16-003298 Doug Williams vs. City Of Coral Springs Police Officers' Pension Fund Status: Closed Recommended Order on Friday, November 18, 2016.

Summary: Respondent failed to demonstrate that it had been delegated legislative authority from the City to allow it to adopt policy on suspension of retirement benefits, or to apply that policy to Petitioners.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DOUG WILLIAMS,

Petitioner,

vs. Case No. 16 - 3298

CITY OF CORAL SPRINGS POLICE

OFFICERS ' PENSION FUND,

Respondent.

_______________________________/

SHERRY WILLIAMS,

Petitioner,

vs. Case No. 16 - 3302

CITY OF CORAL SPRINGS POLICE

OFFICERS ' PENSION FUND,

Respondent.

_______________________________/

RECOMMENDED ORDER

On September 30 and October 10, 2016, a duly - noticed

hearing was held by video teleconference at locations in

Lauderdale Lakes and Tallahassee, Florida, before F. Scott Boyd,

an Administrative Law Judge assigned by the Division of

Administrative Hearings.

APPEARANCES

For Petitioner s : Nicholas E. Christ i n , Esquire

Brandon J. Hechtman, Esquire

Wicker, Smith, O ' Hara, McCoy & Ford, P.A.

2800 Ponce De Leon Boulevard , Suite 800

Coral Gables , Florida 33 134

For Respondent: Mich ael Anthony Gillman , Esquire

Kenneth R. Harrison, Esquire

Robert A. Sugarman, Esquire

Sugarman & Susskind, P.A.

100 Miracle Mile , Suite 300

Coral Gables, Florida 3313 4

Bonni Spatara Jensen , Esquire

Klausner, Kaufman, Jenson & Levinson

7080 Northwest 4th Street

Plantation, Florida 33317

STATEMENT OF THE ISSU E

The issue to be determined is whether the Board of Trustees

for the City of Coral Springs Police Officer s' Pension Fund

( Respondent or the Board) should issue final orders suspending

payment of pension benefits to Douglas Williams and Sherry

Williams (Petitioners or the Williams es ) pending a later Board

decision on forfeiture pursuant to section 112.317 3 , Florida

Statutes (2016), 1/ consistent with initial orders recommending

such suspension of benefits issued on March 15, 2016 .

PRELIMINARY STATEMENT

On February 24, 2016, the Board voted to suspend the

Williams es ' pension benefits, and the Board issued initial

order s to that effect dated March 15, 2016 , which were served on

the Williams es the following day. The Williams es timely

requested a formal hearing pursuant to sections 120.569 and

120.57, Florida S tatutes, on April 15, 2016. On Ma y 27, 201 6 ,

the case s were referred to the Division of Administrative

Hearings for assignment of an Administrative Law Judge. An

Order of Consolidation was issued on July 5, 2016. After a

continuance, the final hearing was conducted on September 30 and

October 10, 2016 , by video teleconference.

The parties stipulated to certain facts, which were

accepted and have been incorporated into the Findings of Fact

below. At hearing, both parties offered testimony from the same

two witnesses: Sergeant Glenn Matonak, p resident of the Coral

Springs Fraternal Order of Police Lodge No. 87 , Inc. ; and

Sergeant Scott Myers, a supervisor in the Coral Springs Police

Department and chairman of the Bo a rd . Petitioners also offered

testimony from Gina Orlando, the administrator of the Coral

Springs police and fire pensions.

Petitioner s offered E xhibits P - 1 through P - 8, which were

admitted into evidence without objection . Respondent offered

Exhibits R - 1 and R - 2, admitted without objection, and Exhibits

R - 3 through R - 6, admitted over Petitioners ' objection s that they

were hearsay, with the caveat that under chapter 120 , hearsay

may only supplement or explain other evidence and is not alone

sufficient to support a finding of fact.

The two - volume Transcript was filed on October 19, 2016 .

Both parties timely filed proposed recommended orders that were

considered in the preparation of this Recommended Order.

FINDING S OF FACT

1. The C ity of Coral Springs is a municipality in Broward

County, Florida. It exercises broad power pursuant to Article

VIII, s ection 2 , Florida Constitution , and the Municipal Home

Rule Powers Act, chapter 166, Florida Statutes.

2 . The City Commission of the City of Coral Springs

(Commission) may create other offices, boards, or commissions to

administer th e affairs of the city and may grant them powers and

duties .

3 . T he C ommission has adopted the Coral Springs Police

Officers ' Pension Plan (the Plan) , which is amended from time to

time by ordinance and is set forth in sections 13 - 5 through

13 - 17 of the Code of Ordinances of the City of Coral Springs.

4 . The Plan is administered by the Board , the powers of

which are set forth in section s 13 - 13 through 13 - 1 5 of the Code

of Ordinances of the City of Coral Springs .

5 . The Plan requires mandatory participation from all

officers. Officers must provide continuous service to the

department and contribute to the P lan to receive benefits.

6 . The Plan creates a 100 - percent vested interest after

ten years of continuous service and contribution.

7 . The Plan allows officers to enter the Deferred

Retirement Option Plan ( " DROP " ) on the first day of the month

coincident with their normal retirement date.

8 . When an officer enters DROP , no additional

contributions are made to the P lan , and the benefits are

calculated as if the officer had ac tually retired. Those

benefits are transferred to an investment account and cannot be

distributed until the officer ' s actual separation from service.

9. Officers who enter DROP must resign from their

employment within five years of entry into the program.

10 . Once an officer enters DROP, any changes in the Plan ' s

benefits do not apply to that officer.

11 . After entering DROP , changes in the P lan may only be

applied to those officers if the changes are also applicable to

r etired member s . The only provisions that mention revision of

benefits after DROP are the cost - of - living adjustment provision

and the repeal or termination of the entire system provision.

12 . The Plan does not provide for change in the vested

interest in the Plan after the officer enters DROP.

13 . The Plan does not provide for the Board to suspend an

officer ' s vested interest in the Plan after the officer enters

DROP.

14 . Section 112.3173 provides for the forfeiture of

pension benefits if a member is con victed of certain " specified

offenses. " This section of the statute applies, with some

exceptions, to any employee pension benefit plan supported in

whole or in part by public funds. Section 112.3173 applies to

the Plan.

15 . Section 112.3173 does not contain a provision for

suspending a member ' s benefits pending criminal charges.

16 . Douglas Williams was a full - time Coral Springs police

officer from September 1981 through September 30, 2009.

17 . Douglas Williams ' s vested interest in his pension plan

reached 100 percent in 1991, after ten continuous years of

service and contributions.

18 . On December 1, 2004, Douglas Williams became eligible

for retirement, and he entered into DROP.

1 9. Effective October 1, 2009, Douglas Williams began

receiving monthly pension payments after terminating his

employment.

20 . From December 1, 2004 , through February 1, 2016,

Douglas Williams received $703,819.30 in pension payments.

21 . Douglas Williams ' s contributions to his pension plan

totaled $80,302.74.

22 . On September 4, 2014, Douglas Williams was arrested

and charged with multiple counts of grand theft related to his

volunteer position with the Coral Springs Fraternal Order of

Police Lodge No . 87, Inc.

23 . Sherry Williams was a full - time Coral Springs pol ice

officer from August 1995 through September 30, 2014.

24 . Sherry Williams ' s vested interest reached 100 percent

in 2005, after ten continuous years of service.

25 . On February 1, 2012, Sherry Williams became eligible

for retirement , and she entered DR OP.

26 . Effective October 1, 2014 , Sherry Williams terminat ed

her employment and began receiving monthly pension payments.

27 . From February 1, 2012 , through February 1, 2016,

Sherry Williams received $363,901.65 in pension payments.

28 . Sherry Williams ' s contributions to her pension plan

totaled $97,901.65.

2 9. On September 5, 2014, Sherry Williams was arrested and

charged with multiple counts of grand theft and fraud related to

her position with the Coral Springs Fraternal Order of Police

Lodge No. 87 , Inc.

30 . The Williams es ' positions with the Coral Springs

Fraternal Order of Police Lodge No. 87, Inc. , required them to

be police officers with the City of Coral Springs.

31 . Sergeant Scott Myers, and possibly other members of

the Board, became aware of the possibility of suspending the

payment of benefits to individuals charged with certain crimes

at a Florida Public Pension Trustees Association (FPPTA)

conference in September 2015.

32 . No contract has been entered into between the City

Commission and the Fraternal Order of Police allowing for the

enactment of a statute or ordinance that amends the Plan to

allow the Board to suspend a member ' s benefits after retirement

before an adjudication of guilt of a specified offense under

section 112.3173.

33 . On January 25, 2016, the Board adopted its " Policy

Regarding Payment of Pension Benefits Pending Forfeiture Under

Florida Statute §112.3173 " (Board Policy).

34 . The Board Policy provides that when a member has

commenced receipt of benefits, and evidenc e has been brought to

the Board ' s attention that the member has been charged with what

may be a specified offense, the Board shall vote at the next

regularly scheduled meeting to allow the member to continue to

receive the monthly pension up to an amount e qual to their

employee contributions. Thus, when monthly pension payments

exceed the employee contribution , payments would be suspended

pending the outcome of charges and held in the interim by the

Board.

35 . The Board Policy further provides that while benefit s

are being held by the Board, the balance will accrue interest at

the Plan ' s assumed rate of return.

36 . The Board provided notice to Douglas and Sherry

Williams, both personally and through their attorney of record

in the criminal case s , that the Board would consider the

suspension of their benefits pursuant to the Board Policy at its

February 24, 2016, meeting.

37 . Douglas Williams attended the meeting ; Sherry Williams

did not .

38 . On February 24, 2016, determining that the offenses

with which Douglas and Sherry Williams had been charged may be

specified offenses under section 112.3173, the Board decided to

suspend Douglas and Sherry Williams ' s pension benefits, and the

Board issued each of them an Order Recommending Suspension of

Benefits (Boar d Orders) on March 15, 2016.

3 9. The Board conducted no factual inquiry into the basis

for the charges against Douglas and Sherry Williams.

40 . Each Board Order states that the Board reviewed the

records, including charging documents from the Broward Clerk of

Court ; section 112.3173 ; and the case of Warshaw v. City of

Miami Firefighters ' and Police Officers ' Retirement Trust , 885

So. 2d 892 (Fla. 3 rd D CA 2004). The Board Order s state d that

Doug and Sherry Williams were " charged with . . . felonies which

may be specified offenses under Florida Statutes 112.3173. "

41 . The Information against Douglas Williams charged , in

part , that he committed the second - degree felony of engag ing in

an organized scheme to defraud , and :

[U] tiliz ing his position on the Coral

Springs Fraternal Order of Police Lodge No.

87, Inc. to defraud the Coral Springs

Fraternal Order of Police Lodge No. 87, Inc.

by systematically, and through an ongoing

course of conduct with intent to defraud,

did misappropriate funds to himself and did

unlawfully convert to his use or the uses of

others not entitled thereto property , to

wit: United States Currency in an aggregate

amount in excess of twenty thousand dollars

($20,000.00) but less than fifty thousand

dollars ($50,000 .00 ) or more belonging to

Coral Springs Fraternal Order of Police

Lodge No. 87 .

In addition, the Information conta ined seven related counts of

the third - degree felon y of grand theft .

42 . The Information against Sherry Williams similarly

charged that she committed the first - degree felony of engaging

in an organized scheme to defraud the Coral Springs Fraternal

Order of Police Lodge No. 87 , Inc., of property consisting of

United States Currency in an aggregate amount in excess of

$50,000.00 . Her Information also contained one second - degree

felony of grand theft in excess of $20,000.00 and five count s of

the third - degree felon y of grand theft .

43 . The crimes Douglas and Sherry Williams were charged

with have not been determined by the Board to be s pecified

offense s under section 112.3173.

44 . The Board O rder s for Douglas Williams and Sherry

Williams were served on Petitioners on March 16, 2016 . The

order s p rovided:

The Claimant has thirty (30) days from

receipt of this Administrative Order to

request a full hearing on the suspension of

benefits by sending a letter outlining the

specific reasons for the appeal to Gina

Orlando at the City of Coral Springs,

Pension Office, 9551 West Sample Road, Coral

S prings, FL 33065. The hearing process

followed will be pursuant to Florida

Statutes §120.569 and §120.57(1).

45 . The Williams es timely requested formal hearing s

pursuant to sections 120.569 and 120.57 on April 15, 2016.

46 . The Williams es have not been convicted of the crimes

with which they have been charged.

CONCLUSIONS OF LAW

47 . DOAH has jurisdiction over the parties and subject

matter of this proceeding. § 120.65(6), Fla. Stat.

48 . The parties disagree as to which bears the burden of

proof. The issue here is whether monthly pension benefits

currently being paid to Petitioners under the Plan should be

suspended. The burden of proof as to this contested issue lies

with Respondent , which is arguing for suspension. See Fla.

Dep ' t of Transp. v. J.W.C. Co., Inc. , 396 So. 2d 778, 788

(Fla. 1st DCA 1981)(the party asserting the affirmative of the

issue has the burden of proof). See also Amico v. Div. of Ret.,

Dep ' t of Admin. , 352 So. 2d 556, 557 (Fla. 1st DCA 1977) (once

payment of disability retirement benefits beg ins , burden to

prove lack of entitlement lies with the Division of Retirement ) ;

Balino v. Dep ' t of H RS , 348 So. 2d 349, 350 (Fla. 1st DCA

1977)(where state intends to discontinue, suspend, or reduce

assistance, it bears the burden to prove the basis for

reclassification). Respondent thus has the burden to prove by a

preponderance of the evidence that f inal o rders s uspen ding

b enefits should be issued. § 120.57(1)(j), Fla. Stat.

4 9. Petitioner s are substantially affected by Respondent ' s

intended decision to suspend payment of th eir retirement

benefit s and have standing in this proceeding .

50 . T he petitions filed in these cases timely requested a

formal hearing on the Board Orders . However, i t is clear that

the basic dispute between the parties -- as framed by the Amended

Pre - h earing Stipulation, at hearing , and in the proposed

recommended orders -- revolve s around the validity of the

January 25, 2016, Board Policy , upon which th ose order s were

based. 2 / Petitioners make several arguments.

51 . First , Petitioners argue that the Board Policy allows

suspension without requiring the Board to make a determination

that a specified offense has occurred. Under section

112.3171(2)(e) , " s pecified offense " for purposes of forfeiture

means:

1. The committing, aiding, or abetting of

an embezzlement of public funds;

2. The committing, aiding, or abetting of

any theft by a public officer or employee

from his or her employer;

3. Bribery in connectio n with the

employment of a public officer or employee;

4. Any felony specified in chapter 838,

except ss. 838.15 and 838.16;

5. The committing of an impeachable

offense;

6. The committing of any felony by a public

officer or employee who, willfully and with

intent to defraud the public or the public

agency for which the public officer or

employee acts or in which he or she is

employed of the right to receive the

faithful perf ormance of his or her duty as a

public officer or employee, realizes or

obtains, or attempts to realize or obtain, a

profit, gain, or advantage for himself or

herself or for some other person through the

use or attempted use of the power, rights,

privilege s, duties, or position of his or

her public office or employment position; or

7. The committing on or after October 1,

2008, of any felony defined in s. 800.04

against a victim younger than 16 years of

age, or any felony defined in chapter 794

against a victim younger than 18 years of

age, by a public officer or employee through

the use or attempted use of power, rights,

privileges, duties, or position of his or

her public office or employment position.

52 . Although substantial interests of Petitioners are

being determined , suspension is far less serious than

forfeiture. The Board Policy requires that " evidence be brought

to the Board ' s attention that a member has been charged with

what may be a specified offense . " This is similar to the

requirement in the state retirement statute, section

1 21 .091(5)(k) , Florida Statutes, which requires suspension " if

the resolution of such charges could require the forfeiture of

benefits. "

53 . A full evidentiary proceeding to determine exactly

what occurred is not required in order to suspend benefits prior

to a forfeiture hearing that will consider th at same issue. It

is enough that an information or indictment allege s an offense

which c ould warrant forfeiture upon conviction.

54 . Certainly i ssues will always remain to be litigate d in

the forfeiture proceeding, but a determination that a member has

been charged with what may be a specified offense is sufficient

to support suspension.

55 . Second, Petitioners argue that the Board Policy allow s

suspension to be imposed without opportunity for the member to

present a case in opposition . This argument is rejected.

Certainly , it would have been preferable for the Board Policy to

describe the hearing process, but its failure to do so is not

fatal , and adequate procedures were followed. While the point

of entry to request a section 120.57(1) hearing is offered only

after the Board ' s initial action to suspend, members then have

an opportunity for a full and complete hearing . Final agency

action ta k es place only after the Board receives the Recommended

Order . See McDonald v. Dep ' t of Banking & Fin. , 346 So. 2d 569,

578 n.5 (Fla. 1st DCA 1977) ( explaining that section 120.57(1)

proceedings are designed to formulate agency action, not to

review it).

5 6 . Third , Petitioners argue d at hearing that adoption of

t he Board Policy was improperly motivated by consideration of

the Williams es ' specific situation. However, j udicial in terest

in legislative action is limited to the question of power .

Inquiry " does not extend to the matter of expediency, the

motives of the legislators, or the reasons which were spread

before them to induce the passage of the act. " Izaak Walton

League v. Monroe Cnty . , 448 So. 2d 1170, 1172 (Fla. 3d DCA

1984) ( quoting City of Miami Beach v. Schauer , 104 So. 2d 129

(Fla. 3d DCA 1958) ) . Even if the Trustees did have the

Williams es ' situation in mind at the time they voted to adopt

the Board Policy, this would not invalidate the ir action . An

administrative body ' s exercise of its legislative power is not

interfered with in the absence of " fraud or gross abuse of

discretion , " not alleged here. Hillsborough Cnty. Aviation

Auth. v. Taller & Cooper, Inc. , 245 So. 2d 100, 102 - 03 (Fla. 2d

DCA 1971). See also Hunter v. Carmichael , 133 So. 2d 584, 586

(Fla. 2d DCA 1961)( i n the absence of fraud or corruption, public

officials are presumed to have properly perform ed their duties

in accordance with law ) .

57 . Fourth , Petitioners maintain that the Board Policy

contravenes state law , s pecifically, section 112.3173. It is

beyond doubt that a state statute prevails over a conflicting

municipal ordinance or local rule . City of Casselberry v.

Orange Cnty . Police Benevolent Ass ' n. , 482 So. 2d 336, 340

(Fla. 1986). T he test is " whether one must violate one

provision in order to comply with the other . " In other words,

there is a conflict when the two legislative enactments cannot

co - exist. Sarasota Alliance for Fair Elections, Inc. v.

Browning , 28 So. 3d 880 , 888 (Fla. 2010) .

58 . As Petit ioner s assert , the suspension provisions of

section 1 21.091(5)(k) are not applicable to the Plan and

section 112.317 3 does not include a provision authorizing

suspension.

5 9. Petitioners are also correct that the statement in the

Board Policy that section 112.3173 " does not address " what

procedure is to be employed when a member has been receiving

benefits prior to conviction is not entirely correct. S ection

112.3173 (5)(d) provides :

If any person ' s rights and privileges under

a public retirement system are forfeited

pursuant to this section and that person has

received benefits from the system in excess

of his or her accumulated contributions,

such person shall pay back to the system the

amount of the benefits received in excess of

his or her accumulated contributions. If he

or she fails to pay back such amount, the

official or board responsible for paying

benefits pursuant to the retirement system

or pension plan may bring an action in

circuit cou rt to recover such amount, plus

court costs.

As Petitioners contend, i t is clear that this paragraph refers

to benefits paid to a retiree prior to conviction , and that it

authorizes the official or board administering the retirement

fund to bring an actio n in circuit court to recover benefits

paid in excess of the retiree ' s contributions.

60 . Petitioner ' s further argument -- that this statutory

procedure is exclusive, and that the Board ' s adoption of any

procedure to suspend payment of benefits prior to conviction is

therefore contrary to statute -- is not persuasive, however .

61 . A uthorization to bring an action in circuit court is

not in conflict with suspension of payments. Since circuit

court action is n ot statutorily required, the provisions can co -

exist as alternatives . M ore importantly, if suspension is

imposed after retiree s ha ve already received benefits which

exceed the amount of their contributions, circuit court action

to recover the excess amount paid still remain s an option. No

con flict exists that would require the violation of one

provision to comply with the other.

62 . Petitioners next contend that the Board lacked

authority to adopt the Board Policy , rendering invalid any

subsequent attempts to apply it.

63 . The power of municipalities in Florida is very broad.

A rticle VIII, section 2(b) , Florida Constitution , provides that

" municipalities shall have governmental, corporate and

proprietary powers to enable them to conduct municipal

government, perform muni cipal functions and render municipal

services, and may exercise any power for municipal purposes

except as otherwise provided by law. " The enactment of the

Municipal Home Rule Act, chapter 73 - 129, Laws of Fl orida

(codified in chapter 166) , recognized that the constitution had

granted municipalities " broad exercise of home rule powers . . .

for municipal governmental, corporate, or proprietary purposes

not expressly prohibited. " § 166.021(4), Fla. Stat. S ection

166.041 describes the procedures that must be followed to enact

an ordinance. It also expressly provides that a municipality

does not have the power or authority to lessen or reduce

requirements set forth in general law.

64 . The Board is not a municipal government, however.

A dministrative polici es that regulate or otherwise affect

persons outside the Board itself must be based upon l egislative

power that has been delegat ed to the Board , otherwise they are

void ultra vires ; administrative bodies have no inherent powers.

Dep ' t of Envtl. Reg. v. Puckett Oil Co. , 577 So. 2d 988, 991

(Fla. 1st DCA 1991)(powers of administrative agencies are

measured and limited by the statutes or acts in which such

powers are expressly granted or implicitly conferred).

65 . The Board Policy constitutes legislation. It purports

to establish a generally applicable policy . Bd . of Cnty .

Comm ' rs v. Snyder , 627 So. 2d 469, 47 4 (Fla. 1993) (local

government action is legislative if it formulates a general rule

of policy ) . By its own terms, when evidence is brought to the

Board ' s attention that a member has been charged with what may

be a specified offense, the policy requires the Board to vote to

allow the member to continue to receive monthly pension benefits

only up to an amount equal to their employee contributions.

66 . The same restrictions which apply to the Legislature ' s

delegation of legislative authority also apply in the enactment

of municipal ordinances. Miami Beach v. Fleetwood Hotel, Inc. ,

261 So. 2d 801 (Fla. 1972). See also Askew v. Cross Key

Waterways , 37 2 So. 2d 913, 925 (Fla. 1978)(fundamental and

primary policy decisions must be made by the Legislature);

Blitch v. City of Ocala , 195 So. 406, 407 (Fla. 1940)(en banc)

(ordinances must not constitute a delegation of legislative

authority). 3 /

67 . There is no allegation here that a n ordinance of the

City of Coral Springs invalid ly delegate s legislative authority

to the Board . Petitioners conten d rather that suspen sion of the

payment of benefits in anticipation of forfeiture is not even

mentioned in the c ity ordinance , and that nothing in the Plan

authorizes the Board to create such a policy.

68 . Respondent argue s that the Board Policy is valid,

noting that it does not amend the terms of the Plan and does not

conflict with the Plan or any other applicable l aw. But this is

not the correct test. The question is not whether the Board

Policy constitutes an amendment of the Plan, which all parties

agree cannot be done. Unlike a municipality, which has plenary,

residual authority, the Board does not have authority to adopt

policy simply because it does not conflict with the Plan or

other applicable law. Instead , the Board has only that

l egislative authority that has been affirmatively granted to it .

The explicit powers of the Board must therefore be carefully

examined. See , e.g. , Fla. Virtual Sch. v. K12, Inc. , 148 So. 3d

97, 99 (Fla. 2014).

6 9. The Board is granted legislative power by sub section

13 - 14 (f) of the Code of Ordinances of the City of Coral Springs,

w hich provides:

Subject to the limitations of this chapter,

the board shall from time to time establish

uniform rules and regulations for the

administration of the plan and fund created

by this chapter and for th e transaction of

its business.

70 . Respondent assert s that p ursuant to its rulemaking

grant to administer the Plan , the Board Policy simply carries

out responsibilities assigned to the Board . S ubsection 13 - 14(h)

of the Plan provides in relevant part :

The duties an d responsibilities of the board

shall include, but not necessarily be

limited to, the following:

(1) To construe the provisions of the plan

and determine all questions arising

thereunder.

(2) To determine all questions relating to

eligibil ity and participation.

(3) To determine or have determined and

certified the amount of all retirement

allowances or other benefits hereunder.

(4) To receive and process all applications

for participation and benefits and, where

necessary, conduct heari ngs thereon.

(5) To authorize all payments whats o ever

from the fund, and to notify the disbursing

agent, in writing, or approve benefit

payments and other expenditures arising

through operation of the plan and fund.

71 . However, Respondent ha s identified n o provision of the

Plan that the Board Policy is construing, administering, or

applying. The Board Policy does not pertain to eligibility or

participation in the Plan, the determination of the amount of

benefits, the processing of application s, or the authorization

of payments and expenditures. As seen earlier, t hese decisions

and actions t ook place some time ago with respect to

Petitioners ' pensions . The forfeiture provisions of section

112.3173 operate independent ly and do not involve any

retrospective determination that Petitioners ' pensions were

erroneously, fraudulently, or illegally granted. The creat ion

of a new policy relating to suspension of benefits pending a

determination of forfeiture under section 112.3173 does not fall

within the administration of any of these Plan provisions.

72 . Respondent ' s main argument, however, is not that these

enumerated duties of the Board authorize it to adopt a

suspension policy, but instead that fiduciary standards

authorize an d require it to do so. S ubsection 13 - 14(i) of the

Plan provid es :

Board members, in the performance of their

duties, must conform and act pursuant to the

documents and instruments establishing and

governing the plan. Members shall carry out

their duties with the care, skill, prudence

and diligence under the circumstances then

prevailing which a prudent man acting in a

like capacity and familiar with such matters

would use in the conduct of an enterprise of

like character and like aims. M embers are

subject to the fiduciary standards in F. S .

§§ 1 12.656, 1 12.661, and 518.11, and the C ode

of Ethics in F.S. §§112.311 - 112.3187.

73 . S ection 112.656 (1) provides:

A fiduciary shall discharge his or her

duties with respect to a plan solely in the

interest of the participants and

beneficiaries for the exclusive purpose of

providing benefits to participants and their

beneficiaries and defraying reasonable

expenses of administering the plan.

74 . Respondent convincingly a ssert s that if Petitioners

are convicted of specified offense s , the Board will have to

collect at least $ 889,516 . 00 from the m, and there is no

guarantee that the Board will ever be able to recoup the full

amount owed.

75. Respondent goes on to argue , less persuasively, that

t o meet fiduciary standards , Respondent is required to suspend

the payment of benefits .

7 6 . Respondent cites to cases from the State of New

Jersey : In the Matter of Frank Watts , 2010 WL 4721193 (N. J.

Super. Ct. App. Div. 2010) ; and Mount vustees of the Public

Employees ' Retirement System , 335 A.2d 559, 562 (N.J. Super Ct.

1975). In these cases, it was found that , even in the absence

of a statutory provision authorizing suspension ( and in Mount ,

even the absence of an administrative rule ) , the trustees could

suspend payment of benefits . The court in Mount noted that the

criminal charges that had been filed were inconsiste n t with

honorable service, an implicit requirement for receipt of a

pension in New Jersey . The co urt stated, " The board of trustees

are [sic] fiduciaries and therefore have a duty to protect the

fund and the interests of all beneficiaries thereof. "

7 7 . In Watts , the court went on to state , quoting other

New Jersey cases :

Generally speaking, we will " intervene only

in those rare circumstances in which an

agency action is clearly inconsistent with

its statutory mission or with other state

policy. " Only if the agency ' s action was

arbitrary, capricio u s, or unreasonable

should it be disturbed ( c itations omitted).

7 8 . This broad concept of the extent of power that may be

exercised by an administrat ive agency stands in stark contrast

with the far more limited power of a dministrat ive agencies under

Florida law, as discussed above.

7 9 . It is clear that fiduciary standards compel the Board

to exercise all of the powers granted to it by statute and

municipal ordinance with the highest degree of care and loyalty

toward P lan retirees and to always use these powers in their

best interest. However, it does not logically follow, as

Respondent seems to argue here , that if a suspension policy is

in the retirees ' best interest, that the Board therefore has

authority to create it. T he Board has the authority to act on

be half of the F und only through the exercise of the duties

granted to it .

80 . In short, the provisions requiring the Board to act in

accord with f iduciary standards do not in themselves create any

new power s, but do dictate how powers otherwise already exist e nt

in the Board must be exercised. Th is is plain ly stated in the

quoted language above of both s ubsection 13 - 14(i) of the Plan ,

" shall carry out their duties , " and section 112.656, " discharge

his or her duties . " The New Jersey cases are not persuasive on

this point. 4/ Under Florida law, i t cannot be concluded that the

Board has powers beyond those granted to it by provisions of

statute and the Plan .

8 1 . Examination of the Code of Ordinances of the City of

Coral Springs shows that the city h as neither adopted a

suspension policy itself, n or properly delegated the authority

to do so to the Board. Petitioners ' argument that the Board

Policy is invalid is accepted. Respondent has not demonstrated

that it has authority to suspend Petitioners ' benefits.

8 2 . Petitioners f inally contend that even if the Board did

have authority to adopt the Board Policy , it s failure to

preserve vested rights violates due process and impair s exist ing

contracts . They assert that Douglas Williams ' s contract cannot

be changed after 2004 , and that Sherr y Williams ' s contract

cannot be changed after 2012. See , e.g. , Busbee v. Div. of

Ret. , 685 So. 2d 914, 916 (Fla. 1st DCA 1996)(analyzing state

law forfeiture provisions using a contract analysis). These

arguments are not considered. Should the City of Coral Springs

choose to amend the Plan to include a provision authorizing

suspension, th e se constitutional claims can be considered in due

course by an appropriate court. 5 /

8 3 . Respondent failed to prove by a preponderance of the

evidence that a final order suspending Petitioner s ' retirement

benefits can be issued .

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Board of Trustees for the City

of Coral Springs Police Officer s ' Pension Fund not issue final

orders suspending payment of pension benefits to Douglas

Williams and Sherry Williams in the absence of provisions in the

Coral Springs Pensi on Plan provid ing for such action .

DONE AND ENTERED this 1 8 th day of November , 2016 , in

Tallahassee, Leon County, Florida.

S

F. SCOTT BOYD

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 1 8 th day of November , 2016 .

ENDNOTES

1/ Citations to Florida Statutes and to the Code of Ordinances

of the City of Coral Springs, Florida, are to the versions now

in effect, except as otherwise indicated.

2/ Even in civil actions, an issue is tried by consent if there

is no objection to the introduction of evidence. See Fla. R.

Civ. P. 1.190(b). Administrative proceedings are less formal

and the pleading requirements less strict. It should also be

noted that s ection 120.57(1)(e)1. clearly provides that a

separate challenge to a rule or una dopted rule underlying agency

action need not be filed. Here, the proposed order to suspend

the Williams es ' retirement benefits determines their substantial

interests and may not be based on the Board Policy if it is an

invalid rule.

3/ Many decisions e xamine the validity of delegations of

authority by a city to administrative agencies that it has

created, often involving zoning boards. The cases apply the

same restrictions which apply to the L egislature ' s delegation of

legislative authority to state agencies. In Clarke v. Morgan ,

327 So. 2d 769 (Fla. 1976), the supreme court discussed a number

of cases and emphasized that a critical factor is the extent to

which the delegation of authority includes meani ngful standards

to guide the agencies in their administration of the various

city zoning ordinances. The fundamental legislative power to

zone may not itself be delegated. State v. Roberts , 419 So. 2d

1164, 1165 (Fla. 2d DCA 1982).

4/ Similarly of no s upport to the Board is the fact that Florida

Administrative Code Rule 60S - 4.021(4)(a), applicable only to the

Florida Retirement System Pension Plan administered by the

Division of Retirement, provides that the administrator may

suspend the payment of bene fits pending resolution of criminal

charges by the circuit court. While that administrative rule

may, as argued by Respondent, demonstrate the prudence of the

Board Policy, it offers no example of administrative authority

untethered to statute. The rule implements an explicit

legislative authorization contained in section 121.091(5)(k).

Should that legislative authorization be repealed, the

administrative rule would lose its force. Rules adopted by the

Board similarly must implement legislative authoriz ation by the

City of Coral Springs or Florida Legislature. As discussed, the

Plan contains no such provision.

5/ Petitioners assert that their claims that the Board Policy

violates the due process and impairment of contract clauses may

be addressed by a n administrative tribunal, citing Miami

Ass ociatio n of Firefighters Local 587 v. City of Miami , 87 So.

3d 93 (Fla. 3d DCA 2012). They note that invalidation of a

statute is not involved and that when considering agency action,

A dministrative L aw J udges ma y also address constitutional

questions when exhaustion requires their consideration of

statutory ones. The invalidation of an agency rule on

constitutional grounds must be distinguished, however. Courts

have long permitted consideration of constitutiona l issues in

proposed rule challenges, in which the rule has not yet been

filed for adoption. Dep ' t of Envtl. Reg. v. Leon Cnty . , 344 So.

2d 297 (Fla. 1st DCA 1977). However, they have not permitted

consideration of constitutional issues in existing rule

challenges. Dep ' t of Admin., Div. of Pers . v. Dep ' t of Admin.,

Div. of Admin. Hearings & Harvey , 326 So. 2d 187, 189 (Fla. 1st

DCA 1976) . Even if the constitutional questions could be

considered here, it would not be appropriate to do so, since it

is not necessary. Constitutional challenges to legislative

action by a local government body are considered through suit in

circuit court. Cit y of St. Pete Beach v. Sowa , 4 So. 3d 1245,

1247 (Fla. 2d DCA 2009).

COPIES FURNISHED:

Bonni Spatara Jensen, Esquire

Kalusner, Kaufman, Jensen & Levinson

7080 Northwest 4th Street

Plantation, Florida 33317

(eServed)

Michael Anthony Gillman, Esquire

Kenneth R. Harrison, Esquire

Robert A. Sugarman, Esquire

Sugarman & Susskind, P.A.

100 Miracle Mile, Suite 300

Coral Gables, Florida 33134

(eServed)

Nicholas E. Christin, Esquire

Brandon J. Hechtman, Esquire

Wicker, Smith, O ' Hara, McCoy & Ford, P.A.

2800 Ponce De Leon Boulevard, Suite 800

Coral Gables, Florida 33134

(eServed)

Gina Orlando, Administrator

City of Coral Springs Police Officers'

Pension Fund

9551 West Sample Road

Coral Springs, Florida 33065

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 with the agency that

will issue the Final Order in this case.