STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF ENVIRONMENTAL ) REGULATION, )

)

Petitioner, )

)

vs. ) CASE NO. 85-1184

) LEX THOMPSON, d/b/a HIGH BLUFF ) ACRES SUBDIVISION, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this cause in Tallahassee, Florida, on October 10, 1985, before the Division of Administrative Hearings by its designated Hearing Officer, Diane K. Kiesling.

APPEARANCES

For Petitioner: Clare E. Gray, Esquire

Daniel H. Thompson, Esquire

Department of Environmental Regulation Twin Towers Office Building

2600 Blairstone Road

Tallahassee, Florida 32301

For Respondent: William L. Hyde, Esquire

Culpepper, Pelham, Turner & Mannheimer

300 East Park Avenue Post Office Drawer 11300

Tallahassee, Florida 32302 ISSUES

The issues are whether Respondent's facility is a public water system subject to regulation by the Department of Environmental Regulation (DER) pursuant to Chapter 17-22, Florida Administrative Code, or whether it is exempt from those regulations by virtue of Rule 17-22.102 if the facility is

subject to regulation by DER, whether Respondent should take the corrective actions set forth in the Notice of Violation and Orders for Corrective Action and should pay DER's expenses incurred in the pursuit of this case.

DER presented the testimony of Cliff McKeown, a potable water engineer, and Linda Frohock, planning manager for the Department of Community Affairs (DCA). DER had Exhibits 1-4 admitted into evidence. Respondent, Lex Thompson, presented his own testimony and that of Hugh Kelly.

The parties have submitted Proposed Findings of Fact and Conclusions of Law. They have been considered and a ruling has been made on each proposed finding of fact in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. DER is the Florida administrative agency which has the authority to administer and enforce the provisions of the Florida Safe Water Drinking Act, and the rules and regulations promulgated thereunder. (See Prehearing Stipulation).

   
   

2. Respondent is a natural person and citizen of the State of Florida. Respondent owns and is responsible for the construction of a potable water distribution main extension ("the facility") which serves a subdivision known as High Bluff Acres-near the community of Midway in Gadsden County, Florida. (See Prehearing Stipulation).

   
   

3. On February 1, 1980, Respondent was issued construction permit number DS20-27385 for the facility. The construction permit described the facility as a potable water distribution main extension to the Talquin Electric Company's Midway water- system. The project was to be constructed with approximately 940 linear feet of four inch PVC valves and appurtenances. Specific condition number 15 of the permit restricted operation of the extension until department approval was issued. This approval would be granted upon receipt of certification by the engineer of record as to construction in accordance with the approved plans and specifications and receipt of two satisfactory bacteriological analyses. DER has not received this information and had not issued an approval for use of the facility. The construction permit expired on September 1, 1981. (See Prehearing Stipulation).

4. Respondent modified the facility by constructing it with 550 feet of one inch to one and one-half inch PVC water mains. (See Prehearing Stipulation).

   
   

5. DER conducted an inspection of the facility on February 23, 1982. The facility was found to be in use without final DER approval. By letter dated February 26, 1982, DER notified Respondent of his non-compliance with Chapter 17-22, Florida Administrative Code, and requested Respondent to submit specified compliance items. (See Prehearing Stipulation).

   
   

6. In October of 1982, DER personnel contacted Respondent

   . by telephone. Respondent agreed to obtain a permit renewal and modify the unauthorized water line as soon as funds in the form of rent were released by the Department of Community Affairs (DCA). On November 1, 1982, DCA notified DER that payments were being made. (See Prehearing Stipulation).

   
   

7. On June 8, 1983, DER notified Respondent of his non- compliance with Chapter 17-22, Florida Administrative Code, and requested a reply on actions to be taken to correct the deficiency. By letters dated October 18, 1984, and December 17, 1984, DER notified Respondent that the facility was not approved for use. Respondent was further requested to inform DER as to the status of the facility. DER received no response to these requests. (See Prehearing Stipulation).

   
   

8. The facility was not constructed in accordance with DER-approved plans, and DER has issued no written approval or consent for alterations to the system. (See Prehearing Stipulation).

   
   

9. Respondent placed the facility in service without submitting a certification of completion and a copy of satisfactory bacteriological results to DER for approval and clearance. (See Prehearing Stipulation).

   
   

10. The facility is not designed to provide maximum hourly system demand without development of distribution pressure lower than 20 psi. (See Prehearing Stipulation).

    
    

11. DER has incurred costs and expenses in the pursuit of this case in the amount of $453.50. (See Prehearing Stipulation).

    
    

12. Respondent's facility consists of distribution and storage facilities only and does not have any collection or treatment facilities. It obtains all its water from and is not

    owned or operated by the Talquin Electric System. Further, Respondent is not a carrier which conveys passengers in interstate commerce. (See Prehearing Stipulation)

    
    

13. The public water distribution system constructed by Respondent is connected to twenty dwelling units in twelve structures.

    
    

14. The High Bluff Acres subdivision is a government- subsidized, but privately-owned, low-income housing development, wherein DCA, acting on behalf of the U.S. Department of Housing and Urban Development (HUD), subsidizes the payment of rent for the housing.

    
    

15. Respondent entered into several agreements on behalf of Salter, Stephens and Thompson, with the DCA to rehabilitate existing structures at High Bluff Acres and thus qualify for the Section 8 Moderate Rehabilitation Housing Assistance Program (HAP) established by HUD. The purpose for entering into the HAP contracts is to provide low cost housing to low income persons. These agreements were entered into over a period of several months during 1981 and 1982.

    
    

16. Upon satisfactory completion of the rehabilitation pursuant to the agreements, Respondent entered into a HAP contract for each structure in High Bluff Acres, for a total of twelve structures (20 dwelling units).

    
    

17. The HAP contract establishes the contract rent that can be allowed for each individual dwelling unit in a structure (the contract covers one structure). The contract rent is calculated according to a formula established by HUD for such purposes, and includes monetary allowances for utilities or other services which are provided by the owner. It does allow the lessor to recover his capital expenses in rehabilitating an individual housing unit.

    
    

18. DER Exhibits 3 and 4 are two of the twelve HAP contracts entered into by the Department of Community Affairs and Respondent, Lex Thompson. Each of these contracts has an Exhibit B which is entitled "statement of services, maintenance and , utilities to be provided by owner." These exhibits show that Respondent has agreed to provide water to the units under the HAP contract.

    
    

19. Contract rents paid to Respondent as authorized agent for the partnership include an allocation of money to reimburse

    Respondent for providing water to the tenants in the dwelling units.

    
    

20. However, subsequent to Thompson's and DCA's entering into the contracts for payment of these rental subsidies, Respondent notified DCA that he had incurred additional capital expenses. Since his rental payments were already at the maximum allowable rate, however, Respondent did not seek to modify the aforementioned contracts because the amendment would not result in any greater payment of monies to him.

    
    

21. At no time has Respondent amended the terms of the HAP contracts with respect to provision of water to the tenants at High Bluff Acres. He is still receiving the reimbursement for provision of water to tenants.

    
    

22. The general partnership which had been receiving contract rents for the dwelling units was dissolved in May, 1985, and the contracts for each structure were assigned to various individuals. Respondent, individually, owns one structure and his wife owns another.

    
    

23. DER has received no potable water quality or quantity complaints regarding the High Bluff Acres subdivision. Moreover, the potable water system existing in the High Bluff Acres subdivision does not constitute a present threat to the public health, safety, and welfare.

    CONCLUSIONS OF LAW

    
    

24. The Division of Administrative Hearings has jurisdiction over the parties to this action and over the subject matter pursuant to Section 120.57, Florida Statutes.

    
    

25. The Department is the administrative agency of the State of . Florida which has the authority to administer and enforce the provisions of Chapter 403, Florida Statutes, and the rules promulgated thereunder, Chapter 17-22, Florida Administrative Code.

    
    

26. The Department has permitting jurisdiction over certain public drinking water systems pursuant to Section 403.851, Florida Statutes, and Rule 17-22.108, F.A.C. The statute requires the Department to implement a water supply program to provide safe drinking water at all times throughout the state. The rule requires a permit to construct certain drinking water systems.

    
    

27. Rule 17-22.103(4), F.A.C., defines a public water system as a system for provision to the public of piped water for human consumption if such system has at least fifteen service connections or regularly serves at least 25 individuals daily at least 60 days out the year. Here, Respondent's water system serves 20 dwelling units and is thereby a public water system as defined. Rule 17-22.102, F.A.C., excludes certain public water systems from coverage if they meet all of the following criteria:

    
    

    1. the system consists of distribution and storage facilities only and does not have any collection and treatment facilities;

       
       

    2. obtains all of its water from, but is not owned or operated by, a public water system to which such regulations apply;

       
       

    3. does not sell water to any person; and

       
       

    4. is not a carrier which conveys passengers in interstate commerce.

       
       

28. Because the parties stipulated that the water system constructed by Respondent meets criteria a, b, and d, above, an essential question is whether Respondent sells water and is thereby covered by Chapter 403 and Chapter 17-22, or whether he

    does not sell water and is thereby exempt from Chapter 403 and Chapter 17-22. Respondent has received reimbursement for the provision of water to the tenants of High Bluff acres in the form of allocations in the contract rents for said water provision. He is under a contractual obligation to provide water to the tenants under the terms of the HAP contracts.

    Unless or until those contracts are modified to relieve Respondent of the duty to provide water to the tenants and to exclude an allocation in the contract rents for the provision of water to the tenants, the terms of the contracts constitute a sale of water. It is, therefore, concluded that Respondent's water distribution system is not exempt from Chapter 403, Florida Statutes, and Chapter 17-22, F.A.C.

    
    

29. The public water distribution system constructed by Respondent did not comply with the permit conditions, in that it did not comply with the plans submitted to and approved by the Department, or submit testing results pursuant to Specific Condition No.14 of the permit. Section 403.859(6), Florida Statutes, makes it a violation of the Florida Safe Drinking Water Act to fail to comply with Department-approved plans.

    
    

30. The Department is entitled to recover it reasonable costs and expenses incurred while investigating this matter and prosecuting the administrative proceeding pursuant to Section 403.860(3), Florida Statutes. The parties have stipulated that those costs and expenses are $453.50. It is concluded that this sum can and should be assessed against Respondent.

    
    

31. Pursuant to Section 403.861(17), Florida Statutes, the Department has the authority to issue such orders as may be necessary to effectuate the intent and purposes of the Florida Safe Drinking Water Act. Orders for corrective action are anticipated in Section 403.860(3), Florida Statutes. It is concluded the corrective action calculated to bring this water system into compliance is appropriate.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

RECOMMENDED that the Department of Environmental Regulation enter a Final Order and therein order the following corrective actions:

1. That within 45 days, Respondent shall hire an engineer registered in Florida to design a new distribution system for High Bluff Acres or modifications to the existing system, and submit a completed application to the Department for a permit to construct or modify the system.

   
   

2. That within 60 days of issuance of the permit, Respondent shall have the distribution system installed, tested(including pressure testing, bacterial testing, disinfectant-testing) and shall have the engineer sign and seal the plans indicating to the Department that the system conforms with the approved plans, and both DER and American Water Works Association standards.

It is further RECOMMENDED that Respondent be ordered to pay the Department's costs and expenses in the amount of $453.50, and that same be paid to the Department by cashier's check within 30days.

DONE and ORDERED this 4th day of November, 1985, in Tallahassee, Florida.

DIANE K. KIESL1NG

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 4th day of November, 1985

APPENDIX

Rulings on Petitioner's Proposed Findings of Fact:

1. Proposed Finding of Fact 1 is adopted in substance (See Finding of Fact 13).

   
   

2. Proposed Finding of Fact 2 is adopted in substance (See Finding of Fact 15).

   
   

3. Proposed Finding of Fact 3 is adopted in substance (See Finding of Fact 15).

   
   

4. Proposed Finding of Fact 4 is adopted in substance (See Finding of Fact 17).

   
   

5. Proposed Finding of Fact 5 is adopted in substance (See Finding of Fact 18).

   
   

6. Proposed Finding of Fact 6 is adopted in substance (See Finding of Fact 19).

   
   

7. Proposed Finding of Fact 7 is adopted in substance (See Finding of Fact 22).

8. Proposed Finding of Fact 8 is adopted in substance (See Finding of Fact 21).

Rulings on Respondents Proposed Findings of Fact:

1. Proposed Finding of Fact 1 is adopted in substance (See Finding of Fact 1).

   
   

2. Proposed Finding of Fact 2 is adopted in substance (See Finding of Fact 2).

   
   

3. Proposed Finding of Fact 3 is adopted in substance (See Finding of Fact 3).

   
   

4. Proposed Finding of Fact 4, first sentence, is adopted in substance (See Finding of Fact 4). The second sentence is rejected as being unsupported by the evidence and irrelevant.

   
   

5. Proposed Finding of Fact 5 is adopted in substance (See Finding of Fact 5).

   
   

6. Proposed Finding of Fact 6 is adopted in substance (See Finding of Fact 6).

   
   

7. Proposed Finding of Fact 7 is adopted in substance (See Finding of Fact 7).

   
   

8. Proposed Finding of Fact 8, first sentence, is adopted in substance (See Finding of Fact 8). The remainder of Proposed Finding of Fact 8 is rejected as irrelevant.

   
   

9. Proposed Finding of Fact 9 is adopted in substance (See Finding of Fact 12).

   
   

10. Proposed Finding of Fact 10 is adopted in substance (See Finding of Fact 14).

    
    

11. Proposed Finding of Fact 11 is adopted in substance (See Finding of Facts 19 and 20).

    
    

12. Proposed Finding of Fact 12 is rejected as unsupported by the evidence, irrelevant and conclusory.

    
    

13. Proposed Finding of Fact 13 is adopted in substance (See Finding of Fact 23), except that it is rejected as it relates to a potential threat because that portion is unsupported by the competent, credible evidence.

COPIES FURNISHED:

Clare E. Gray, Esquire Daniel H. Thompson, Esquire

Department of Environmental Regulation Twin Towers Office Building

2600 Blair Stone Road Tallahassee, Florida 32301

William L. Hyde, Esquire

300 East Park Avenue Post Office Drawer 11300

Tallahassee, Florida 32302

Victoria Tschinkel Secretary

Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32301

Docket for Case No: 85-001184

Orders for Case No: 85-001184