residents and landowne rs within the existing Districts ,

includ ing administrative cost savings and having to deal with

only one entity.

42. T he merger will have no effect on the daily field

operations , but it will result in a more eff icient

administrative function. T he propos ed merger will reduce the

DistrictsÓ budgets and the assessments .

43. P otential savings in various line items of the

DistrictsÓ budgets may be realized if the merger is approved ,

including supervisor salaries , filing fees, legal fees, district

management fees, meeting expenses , and insurance costs .

44. Savings are estimated to be $54,000 based on the

fiscal year 2010 - 2011 budget and are expected to increase over

time.

45. T he proposed Merged District is the best alternative

available to provide the proposed community development services

and facilities. The Districts will be able to eliminate

numerous administration costs. It would eliminate

administrative duplication and time. The Merged District will

provide the highest level of services and facilities in the most

cost - effective, efficient , and convenient manner to this

project.

46. T he proposed Merged District is of sufficient size, is

sufficiently compact and suffic iently contiguous to be

developable as one functional, interrelated community. The

Districts are adjacent, so there are no physical barriers to

interfere with the delivery of services and facilities by the

Merged District. The Merged District will allow for the

successful delivery of improvements, management , and operations

to the land.

47. T he proposed Merged District will not be incompatible

with the uses and existing local and regional facilities and

services. The facilities and services within th e proposed

Merged District will not duplicate any available regional

services or facilities and are not intended to be different from

the services and facilities currently planned and being

provided. The proposed merger will not impact the Merged

District Ós ability to successfully manage its existing services

and facilities .

48. Merging the two District s will not affect their

ability to function as a separate special district government.

Merging the Dis tricts will streamline decision - making and

levying of assessments for operations and maintenance.

Residents within the Districts will benefit from having to deal

with only one authority.

APPLICABLE LAW

A. General

49. Section 190.046(3) , Florida Statutes, provides the

means of merging the boundaries o f a community development

district pursuant to Section 190.005. In relevant part, it

provides:

The government formed by a merger involving

a community development district pursuant to

this section shall assume all indebtedness

of, and receive title to, all property owned

by the preexisting special districts, and

the rights of creditors and liens upo n

property shall not be impaired by such

merger. Any claim existing or action or

proceeding pending by or against any

district that is a party to the merger may

be continued as if the merger had not

occurred, or the surviving district may be

substituted i n the proceeding for the

district that ceased to exist. Prior to

filing the petition, the districts desiring

to merge shall enter into a merger agreement

and shall provide for the proper allocation

of the indebtedness so assumed and the

manner in which su ch debt shall be retired.

The approval of the merger agreement and the

petition by the board of supervisors of the

district shall constitute consent of the

landowners within the district.

B. Petition Requirements

50. Section 190.046(3) requires that a petition to merge

be filed containing the same elements found in Section

190.005(1)(a). Those elements are:

1. A metes and bounds legal description of

the area to be served by the district with a

specific description of real property to be

excluded fro m the district, if any.

2. Written consent to the merger of the

districts by all landowners whose real

property is to be included in the proposed

merged district of 100% of the real property

to be included in the district.

3. A designation of five p ersons to be the

initial members of the board of supervisors

who shall serve in that office until

replaced by elected members as provided in

Section 190.006, Florida Statutes.

4. The proposed name of the district.

5. A map of the current major trunk water

mains and sewer interceptors and outfalls if

in existence.

6. The proposed timetable for construction

of any district services to the area and the

estimated cost of constructing the proposed

services.

7. The designation of the future general

distribution, location and extent of public

and private uses of land proposed for the

area by the future land use plan element of

the adopted local government local

comprehensive plan.

8. A statement of estimated regulatory

costs in accordance with the requirements of

Section 120.541, Florida Statutes.

C. Applicable Procedures

51 . S ection 190.046(3) incorporates the proc edure of

Section 190.005(1)(a) and provides that the Petition sha ll be

filed with the Commission. This requirement was met.

52 . Section 190.005(1)(b)1, Florida Statutes, requires

that petitioner provide a copy of the petition and the requisite

filing fee to the county and to each municipality whose proposed

boundar y is within or contiguous to the district prior to filing

the petition with the Commission. This requirement was met .

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

the c ounty containing all or a portion of the lands within the

proposed me rged districts has the option to hold a public

hearing within forty - five (45) days of the filing of a petition.

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

local public hearing to be conducted by a hearing officer in

conformance with the applicable requirements and procedures of

the Administrative Procedure Act. Such public hearing is

limited to oral and wr itten comments on the petition pertinent

to the factors specified in Section 190.005(1)(e), Florida

Statutes.

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

petitioner to publish notice of the local public hearing once a

week for four succes sive weeks immediately prior to the hearing

in a newspaper of general paid circulation in the county and of

general interest and readership in the community. This

requirement was met .

56 . Florida Administrative Code Rule 42 - 1.010 requires

Notice of Rece ipt of Petition to be published in the Florida

Administrative Weekly .

D. Factors to be Considered for Granting or Denying Petition

57 . The Commission must proceed in accordance with Section

190.005(1)(e), Florida Statutes, upon the receipt of the full

record of the local public hearing. The CommissionÓs

determination is not whether to establish a new district where

one did not exist. In stead, it s determination is whether to

allow two existing districts to merge . If the merger petition

was denied, then the two districts would continue to exist.

58 . Pursuant to Section 190.005(1)(e)1. - 6., Florida

Statutes, the Commission must consider the entire record of the

local hearing, the transcript of the hearing, any resolutions

adopted by local general - purpose governments, and the following

factors (altered slightly to reflect the merger petition), to

make a determination to grant or deny a pet ition for the merger

of the boundaries of districts:

1. Whether all statements contained within

the petition have been found to be true and

correct;

2 . Whether the merger of the boundaries of

the districts is inconsistent with any

applicable element or portion of the state

comprehensive plan or of the effective local

government comprehensive plans;

3 . Whether the merger of the districts will

result in a district that is still of

sufficient size, is still sufficiently

compact, and is still sufficiently

contiguous to continue to be developable as

one functional interrelated community;

4. Whether the merger of the districts is

the best alternative available for

delivering community development services

and facilities to the area that will be

served by t he proposed merged district;

5. Whether the community development

services and facilities that will continue

to be provided by the proposed merged

district will be incompatible with the

capacity and uses of existing local and

regional community developme nt services and

facilities; and

6. Whether the area that will continue to

be served by the proposed merged district is

still amenable to separate special - district

government.

COMPARISON OF INFORMATION IN RECORD TO APPLICABLE LAW

A. Procedural Requireme nts

59 . The evidence establishes that Petitioners have

satisfied all the procedural requirements for the merger of the

Districts by filing the Petition in the proper form wi th the

required attachments, tendering the requisite filing fee to the

local governments, arranging for a public hearing to be

conducted by an administrative law judge, and publishing

statutory notices of the local public hearing.

B. Six Factors of Section 190.005(1)(e)1. - 6., Florida Statutes

60 . The evidence establishes that the statements in the

Petition and its attachments, as revised, are true and correct.

In relation to the consents, pursuant to Section 190.046(3),

Florida Statutes, Ð [t]he approval of the merger agreement and

the petition by the board of supervisors of the district shall

constitute consent of the landowners within the district.Ñ

Consent for all lands currently included within the Districts

was provided as evidenced by Rivers Edge Resolution No. 2010 - 07

and Main Street Resolut ion 2010 - 06.

61 . The evidence establishes that the merger of the

boundaries of the Districts is not inconsistent with any

applicable element or portion of the State and local government

comprehensive plan.

62 . The evidence establishes that the proposed Merged

District is of sufficient size, is still sufficiently compact,

and is still sufficiently contiguous to continue to be

developable as Ðone functional interrelated community.Ñ

63 . The evidence establishes that the proposed Merged

District is the b est alternative available for delivering

community development services and facilities to the area to be

included within the boundaries of the proposed Merged District

and that will be served by the proposed Merged District.

64 . The evidence establishes that the community

development services and facilities that will continue to be

provided by the proposed Merged District will not be

incompatible with the capacity and uses of existing local and

regional community development services and facilities.

6 5 . The evidence establishes that the area that will

continue to be served by the proposed Merged District is

amenable to separate special - district government.

CONCLUSION

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

Commission "shall consider the entire record of the local

hearing, the transcript of the hearing, resolutions adopted by

local general - purpose governments," and the factors listed in

that subparagraph. Based on the record evidence, the Petition

meets all statutory requirements, and there appears to be no

reason not to grant the Petition to Merge the Boundaries of the

Main Street Community Development District and the Rivers Edge

Community Development District. The record supports having

Rivers Edge continue to exist as the Ðsurvivi ng district,Ñ with

the landowner election schedule to continue as it presently

exists and the existing Rivers Edge board members to remain in

office.

DONE AND ENTERED this 10th day of December, 2010, in

Tallahassee, Leon County, Florida.

S

J. LAWRENCE JOHNSTON

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 10th day of December, 2010.

ENDNOTE

1/ When the original petition to establish a community

development district over the lands currently served by Rivers

Edge was filed with the Comm ission in December of 2005, the

proposed name was ÐKendall Creek Community Development

District.Ñ After the local public hearing, the petitioner (in

that proceeding) requested a name change from Kendall Creek

Community Development District to Rivers Edge Community

Development District. See PetitionersÓ Notice of Filing

Affidavit of Jonathan T. Johnson filed with DOAH on November 19,

2010.

COPIES FURNISHED :

Tucker F. Mackie , Esquire

Jonathan T. Johnson, Esquire

Hopping, Green & Sams, P.A.

119 South Monroe Street, Suite 300

Tallahassee, Florida 32301 - 1591

Jerry McDaniel, Director

Florida Land and Water

Adjudicatory Commission

Office of the Governor

The Capitol, Room 1802

Tallahassee, Florida 32399 - 1001

Rick Figlio, General Counsel

Office of th e Governor

The Capitol, Suite 209

Tallahassee, Florida 32399 - 1001

Barbara Leighty, Clerk

Growth Management and Strategic

Planning

The Capitol, Room 1802

Tallahassee, Florida 32399 - 0001

Shaw Stiller, General Counsel

Department of Community Affairs

255 5 Shumard Oaks Boulevard

Tallahassee, Florida 32399 - 2100