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Item J1 Hugh J. Morgan James T Hendrick Karen K. Cabanas Robert Cintron., Jr. LAW OFFICES MORGAN & HENDRICK 317 WHTTEHF.AD STREET KEy WEST, FLORIDA 33040 TELEPHONE 305.296.5676 FACSlMlLE 305.296.4331 37 w. Curry Harris (1907~1988) HilaJy U. Albury (1920-1999) FAX TRANSMISSION TO: COMMISSIONER SONNY MCCOY COMM rSSIONER GEORGE NEUGENT MAYOR DlXlE SPEHAR COMMJSSIONER DAVID RICE MAYOR PRO TEM MURRAY NEJ~SON RICHARD COLLINS, ESQ. JIM ROBERTS BELLE DESANTIS, CLERK'S OFFICE TIM MCGARRY FAX #: 292-3S77~ 872-9195. ~ 292-3466,,/ I. 289-630V.... 852-7162~ 292-3516 .// 292-4544-" 295-3663 289-2536 FROM: KAREN CA8ANAS, ESQ. DATE: NOVEMBER 14, 2003 SUBJECT: GROWTH MANAGEMENT LmGATION REpORT TRANSM..rrl'ER: Total number of pages including this cover sheet: 4 ORIGINAL DOCUMENT(S): WILL NOT BE SENT REGULAR COMMENTS: WILL BE SENT OVERNIGHT Our File # 161.01 l'he information eontlincd in this facsilIlile messagc i~ lltIDrnllY privileged and coDfklcrnial, inn:ocit:d onl)' for ~ uge of tht: individWll or entRy natotd above. If the Teader of lhis message is nOt The intllnUt:U recip~lll, you arc bcrchy nolifil:d !bar any disscminal:ion, disttibudon or eopy ofdri.~ communicatloll is strictly pTohibit.:d. If you have received dW wmmuaicatiOIl in errOT, (llcuc immediately notify ug by td~OJie and remm till: original message TO 1L~ at Thll above address VlA the U. S. Postal Service. IfyOll do not n:ccivll all pages, plcuc call back lIS soon as possible 305- 296-5676. The following is aur fax IlUn1j)eT 305-296-4331. P.O. Box 1117, KevWEST, FL 33041 s TELEPHONE 305296-5676 !;i FACSIMILE 305296-4331 j.t GROWTH MANAGEMENT LITIGATION REPORT TO: BOCC; Richard Collins; Tim McGarry; Jim Roberts FROM: Karen Cabanas DATE: November 14,2003 (This report will now set forth any new developments in underline font). Vacation Rentals Nenmont (Federal Class Action) - Federal class action case alleging vacation rental ordinance was prematurely enforced, is an unconstitutional taking of Plaintiffs' properties, and was adopted in violation of due process_ The Court has either dismissed or entered judgment in favor of Monroe County on all counts. Awaiting entry of fmal order and resolution of motions for fee-shifting sanctions relating to discovery. Plaintiffs have stated that they intend to appeal to the 11 th Circuit. ($77,878.75 as of October 31,2003). Takin2s Claims Galleon Bay - Two cases: Appeal of vested rights decision and taking claim. Awaiting ruling from 3rd DCA on vested. rights appeal. Taking case: As set forth in mv Drior letter. Judge Payne has entered summary judgment in favor of Plaintiffs on liability. Case '.v)1l proceed with iury trial as to damages_ County has filed Motion for Leave to File 3rd Party Comnlaint (against State of Florida) and various discovery reQuests relating to damages. ($23,622.75 as of October 31,2003) (does not include prior Galleon Bay matters). Phelps/Hardin - Claim brought in federal court for due process and inverse condemnation based on code enforcement proceedings that resulted in a lien on Plaintiffs' property. Federal court has entered judgment in favor of Monroe County due to reinstatement of state cowt appeal of code enforcement order. ($6,059.00 as of October 31, 2003). Good - Seeking declaratory relief and takings claim for ~ 16 acre Sugarloaf Shores property due to commercial moratorium which began January 4, 1996. County's motion to dismiss is being held in abeyance until Plaintiff obtains a pre-application letter of understanding as to the level of development that is permissible on each parccl ofproperty. ($9,780.00 as ofOctobcr 31, 2003). Emmert - Complaint seeking inverse condemnation based on partial granting of Beneficial Use application. Plaintiffs were granted partial beneficial use from wetland regulations, thus expanding the buildable area oftheir vacant Ocean ReefIot from approximately 1,800 to 2,500 square feet. However, Plaintiffs cannot build within this area due to Ocean Reef Association deed restrictions requiring setbacks in excess of those required by Monroe County. Plaintiffs allege that Monroe County's actions have resulted in a denial of all economic use of their property, despite expressly allowing a 2,500 square foot buildable area. Monroe County's motion to dismiss was denied on grounds that court has original jurisdiction over constitutional claims & cannot be bound by Hearing Officer's findings. Parties are proceeding with discovery. ($2,957.50 as of October 31, 2003). Kalan - Takings claim filed as to residential property in Cahill Pines & Palms subdivision for failure to obtain ROGO allocation in 4 year period. Based on CountYs motion to dismiss. the parties have agreed on entry' of an order holding the case in abeyance while Plaintiff seeks a beneficial use detennination, as reouired to exhaust available administrative remedies and ripen the case for iudicial review. ($22.50 as of October 31,2003). Other Matters Clay (Big Pine Moratorium) - Complaint filed against Monroe County alleging various claims (takings, vested rights, etc.) based on the de facto building moratorium on Big Pine due to the traffic level of service and concurrency mandate. Judgment was entet"ed in favor of Monroe County on basis that concurrency is a state-imposed mandate, not a County regulation; also based on fact that FDOT is responsible for upgrading U.S. 1, not Monroe County and issuance of any building permits by Monroe County may vio late state concurrency and Endangered Species Act provisions. Plaintiffs appealed to 3rd District Court of Appeals, which affumed the trial court's mling in favor of County. Plaintiffs have filed with the Florida Supreme Court Tequesting it to accept jurisdiction over case based on alleged conflict between 3d DCA's judgment and other DCA & U.S. Supreme Court opinions on the issue of ripeness and futility. Jurisdictional briefs have been filed, awaiting ruling as to whether Fla.S.Ct. will hear case. ($22,791.50 as of October 31,2003). Ambrose - Declaratory action claiming vested rights under 9380.05(18) based on filing of subdivision plats. Pursuant to summary judgment proceedings and his previous orders, Judge Payne ordercd that Plaintiffs prove ownership ofa single Plaintiffs' lot so that legal issues maybe appealed rather than spend extensive time in trial eourt litigating ownership issues as to each lot at issue. Various environmental groups were also granted leave to intervene. Court entered final summary judgment for approximately 75 Plaintiffs. Final Order has been entered by Court and all Defendants have filed notices of appeal. Oral argument was held February 5, 2003. Awaiting roling. ($56,018.75 as of October 31,2003). Industrial Communications & Electronics - Federal case alleging wiTeless tower moratoria were unconstitutional on various grounds and violated Federal Telecommunications Act. Case was dismissed by trial court based on claims being identical to those brought in state court action and failure to reserve federal claims therein. Case is pending on appeal with 11 th Circuit. Filing of County's brief has been extended to January 2. -pending confidential mediation discussions. ($3,915.00 as ofOetober 31, 2003). Upper Keys Citizens Association ~ Appeal to Div. of Admin. Hearings of Planning Commission's approval of North Key Largo sub-station for Fla.. Keys Electric Co-Gpo Hearing officer's ordet" upholding planning Commission resolution was upheld, but Plaintiffs have filed further appeal to circuit court. Oral argument took place on November 13; ruliug anticipated in 1-2 weeks. ($12,375.00 as ofOetober 31,2003). 2 Lawson - Appeal of Monroe County Planning Commission resolution. Oral argument is scheduled for November 24. ($112.50 as of October 31, 2003). Johnson - Writ of Mandamus challenging Director of Planning's detennination that application for "boundary determination" by alleged errOT requires zoning map amendment application. Applicant applied for boundary detennination based on allegation that BOCC previously adopting change in zoning. Director's determination was based on review of records failing to show any error or prior consideration of such zoning change. Director rejected application and informed Owner to properly file for zoning map amendment (Boundary detennination may be placed on BOCC agenda without the public notice required for a zoning change). Pursuant to oral argument. Monroe County has agreed to re-process application for denial or approval (application was previously returned as incomplete) and Plaintiffs may appeal as 'Provided by Code if denied_ ($1,280.00 as of October 31, 2003)_ Department of. Community Affairs v. Monroe County - Case before Land and Water Adjudicatory Commission alleging that County has failed to comply with various Comp Plan requirements by failing to routinely amend endangered species maps, and vegetation surveys as to high & moderate quality hammock areas. Also alleges that County has allowed higher ROGO scores that should have been allocated due to failure to amend maps, thereby allowing more residential development than should have been approved. DCA has recently given notice that case will proceed to administrative hearing in January. ($2,R70.00 as of October 31,2003). Eads v. Monroe County - Three pending cases: (1) Appeal ofBOCC decision to deny rescindment of designation and original declaratory action alleging de-designation criteria is violation of due process because it is unduly oppressive fOT failing to consider financial burden & condition of structure (2) appeal of code enforcement order finding property in violation for unsafe condition and (3) appeal before hearing officer of HPC decision to deny application for demolition & reconstruction. BOCC's decision to deny rescinding historical designation was upheld by Judge Garcia. Code enforcement appeal and demolition/reconstruction appeal are being held in abeyance pending final ruling on due process claim. Trial on due process claim was held August 22. Court has issued final. judgment in favor of County. holding that application of historic preservation ordinance did not result in a denial of due process and was not arbitrary OT oppressive. (Plaintiffhad argued that ordinance was oppressive because cost of reconstruction was more than cost of demolition and construction of new non-historic bldg_ ($20,912.50 as of October 31, 2003). Quay Appeal (parker v. Monroe County): Appeal of Planning Commission resolutions granting conditional use, receiver and sender site commercial square footage transfer. Oral argument has been set for November 17- NROGO Allocation appeals (Smart Planning v. Monroe County): Smart Planning Coalition challenge ofNROGO allocations based on allegation that allocations violate NROGO/Comp Plan provisions because Key Largo Communi Keys Master Plan not yet adopted. Case was dismissed by DOAH fOT lack of jurisdiction. New complaint has been filed in circuit court on same grounds. County has filed motion to dismiss for lack of jurisdiction on grounds that plaintiff is not an "aggrieved party," as required by statute. Party's interest must be greater than that of general community. 3 County of Monroe Growth Mana9;ernent Division 2798 Overseas Highway Suite 410 Marathon, norida 33050 Voice: 305.289. 2500 FAX: 305.289.2536 Board of County Commissioners Mayor Dixie Spehar, District 1 Mayor Pro Tern Murray Nelson, District 5 Comm. Charles "Sonny" McCoy, District 3 Cornrn. George Neugent, District 2 Cornrn. David Rice, District 4 MEMORANDUM TO: Board of County Commissioners FROM: Timothy J. McGarry, AIS!::i2 Director of Growth Manapn;nt November 18, 2003 DATE: SUBJECT: Progress Report and Proposed Approach Regarding Shadek Settlement, Galleon Bay v. Monroe County, and Other On-going Growth Management Litigation As requested by the Board, attached is a legal strategy memorandum drafted by Robert Freilich, of the law firm of Freilich, Leitner & Carlisle. This memorandum suggests approaches for the County to follow in avoiding potential future liabilities, potential reimbursement arrangements for the Shadek Settlement and a strategy for securing State participation and responsibility for defending law suits resulting from policies and regulations imposed upon the County by the State and some concerns that could be addressed in a "Global Agreement" between the State and County. This memorandum provides the Board with a starting point for discussion of possible strategies in addressing growth management litigation issues and forming the County's response to the Secretary of DCA's proposa1. In that regard, the staff would appreciate receiving further direction from the Board on whether or not it wants to further pursue the approach proposed in this memorandum. Attachment cc: James L. Roberts, County Administrator John R. Collins, County Attorney Mark Rosch, Executive Director, Land Authority J ames Hendrick, Morgan and Hendrick PRIVILEGED AND CONFIDENTIAL MEMORANDUM To: Mayor Spehar and Members of the Board of County Commissioners From: Robert H. Freilich; Freilich, Leitner & Carlisle Date: November 18,2003 Subj: Progress Report and Proposed Approach regarding Shadek Settlement, Galleon Bay v. Monroe County, and other ongoing litigation We have prepared an approach for seeking state reimbursement of the funds used by the County in settling the Shadek case. Reimbursement of all or a portion of these monies requires us to take into account two additional matters: the recent "partnership" proposed by the Secretary of the Department of Community Affairs and the importance of avoiding future liabilities as the County continues to operate under the state's Area of Critical State Concern (ACSC) designation. These three components are interrelated and we recommend that they be addressed comprehensively. Specifically, Secretary Castille's proposed partnership should address past and future County liabilities that have resulted or will result from the state imposed ACSC designation. The approach set forth here is broad in its scope. We do not expect the Board to evaluate or commit to it prior to the Secretary's November 19th visit. However, we do recommend that any "partnership" include an agreement between the State and County, which addresses future liabilities that have or may arise as a result of the partnership that the State and County have had since the ACSC designation was made. This concept may be discussed with the Secretary, even if the details of such an arrangement are not finalized at this time. Following the Secretary's visit, we will seek the Board's direction on how to proceed. We will assist County staff as much or as little as the Board wishes with regard to implementation of the approach set forth herein. doc.#59747 /90355.011 1 PRIVILEGED AND CONFIDENTIAL Proeress Report Since the Florida Keys were designated as an Area of Critical State Concern, the State has, through the ACSC legislation and by rule, mandated that the County adopt comprehensive plan provisions and land development regulations that severely restrict new development. As a result, the County has been named as the primary defendant in numerous lawsuits launched by property owners impacted by these regulations. Despite the underlying State mandate, the burden of defending these cases has fallen to the Board of County Commissioners. The liability that arose in the recent Shadek case is but one example of the County's exposure to the legal risks that can result from this State driven system of land use control, especially because State purchases of restricted lands have not been accompanied by general releases of the County from liability accruing prior to the purchase. The actions that gave rise to the claims in Shadek stemmed directly from the State's ACSC designation and the resulting eight-year delay in the final adoption of the Comprehensive Plan and Habitat Conservation Plan. When the Board settled the Shadek case, it directed Freilich, Leitner & Carlisle to explore opportunities for seeking reimbursement from the State for these costs. Since that time, the dynamic at the State- level has been in constant flux, both politically and administratively. The State's recent proposal to earmark as much as $113 million for the purchase of environmental lands in Monroe County poses serious problems unless an agreement with the State can be worked out that resolves a number of important issues. On November 6, 2003, we met with County staff, Attorney Jim Hendrick, and Mark Rosch of the Land Authority to develop a strategy not only for securing doc.#59747/90355.011 2 PRIVILEGED AND CONFIDENTIAL reimbursement of settlement funds for the Shadek case but, more important, for establishing a methodology to allocate future liabilities that arise out of State-mandated regulatory controls. In other words, to correct the inequitable condition that currently puts the County in the position of defending suits brought pursuant to State-mandated Plan policies and State purchased lands without general releases. We recognize the sensitive position in which the Board finds itself. The County is a political subdivision of the State and State law effectively supercedes County regulations. We also recognize that it is patently unfair, and we believe contrary to the Legislature's intent, to force the County to defend State imposed policies that result in great administrative expense and costly litigation damages. Although we would counsel against an unnecessarily adversarial posture at this time, we do recommend an approach that will require the State to accept the liabilities that arise from its mandates upon Monroe County. This memorandum sets forth a suggested approach and a time table for addressing past, current, and potential liabilities that have arisen or may arise as a result of the County's ACSC designation and the suits filed against the County as a result of that designation. A voidine Potential Future Liabilities State Land Acquisition Activities The State, through various acquisition programs, continues to purchase parcels within the County that have been subject to State-mandated policies and regulations. In order to protect the Board from another Shadek, we began discussions with the regional office of the State Attorney General last spring to ensure that whenever it purchases land doc.#59747/90355.011 3 PRIVILEGED AND CONFIDENTIAL in the County, the property owner releases the Board from any claim that arises from regulatory restrictions in place prior to the State's purchase. Had the State taken this simple step in 1986 and 1990 when it purchased the two portions of the Shadek property, the case against the County would have been barred. We are preparing letters to various State agencies to ensure that this blanket policy applies to all future acquisitions by the State. The problem is complicated by the fact that the Division of State Lands, the DCA, and Attorney General all have separate attorney offices and do not appear to consult each other and have not prepared a unified policy for protecting either the State or the County from ongoing liability. Pending Cases Over the past year, Mr. Hendrick's office has filed third-party claims against the State in cases that arise from Plan policies or regulations imposed by the State. Since the County actions complained of in these suits stem from State imposed polices, the State should bear complete responsibility for the costs and liabilities that result. None of these third-party claims have been resolved, but this approach may reduce significantly the County Commission's future legal liabilities. Galleon Bav v. Monroe County At the Board's direction, Mr. Hendrick's office has filed for leave of court to file a third-party complaint to join the State in the litigation between the County and Galleon Bay. This case presents an egregious example of a claim arising directly from a State imposed requirement. Prior to 1996, the plaintiffs in this case likely would have had sufficient points to secure a building permit under the rate of growth ordinance (RaGa). However, pursuant to State rule, in 1996, the County was forced to amend RaGa to doc.#59747/90355.011 4 PRIVILEGED AND CONFIDENTIAL assign significant negative points to certain environmentally sensitive lands. As a result of the State's amendments, the plaintiffs score dropped immediately to approximately minus 70 points, making them ineligible for permits under the ROGO point system. On November 3,2003, Judge Payne granted Galleon Bay's motion for summary judgment, finding the County liable for an unconstitutional taking without compensation. The 1996 Plan amendment was adopted by rule of the Governor and Cabinet, sitting as the Administration Commission, not by the Board of County Commissioners. Nonetheless, the amendment became a part of the County Plan and the County became the named defendant when Galleon Bay brought suit. For present purposes, the County does not dispute the legality of the State's power to mandate the ROGO amendment. The County seeks only to shift responsibility for the State's actions to the State. If the State Legislature or Administration Commission wishes to increase or maintain current regulatory restrictions on County property owners that result in regulatory takings or exposure to Bert 1. Harris claims, the State should be prepared to assume the liabilities that arise from those restrictions. Potential Reimbursement Arraneements In addition to resolving future claims against the County, the State's recent funding proposal presents opportunities for the County to secure reimbursement of Shadek settlement funds, either directly or indirectly. It is unlikely that the State will, in light of its recent proposal, earmark funds for direct Shadek reimbursement outside of the parameters of its proposal. However, there are several ways that the settlement may be leveraged to the County's favor through indirect contribution in the context of the proposal. doc.#59747/90355.0 II 5 PRIVILEGED AND CONFIDENTIAL First, during negotiations with the State over wastewater treatment and the purchase of environmentally sensitive lands, the Shadek settlement should be viewed as a contribution already made by the County for purposes of environmental preservation. In order to settle the Shadek case, the County had to appropriate funds that would have supported its wastewater treatment efforts and its ability to enter into the arrangement now proposed by the State. Accordingly, $5.9 million should be contributed by the State to the County's wastewater treatment efforts. These funds may come from DEP's contribution for environmental protection or another source. Second, implementation of a countywide wastewater treatment system will implicate other planning issues and will have to be preceded by an extensive infrastructure planning effort. The County will be faced with Comprehensive Plan and land development regulation amendments made necessary by its agreeing - should it do so - to develop a countywide wastewater treatment system. The costs of the Shadek settlement have hampered its ability to cover these costs and the State should reimburse it for all or a significant portion of these costs. Third, the State may, as an alternative, direct additional funds through the County Land Authority, either to offset the costs of the Shadek reimbursement directly or to facilitate future environmental land acquisition projects. Even if the State's recent proposal comes to fruition, the Land Authority will continue to have a role in achieving localized acquisitions for environmental and affordable housing purposes. Since the State failed to secure a general release against the County when it purchased the Shadek's land, the cost of settling the case amounts to a cost of dealing with "the challenges of implementing comprehensive land use plans developed pursuant to the area of critical doc.#59747/90355.011t 6 PRIVILEGED AND CONFIDENTIAL state concern program..." making reimbursement through the Land Authority appropriate. See ~380.0661, F.S. At the Board's direction, we will explore these and other potential funding arrangements during any negotiations that result from the State's current funding proposal and the development of a Global Agreement. Global Aereement The partnership proposed by the State should be premised on the execution of a comprehensive written agreement between the State and County, which addresses all issues implicated in the Secretary's proposal, in addition to those discussed here. For example, this "Global Agreement" should establish a policy that requires the State to assume the responsibility of defending lawsuits that result from the policies and regulations that have been or are in the future imposed upon the County by the State. Other issues must be resolved, including the following: (a) Shadek settlement reimbursement funds; (b) a policy of requiring a general release from property owners in future State land purchase agreements; (c) the State's proper role in pending and future lawsuits against the County; (d) the status of the pending Notice of Violation regarding the County's administration of its Habitat Evaluation Index (HEI) and other environmental standards; and (e) the allocation of funds and RaGa permits as described in the partnership recently proposed by Secretary Castille. We suggest that the idea of the Global Agreement be discussed with Secretary Castille on November 19th as a prerequisite for entering into the proposed partnership. Should the State agree to negotiate an agreement, the County should attend an upcoming staff meeting with Cabinet aides to discuss the substance and timeframe for completing a doc.#59747/90355.011 7 PRIVILEGED AND CONFIDENTIAL draft Global Agreement for the consideration of the Administration Commission. We would like the Administration Commission to adopt this approach by resolution on December 16,2003, and to direct appropriate State staff to negotiate such agreement with the County. Proposed Approach and Timeline In order to facilitate the approach set forth here, we suggest the following approach. 1. We will continue to work with relevant State agencies to ensure that future State purchases of County lands include general releases protecting the County from subsequent claims by property owners. 2. Any resolution of the Board, agreeing to explore with the State the partnership it proposes, should include, in addition to the feasibility of wastewater funding, a condition that the State agree to proceed with the development of an agreement similar to the one described above. The County's eventual agreement to enter into the proposed partnership would hinge on the actual appropriation of the funds described by the Secretary in her letter of November 10,2003 and the execution ofa Global Agreement. 3. The County should attend the Cabinet aides meeting prior to the December 16, 2003 hearing of the Administration Commission, to propose and discuss development of a Global Agreement. 4. The County should prepare a resolution for the Administration Commission's consideration on December 16th, which directs the County and State to submit a draft Global Agreement for the Administration Commission's consideration. doc.#59747/90355.011 8 PRIVILEGED AND CONFIDENTIAL 5. The County should attend the December 16,2003 hearing of the Administration Commission to urge its support for the resolution. 6. Following the Administration Commission's adoption of the resolution, the County should prepare a draft Global Agreement to be presented to the State for consideration and the eventual consideration of the Administration Commission. The Agreement should be comprehensive in its scope and must shield the County from future liability as provided under the law. 7. We will work with County Staff and the Board as it considers the State's recent funding proposal. Reimbursement of Shadek settlement costs may be achieved within the context of the Global Agreement, but other important objectives should be resolved as well. Following the November 19th meeting, we will confer with the Board to seek its direction and will proceed accordingly. Conclusion This is not the time or place to dispute the need for the ACSC designation or the policies the State wishes to implement in the Keys. For present purposes, that need not be the expressed position of the Board. Rather, as we view Shadek, Galleon Bay, and other pending cases, the issue is one of assigning to the State the responsibility of defending and indemnifying the County. The current arrangement unfairly puts the County between the State and the property owners its policies impact. Secretary Castille's November 10th letter may constitute a starting point for a viable "partnership" between the County and the State. However, that partnership must include the State's assumption ofliability in future litigation and must be based on a doc.#59747/90355.011 9 PRIVILEGED AND CONFIDENTIAL meaningful and enforceable agreement between the State and County for addressing all issues implicated in the Secretary's proposal. A resolution from the Administration Commission should direct the development of a Global Agreement establishing a long- term approach to future development rights, ROGO allocations, land acquisition, and the allocation of responsibility in future lawsuits. At the Board's direction, we will, together with County staff and Mr. Hendrick, undertake the above steps to protect the Board from future claims that properly should be directed to the State, not the County, and to see that a proper allocation of State funding be made for environmental purchases and affordable housing. doc.#59747/90355.011 10