STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLAV-O-RICH, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 90-2058

)

STATE OF FLORIDA DEPARTMENT ) OF ENVIRONMENTAL REGULATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Veronica E. Donnelly, held a formal hearing in the above styled case on November 2, 1990, in St. Petersburg, Florida.

APPEARANCES

For Petitioner: William Chadeayne, Qualified Representative 8933 Western Way, Suite 16

Jacksonville, Florida 32256

For Respondent: Janet E. Bowman, Esquire

Assistant General Counsel Department of Environmental

Regulation

2600 Blairstone Road

Tallahassee, Florida 32399-02400 STATEMENT OF THE ISSUES

Whether the Petitioner, Flav-O-Rich, Inc., is eligible for the restoration funding portion of Florida Petroleum Liability Insurance and Restoration Program at the Jacksonville location.

On March 7, 1990, Respondent, Department of Environmental Regulation (the Department), determined that Petitioner, Flav-O-Rich, Inc. (the Applicant) was precluded from obtaining Florida Petroleum Liability Insurance and Restoration Program eligibility and restoration funding.

By letter dated March 20, 1990, the Applicant contested the Department's denial of its application for eligibility and funding. The factual basis given for denial was disputed, and a formal administrative hearing was requested to resolve the controversy.

During the hearing, the Applicant presented two witnesses and filed four exhibits. The Department called four witnesses and submitted seven exhibits. All of the exhibits were admitted into evidence.

The Hearing Officer allowed the Applicant to file one additional exhibit posthearing, so that the Department's counsel could review it. The objection as to relevancy was overruled, and the exhibit was admitted as Petitioner's Exhibit #5.

A transcript of the proceedings was filed on December 3, 1990. Proposed Recommended Orders were timely submitted by the parties. Rulings on the proposed findings of fact are in the Appendix of the Recommended Order.

FINDINGS OF FACT

1. Since 1984, the Department has been the state agency charged with the responsibility to establish rules and regulate underground pollutant storage facilities in Florida. In 1988, the Legislature added the administration of the newly enacted Florida Petroleum Liability and Restoration Program to the Department's duties. The program was to be established on or before January 1, 1989.

   
   

2. The Applicant is the owner of a petroleum storage system in Jacksonville, Florida. Since 1984, it has been subject to the rules regarding underground pollutant storage facilities promulgated by the Department.

   
   

3. On September 18, 1989, an odor indicative of possible petroleum contamination was discovered at the site during the installation of monitoring wells. A Discharge Notification Form was sent to the Department by the Applicant on October 23, 1989. The form advised that there were no leaks in the system. It was suggested that the odor may have resulted from surface spill at the site over a number of years.

   
   

4. In response to the notification, an inspection of the site was completed by the Department on December 5, 1989. The inspection revealed the following on-site violations:

   
   

   1. Registration requirements were not being met. The forms had not been updated to include the presence of monitoring wells

      and overfill protection at the facility.

   2. Two underground tanks had not been properly abandoned.

   3. Inventory and reconciliation records had not been properly maintained, as required by rule since 1987. This violation was reviewed, and discussed in detail with on-site representatives of the Applicant.

   4. The monitoring wells were not installed by the time deadlines set forth in the Department's rules regarding stationary tanks.

   5. Since the wells were installed in September 1989, samples had not been taken for visual signs of petroleum contamination. The purpose

      of the system is to allow the owner of the storage tanks to learn if there is a leak in the tanks that can be quickly controlled to limit contamination.

5. The day after the inspection, the Applicant applied for a determination of eligibility for participation in the restoration coverage portion of the new Florida Petroleum Liability Insurance and Liability Program. An affidavit was signed stating that all of the Department's rules regarding stationary tanks were being complied with by the Applicant.

   
   

6. Six days after the inspection, the Department sent the Applicant written notice of the results of the inspection. The Applicant was given time frames and instructions for correcting the listed violations that could be corrected. A contamination assessment and clean up were also required in the letter. This letter did not address the issue of eligibility for the restoration funding program because that was a matter unrelated to the inspection results.

   
   

7. On March 7, 1990, the Department determined the facility was ineligible for participation in the restoration funding provided by the Florida Petroleum Liability and Coverage Program. The following reasons were given:

   
   

   1. Failure to properly abandon underground storage tanks, pursuant to Section

      17-61.050(3)(c), Florida Administrative Code.

   2. Failure to maintain inventory records, reconciliations, and significant loss/gain investigation as per Section 17-61.050(4)(c), Florida Administrative Code.

   3. Failure to install monitoring system and overfill protection by the dates set forth in Section 17-61.06(2)(c)2, Florida Administrative Code.

   4. Failure to properly monitor leak detection system, pursuant to Section 17-61.050(5)(c), Florida Administrative Code.

      
      

8. The 10,000 gallon fuel oil tank and the 3,000 gallon waste oil tank present at the facility were abandoned in March 1990. The notice issued by the Department after its inspection in December 1989, gave the Applicant sixty days after receipt of the notice to properly abandon the tanks. The Applicant substantially complied with this requirement after the written notice was received.

   
   

9. Although the Applicant failed to maintain the inventory records, reconciliations, and significant loss/gain investigations required by the Department rules, some of these violations had been corrected prior to the Department's inspection in December 1989. Correct inventory recordkeeping was discussed during the inspection, and the need to immediately implement the proper recordkeeping practices was emphasized in the post-inspection notice of violations. All of the recordkeeping violations were not cured until August 1990. The records kept by the Applicant during the noncompliance period from 1984 to August 1990, did not provide a substantially equivalent degree of information regarding possible leak detection or prohibited discharges as the required recordkeeping procedures.

10. Two underground stationary storage tanks on the site have been part of the Applicant's petroleum storage system since 1970 and 1975, respectively. The monitoring wells and overfill protection for these tanks should have been in place by December 31, 1987. Neither monitoring system was installed until September 1989. The Applicant began the contract negotiations for installation in September 1988.

    
    

11. The Applicant did not demonstrate that the facility contained an alternative procedure between December 31, 1987 and September 1989, that provided a substantially equivalent degree of protection for the lands, surface waters, or groundwaters of the state as the established requirement for monitoring wells and overfill protection.

    
    

12. In December 1989, the Department's notice advised the Applicant that the monitoring wells should be sampled monthly for visual signs of petroleum contamination.

    
    

13. Since April 1990, the Applicant has been completing the monthly sampling in the monitoring wells as part of its leak detection system, as required by the Department's rule regarding underground stationary tanks.

    
    

    CONCLUSIONS OF LAW

    
    

14. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter pursuant to Section 120.57(1), Florida Statutes.

    
    

15. Through its application for enrollment in the Florida Petroleum Liability Insurance and Restoration Program, the Applicant seeks the right to obtain funds from the Inland Protection Trust Fund if a future petroleum discharge needs to be cleaned up at its Jacksonville facility. If such an event occurs, and the site restoration is conducted using the criteria and procedures established in Section 376.3071, Florida Statutes, the program will provide up to one million dollars for restoration per incident, with an annual aggregate limit of two million dollars per facility.

    
    

16. Eligibility for participation in the program is determined by the criteria set forth in Section 376.3072(3), Florida Statutes, which provides as follows, in pertinent part:

    
    

    Any owner or operator of a petroleum storage system, as defined in s. 376.301, who is subject to and in compliance with this chapter and the rules relating to stationary tanks adopted pursuant to s. 376.303 with respect to a particular location, as determined by the department, is eligible to participate in the Florida Petroleum Liability and Restoration Program for that location.

    
    

17. The evidence adduced at hearing demonstrates that the Applicant failed to meet the eligibility requirements because the Jacksonville facility was not in compliance with the Department's rules relating to stationary tanks. The program mandates compliance because the purpose of the program is twofold: it is designed to prevent pollutant discharge as well as provide funds for its removal in the event a discharge occurs. The opportunity to use funds from the Inland Protection Trust Fund can take place if the facility can demonstrate it has been attempting to prevent such discharges. The Legislature has determined

    that the establishment of eligibility in the Florida Petroleum Liability Insurance Program is the vehicle to be used by facilities to demonstrate eligibility for the restoration funds. The statutorily mandated compliance with the Department's rules is a reasonable indicator of responsible operation of a petroleum storage system by a facility and is a proper prerequisite to the access of funding from the state.

    
    

18. The rules violated by the Applicant were cited in the denial letter and are again set forth in the Findings of Fact. During the hearing, the qualified representative for the Applicant addressed these violations in his presentation.

    
    

19. The first violation noted in the denial letter was the Applicant's failure to properly abandon two underground storage tanks, in violation of Rule 17-61.050(3)(c), Florida Administrative Code.

    
    

20. It was argued that these tanks were not part of the system for which the Applicant was seeking restoration program benefits. Therefore, these tanks should not be considered in the Department's review. This argument is rejected because, as previously mentioned, one purpose of the program is to prevent pollutant discharge. In any event, the tanks have now been properly abandoned, as required by the Department's written notice of December 11, 1989.

    
    

21. The second violation cited the Applicant's failure to maintain proper records, as required by Rule 17-61.050(4)(c), Florida Administrative Code. Although Section 376.3072(3)(b), Florida Statutes, allows the Department to waive minor violations in recordkeeping once a facility becomes a program participant, it is clear from the wording of the statute that such discretion is not granted to the Department prior to actual participation in the program. Therefore, the argument that other types of records were kept at the facility is rejected as irrelevant. The facts presented established that these other records did not provide the type of information sought through the required recordkeeping procedures, and the Department was unable to waive the violation.

    
    

22. The third violation was the facility's failure to have the monitoring wells installed by the dates required under Rule 17-61.06(2)(c)2, Florida Administrative Code. While the evidence presented by the Applicant showed that an attempt had been made to contract for the installation in September 1988, this first attempt came ten months after the deadline set within the rule.

    
    

23. The final violation is the Applicant's failure to use the monitoring wells for their intended purpose for nine months after installation and four months after written notice from the Department that monthly readings and reports were required by Rule 17-61.050(5)(c), Florida Administrative Code. It was only after the application for eligibility into the restoration funding program was rejected that the monitoring system was used by the facility.

    
    

24. In Miller v. Department of Environmental Regulation, 12 FALR 2555, the Department ruled that continuous compliance with tank rules beginning with the enactment of Chapter 17-61, Florida Administrative Code in 1984, is a prerequisite for eligibility in the restoration program. This agency interpretation of the application of the law relating to the restoration program is given great weight by the Hearing Officer. Therefore, the Applicant will continue to remain ineligible under the present law due to its past rule violations even though the violations have now been cured.

25. Based upon the foregoing, the Department did not abuse its discretion in its review of the application submitted by the Applicant for participation in the restoration program. The affidavit submitted by the owner or operator of the facility was incorrect in its statement that the facility was in compliance with the applicable rules and statutes. Such compliance is required by statute, and the Department has not been granted the power to make exceptions in individual cases.

RECOMMENDATION

Accordingly, it is RECOMMENDED:

That the Department enter a Final Order denying Petitioner's application for restoration coverage in the Florida Petroleum Liability and Restoration Program at the Jacksonville location.

DONE and ENTERED this 28 day of December, 1990, in Tallahassee, Leon County, Florida.

VERONICA E. DONNELLY

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904)488-9675

Filed with the Clerk of the Division of Administrative

Hearings this _28_ day of December, 1990.

APPENDIX TO RECOMMENDED ORDER

The proposed findings of fact submitted by Petitioner are addressed as follows:

1. Rejected. Improper interpretation of law. As for the facts in the first sentence, they are accepted. See HO #8.

2. Rejected. Irrelevant. See HO #9.

3. Rejected. Contrary to fact. See HO #9 and #11.

4. Rejected. Contract to fact. See HO #11.

5. Rejected. Contrary to fact. See HO #12 and #13.

6. Rejected. Contrary to fact. Improper shifting of duty ad legal responsibility.

7. Rejected . Improper application of law.

The Respondent's proposed findings of fact are addressed as follows:

1. Accepted.

2. Accepted.

3. Accepted.

4. Accepted. See HO #8.

5. Accepted. See HO #8.

6. Accepted. See HO #3.

7. Accepted. See HO #3.

8. Accepted. See HO #3.

9. Accepted. See HO #5.

10. Accepted.

11. Accepted. See HO #4.

12. Accepted. See HO #4.

13. Accepted.

14. Accepted. See HO #6.

15. Accepted. See HO #4 and #6.

16. Accepted. See HO #4 and #6.

17. Accepted.

18. Accepted.

19. Accepted. See HO #4 and #9.

20. Accepted.

21. Accepted. See HO #4 and #9.

22. Accepted.

23. Accepted. See HO #9.

24. Accepted. See HO #4 and #10.

25. Accepted.

26. Rejected. Contrary to fact. See HO #10.

27. Accepted.

28. Accepted.

29. Accepted. See HO #10.

30. Accepted. See HO #3 and #12.

31. Accepted.

32. Accepted. See HO #13.

33. Accepted.

34. Accepted. See HO #6.

35. Accepted. See HO #4 and #6.

36. Accepted. See HO #6.

37. Accepted.

38. Rejected. Not established by evidence. See HO #6.

39. Accepted.

40. Accepted.

41. Accepted.

42. Accepted. See HO #7.

43. Accepted.

44. Accepted.

COPIES FURNISHED:

William Chadeayne, Qualified Representative

8933 Western Way, Suite 16

Jacksonville, Florida 32256

Janet E. Bowman, Esquire Assistant General Counsel

Department of Environmental Regulation 2600 Blairstone Road

Tallahassee, Florida 32399-2400

Dale H. Twachtmann, Secretary Department of Environmental Regulation 2600 Blairstone Road

Tallahassee, Florida 32399-2400

Daniel H. Thompson, Esquire General Counsel

Department of Environmental Regulation 2600 Blairstone Road

Tallahassee, Florida 32399-2400

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 90-002058

Orders for Case No: 90-002058