Opinion
No. 86-2462.
February 23, 1988.
Legal Services of Greater Miami and John M. Little, for appellant.
Diana M. Parker, Tallahassee, for appellee.
Before HUBBART, NESBITT and FERGUSON, JJ.
This is an appeal from a final agency order of the Florida Department of Community Affairs [the Department] which denied an application for a funding grant under the Florida Community Development Corporation Support and Assistance Program. The applicant Martin Luther King Economic Development Corporation [MLK], whose application was denied below, appeals this order. We find no merit in MLK's points on appeal and affirm.
At the outset, MLK attacks certain aspects of the Department's rules for evaluating grant applications under the above-stated community assistance program on the ground that the rules are allegedly inconsistent with the enabling legislation. It contends that the subject rules do not require the department secretary to "consider" the relative degree of distress of the target area served by the community development corporation, as provided by Section 290.036(5), Florida Statutes (1985). We cannot agree because Rule 9B-14.0081 of the Florida Administrative Code specifically provides that all grant applicants are to be ranked according to a formula indicating the relative degree of distress of the target area served by the grant applicant. In order to even be eligible for a grant, an applicant must satisfy a certain minimum threshold distress score — which must be set so that the number of eligible applicants is no more than twice the number of grants available. In a crowded field of applicants, this provision may eliminate altogether the least distressed applicants; in a small field of applicants, as here, this provision may not eliminate any applicant. In any event, however, the rule requires the department secretary to "consider" the relative degree of distress of the target area served by the grant applicant and is in no way inconsistent with Section 290.036(5), Florida Statutes (1985).
The balance of MLK's points on appeal attack certain decisions made by the Department in scoring MLK's grant application. The Department awarded sixteen grants pursuant to a competitive grant application process based on a complicated scoring system. MLK was awarded seventy-nine points out of a possible 200 points and was ranked twenty-second out of thirty applicants; as scored by the Department, MLK was thirty-three points behind the sixteenth and lowest successful grant applicant. MLK claims, in essence, that the Department made three erroneous scoring decisions which deprived MLK of certain scoring points — at least thirty-four — so as to defeat MLK's grant application.
First, MLK urges that the Department applied an improper legal standard in evaluating the technical assistance indicated in MLK's application. The Department gave MLK ten points for its available technical assistance, rather than twenty points as requested, because the subject technical assistance was not directly related to the development of an income-generating venture, as detailed in the grant application guide available to grant applicants. We see no error in the Department's use of this guide criteria, as the guide properly explains and supplements the Department's rules for grant applications and, in essence, is incorporated by such rules.
Second, MLK urges that the Department erroneously awarded only nineteen points, rather than the fifty points to which it was allegedly entitled under the Department's rules, for leveraged administrative funding. The Department gave MLK credit for $105,505 for such leveraged administrative funding; MLK claims it was entitled to a $301,284 credit for such funding. We have reviewed the complicated documentation for such leveraged funding as submitted by MLK (R. 212-242), and are unable to say that the Department abused its discretion in determining that only $105,505 of leveraged funding was established by these documents. Indeed, much of the documentation does not match MLK's claims of committed funds, as the Department properly determined below.
Third, MLK urges that the Department's refusal to give any scoring points for its Capital Bank Building was erroneous; MLK urges, in essence, that it was entitled to fifty points for this building because the building had a value of $200,000. We cannot agree for two reasons. (1) MLK's attached documentation falls woefully short of establishing that the building had a value of $200,000. MLK merely attached a deed to the property showing a $1.00 nominal consideration for a conveyance of same (R. 267), an undated lease of the property for $18,000 a year rent (R. 268-69), and a 2 1/2-year-old Miami Times newspaper article stating that Capital Bank had conveyed the property "with an estimated market value of over $200,000" to MLK, and that the building "was approved as a corporate contribution by the Florida Department of Community Affairs. . . ." (R. 270). None of the above can be considered adequate proof of the property's market value, much less that the property had a market value of $200,000 at the time of the application. The only item which even speaks to the market-value issue is the above 2 1/2-year-old newspaper article, and, obviously, a newspaper article cannot constitute competent proof of the value of real estate. See Southern Bell Tel. Tel. Co. v. County of Dade, 275 So.2d 4, 8 (Fla. 1973); City of Tampa v. Colgan, 121 Fla. 218, 163 So. 577 (1935); Dade County v. Miami Herald Publishing Co., 285 So.2d 671 (Fla. 3d DCA 1973), cert. denied, 293 So.2d 713 (Fla. 1974). (2) Even if the $200,000 market value for this property be deemed established by the above documentation, MLK would only have been entitled to twenty-five additional scoring points, not fifty points as claimed, because, according to the Department's rules, one point per $5,000 is awarded for the first $50,000 of committed funds [ten points] and one point per $10,000 is awarded for the next $150,000 of committed funds [fifteen points]. (R. 18). This twenty-five point increase would have been insufficient, in any event, to have qualified MLK for a grant in this case — as it was thirty-three points behind the sixteenth and lowest successful grant applicant in this case.
For the above-stated reasons, the final agency order under review is, in all respects,
Affirmed.
HUBBART and NESBITT, JJ., concur.
I agree with the appellant that it was denied a grant because of administrative arbitrariness. A reversal on just two of the three issues discussed in this dissent would change the outcome of the case.
First, the appellant claims that the Department of Community Affairs has promulgated and applied an administrative rule for ranking entitlement to a government grant which is inconsistent with and defeats the purpose of the enabling statute. Second, it is argued that a ruling by the hearing officer, that a former bank building owned by the appellants has no demonstrated value greater than the one-dollar consideration reflected on the warranty deed, is erroneous. Third, the finding that the corporation was not engaged in a job producing activity ignores the substantial competent evidence.
Section 290.036, Florida Statutes (1985), the enabling statute, establishes the criteria for competitive grading of proposals. Subsection (5) provides: "in evaluating proposals pursuant to this section, the secretary shall consider: (a) the relative degree of distress of the target area served by the community development corporation." (Emphasis added.)
The Department's scoring criteria for grants, codified as section 9B-14.009, Florida Administrative Code Annotated (1986), fails to consider the "relative degree of distress of the target area." Instead the matter of area distress is considered only for the purpose of threshold eligibility pursuant to section 9B-14.0081. Therefore, under the Department's rules, community development corporations serving only slightly distressed areas are entitled to the same number of points as a community development corporation serving a severely distressed area so long as the former are not excluded by sheer number of applicants. Clearly the rule is not consistent with the plain statutory language that when awarding funds to eligible applicants the secretary must consider the relative degree of distress of the area to be served. The appellant argues that in this case it has been particularly harmed by the Departments' failure to adhere to the statute because the appellant serves the largest and most distressed community in the area.
It is elementary in administrative law that a rule promulgated in furtherance of a statute must be consistent with the statute, DeThorne v. Beck, 280 So.2d 448 (Fla. 4th DCA 1973), and that any rule which fails the test for consistency is ineffective. Grove Isle, Ltd. v. Department of Environmental Regulation, 454 So.2d 571 (Fla. 1st DCA 1984). Sections 9B-14.0081 and 9B-14.009 constitute an impermissible amendment to the statute. See Florida Growers Coop Transport v. Department of Revenue, 273 So.2d 142 (Fla. 1st DCA), cert. denied, 279 So.2d 33 (Fla. 1973).
The second point challenges a ruling which borders on the absurd. Appellant was awarded zero points out of a possible fifty points under the statutory criteria requiring the secretary to consider the "demonstrable capacity of the community development corporation to carry out the proposal." The statutory requirements are administratively defined by section 9B-14.009(6):
Applicants who can demonstrate direct financial participation in the acquisition, expansion or creation of a revenue generating, job producing activity within the past 3 years from the time of submittal of the application will be scored according to the total funds committed to that activity through donations, grants, loans or direct equity injunction. In order to be awarded venture leverage points, the CDC must certify that the venture activity is fully operational at the time of submittal. All commitments must be documented, binding and included in the grant application.
Claiming entitlement to the maximum points under this criteria, the appellant offered evidence of a building, formerly used as a banking facility, which it had acquired by gift and was leasing to tenants for $18,000 per year. As documentation of ownership the appellant produced a warranty deed which showed consideration of one dollar; as proof of a revenue generating venture appellant offered a lease showing that the building produced a revenue of $18,000 a year; as evidence of the value of the building the appellant produced news clippings showing that the appellee Department had accepted a $200,000 valuation of the building pursuant to its own Community Contributions Tax Credit Program. In other words, the Department of Community Affairs had previously approved the $200,000 valuation of the building and the valuation is a matter of the Department's own records. The hearing officer, nevertheless, denied points on a finding that the building had a value of only $1.00. A $1.00 valuation is not supported by evidence which a reasonable person would accept as adequate to support a conclusion, De Groot v. Sheffield, 95 So.2d 912 (Fla. 1957); the only reasonable and competent evidence in the record fixes the building's value at $200,000. Furthermore, a recitation in the deed of the amount of consideration paid does not establish the property's value. United States v. Certain Lands Located in Town of Highlands, 57 F. Supp. 96 (S.D.N.Y. 1944).
Because the $18,000 per year lease was undated it too was rejected as evidence of an ongoing job producing venture. There was no basis for believing that the substantial named tenants were not occupying the premises and making payments according to the terms of the lease. The total denial of points for the venture was arbitrary and capricious.
We are obligated to grant relief from administrative actions as those described in this case. See Florida Motor Lines v. R.R. Comm'n, 101 Fla. 1018, 132 So. 851 (1931).
The case should be reversed and remanded for new proceedings.