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Item H1* 2:30 P.M. CLOSED SESSION BOARD OF COUNTY COMMISSIONERS AGENDA ITEM SUMMARY Meeting Date. 3/18/09 — MAR Division: County Attorney Bulk Item: Yes No xx Staff Contact Person: Bob Shillinuer x3474 AGENDA ITEM WORDING: A closed executive session of the Board of County Commissioners in the matter of Roy's Trailer Park Inc v. Monroe County, CA K 07-1505 during its regular meeting scheduled for March 18, 2009. Legal staff desires direction from the Board on the case. Per F.S. 286.011(8), the subject matter of the meeting shall be confined to settlement negotiations or strategy sessions related to litigation expenditures. Present at the meeting will be the Commissioners, County Administrator Roman Gastesi, County Attorney Suzanne Hutton, Chief Assistant County Attorney Bob Shillinger, Assistant County Attorney Susan Grimsley, Assistant County Attorney Cynthia Hall, Assistant County Attorney Lisa Granger and a certified court reporter. PREVIOUS RELEVANT BOCC ACTION: 2/27/09 BOCC approved Closed Session for 3/18/09 BOCC @ 2.30 p.m. CONTRACT/AGREEMENT CHANGES: N/A STAFF RECOMMENDATIONS: Approval, TOTAL COST: @$200.00 INDIRECT COST: BUDGETED: Yes xx No COST TO COUNTY: @$200.00 SOURCE OF FUNDS: REVENUE PRODUCING: Yes No xx AMOUNT PER MONTH Year APPROVED BY: County Atty xx OMB/Purchasing n/a Risk Management n/a DOCUMENTATION: Included MTTki-0i13wry Revised 2/05 Not Required X County of Monroe The Florida Keys Robert B. Shillinger, County Attorney" Pedro J. Mercado, Assistant County Attorney ** Cynthia L. Hall, Assistant County Attorney ** Christine Limbert-Barrows, Assistant County Attorney ** Derek V. Howard, Assistant County Attorney** Steven T. Williams, Assistant County Attorney** Peter H. Morris, Assistant County Attorney Patricia Eables, Assistant County Attorney Chris Ambrosio, Assistant County Attorney ** Board Certified in City, County & Local Govt. Law May 25, 2017 Kevin Madok, Clerk of the Circuit Court Sixteenth Judicial Circuit, State of Florida Monroe County Courthouse 500 Whitehead Street Key West, FL 33040 BOARD OF COUNTY COMMISSIONERS Mayor George Neugent, District 2 Mayor Pro Tern David Rice, District 4 Danny L. Kolhage, District 1 eta _ Heather Carruthers, District 3 Sylvia J. Murphy, District 5 Office of the County Attorney 1111 121h Street, Suite 408 Key West, FL 33040 (305)292-3470 — Phone (305) 292-3516 — Fax In Re: Roy Trailer Park, Inc. v. Monroe County Case No.: CA-K-07-1505 Dear Mr. Madok: Please find enclosed herewith the transcript of the March 18, 2009 closed attorney/client session of the Monroe County Board of County Commissioners regarding the above - referenced matter. Under F.S. 286.011(8), the transcript may be part of the public record because the litigation has concluded. Thank you for your assistance with this matter. Please contact me should you have any questions. Sincerely, /bbehillinger Monroe County Attorney Enclosure 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 1 MEETING OF THE MONROE COUNTY BOARD OF COUNTY COMMISSIONERS ATTORNEY -CLIENT CLOSED SESSION RE: ROY'S TRAILER PARK, INC., VERSUS MONROE COUNTY CASE NO.: CA K 07-1505 HELD AT THE COMMISSION CHAMBERS 2798 OVERSEAS HIGHWAY MARATHON, FLORIDA 33050 WEDNESDAY, MARCH 18, 2009 2:40 P.M. - 3:04 P.M. ORIGINAL Commissioners Present: COMMISSIONER HEATHER CARRUTHERS COMMISSIONER MARIO DiGENNARO MAYOR GEORGE NUGENT MAYOR PRO TEM SYLVIA J. MURPHY COMMISSIONER KIM WIGINGTON COUNTY ATTORNEY SUZANNE HUTTON CHIEF ASSISTANT COUNTY ATTORNEY BOB SHILLINGER ASSISTANT COUNTY ATTORNEY SUSAN GRIMSLEY ASSISTANT COUNTY ATTORNEY LISA GRANGER COUNTY ADMINISTRATOR ROMAN GASTESI All Keys Reporting — Court Reporters — (305) 289-1201 Locations in Key Largo, Marathon & Key West 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 ON 19 20 21 22 23 24 25 MS. HUTTON: For the record, this meeting is being held at my request, at a prior public meeting. I requested that we have -- we get advice concerning Roy's Trailer Park, Inc., versus Monroe County, CA K 07 1505. At that meeting the board -- at the meeting of February 27th, the board approved holding today's closed session. Public notice was given at the February 27th, 2009 special meeting and through publication of the agenda for the March 18th, 2009 regular meeting. For the record and the benefit of the court reporter, each of us will state our name and position, starting with the commission. COMMISSIONER CARRUTHERS: Heather Carruthers, county commissioner, district three. COMMISSIONER DIGENNARO: Mario DiGennaro, county commissioner, district four. MAYOR NUGENT: George Nugent, county commissioner, district two. COMMISSIONER MURPHY: Sylvia Murphy, county commissioner, district five. COMMISSIONER WIGINGTON: Kim Wigington, county commissioner, district one. MS. HUTTON: Suzanne Hutton, county attorney. MR. GASTESI: Roman Gastesi, county administrator. MR. SHILLINGER: Bob Shillinger, chief assistant All Keys Reporting - Court Reporters - (305) 289-1201 Locations in Key Largo, Marathon & Key West 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 county attorney. MS. GRIMSLEY: Susan Grimsley, county attorney. MS. GRANGER: Lisa Granger, assistant county attorney. MS. GRIMSLEY: Suzanne, we have people in the back. MS. GRANGER: Can you hear me? MS. HUTTON: No. COMMISSIONER DIGENNARO: I didn't hear you. MS. GRANGER: Lisa Granger, assistant county attorney. MS. HUTTON: She is the newest addition to our staff. She is taking over all of the code enforcement. Remember you decided to have a full-time code enforcement attorney to do collections and code enforcement. So, hopefully, start turning some money over. Anyway, as a reminder, in this matter we will only be discussing settlement negotiations and strategy relating to litigation expenditures. You can not take any decisive action during the closed session. We have a separate item on -- in the open session if you would want to take action. Any -- and I'll turn this over to Bob Shillinger. MR. SHILLINGER: Good afternoon. This case, in a nutshell -- COMMISSIONER DIGENNARO: Bob, move the mike towards All Keys Reporting - Court Reporters - (305) 289-1201 Locations in Key Largo, Marathon & Key West 31 1 you. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. SHILLINGER: Sure. The mikes may be off so I'll speak up. In a nutshell, this case is involving Roy's sued the county to seek a Declaratory Judgment, along with a couple other theories. Basically, there are two sewer systems on Stock Island. There is the gravity system that's been in existence for 20, 30 years. There was the vacuum system that the county helped finance, and they helped the utility to expand. As part of the hookup process, part of the financing for it, the county authorized, and those folks who hooked into the new system, the vacuum system, we authorized them to pay their hookup fees over time. Amortized them over time because we had an investment in that system. We were allowed to do that. We're essentially loaning money to those people. They're repaying it back over time. Mr. Browning, in his park, at Roy's Trailer Park, had the option really, physically, of going to the vacuum system and paying it over time, or the old gravity System, and paying it all up front. They chose, because it was cheaper, initially, to hook into the gravity system. Our position has been, from the beginning, that they could not -- they didn't qualify under the Florida Constitution. We weren't allowed to offer them the All Keys Reporting — Court Reporters — (305) 289-1201 Locations in Key Largo, Marathon & Key West 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 hookup or the amortization of their -- of their costs over time because they didn't hook into the system he had a financial stake in. They've challenged that position in a Declaratory Judgment action. We've got a Summary Judgment Motion set for April 1st, where we're basically going to get a ruling on this issue from the trial judge. The first time we've been up before the court. In order to settle this case, what Mr. Browning has offered is, that they will waive any costs and attorney's fees, and interest, if we just agree to pay back their $278,100, and allow them to repay it over 20 years. Essentially, they're asking us to pay back money that they paid to Key West Resort Utility, and allow them to pay us back over 20 years. COMMISSIONER CARRUTHERS: Why? COMMISSIONER DIGENNARO: Why? MR. SHILLINGER: Well, that's just it, it's a settlement offer and so I'm bringing it to you. I don't necessarily follow the logic of what they want to do, but they're taking the position that the ordinance that the county adopted doesn't distinguish between vacuum and gravity. They're -- we're taking the position, they've been ignoring the context of the Florida Constitution which says we can only loan money, absent a referendum, if it's into an object, or a project that we have some All Keys Reporting — Court Reporters — (305) 289-1201 Locations in Key Largo, Marathon & Key West 5 L4q 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 W. 19 20 21 22 23 24 25 sort of interest in, ownership interest, or financing interest. The only way, in my judgment, or our judgment, that we could do what you would want, is if he were to give us something in exchange on that property, a mortgage, a deed restriction, something like that, we might be able to consider that. It might be able to fly, legally. So far he's resisted those efforts. So we're recommending that we reject this offer and go forward with the Summary Judgment hearing, and let the chips fall where they may. COMMISSIONER WIGINGTON: There's some things you might need to know. MR. SHILLINGER: There are some additional things -- COMMISSIONER DIGENNARO: Say it again. COMMISSIONER WIGINGTON: I said, there's some things that I think you need to know. MR. SHILLINGER: Speak up. COMMISSIONER WIGINGTON: Both sides need to know. You can finish. MR. SHILLINGER: Okay. If we -- if we go forward and we lose, we obviously, have our appellate rights. We're looking at, probably, another 25 to $30,000 in attorney's fees that we would owe them. So that's what we would be saving, plus any kind of prejudgment interest, which I haven't crunched the numbers on, but it All Keys Reporting — Court Reporters — (305) 289-1201 Locations in Key Largo, Marathon & Key West 61 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 would be, I think it would be, in the 10 to 15,000 is -- just an off the top. So we're talking about a 40, $50,000 swing. But, we really don't have the $278,000 to give them, so. COMMISSIONER DIGENNARO: Can I ask a question. So, basically, the way I understand it, they're looking to borrow from us $278,000? MR. SHILLINGER: Yes. COMMISSIONER DIGENNARO: At what interest rate or anything? I mean, why would we want to, if you say we can't, or we couldn't, we should? But, is it unprofitable for the county, or is it profitable, first of all? MR. SHILLINGER: Well, it wouldn't be profitable for the county if -- we certainly can't do it, legally, if -- but if -- if the court rules that we could do it, had to do it, legally, then they would be treated the same as any other person who is -- who hooked in, over into the vacuum system, and be financed over time, the way they did it. So I don't know what the -- I haven't done a comparison financial analysis to tell you what the rate of return would be. MAYOR NUGENT: Break even, at best? MR. SHILLINGER: Yes. COMMISSIONER MURPHY: But I would like to hear what All Keys Reporting - Court Reporters - (305) 289-1201 Locations in Key Largo, Marathon & Key West 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Kim has to say. COMMISSIONER DIGENNARO: Yeah. So would I. Boy, is she on a roll. MAYOR NUGENT: Are you finished with your presentation -- MR. SHILLINGER: Yes. MAYOR NUGENT: -- Bob? MR. SHILLINGER: Yes. COMMISSIONER DIGENNARO: You're on a roll today. COMMISSIONER WIGINGTON: When the contract started, with Key West Resort Utility, there was no mechanism for to reform Stock Island on the new system, to finance the $2,700, what they thought was a hookup fee. Which ended up being a capacity reservation fee. And then you had all of these other things that ended up making it 16 or $17,000 to hook up. COMMISSIONER CARRUTHERS: With Key West Resort Utility? COMMISSIONER MURPHY: Yeah. COMMISSIONER WIGINGTON: This is Key West Resort Utility. On January of 2003, there was a BOCC meeting in which the -- a Wolfe? Was there an attorney named -- MR. SHILLINGER: Rob Wolfe. Yes. COMMISSIONER WIGINGTON: Brought forward a proposal that the mobile home parks, and condominiums, could All Keys Reporting - Court Reporters - (305) 289-1201 Locations in Key Largo, Marathon & Key West 81 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 finance because there was a state statute, could finance the $2,700. It had to be eight years through the statute 7.30, I believe, of mobile home parks. MR. SHILLINGER: What, 723 -- COMMISSIONER WIGINGTON: 723. MR. SHILLINGER: Which says it can be no shorter than eight years. COMMISSIONER WIGINGTON: No shorter than eight years. And then it was moved later, that the county would finance the $2,700 for all people. They put it on their property tax, just like we're doing now. What -- what took place in the meantime was, he is in the new system. He was -- he was engineered in the new system. He's in phase one or three of the new system. And I've got the plans from day one, where he was to either -- he had a choice of putting a vacuum system on his property, which is very expensive, and connecting into a vacuum line that was given an easement through the property to get to Maloney Avenue. Or, he could hook his lift station off of his waste water treatment plant and just run across the street from K.W. Resort Utility. He's right across the street from K.W. Resort Utility. I mean, literally, 20 feet. So he chose to, wisely, use the gravity system. That way, he just uses his waste water treatment, one All Keys Reporting — Court Reporters — (305) 289-1201 Locations in Key Largo, Marathon & Key West 91 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 10 pipe. But knowing, in community meetings, that he was choosing to, at the time, it had already come up, that K.W. Resort Utility was saying, no. The gravity system is not in the part of the contract between the county and K.W. Resort Utility. It says, specifically, connecting to the vacuum system. At that time, Richard Collins was the attorney, and he said, even he was surprised that that was something they were going to bring out in the utilities contract with the county. So he, knowingly, connected. Made the choice to connect by gravity, knowing that he would have to pay up front, to the utility, all the money, and not get any financing through the county. That decision had already been made. But he was planning on challenging it because he is in the new system. The old system is over in Lincoln Gardens. That's the old system. But this is the new part that we contracted for. We have paid, and I had the invoices of some of the gravity parts, in that system, that he may be able to use in a court case. We've paid for some gravity pipe, but it's not necessarily to pay for his pipe, to connect to a gravity pipe. So did he make the decision, knowingly? Does he think he has a case because he's in the new system? Probably. Do we have the money to loan him? No. But I know he was part of those meetings All Keys Reporting — Court Reporters — (305) 289-1201 Locations in Key Largo, Marathon & Key West 1A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 because Genevieve Isaksen was part of those meetings, with Waters Edge. This Flagler Village, that was Overseas. All of these -- MAYOR NUGENT: What am I missing here? Did he make a conscious decision to hook into the gravity system and, therefore, disallowed him to get the financing that was available? COMMISSIONER WIGINGTON: He was forced to pay it because of code enforcement. He made a decision, thinking that it could -- that we would not be able to force him to pay the amount, totally, and we did through code enforcement. He feels, legitimately, that he should be allowed the eight years, always felt that way. MR. SHILLINGER: He's asking for 20. He's asking for 20. COMMISSIONER WIGINGTON: He's asking for 20; okay. And that's what most people were given, I believe -- MR. SHILLINGER: Right. COMMISSIONER WIGINGTON: -- 20 years because he is in the new system and on the CH2M Hill plans, from day one, even the ones that the date changed, all the way back in 1999, he's on every one of those engineering plans. MR. SHILLINGER: Yes. That's information that our engineering department, different than what our All Keys Reporting - Court Reporters - (305) 289-1201 Locations in Key Largo, Marathon & Key West 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 12 I engineering department has given us. So I'm glad we're having this discussion. COMMISSIONER WIGINGTON: I can give you the originals. MR. SHILLINGER: Because -- you know, because that may affect our analysis of the case. But, you know, I gave you our analysis, based on the technical information we had from both the utility and our engineering department, so. MAYOR NUGENT: In that Kim has tremendous experience in having dealt with that, then why wouldn't she be plugged into the discussion, with engineering, to articulate exactly those thoughts, and then make our decision on what we're going to do. MR. SHILLINGER: All right. Well, what I'm hearing is that there's information that we don't have. So we may need to postpone this and come back to you. Now we've got a hearing set for April 1st. I'm going to try and move that off, in light of this information which, I I'm glad I have now. And we'll try and come back to you. If we don't, if we can't get it pushed off, is there any direction you want me to give? Or do we want and try and come back with another special meeting for a closed session before that April 1st meeting? COMMISSIONER WIGINGTON: You may still be able to All Keys Reporting — Court Reporters — (305) 289-1201 Locations in Key Largo, Marathon & Key West 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 W-1 19 20 21 22 23 24 25 make a decision because I don't know whether this -- I mean, is it compelling to where you think you would lose a case? MR. SHILLINGER: Possibly. I mean, he may have an argument. What you're articulating is, that there's possibly, if we had put an inter-- if we had some interest in that gravity system, they may be on the same basis as the people who went into the vacuum system. COMMISSIONER WIGINGTON: You have an interest in that system, in that he's in the phase one, two, or three of the new Stock -- of the south Stock Island waste water contract, between K.W. Resort Utility and the county. MAYOR NUGENT: Well, let me ask you this, Kim. Is he in the capacity that we reserved? COMMISSIONER WIGINGTON: Yes. MAYOR NUGENT: So he's -- he's -- he's -- even though -- COMMISSIONER WIGINGTON: Yes. He's in the -- he's in the 1,600 EDUs that we reserved for capacity, for that plan. He didn't connect to an old gravity system. He ran a pipe across the street, by gravity. But, your contract says those connecting to the vacuum system. MR. SHILLINGER: Right. COMMISSIONER DIGENNARO: Bob, you already passed the point of discovery; discovery is finished? All Keys Reporting - Court Reporters - (305) 289-1201 Locations in Key Largo, Marathon & Key West 13 Al, 1 2 3 ff 5 6 7 8 9 10 11 12 13 14 15 16 17 19 20 21 22 23 24 25 We -- 14 MR. SHILLINGER: No. We haven't finished discovery. COMMISSIONER DIGENNARO: You don't know his -- their counter arguments? MR. SHILLINGER: Right. We've had -- we've had some discovery. We've had some informal discussions. And -- and -- they haven't raised this point of connecting into the gravity. They've raised the legal issue of, your ordinance doesn't say gravity versus vacuum, so. COMMISSIONER WIGINGTON: Well, in all the mobile home parks on Stock Island, we're told, definitively, that the state said the county would have to offer them -- and I was of the opinion eight years, at least eight years. So that's what the argument was based on. MAYOR NUGENT: Miss Carruthers. COMMISSIONER CARRUTHERS: I guess I'm even more confused than I was when we started talking about this. But, from what you just heard from Commissioner Wigington, do you now think that the county did have an interest; is that what you're saying? MR. SHILLINGER: I'm saying it's possible and I want to look at that information a little more before I give you that answer. COMMISSIONER CARRUTHERS: You also said that we could require some kind of an interest from him. All Keys Reporting - Court Reporters - (305) 289-1201 Locations in Key Largo, Marathon & Key West 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Ln MR. SHILLINGER: Well, acquire. Acquire. And that was my -- the other way of doing this, his position is hey, I'm providing affordable housing. COMMISSIONER CARRUTHERS: Yes. MR. SHILLINGER: I've got these 30-year agreements with my people. And we could foot that. And if we were going to get a deed restriction from him, then there is at least some document, some interest we can point to, when we're defending ourselves against a challenge from other tax payers saying, no. This is a -- you know, the county, in exchange for giving him the hookup, they have the right to amortize it over time. I'm butchering that word, I know. COMMISSIONER CARRUTHERS: Amortize. MR. SHILLINGER: We get the -- you know, we got something out of it, which 30-year protection on affordable housing. He hasn't been willing to do that yet, but -- COMMISSIONER WIGINGTON: But he didn't do it for Overseas, Ocean Spray, any of those others. MAYOR NUGENT: Bob, it sounds to me like you need to talk to Kim. MR. SHILLINGER: Yes. Absolutely. MAYOR NUGENT: And get that information. And then come back to us. All Keys Reporting - Court Reporters - (305) 289-1201 Locations in Key Largo, Marathon & Key West 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 16 MR. SHILLINGER: Yes. COMMISSIONER DIGENNARO: And Bob, also, just one more thing as to the negotiations. Wouldn't it be reasonable, on his part, also, to let you have a lien on this property so you can work something out? COMMISSIONER WIGINGTON: That does happen when you -- yeah. The reason is -- MAYOR NUGENT: But he has said no? MR. SHILLINGER: He said no to a deed restriction, affordable housing deed restriction. Deed restricting his property as if it were an affordable housing loan. MAYOR NUGENT: Well, whatever. You still need to talk to Kim. MR. SHILLINGER: Yes. MAYOR NUGENT: And make up your mind. Come back to US. Again, bridge is closing. MR. SHILLINGER: Bridge is closing. MAYOR NUGENT: Thank you. We're adjourned. MS. HUTTON: Okay. If somebody will let the public know that we're reconvening. (The closed session was concluded at 3:04 p.m.) All Keys Reporting - Court Reporters - (305) 289-1201 Locations in Key Largo, Marathon & Key West 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CERTIFICATE STATE OF FLORIDA, COUNTY OF MONROE I, Patricia A. Zischka, certify that I was authorized to and did stenographically report the foregoing proceedings and the transcript is a true record. Dated this 24th day of March, 2009. ----- — — --- Patricia A. Zischka All Keys Reporting — Court Reporters — (305) 289-1201 Locations in Key Largo, Marathon & Key West 17