14-002808 John R. Blum vs. Department Of Management Services, Division Of Retirement Status: Closed Recommended Order on Monday, August 25, 2014.

Summary: Division established that Petitioner had violated the reemployment provision of the Florida Retirement System, and must repay all retirement benefits to the Division.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JOHN R. BLUM,

Petitioner,

vs. Case No. 14 - 2808

DEPARTMENT OF MANAGEMENT

SERVICES, DIVISION OF

RETIREMENT,

Respondent.

_______________________________/

RECOMMENDED ORDER

Pursuant to notice, a hearing was conducted in this case

pursuant to sections 120.569 and 120.57(1), Florida Statutes,

before Jess ica E. Varn, a duly - designated Administrative L aw

J udge of the Division of Administrative Hearings (DOAH). The

hearing was held on Au gust 5 , 2014, in Tallahassee, Florida.

APPEARANCES

For Petitioner: John R. Blum , pro se

5050 Southwest Eleven th Place

Margate, Florida 33068 - 4060

For Respondent: Larry D. Scott, Esquire

Department of M anagement Services

4050 Esplanade Way , Suite 160

Tallahassee, Florida 32399 - 0950

STATEMENT OF THE ISSUE S

Whether Respondent, John R. Blum ( Mr. Blum ), violated the

re - employment provisions set forth in section 121.091(13) (c) 5.d . ,

Florida Statute s (2013) , and , therefore , must repay his Deferred

Retirement Option Program (DROP) distribution and subsequent

monthly retirement benefits.

PRELIMINARY STATEMENT

By letter dated May 8, 2014, the Department of Management

Services, Di vision of Retirement (Division) , advised Mr. Blum

that the Division intended to void his participation in DROP.

The letter further instructed Mr. Blum to repay all retirement

benefits received, including his DROP accumulation, in the amount

of $227,755.51 . The letter cited sections 121.021(39)(b)2. and

121.091(13)(c)5.d., Florida Statutes, as authority; it also

afforded Mr. Blum a point of entry to challenge the DivisionÓs

decision.

Mr. Blum disputed the DivisionÓs decision and timely

requested an adminis trative hearing. The request for a hearing

was forwarded to DOAH on or about June 17, 2014. A hearing was

scheduled for August 5, 2014.

At hearing, Mr. Blum testified on his own behalf and offered

t he testimony of Teresa Strepp, chief of personnel s erv ices at

the Department of Highway Safety and Motor Vehicles.

Petitioner Ós Exhibits 1 through 3 and 5 were admitted into

evidence. The Division offered the testimony of two witnesses:

Ira Gaines, r etirement benefits a dministrator with t he Division;

and B onnie Bevis, assistant d irector of Finance and Accounting

for the Department of Highway Safety and Motor Vehicles.

RespondentÓs Exhibits 1 through 6 , 8 , and 9 were admitted into

evidence. The DivisionÓs Motion for Official Recognition of

sections 121.091 (1), 121.091(13)5.d., 121.021(39)(b)2.,

121.021(17), and 121.021(24) was granted.

The hearing was not transcri bed. The parties timely filed

proposed recommended o rders, which have been duly considered in

the preparation of this Recommended Order.

Refere nces to Florida Statutes will be to the 2013 version

unless otherwise noted.

FINDING S OF FACT

1. The Division is the state agency charged with the

responsibility of administering the Florida Retirement System

(FRS).

2. Mr. Blum w as employed as a highway patrol o fficer with

the Department of Highway Safety and Motor Vehicles (DHSMV). He

made the decision to enter DROP , and , f or the last five years of

his employment with DHSMV, he participated in DROP.

3. Prior to ending his DROP participation, Mr. Blum

c ompleted a Deferred Retirement Option Program Termination

Notification , confirming he would terminate employment on May 31,

2013 . The notif ication was also signed by the retirement

c oordinator for DHSMV confirming Mr. BlumÓs employment

termination date, a nd reads in pertinent part:

In order to satisfy your employment

termination requirement, you must terminate

all employment relationships with all

participating FRS employers for the first 6

calendar months after your DROP termination

date. Termination req uirement means you

cannot remain employed or become employed

with any FRS covered employer in a position

covered or non - covered by retirement for the

first 6 calendar months following your DROP

termination date. This includes but is not

limited to: part - time work, temporary work,

other personal services (OPS), substitute

teaching, adjunct professor or non - Division

approved contractual services.

* * *

If you fail to meet the termination

requirement, you will void (cancel) your

retirement and DROP participation and you

must repay all retirement benefits received

(including accumulated DROP benefits).

4. The form has been incorporated by reference into Florida

Administrative Code Rule 60S - 11.004(9).

5. Mr. Blum terminated his employment with DHS MV on the

agreed termination date of May 31, 2013.

6. In July 2013, Mr. Blum began to work once again with

DHSMV. He had applie d and was hired to return as a reserve

o fficer to work security at Florida turnpike stations. The

Florida Highway Patrol provi ded Mr. Blum with access to the

online system for payroll, and he was paid for his work through

direct deposit from DHSMV, an FRS employer.

7. Mr. Blum was under the mistaken impression that , when he

worked the security for the turnpike stations, he was working for

a private vendor. He had no intention of violating the

termination of employment provisions.

8 . In September 2013, after working for almost three

months, Mr. Blum was notified that he had violated the

termination of employment provisions of D ROP, and he ceased

working as a reserve o fficer.

9 . On May 8, 2014, the Division sent a letter to Mr. Blum,

notifying him that his DROP participation and retirement had been

voided and that he must repay all retirement benefits, including

his DROP accum ulation. The total amount paid is $227,755.51,

which the Division seeks to recover. He was also informed that

his retirement account would be credited t o reflect membership

from March 2009 through May 2013.

10. Mr. Blum has returned to work as a h ighwa y patrol

o fficer , and his DROP application has been approved effective

May 1, 2014.

CONCLUSIONS OF LAW

11 . The Division of Administrative Hearings has

jurisdiction over the parties and subject matter of this

proceeding. §§ 120.569 & 120.57(1), Fla. Stat. (2014 ).

12. This proceeding is de novo. § 120.57(1)(k), Fla. Stat.

(2014 ).

13. The burden of proof in an administrative proceeding is

on the party asserting the affirmative of the issue unless the

burden is established otherwise by statu te. Balino v. DepÓt of

HRS , 348 So. 2d 349 (Fla. 1st DCA 1977 ) . The Division, as the

party asserting that Mr. Blum has voided his retirement benefits

and that those benefits must now be repaid, has the burden of

proof in this proceeding. The standard of proof is by a

preponderance of the evidence. Nelson v. DepÓt of Mgmt. Servs.,

Div. of Ret. , Case No. 11 - 4343 ( Fla. DOAH June 6, 20 12), aff Ód .

107 So. 3d 410 (Fla. 1st DCA 2013).

14. The Division is the state agency responsible for

administering the FRS. §§ 121.025 & 121.031, Fla. Stat.

15. The Legislature has imposed limitations upon employees

who opt to participate in DROP: specifically, there is a waiting

period of six months after termination of employment before a

participant can return to employment with an FRS employer.

Section 121.09 1 (13)(c)5. provides:

At the conclusion of the member Ós

participation in DROP, the Division shall

distribute the member Ós total accumulated

DROP benefits, subject to the following:

* * *

d. A D ROP participant who fails to terminate

all employment relationships as provided in

s. 121.021(39) shall be deemed as not

retired, and the DROP election is null and

void. Florida Retirement Services membership

shall be reestablished retroactively to the

da te of the commencement of DROP . . . .

16. Section 121.021(39) provides as follows:

(b) ÐTerminationÑ for a member electing to

participate in the DROP occurs when the

program participant ceases all employment

relationships with an employer in accor dance

with s. 121.091(13), however:

* * *

2. For termination dates occurring on or

after July 1, 2010, if the member becomes

employed by any such employer within the next

6 calendar months, termination will be deemed

not to have occurred . . . .

17. Rule 60S - 11.004(9) states that , if a participant fail s

to meet the te rmination requirement, the participant void s or

cancels their retirement and DROP participation and must repay

all retirement bene fits received, incl uding accumulated DROP

ben efits .

18 . Mr. Blum, without the intention of doing so, voided his

termination of employment by returning to work with the same FRS

em ployer within the forbidden six - month period after he

terminated his participation in DROP.

19 . Mr. Blum mu st , therefore, repay the Division the total

amount of $227,755.51, which includes the DROP accrual, the

health insurance subsidy, and the monthly retirement benefits he

received.

20. Given the facts established by the Division, the

undersigned has no discretion to conclude otherwise.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Division enter a final o rder

finding that Mr. Blum violated the re - employment provisions of

section 121.091(13)( c)5.d., Fl orida Statutes, and , therefore ,

must repay retirement payments in the amount of $227,755.51 to

the Division.

DONE AND ENTERED this 25 th day of August , 2014 , in

Tallahassee, Leon County, Florida.

S

JESSICA E. VAR N

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 25 th day of August , 2014 .

COPIES FURNISHED:

John R. Blum

5050 Southwest Eleven th Place

Margate, Florida 33068 - 4060

Larry D. Scott, Esquire

Department of Management Services

4050 Esplanade Way , Suite 160

Tallahassee, Florida 32399 - 0950

Dan Drake, Director

Division of Retirement

Department of Management Services

Post Office Box 9000

Tallahassee, Florida 32315 - 9000

Bruce Conroy, Interim General Counsel

Office of the General Counsel

Department of Management Services

4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399 - 0950

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed wit h the agency that

will issue the Final Order in this case.