17-003730 In Re: Petition To Merge Mediterra North Community Development District And Mediterra South Community Development District vs. * Status: Closed Recommended Order on Thursday, September 21, 2017.

Summary: Evidence supported request to merge two community development districts in Lee and Collier counties.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

IN RE: PETITION TO MERGE

MEDITERRA NORTH COMMUNITY

DEVELOPMENT DISTRICT AND Case No. 1 7 - 3730

MEDITERRA SOUTH COMMUNITY

DEVELOPMENT DISTRICT

/

REPORT TO TH E FLORIDA

LAND AND WATER ADJUD ICATORY COMMISSION

D. R. Alexander, Administrative Law Judge of the Division

of Administrative Hearings (DOAH), conducted a local public

hearing in this case on September 5 , 201 7 , at T he Club at

Mediterra in Naples , Florida .

APPEARANCES

For Petitioner: J onathan T. Johnson , Esquire

Alyssa C. Willson, Esquire

Hopping Green & Sams, P.A.

Post Office Box 6526

Tallahassee, Florida 32314 - 6526

STATEMENT OF THE ISSUE

The issue presented in this proceeding is whether the

Petition to Merge Mediterra North Community Dev elopment District

and Mediterra South Community Development District (Petition)

meets the applicable criteria in chapter 190, Florida Statutes ,

and Florida Administrative Code Chapter 42 - 1. The purpose of

the local public hearing was to gather information in

anticipation of quasi - legislative rulemaking by the Florida Land

and Water Adjudicatory Commission (Commission).

PRELIMINARY STATEMENT

On May 1 2 , 2017, the Mediterra North Community Development

District and Mediterra South Community Development District

( Petitioner or Districts ) filed their Petition and exhibits with

the Commission requesting that the Commission adopt a rule

merging the two Dist ricts, with the surviving entity known as

Mediterra Community Development District (Merged District) .

Prior to that time, the Petition and exhibits were delivered to

the City of Bonita Springs (City) , Lee County, in which the

North District is located, a n d Collier County (County) , in which

the South District is located . The Department of Economic

Opportunity (DEO) was also requested to review the Petition for

its compliance with DEO programs and responsibilities. Both the

County and the City elected not to hold an optional public

hearing on the Petition. On June 28, 2017, the Secretary of the

Commission certified that the Petition contained all required

elements and referred it to DOAH to conduct a local public

hearing, as required by section 190.005 (1)( d), Florida Statutes .

Notice of the public hearing was published in accordance

with section 190.005(1)(d ) . At the local public hearing

conducted on September 5, 2017 , t he District presented the

testimony , live and written, of Chesley E. Adams, Jr., Distri ct

Manager, Secretary, and Financial Advisor to the Districts and

accepted as an expert; David K. Robson, a registered

professional engineer and accepted as an expert; and Laura

DeJohn, AICP, a professional planner and accepted as an expert .

Petitioner ' s Exhibits A through K were accepted in evidence.

There were no members of the public that attended the hearing ,

and except for a letter from the DEO, no written comments were

submitted after the local hearing. See Fla. Admin. Code R. 42 -

1.012(3).

A one - volume T ranscript of the hearing has been prepared.

Petitioner filed a p roposed r eport of findings and conclusions ,

which has been considered in the preparation of this Report .

Overview of the District

1. Petitioner is seeking the adoption of a rule t o m erge

Mediterra North with Mediterra South with Mediterra South as the

surviving entity under the name Mediterra Community Development

District .

2. As required by section 190.046(3), prior to filing the

Petition, the Districts adopted a merger agreement wh ich, among

other things, makes provision for the filing of the Petition,

for the intent that Mediterra South remain as the surviving

district under the name Mediterra Community Development

District, for the proper allocation of the indebtedness so

assumed, and for the manner in which the debt shall be retired.

3. The sole purpose of this proceeding was to consider the

merger of the District s as proposed by Petitioner. Information

relating to the managing and financing of the service - delivery

function of t he M erged District was also considered. Because

sections 190.046 and 190.005 provide the statutory criteria to

be considered, this Report summarizes the evidence relating to

each relevant section of the statutes.

SUMMARY OF THE RECORD

A. Whether all stat ements contained within the Petition

have been found to be true and correct.

4. Exhibit A consists of the Petition and its exhibits as

filed with the Commission. Mr. Adams testified that he is

familiar with the Petition , and he generally described the

exhibits attached to the Petition .

5. He also testified that he prepared, or had others

prepare under his supervision, Exhibit 8 to Exhibit A, the

Statement of Estimated Regulatory Costs (SERC).

6. Finally, Mr. Adams testified that the contents of the

Pe tition and the exhibits attached thereto were true and correct

to the best of his knowledge.

7 . Mr. Robson testified that he is familiar with the

Petition and that he prepared, or had others prepare under his

supervision, certain of the Petition exhibits. Mr. Robson

generally described the P etition exhibits that he or the prior

District Engineer prepared, including Exhibits 3, 4, 5, 6, and 7

to Exhibit A. Finally, he testified that these exhibits were

true and correct to the best of his knowledge.

8. Pe titioner has demonstrated that the Petition and

exhibits are true and correct.

B. Whether the merger of the District s is inconsistent

with any applicable element or portion of the State

Comprehensive Plan or of the effective local government

comprehensive plan.

9 . M s. DeJohn reviewed the proposed District s' merger in

light of the requirements of the State Comprehensive Plan found

in chapter 187 , which provides long - range policy guidance for

the orderly, social, economic, and physical growth of the State

by way of 25 subjects, goals, and policies . Ms. DeJohn

identified Subjects 17 and 20 as particularly relevant.

10. Subject 17 of the State Comprehensive Plan, Public

Facilities, calls for the timely, orderly, and efficient

financing of new facilities. M s. DeJohn testified that a M erged

District will provide the needed infrastructure in a more

orderly and efficient manner.

1 1 . Subject 20 of the State Comprehensive Plan,

Governmental Efficiency, advocates the elimination of needless

duplication of governm ental activities through Policy Number 5.

Ms. DeJohn testified that a merger in this instance would

eliminate the inherent duplication of having two entities serve

one project.

1 2 . Ms. DeJohn testified that the M erged District is not

inconsistent with any applicable provisions of the State

Comprehensive Plan .

1 3 . Ms. DeJohn also reviewed the M erged District in light

of the requirements of the County Comprehensive Plan and the

City Comprehensive Plan.

14. Chapter 190 prohibits a community development d istrict

from acting in any manner inconsistent with the local

government's comprehensive plan. Ms. DeJohn testified that the

M erged District would not be inconsistent with any applicable

element or portion of the County Comprehensive Plan or the City

Comp rehensive Plan and will continue to serve as an alternate

provider of these infrastructure systems and services to meet

the needs of the lands within its boundaries in an orderly way.

15. Petitioner has demonstrated that the M erged District

will not be in consistent with an y applicable provision of the

State Comprehensive Plan , County Comprehensive Plan , or City

Comprehensive Plan .

C. Whether the area of land within the Merged District is

of sufficient size, is sufficiently compact, and is sufficiently

con tiguous to be developable as one functional interrelated

community.

1 6 . The merged District will include approximately

1,67 4.87 acres, located entirely within the County and the City.

17. Mr. Adams testified that the M erged District is

sufficiently size d, compact , and contiguous to allow for the

successful delivery of improvements, services, and facilities as

one functional ly interrelated community.

18 . Mr. Robson testified that the area of land within the

District s was intended to be a functionally int errelated

community and was operated and developed as one large, multi - use

project. Currently, the Districts function reasonably well

because of a series of interlocal agreements put in place to

ensure there would not be duplicative construction or

mainte nance activities or any disconnection between projects.

In Mr. Robson's opinion, the area to be served is sufficiently

contiguous and compact to be served by one district and given

the state of development, it is preferable for Mediterra South

to be the s urviving d istrict. As a result, the M erged District

remains of sufficient size, compact ness , and contigu ity to

function as one interrelated community.

19 . Petitioner has demonstrated that the Merged District

will be of sufficient size, sufficiently compa ct, and

sufficiently contiguous to be developed as a single functionally

interrelated community.

D. Whether the Merged District remains the best

alternative available for delivering community development

services and facilities to the area that will be se rved by the

Merged District.

2 0 . Mr. Adams testified that, based on his experience in

district management and operations, the Merged District is the

best alternative available to provide community development

services and facilities. The Districts will be able to

eliminate numerous duplicative administration costs and the

Merged District will provide the highest level of services and

facilities in the most cost - effective, efficient, and convenient

manner to this project. Mr. Adams also testified based o n his

experience as a financial advisor that the proposed Merged

District is the best available alternative for providing

economically efficient, focused, professional operations and

management. The Merged District should be able to maintain

certain infra structure and community facilities in a more

efficient way with only one board making decisions. This

increased efficiency should result in a lower operations and

maintenance assessment than what has been the case with two

independent districts.

2 1 . Mr. Robson testified that the Merged District will

reduce duplication and potential inconsistency or disconnect in

the maintenance of infrastructure. Mr. Robson further testified

that given the nature of the development, the infrastructure

provided, and the c ontinuing maintenance obligations, the best

alternative is to merge the Districts and have Mediterra South

to be the surviving district.

2 2 . Petitioner has demonstrated that the Merged District

is the best alternative available for delivering community

de velopment services and facilities to the area that will be

served by the Merged District.

E. Whether the community development services and

facilities of the Merged District will be incompatible with the

capacity and uses of existing local and regional co mmunity

development services and facilities.

2 3 . Mr. Adams testified that , based on his experience in

district management and operations, the proposed Merged District

will not be incompatible with the uses and existing local and

regional facilities and s ervices. The facilities and services

within the 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 being

provided. The proposed merger will not negatively impact the

Merged District's ability to successfully manage the Districts'

existing services and facilities.

2 4 . Mr. Robson testified that , based on his experience and

information provided by the County and City, the s ervices and

facil ities provided by the 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 infrastructure which is

fully consiste nt with the existing capacity and facilities in

the area. The proposed merger will not change what is being

provided and therefore cannot be inconsistent with existing

facilities.

25 . Petitioner has demonstrated that the community

development services an d facilities of the Merged District will

not be incompatible with the capacity and uses of existing local

and regional community development services and facilities.

F. Whether the area that will be served by the Merged

District is amenable to separate sp ecial - dist rict government.

26 . Mr. Adams testified that the area to be included

within the proposed Merged District will enhance its ability to

function a s a separate special - district government . Merging the

Districts will streamline decision - making and increase

efficiency in levying assessments for operations and

maintenance. Mr. Adams further testified that the Merged

District will serve as a more efficient mechanism to oversee the

maintenance of the capital improvements and that from a

financial pers pective, having Mediterra South as the surviving

entity will be the least confusing to the financial markets and

thus more easily understood.

27 . Mr. Robson testified that , based on his experience,

the area being included within the proposed Merged Distri ct is

amenable to being served by a separate special - district

government. The area is presently being served by the Districts

separate from the local general purpose governments. The Merged

District will allow the long - term maintenance of infrastructure

to be provided by a single entity focused on the entire

community.

28 . Petitioner has demonstrated that the area that will be

served by the Merged District is amenable to separate special -

district government.

G. Other requirements imposed by statute or r ule.

29 . Chapter 190 and rule chapter 42 - 1 impose specific

requirements regarding the P etition and other information to be

submitted to the Commission.

Elements of the Petition

3 0 . The Commission has certified that the Petition meets

all of the requireme nts of section 190.005.

Statement of Estimated Regulatory Costs (SERC)

3 1 . Section 190.005(1) (a)8 . requires the P etition to

include a SERC, which meets the requirements of section 120.541.

The Petition contains a SERC attached as Exhibit 8 to Exhibit A .

3 2 . Mr. Adams explained the purpose of the SERC, the

economic analysis presented therein, and the data and

methodology used in preparing the SERC.

3 3 . The SERC contains an estimate of the costs and

benefits to all persons directly affected by the propose d rule

to merge the boundaries of the District s -- the State and its

citizens, the County and its citizens, the City and its

citizens, and property owners within the existing District s .

3 4 . Beyond administrative costs related to rule adoption ,

the State a nd its citizens will only incur modest costs merging

the Districts as proposed. Specifically, State staff will

process, analyze, and conduct a public hearing on the Petition

to merge the Districts . Th e se activities will utilize the time

of the staff and State officials. However, these costs to the

State are likely to be minimal for a number of reasons .

35 . As with the current District s , the ongoing costs to

various State entities related to the Merged District relate

strictly to the receipt and processi ng of various reports that

the Merged District is required to file annually with the State

and various entities. However, the costs to the State agencies

that will receive and process the Merged District ' s reports will

be minimal and decline a bit as the State will have to monitor

one instead of two districts.

36. It is not anticipated that the County will incur costs

in reviewing the Petition, as the District remitted a $15,000.00

filing fee to the County to offset any such costs.

Additionally, the Coun ty will not be required to hold any public

hearings on the matter, and in fact , declined to hold a public

hearing. As with existing Mediterra South, the County will not

incur any quantifiable on g oing costs resulting from the ongoing

administration of the Merged District.

37 . It is not anticipated that the City will incur costs

in reviewing the Petition, as the District remitted a $15,000.00

filing fee to the City to offset any such costs. Additionally,

the City will not be required to hold any public hea rings on the

matter, and in fact declined to hold a public hearing. As with

existing Mediterra North , the City will not incur any

quantifiable ongoing costs resulting from the ongoing

administration of the Merged District.

38 . The costs of petitioning fo r the merger of the

Districts will be borne entirely by the landowners within the

Districts. Addi ti ona l ly, the Merged District will be an

independent unit of local government and all administrative and

operating costs incurred by the Merged District relat ing to the

maintenance of infrastructure will be borne entirely by the

Merged District and its landowners.

39 . Petitioner has demonstrated that the SERC meets all

requirements of section 120.541.

Other Requirements

4 0 . Petitioner has complied with the pr ovisions of

section 190.005(1)(b) in that the County and City were provided

with copies of the Petition and w ere paid the requisite filing

fee s prior to Petitioner filing the Petition with the

Commission.

4 1 . Section 190.005(1)(d) requires Petitioner to publish

notice of the local public hearing in a newspaper of general

circulation in the c ounty where the district is located for four

consecutive weeks prior to the hearing. The notice was

published in a newspaper of general paid circulation in Lee

Count y ( Fort Myers News - Press ) on August 9 , 1 5 , 22 , and 29 ,

201 7, and in Collier County ( Naples Daily News ) on August 8, 15,

22, and 29, 2017.

Other Information

4 2 . Mr. Adams testified that there are no outstanding

bonds for Mediterra North and that there wi ll be no adverse

impact on the outstanding bonds of Mediterra South which have an

outstanding par value in the amount of $7,235,000.00 in Capital

Improvement Revenue Refunding Bonds, Series 2012, and

$3,360,000.00 in Capital Improvement Revenue Refunding B onds,

Series 2013.

43. Mr. Adams also testified that neither District has

ever experienced a delay with respect to meeting its debt

service obligations under the Indenture . T herefore, the

Districts have never experienced an event of default.

44. Mr. Ada ms further testified that the bonds will

continue to be secured by the assessments on the lands within

each District. Mediterra South, as the surviving district, will

certify for collection and enforce the collection, as necessary,

of the assessments on t he land with in Lee County in the same way

it currently does for its bonds secured by assessments on the

land within Collier County. The security for the bonds does not

change and thus there will be no adverse impact.

Public Comment During the He aring

45. No members of the public attended the hearing or

provided testimony at the hearing.

CONCLUSIONS

46 . This proceeding is governed by chapters 120 and 190

and rule chapter 42 - 1.

4 7 . The proceeding was properly noticed pursuant to

section 190.005 by publication of an advertisement in two

news paper s of general paid circulation in Collier and Lee County

of general interest and readership , once each week for the four

consecutive weeks immediately prior to the hearing.

48 . Petitioner has met the requi rements of

section 190.005 (1)(a) regarding the submission of the Petition

and satisfaction of the filing fee requirements.

49 . Petitioner bears the burden of establishing that the

Petition meets the relevant statutory criteria set forth in

sectio n 190.005(1)(e).

5 0 . All portions of the Petition and other submittals have

been completed and filed as required by law.

5 1 . All statements contained within the Petition are true

and correct.

5 2 . The merger of the Districts is not inconsistent with

any applicable element or portion of the State Comprehensive

Plan or the effective County or City Comprehensive Plan s .

5 3 . The area of land within the Merged District remains of

sufficient size, is sufficiently compact, and is sufficiently

contiguous to be de velopable as one functional interrelated

community.

5 4 . The Merged District remains the best alternative

available for delivering community development services and

facilities to the area that will be served by the Merged

District.

5 5 . The community deve lopment services and facilities of

the Merged District will not be incompatible with the capacity

and uses of existing local and regional community development

services and facilities.

5 6 . The area to be served by the Merged District remains

amenable to s eparate special - district government.

5 7 . B ased on the record evidence, the Petition satisfies

all of the statutory requirements and, therefore, there is no

reason not to grant Petitioner ' s request for merger of the two

Districts and to formally adopt a ru le to merge the Districts'

boundaries, as requested by Petitioner .

DONE AND ENTERED this 21st day of September, 2 01 7 , in

T allahassee, Leon County, Florida.

S

D. R. ALEXANDER

Administrative Law Judge

Division of Administra tive 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 21st day of September, 2017.

COP IES FURNISHED :

Cynthia Kelly , Secretary

Florida Land and Water

Adjudicatory Commission

Room 1801, The Capitol

Tallahassee, Florida 32399 - 0001

John P. "Jack" Heekin , General Counsel

Office of the Governor

Room 209, The Capitol

Tallahassee, Florida 323 99 - 0 001

(eServed)

Peter L. Penrod , General Counsel

Department of Economic Opportunity

The Caldwell Building, MSC 110

107 East Madison Street

Tallahassee, Florida 32399 - 4128

(eServed)

Barbara R. Leighty, Clerk

Transportation and Economic

Development Po licy Unit

Room 1801, The Capitol

Tallahassee, Florida 32399 - 0001

(eServed)

Jonathon T. Johnson , Esquire

Hopping Green & Sams, P.A.

Post Office Box 6526

Tallahassee, Florida 32314 - 6526

(eServed)