STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
SOUTH FLORIDA CARGO )
CARRIERS ASSOCIATION, INC., )
a Florida corporation, )
)
Petitioner, )
)
vs. ) Case No. 00-1534
)
DEPARTMENT OF BUSINESS AND )
PROFESSIONAL REGULATION, ) PILOTAGE RATE REVIEW BOARD, ) and BISCAYNE BAY PILOTS' )
ASSOCIATION, )
)
Respondents. )
)
RECOMMENDED ORDER
Pursuant to notice, a formal hearing was held in this case on September 20 and 21, 2000, in Miami, Florida, before Patricia Hart Malono, the duly-designated Administrative Law Judge of the Division of Administrative Hearings.
APPEARANCES
For Petitioner: William L. Hyde, Esquire
Gunster, Yoakley, Valdes-Fauli & Stewart, P. A.
215 South Monroe Street, Suite 830 Tallahassee, Florida 32301
For Respondent: John J. Rimes, III, Esquire Pilotage Rate Department of Legal Affairs Review Comm'n The Capitol, Plaza Level 01
Tallahassee, Florida 32399-1050
For Respondent: Stephen Marc Slepin, Esquire Biscayne Bay Slepin & Slepin
Pilots' Ass'n 1114 East Park Avenue
Tallahassee, Florida 32301-2684 STATEMENT OF THE ISSUE
Whether the application of the Biscayne Bay Pilots' Association for an increase in the pilotage rates for the Port of Miami should be granted in whole or in part or denied.
PRELIMINARY STATEMENT
In October 1999, the Biscayne Bay Pilots' Association ("Pilots' Association") submitted an application to the Department of Business and Professional Regulation, Pilotage Rate Review Board ("Board"), pursuant to Section 310.151(2), Florida Statutes (1999), 1/ in which the Pilots' Association requested an increase in pilotage rates for the Port of Miami. 2/ In its Decision on the Biscayne Bay Pilots' Association Pilotage Rate Increase Application in the Port of Miami ("Decision"), dated February 24, 2000, and filed on March 9, 2000, the Board stated its intention to grant in part the requested rate increase. The Pilots' Association did not challenge the Board's decision to approve a pilotage rate increase in an amount less than that requested in its application. However, as authorized in Section 310.151(4), Florida Statutes (1999), the South Florida Cargo Carriers Association ("Cargo Carriers Association") timely filed the
South Florida Cargo Carriers Association, Inc.'s Petition for Formal Administrative Proceeding, in which it challenged the Board's decision to allow a pilotage rate increase at the Port of Miami and requested a formal hearing pursuant to
Sections 120.569 and 120.57(1), Florida Statutes (1999).
In its Petition, the Cargo Carriers Association asserted as disputed issues of material fact the following:
Whether the duties, responsibilities, skills and stresses of pilots and ship's masters are comparable, such that the compensation afforded to ship's masters should be a guidepost for determining rates of compensation for pilots.
Whether an increase in the rates of pilotage for the Port of Miami will have an adverse impact on that port's competitive posture in relation to other similar or nearby ports, in particular Port Everglades.
Whether the pilots' pension plans are exorbitantly generous to pilot retirees.
Whether the increase in rates as approved by the PRRB [Pilotage Rate Review Board] is substantially in excess of the rates currently in effect for Port Everglades, a substantially similar and nearby port in a unique competitive relationship with the Port of Miami.
Whether the Port of Miami and Port Everglades are substantially similar and/or competitive ports whose pilotage rates should also be substantially similar, if not identical.
Whether the pilots at the Port of Miami are overcompensated, especially when compared to other maritime professionals such as ship's masters.
Whether the PRRB [Pilotage Rate Review Board] abused its discretion in determining to substantially grant the BBPA's
application for a rate increase in a phased- in manner.
Whether the pilots are truly independent business people whose capital is at risk such that they may be treated differently from employees in a maritime profession when considering what is a reasonable level of pilot income.
Whether the pilots' duties, responsibilities, skills and stresses are unique to their profession, thus justifying their exorbitantly high annual salaries.
Whether the profession of piloting is an inherently stressful and/or dangerous occupation not comparable to other similar maritime professionals.
Whether a pilot's income should be substantially greater than that available to individuals in comparable maritime employment.
Whether piloting a vessel in the Port of Miami is inherently dangerous and requires the continual acceptance of physical and emotional stress in a manner or extent unique to that profession.
Whether there is any rational justification or explanation for the differential in pilotage rates for the Port of Miami and Port Everglades.
Whether there is a need for the increase in pilotage rates at the Port of Miami.
Whether the BBPA has provided competent, substantial evidence as to a need for the increase in pilotage rates at the Port of Miami.
Whether the pilotage rates as determined by the PRRB for the Port of Miami are appropriate and justified in light of the factors set forth in section 310.151(5), Florida Statutes.
Whether the PRRB's decision to substantially grant the PBBA's [sic] application in [sic] phased-in manner adequately protects the competitive posture of the Port of Miami vis-à-vis Port Everglades.
As "ultimate facts," the Cargo Carriers Association asserted in paragraph 29 of its Petition "the affirmative of disputed issues of material fact set forth in paragraphs 12 through 18 above and the negative of issues 19 through 28."
The Board forwarded the Cargo Carriers Association's petition to the Division of Administrative Hearings for assignment of an administrative law judge, and the Division of Administrative Hearings took jurisdiction of the matter pursuant to Section 310.151(4)(a), Florida Statutes (2000), and
Sections 120.569 and 120.57(1), Florida Statutes (2000). The final hearing was scheduled for September 20 and 21, 2000.
Prior to the hearing, the parties submitted a pre-hearing stipulation in which they identified certain facts that were admitted and need not be proved at the hearing; these facts are included in the Findings of Fact, below. Also prior to the hearing, the order of proof was established in an order entered September 14, 2000, as follows:
The BBPA [Pilots' Association] shall present a prima facie case in support of its application for an increase in pilotage rates; the Petitioner [Cargo Carriers Association] shall present evidence with respect to the disputed issues of fact set forth in the Petition for Formal Administrative Hearing; and, finally, the BBPA [Pilots' Association] shall present evidence in rebuttal if they choose to do so. See Department of Transportation v.
J.W.C. Company, Inc., 396 So. 2d 778, 788-
89, (Fla. 1st DCA 1981).
At the start of the hearing, the Pilots' Association offered into evidence Pilots' Association's Exhibits 1 through
5. Pilots' Association's Exhibit 1 consists of a packet of materials containing the Agenda of the Pilotage Rate Review Board, for January 21, 2000, the Report of the Investigative Committee ("Investigative Committee Report") of the Department of Business and Professional Regulation, Pilotage Rate Review Board, the Application for Change of Rates of Pilotage at the Port of Miami, and the corrected application for a rate increase at the Port of Miami submitted by the Pilots' Association; Pilots' Association's Exhibit 2 consists of a memorandum dated December 9, 1999, to which is attached another copy of the Pilots' Association's corrected application for a pilotage rate increase at the Port of Miami; Pilots' Association's Exhibit 3 consists of a copy of the transcript of the proceedings before the Board on January 21, 2000; Pilots' Association's Exhibit 4 consists of a copy of the transcript of the public hearing held by the Investigative Committee on October 28, 1999; and Pilots' Association's Exhibit 5 consists of a copy of the Board's Decision. Pilots' Association's Exhibits 1 through 4 were received into evidence over hearsay objections, and Pilots' Association's Exhibit 5 was received into evidence without objection.
The Cargo Carriers Association presented the testimony of four witnesses: Richard Law, Diane Camacho, Steven Bock, and Graham Burton. Petitioner's Exhibits 1 through 4 were offered and received into evidence. Cargo Carriers Association's Exhibit 1 consists of the Final Order filed by the Board on June 15, 1998, in DOAH Case Nos. 97-3656 and 97-3657, which dealt with an application for an increase in pilotage rates at Port Everglades and two applications for a decrease in pilotage rates at the port; Cargo Carriers Association's Exhibit 2
consists of a copy of the opinion of the Third District Court of Appeal in South Florida Cargo Carriers Association, Inc. v.
State of Florida, Department of Business and Professional Regulation, Pilotage Rate Review Board and Port Everglades
Pilots' Association, 738 So. 2d 391 (Fla. 3d DCA 1999); Cargo Carriers Association's Exhibits 3 and 4 consist of NOAA charts of the Port of Miami and of Port Everglades, respectively.
The Board did not present the testimony of any witnesses or offer any exhibits into evidence.
The Pilots' Association presented in rebuttal the testimony of eight witnesses: Ella Reynolds, David P. Karcher, James J. Connelly, Andrew Melick, Steven Gerard McDonald, John Richard Fernandez, William A. Arata, and Joseph Daniel Sachs. The Pilots' Association offered into evidence Pilots' Association's Exhibits 6 and 7, marked for identification. The Cargo Carriers
Association objected, and, after the parties argued their respective positions on the objection, it was determined that, because the documents were not disclosed to the Cargo Carriers Association prior to their being offered into evidence, their receipt into evidence would be prejudicial to the Cargo Carriers Association. Accordingly, those documents marked for identification as Pilots' Association's Exhibits 6 and 7 were rejected, subject to the proffer of the Pilots' Association.
During the course of the hearing, the Petitioner classified the areas in which it disputed the facts included in the Board's Decision as follows: (1) The difficulty of piloting in the Port of Miami; (2) the pilots' compensation package; (3) the competitiveness of the Port of Miami; (4) the validity of comparing pilots with ships' masters; (5) the dangers inherent in piloting; (6) the rate differential between ports; (7) the need for an increase in the pilotage rates for the Port of Miami. With the exception of item number 7, these areas fall within one or more of the criteria set forth in
Section 310.151(5)(b), Florida Statutes (2000).
A two-volume transcript of the proceedings was filed with the Division of Administrative Hearings on October 16, 2000.
The parties timely filed proposed findings of fact and conclusions of law, which have been considered in the preparation of this Recommended Order.
FINDINGS OF FACT
Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made:
In their Prehearing Stipulation, the parties stipulated to the following facts, which are deemed admitted:
The Cargo Carriers Association is a Florida not-for- profit corporation with its principal office in Miami, Florida. The purpose of the Cargo Carriers Association is to promote, advance, and secure laws, rules, and regulations concerning vessels utilizing the navigable waters of the State of Florida, in particular the Port of Miami and Port Everglades, in order that the waters, harbors, and ports of the state and the environment and property of all persons be protected to the fullest possible extent consistent with sound financial principles. A substantial number of the members of the Cargo Carriers Association are affected by the rates of pilotage currently set for the Port of Miami, inasmuch as they are required by Florida law, Chapter 310, Florida Statutes, to utilize and compensate the Port of Miami pilots whose rates are established by the Board, and they are, in fact, utilizing and compensating pilots in accordance with the rates established for the Port of Miami. Accordingly, the Cargo Carriers Association
is substantially affected by and has standing to maintain this challenge to the Board's Decision dated March 9, 2000.
The Board is an agency of the State of Florida created pursuant to Section 310.151, Florida Statutes, which is invested with the authority and responsibility to determine the rates of pilotage at the various ports of Florida, including the Port of Miami. Section 310.151, Florida Statutes (2000).
The Pilots' Association is an association of harbor pilots that is treated as a partnership for tax purposes and that performs the pilotage services at the Port of Miami. The offices of the Pilots' Association and its affiliate, Biscayne Bay Pilots, Inc., are located in Miami, Florida.
In October 1999, the Pilots' Association submitted to the Board an application for an increase in the pilotage rates for the Port of Miami.
On October 28, 1999, the Investigative Committee for the Board convened a fact-finding public hearing on the Pilots' Association's application in Miami, Florida, at which numerous interested persons provided comments and testimony, both for and against the Pilots' Association's requested rate increase.
On November 29, 1999, the Pilots' Association submitted to the Board a version of its application that, in its words, "has been edited to correct scrivener's errors."
On December 9, 1999, the Investigative Committee for the Board completed its review and investigation of the Pilots' Association's application and presented its written findings to the Board as required by Rule 61E13-2.007(4), Florida Administrative Code.
On January 21, 2000, the Board met in Miami, Florida, to review the rate increase application of the Pilots' Association and heard comments and testimony from persons who supported or opposed the application in whole or in part. At the conclusion of this meeting, the Board preliminarily determined to grant the Pilots' Association's application in part with a phased-in increase in rates.
The Board's written decision was filed with the agency's clerk on March 9, 2000. The Cargo Carriers Association timely filed its petition for a proceeding under Sections
120.569 and 120.57(1), Florida Statutes (1999).
The Pilots' Association requested in its application a
10 percent increase in the rate for draft charges, for tonnage charges, for shifting or anchoring charges, and for minimum fees, effective immediately, with an additional increase of
5 percent in these rates and fees six months after the effective date of the initial increase. The requested increase would result in a total 15.5 percent increase in pilotage rates and minimum fees at the Port of Miami.
The Board hired an Investigative Committee composed of two consultants, one a Certified Public Accountant and the other a retired Coast Guard officer, to examine the Pilots' Association's application in light of the statutory factors set forth in Section 310.151(5)(b) and (c), Florida Statutes (1999). The Investigative Committee held a public hearing in which it received testimony from interested parties. The Investigative Committee Report was presented to the Board at the public hearing on January 21, 2000.
The Board included in its written Decision findings of fact and comments with respect to each of the criteria set forth in Section 310.151(5), Florida Statutes (1999), 3/ an analysis and statement of its decision to approve an increase in the pilotage rates at the Port of Miami, and an order specifying the approved increases. The Board stated its intention to grant the Pilots' Association's application in part and to increase the rates of pilotage at the Port of Miami 3 1/2 percent for draft charges, tonnage charges, shifting or anchoring charges, and the minimum fees, effective on the date of its order, 4/ with an additional 3 percent rate increase in each of the charges effective 12 months from the effective date of the first increase and another 3 percent increase in each of the charges effective 24 months after the effective date of the first
increase. This increase is 63.16 percent of the increase requested by the Pilots' Association.
The public interest in having qualified pilots available to respond promptly to vessels needing their service.
Section 310.151(5)(b)1., Florida Statutes (2000). 5/
In its Decision, the Board accepted the findings in the Investigative Committee Report with regard to this statutory criterion, which facts are found at page 11 of the report. 6/ The record of the hearing held before the Division of Administrative Hearings does not contain any evidence sufficient to form a basis for findings of fact different from, or in addition to, the facts relied on by the Board in its Decision with respect to this criterion. 7/
A determination of the average net income of pilots in the port, including the value of all benefits derived from service as a pilot. For the purposes of this subparagraph, "net income of pilots" refers to total pilotage fees collected in the port, minus reasonable operating expenses, divided by the number of licensed and active state pilots within the ports.
Section 310.151(5)(b)2., Florida Statutes (2000).
In its Decision, the Board accepted the findings in the Investigative Committee Report with regard to this statutory criterion, which facts are found at pages 12 and 13 of the report, with the following modification to the depreciation adjustment included in the calculation of the pilots' total compensation if the requested rate increase were approved in toto and the resulting modification in the projected "adjusted (all inclusive) income per pilot": The depreciation adjustment
projected for the year 2000 was decreased from $6500.00 to
$1600.00, resulting in an adjusted (all inclusive) income per pilot for the year 2000 of $340,800.00; the depreciation adjustment projected for the year 2001 was decreased from
$6500.00 to $4800.00, resulting in an adjusted (all inclusive) income per pilot for the year 2001 of $340,000.00. The Investigative Committee Report included in the computation of average net pilot income the value of health and retirement benefits, pension valuation, and discretionary costs such as political contributions, lobbying expenses, and business promotion expenses.
The Investigative Committee identified the actual total pilot compensation for pilots at the Port of Miami, including adjustments for pension valuation and discretionary costs but not for depreciation, as $308,200.00 for 1998, and it projected the total pilot compensation for 1999, 2000, and 2001, without a rate increase, as $288,200.00, $296,200.00, and $290,200.00, respectively.
The record of the hearing held before the Division of Administrative Hearings does not contain evidence sufficient to form a basis for findings of fact different from, or in addition to, the facts relied on by the Board in its Decision with respect to this criterion, except as specifically set forth in the following paragraphs.
Since 1993, the Pilots' Association has tried to maintain a roster of 18 active pilots at the Port of Miami, although this number has fluctuated from time to time. Currently, there are 17 pilots and one deputy at the Port of Miami.
Excluding adjustments for pension valuation and discretionary costs, compensation in 1997 and 1998 for pilots at the Port of Miami was $281,000.00 and $278,000.00, respectively; compensation at Port Everglades was $329,000.00 and $344,000.00, respectively; compensation at the Port of Palm Beach was
$154,000.00 and $230,000.00, respectively; and compensation at the Port of Jacksonville was $250,000.00 and $254,000.00, respectively. Because of the exclusions noted above, these amounts understate actual compensation.
Compensation for the Port of Miami pilots increased
38.4 percent between 1989 and 1996. In 1989, pilot income at the Port of Miami was $203,000.00, and, in 1990, it was
$181,000.00. The pilots received an effective 32 percent rate increase as a result of a 26 percent rate increase in 1992 and a
5 percent rate increase in 1993, and gross pilotage revenue increased 72 percent between 1989 and 1996, an increase primarily attributable to an increase in the number of larger vessels using the port. As a result of the revenue increase, pilot income rose to over $281,000.00 in 1997.
In addition to piloting, the pilots at the Port of Miami carry out the duties of Harbor Master, which involve coordinating all of the ship traffic in the port. The pilots receive no additional compensation for this service.
Reasonable operating expenses of pilots. Section 310.151(5)(b)3., Florida Statutes (2000).
In its Decision, the Board accepted the findings of the Investigative Committee Report with regard to this statutory criterion, which facts are found at pages 13 through 16 of the report. In the report, the Investigative Committee found that, with the exception of the costs associated with the Pilots' Association's retirement plan, the operating expenses included in the Pilots' Association's application were reasonable.
The Investigative Committee Report included a detailed discussion of the Pilots' Association's retirement plan. The retirement plan of the Pilots' Association is a non-qualified plan under the Internal Revenue Code and is unfunded and, therefore, contingent on the future operations at the Port of Miami. The plan is in the form of a consulting agreement between the Pilots' Association and its retirees, pursuant to which each pilot who reaches 55 years of age and completes 20 years of service as a full-time active pilot, and who agrees to act in the best interests of the Pilots' Association, is eligible to be paid up to 50 percent of an active pilot's
income, provided that the aggregate amount paid to retirees may not exceed 20 percent of the annual total gross pilotage revenue. The payments are to be made from future pilotage revenue.
The total costs associated with retired pilot compensation and benefits (equity buy-outs, surviving spouse accrual, and health insurance) included in the Investigative Committee Report for 1998 were $2,093,086.00, of which $1.4 million was attributable to payments to 11 retirees for consulting services. The Investigative Committee questioned the reasonableness of this operating expense at page 16 of its report, although it noted that there are similar plans in other Florida ports.
The record of the hearing held before the Division of Administrative Hearings does not contain evidence sufficient to form a basis for findings of fact different from, or in addition to, the facts relied on by the Board in its Decision with respect to this criterion, except as specifically set forth in the following paragraphs.
In 1998, payments to the five retired pilots at Port Everglades totaled $962,714.00.
The retirement plan for the Port Everglades pilots has the same limits as the plan for the pilots at the Port of Miami: A Port Everglades retiree's benefit is limited to 50 percent of
the income of an active pilot, and the aggregate benefits paid to Port Everglades retirees may not exceed 20 percent of the pilots' annual gross revenue. The plan at Port Canaveral limits the aggregate benefits paid to retirees to 33 1/3 percent of gross annual revenue; the limitation at the Port of Jacksonville for current retirees is 28 percent of gross annual revenue and
22 percent for new retirees. There are no aggregate limits on the amounts paid to retirees at the ports in Charleston, South Carolina, or Savannah, Georgia.
Pilotage rates in other ports. Section 310.151(5)(b)4., Florida Statutes (2000).
In its Decision, the Board accepted the findings of the Investigative Committee Report with regard to this statutory criterion, which facts are found at pages 16 and 17 of the report, and stated its intention to confine its comparative rate analysis to ports in Florida and the southeastern seaboard.
It was noted in the Investigative Committee Report that, in 1998, the Port of Miami was ranked the seventh highest of 12 Florida ports with respect to the cost for piloting both a standard large and a standard small vessel and the eighth highest out of the 12 Florida ports in the amount of revenue per handle. 8/
As part of its comparison of pilotage rates in other ports, the Investigative Committee included in its report a
chart based on 1998 data setting out the number of handles in each of the 12 Florida ports surveyed, together with 1998 revenue, average handle time, number of pilots, revenue per handle, and revenue per handle hour for each of the 12 ports. In 1998, the Port of Miami had 8,909 handles, revenue of
$8,433.539.00, average handle time of 2.0 hours, 18 pilots, revenue per handle of $947.00, and revenue per handle hour of
$473.00. Based on 1998 data, Port Everglades, the port closest geographically to the Port of Miami, had 10,168 handles, revenue of $6,899,006.00, average handle time of 1.9 hours, 16 pilots, revenue per handle of $679.00, and revenue per handle hour of
$357.00.
In its Decision, the Board recognized that pilotage rates cannot be considered in a vacuum and that a rate increase or decrease is not justified simply because a rate is comparatively low or high. Rather, the Board found that consideration must be given to the size and number of vessels using the port, the time required to service the vessels, and the characteristics of the port that impact positively or negatively on the gross revenue and net income derived from the rate structure.
The record of the hearing held before the Division of Administrative Hearings does not contain evidence sufficient to form a basis for findings of fact different from, or in addition
to, the facts relied on by the Board in its Decision with respect to this criterion, except as specifically set forth in the following paragraphs.
The Investigative Committee determined that Port Everglades was the closest and most relevant competitive port to the Port of Miami. The Port of Miami handles primarily cruise ships, excluding daily cruise ships, and container cargo vessels. Port Everglades handles both container cargo vessels and vessels containing bulk and neo-bulk products such as petroleum, cement, steel, and lumber, as well as a mix of large cruise ships and smaller, daily cruise ships. Port Everglades is one of the largest petroleum ports in the southeastern United States.
The Port of Miami handles fewer but generally larger vessels than Port Everglades.
The distance between the sea buoy 9/ and the turning basin where the pilots turn and dock cruise ships in the Port of Miami is approximately six miles; the distance between the sea buoy and the turning basin where the pilots turn and dock cruise ships in Port Everglades is approximately two miles. In Port Everglades, the distance from the sea buoy to the channel is short, so that there is little room to position the vessel properly for entry into the channel. The channel is, however,
straight. In the Port of Miami, there is a 40-degree turn mid- channel.
Currently, Port Everglades has 16 pilots and two deputies.
A comparison of the pilotage rates in the Port of Miami and in Port Everglades shows that, without considering the rate increase proposed by the Board, the current draft rate in the Port of Miami is 38 percent higher than that in Port Everglades and the current tonnage rate is 7.5 percent higher in the Port of Miami than in Port Everglades. With the Board's proposed rate increase, the draft rate at the Port of Miami is roughly 40 percent higher than that at Port Everglades, and the tonnage rate is roughly 16 percent higher.
Without a rate increase, total pilotage fees at the Port of Miami are 18 percent higher for small vessels and
14 percent higher for large vessels than the total pilotage fees at Port Everglades. Using the cruise ship Enchantment of the Seas as an example, without the rate increase, pilotage fees are
$5,700.00 per trip in and out of the Port of Miami, or
$260,000.00 annually; with the Board's proposed rate increase, pilotage fees are $6,270.00 per trip, or $326,000.00 annually. In contrast, the pilotage fees for the Enchantment of the Seas at Port Everglades are $5,150.00 per trip in and out of the port, or $268,000.00 annually. 10/
The amount of time each pilot spends on actual piloting duty and the amount of time spent on other essential support services. Section 310.151(5)(b)5., Florida Statutes (2000).
In its Decision, the Board accepted the findings in the Investigative Committee Report with regard to this statutory criterion, which facts are found at page 18 of the report. The record of the hearing held before the Division of Administrative Hearings does not contain any evidence sufficient to form a basis for findings of fact different from, or in addition to, the facts relied on by the Board in its Decision with respect to this criterion.
The prevailing compensation available to individuals in other maritime services of comparable professional skill and standing as that sought in pilots, it being recognized that in order to attract to the profession of piloting, and to hold the best and most qualified individuals as pilots, the overall compensation accorded pilots should be equal to or greater than that available to such individuals in comparable maritime employment. Section 310.151(5)(b)6., Florida Statutes (2000).
In its Decision, the Board accepted the findings in the Investigative Committee Report with regard to this statutory criterion, which facts are found at pages 18 and 19 of the report.
In its report, the Investigative Committee recognized that the Board, in the Port Everglades case, concluded in its Final Order that the profession most comparable to that of a port pilot is that of a captain of a large United States-flagged vessel. The Investigative Committee further recognized that the
Board, in the Port Everglades case, concluded that pilot compensation should be equal to or greater than $203,000.00, represented by the Investigative Committee in its report as the annualized compensation of a "U.S. master."
The Investigative Committee found, further, that the skills, risks, and working conditions of a ship's captain and a pilot are considerably different in that a pilot must have a wider range of technical skills to pilot a variety of vessels of different sizes; a pilot assumes more physical risks because of the need to board and disembark each vessel; a pilot is constantly in a stressful situation while piloting a vessel into port; and a pilot is a private businessman rather than an employee and must face all of the attendant risks and obligations.
In its Decision, the Board established the "floor" compensation for pilots at approximately $200,000.00 to
$220,000.00, which represents the wage of the highest-paid ship's master on a United States-flagged ship. 11/ The Investigative Committee found in its report that the amount of compensation above the floor established by the Board depends on several factors, including the size of the ships calling on the port, the difficulty of the port, the cost of living in the surrounding community, and pilot compensation in other United States ports.
Finally, the Board expressly recognized in its Decision that, unlike ships' masters, pilots are not employees of a corporation but are independent businessmen, with all of the financial risks that status implies.
The record of the hearing held before the Division of Administrative Hearings does not contain evidence sufficient to form a basis for findings of fact different from, or in addition to, the facts relied on by the Board in its Decision with respect to this criterion, except as specifically set forth in the following paragraphs. 12/
The education and training of a pilot and a ship's master is, in many cases, the same. A ship's master operating on the high seas, however, has the responsibility for the ship's well-being 24 hours a day, seven days a week during the course of the voyage. The scope of responsibility of a ship's master requires a wider array of skills than those of a pilot; he or she must make judgments regarding matters extending beyond the navigation of the ship. The ship's master is responsible for the ship's crew and, if the ship is a cruise ship, for the welfare of the passengers, and he or she must deal with the hazards of the ship catching fire, disease onboard, and a variety of other matters requiring non-technical skills. A ship's master must have navigational skills and must be knowledgeable about many ports throughout the world and many
weather systems. Even when a ship is being piloted into port, the ship's master retains the ultimate responsibility for the ship, and the ship's master will sometimes dock the ship once the pilot has brought it to the docking area.
Pilots are licensed to operate in a particular port, and they must have an intimate knowledge of that port. Because pilots must handle almost every vessel calling at the Port of Miami, they must be familiar with the peculiarities of numerous types and sizes of vessels, and they must continually take courses to keep up with the changing technology used on new vessels. Consequently, the knowledge and skills required of a pilot are more specialized and more narrowly focused than those required of a ship's master.
When a vessel is ready to come into the Port of Miami, the pilot is taken to the vessel, which, depending on its size, may be located two-to-three miles east of the sea buoy. The pilot must, therefore, board and disembark from a vessel in open water. A pilot at the Port of Miami must guide vessels, sometimes exceeding 1,000 feet in length, through a 500-foot wide channel cut in rock, make a 40-degree turn, and guide the vessel into the port's turning basin and, ultimately, to its berth. There is little maneuvering room, and the pilot must deal with the ever-changing winds, currents, and tides that affect a vessel's passage to the berthing area. For ships of
1,000 feet or longer, there is adequate but not generous room for maneuvering in the turning basin.
The number of large vessels using the Port of Miami has increased since 1989. Piloting large vessels increases the complexity of the pilot's job and increases the potential for an accident, necessarily increasing the amount of stress experienced by pilots routinely bringing such vessels into the Port of Miami.
A pilot must direct the crew of a vessel when bringing the vessel into and through the channels leading to the turning basin and from the turning basin to the berths, and his or her success depends on his ability to communicate instructions to crewmembers. This communication is becoming more difficult because crewmembers are recruited from many different countries, including those from Eastern Europe, and they may or may not understand English. The stress experienced by a pilot is significantly increased when he must depend on crewmembers who do not understand English, because disaster could result if the pilot's instructions are not followed precisely.
The stress experienced by pilots when they are on the job is much more intense, though of shorter duration, than that experienced by ship's masters. A pilot at the Port of Miami will pilot between six and 18 ships each week and is on-call 24
hours each day while on piloting duty, under conditions that are physically and mentally stressful.
The pilots at the Port of Miami are not employees of the Pilots' Association. Rather, the Pilots' Association is operated as a partnership of the pilots, and it is funded from the pilotage revenue at the Port of Miami. There are significant operating expenses deducted from gross pilotage revenue before the pilots are paid.
The Pilots' Association owns and maintains a building at the far eastern end of the Port of Miami that houses the pilots' business office and also contains bedrooms, restrooms, a lounge, and a chart room for use by the pilots. The Pilots' Association employs office staff to handle billing and accounting functions.
The Pilots' Association owns and operates four pilot boats used to transport pilots to and from vessels arriving at and departing from the Port of Miami, and it employs six full- time boat operators. Replacement costs for the pilot boats exceed $2 million. The pilots must absorb rising fuel costs, which cannot be passed on as a surcharge to those using the port and are also responsible for the costs of maintaining the boats.
The pilots provide communications services to the vessels entering the Port of Miami, and the Pilots' Association maintains three Federal Communications Commission licenses, a
marine coastal station, a high power UHF repeater, and VHF radios in all of the pilot boats. The pilots have invested approximately $50,000.00 in communications equipment that they make available to the Port of Miami, including a 100-watt VHF long range radio and tower, as well as the UHF repeater, and they also maintain the equipment. In addition, the pilots employ dispatchers who handle the radios.
The pilot's income is a function of the volume and size of traffic in and out of the port, and they are, consequently, affected by decisions made by the Port of Miami authorities with respect to services to be provided vessels using the port and with respect to port charges.
The financial risks faced by the pilots at the Port of Miami are, for the most part, shared by all independent business owners. However, even though pilots of the Pilots' Association are the only pilots allowed to provide services in the Port of Miami and even though pilotage rates are highly regulated and, to an extent, non-competitive, pilots, unlike most private independent business owners, cannot pass on increases in operating expenses; rather, the pilots must absorb these increases until, and unless, an application for a rate increase is approved. 13/
The impact rate change may have in individual pilot compensation and whether such change will lead to a shortage of licensed state pilots, certificated deputy pilots, or qualified pilot applicants. Section 310.151(5)(b)7., Florida Statutes (2000).
In its Decision, the Board accepted the findings in the Investigative Committee Report with regard to this statutory criterion, which facts are found at page 19 of the report.
In its report, the Investigative Committee found that all-inclusive pilot compensation for the pilots at the Port of Miami would increase 8.76 percent if the increase requested by the Pilots' Association were approved by the Board. As a result, the compensation of pilots at the Port of Miami would still be lower than that of the pilots at Port Everglades, but only slightly.
The Investigative Committee noted that an opening at any of the four major Florida ports, the Port of Miami, Port Everglades, Tampa, and Jacksonville, draws 20 to 30 applicants from all over the United States. The Investigative Committee observed that, with or without a rate increase, any of these four ports would attract qualified pilots because they are likely to find more attractive compensation and working and living environments than provided by their present situations.
The record of the hearing held before the Division of Administrative Hearings does not contain any evidence sufficient to form a basis for findings of fact different from, or in
addition to, the facts relied on by the Board in its Decision with respect to this criterion.
Projected changes in vessel traffic.
Section 310.151(5)(b)8., Florida Statutes (2000).
In its Decision, the Board accepted the findings in the Investigative Committee Report with regard to this statutory criterion, which facts are found at pages 20 and 21 of the report.
The Investigative Committee accepted the estimated handles provided by the Pilots' Association in its application, which reflects an increase from 8,909 handles in 1998, to an estimated 9,200 handles in 1999, 2000, and 2001. The Investigative Committee noted in its report that the number of cruise passengers at the Port of Miami has remained steady since 1991 and that, although the number of handles decreased between 1992 and 1995, there was steady growth in cargo tonnage between 1988 and 1998. Even with the decrease in the number of handles, the average revenue per handle increased from $545.00 in 1990 to
$978.00 in 1998, accounting for a 73 percent increase in the gross annual revenue and a 79 percent increase in the average revenue per handle. The Investigative Committee found that the data suggests that the increase in the pilots' average revenue per handle, and, therefore, its gross annual revenue, is more a function of the increase in the size of the vessels calling at
the Port of Miami than a function of the 32 percent rate increase in 1992 and 1993.
The Investigative Committee found in its report, and the Board recognized in its Decision, that Port Everglades and the Port of Miami have a strong competitive relationship and that a large increase in pilotage rates at the Port of Miami might result in a decision by Maersk Shipping, a large shipping company currently calling at the Port of Miami and at Port Everglades, to consolidate its operations and use Port Everglades rather than the Port of Miami, resulting in a material decrease in the revenue of the Port of Miami pilots. Prior to the rate increase proposed by the Board, Maersk Shipping paid the pilots at the Port of Miami $1.08 million each year in pilotage fees. A change in operations to Port Everglades would result in a decrease in each pilot's annual income of approximately $48,000.00, with a $24,000.00 decrease in each retiree's benefits. 14/
The record of the hearing held before the Division of Administrative Hearings does not contain evidence sufficient to form a basis for findings of fact different from, or in addition to, the facts relied on by the Board in its Decision with respect to this criterion, except as specifically set forth in the following paragraphs.
In choosing ports of call, ship owners, particularly cargo lines, consider many factors, including marketing factors, the availability of berths, the availability of terminal space, the availability of inland transportation, and port congestion, as well as port costs.
Port costs, also known as port call expenses, at the Port of Miami are composed of many elements in addition to pilotage fees, such as terminal fees ($8,800.00) 15/ , dockage fees ($3,349.00), wharfage fees ($3,400.00), tug boat fees ($3,009.00), agent fees ($1,500.00), custom and agriculture entry fees ($1,995.00), and harbor fees ($162.00), for a total of $5,570.00; pilotage fees at the Port of Miami for a standard large vessel, according to 1998 data, were $1,085.40, or approximately 15-to-20 percent of port call expenses for a standard large vessel. Therefore, while pilotage fees are a significant part of the mix of port call expenses considered by ship owners in determining whether to call at the Port of Miami, pilots have no control over most of the fees and tariffs comprising port call expenses or over the many other factors that might influence the competitive posture of the Port of Miami vis-à-vis Port Everglades or changes in vessel traffic in the Port of Miami.
The Port of Miami consists of Lummus and Dodge Islands, and it is run by the Miami-Dade County Seaport
Department. The port rates at the Port of Miami increased approximately 30 percent between 1991 and 1998, generating a revenue increase of approximately 76 percent. Operating expenses increased approximately 44 percent during that time period, but, in general, the port's rate increases have gone primarily to finance improvements in the port's infrastructure and to provide its customers with facilities to accommodate their larger vessels. The port has also received a number of federal and state grants to fund construction programs to improve the port, as well as federal funds for the Port of Miami's dredging program.
POMTOC, the Port of Miami Terminal Operating Company, recently received approval to raise its gate fee and empty container storage fee 2.7 percent. The Miami-Dade County Seaport Department also increased its harbor fee for large vessels from $195.00 in 1999 to $235.00 in 2000. In addition, the majority of the port's tariff items increased between 1999 and 2000.
Competition is very aggressive among the ports along the eastern seaboard of the United States and along the Gulf of Mexico. As one response to the competitive nature of the market, the Port of Miami has, since 1998, entered into volume incentive agreements with several of its largest customers. The purpose of these agreements is to increase the level of activity
at the port by offering a reduction in the port's tariff rate, while at the same time having a guaranteed minimum level of revenue for the port. The Port of Miami has entered into volume incentive agreements with Carnival Cruise Lines, Royal Caribbean Cruise Lines, Seaboard Marine, Maersk, Columbus Lines, and Chilean, and it is in the process of negotiating other such agreements. As a result of the agreements, these lines have brought additional business to the port or have brought new lines to the port.
Cost of retirement and medical plans.
Section 310.151(5)(b)9., Florida Statutes (2000).
In its Decision, the Board accepted the findings in the Investigative Committee Report with regard to this statutory criterion, which facts are found at pages 22 through 25 of the report.
In its report, the Investigative Committee determined that the estimated cost of the medical plan available to active and retired pilots for 1999, 2000, and 2001 was $8,125.00,
$8,235.00, and $8,400.00, respectively, for each active pilot (or a gross for active pilots of $143,000.00, $140,000.00, and
$148,000.00, respectively), and $4,636.00, $5,083.00, and
$5,083, respectively, for each retiree (or a gross for retirees of $51,000.00, $61,000.00, and $61,000.00, respectively).
The Pilots' Association funds both a money purchase pension plan and a 401k plan for all of its employees, after they have completed one year's service. The total annual contribution averages $6,000.00 per employee.
Because the pilots are members of a partnership, they are not considered Pilots' Association employees. Their retirement plan is unfunded, and, as noted above, is in the form of a lifetime consulting agreement pursuant to which eligible pilots receive income that is limited to 50 percent of an active pilot's income, with the aggregate payments to retirees capped at 20 percent of the pilots' gross annual revenue. A surviving spouse of a retired pilot is entitled to receive 25 percent of an active pilot's income for life. The equity interests of retiring pilots in the Pilots' Association are also purchased by the Pilots' Association. These benefits result in an aggregate cost to the Pilots' Association of $2,093,086.00 per year.
The Investigative Committee valued the pension plan at a conservative $30,000.00 per year, a figure that the Board accepted over objections by the Pilots' Association.
The record of the hearing held before the Division of Administrative Hearings does not contain evidence sufficient to form a basis for findings of fact different from, or in addition to, the facts relied on by the Board in its Decision with respect to this criterion.
Physical risks inherent in piloting.
Section 310.151(5)(b)10., Florida Statutes (2000).
In its Decision, the Board accepted the findings in the Investigative Committee Report with regard to this statutory criterion, which facts are found at pages 25 and 26 of the report.
The Investigative Committee found that boarding a vessel at sea is the most difficult and dangerous aspect of a pilot's job, and that several pilots were injured between 1996 and 1999. Pilots board vessels in the open sea under many different conditions, with considerable risk, and the pilot often receives minimal support from a vessel's crew.
The record of the hearing held before the Division of Administrative Hearings does not contain evidence sufficient to form a basis for findings of fact different from, or in addition to, the facts relied on by the Board in its Decision with respect to this criterion, except to the extent specifically set forth in the immediately following paragraphs.
Even though they may refuse if conditions are unsafe, as a general rule pilots board and disembark from vessels in the open sea, in all kinds of weather, day and night, on rope ladders that are not fixed, that are sometimes not consistent with standards established by the International Maritime Organization, and that are sometimes in poor repair. Whenever
possible, the vessels turn to create a lee, or sheltered side, where the pilot can board and disembark from the vessel with less risk, although it is always possible, even in a calm sea, for a cross swell to hit the vessel during boarding or disembarking. Another point at which a pilot is physically at risk is upon moving from the ladder to the deck of the vessel.
Many cruise ships have pilot doors low on the side of the vessel to shorten the distance a pilot must ascend or descend a ladder to board and disembark from the ship.
Once the pilot is on board the vessel, he is escorted to the bridge, which is accessible only by stairs, sometimes totaling 100 steps in many modern cargo ships.
Special characteristics, dangers, and risks of the particular port. Section 310.151(5)(b)11., Florida Statutes (2000).
In its Decision, the Board accepted the findings in the Investigative Committee Report with regard to this statutory criterion, which facts are found at pages 26 and 27 of the report.
In its report, the Investigative Committee identified several special characteristics, dangers, and risks of the Port of Miami. It recognized that, due to the velocity and direction of the currents, the proximity of the Gulf Stream presents a variety of challenges to pilots as vessels approach the Outer Bar Channel and that the Gulf Stream, together with northerly
winds and a flooding current, make transiting the jetties especially difficult. Because the channel bottom is hard coral from the sea buoy to the berths, it is extremely difficult to handle large, deep-draft vessels to and from the gantry berths, and the current and wind conditions require special handling of these vessels when they dock or turn. In addition, reefs lining the approaches to the Port of Miami are unmarked, and the background light from Miami-Dade County makes it difficult to identify land and navigational marks.
Weather can cause hazards to navigation in the Port of Miami, with rapidly changing wind conditions resulting from thunderstorms and with changing tidal conditions resulting from heavy rains. In addition, northwesterly and northeasterly winds cause heavy sets on a flood tide for vessels passing through the jetties.
The record of the hearing held before the Division of Administrative Hearings does not contain evidence sufficient to form a basis for findings of fact different from, or in addition to, the facts relied on by the Board in its Decision with respect to this criterion, except to the extent specifically set forth in the immediately following paragraphs. 16/
The complexity of the waterway poses a high risk to vessels being piloted into the Port of Miami. Waterway complexity at the Port of Miami includes the amount of crossing
traffic, turns in the channel, converging traffic from different channels, background lighting, and the large number of small pleasure craft in and around the channels.
The hard rock bottom of the channels poses a high risk to vessels being piloted into the Port of Miami. The channel is dredged in a "U" shape, forming a narrow underwater trench through which vessels must pass, and vessels can be seriously damaged if they come into contact with the sides of the trench.
Any other factors the board deems relevant in determining a just and reasonable rate. Section 310.151(5)(b)12., Florida Statutes (2000).
In its Decision, the Board determined that there were no such factors. The record of the hearing held before the Division of Administrative Hearings does not contain any evidence sufficient to form a basis for findings of fact different from, or in addition to, the Board's finding.
The board may take into consideration the consumer price index or any other comparable economic indicator when fixing rates of pilotage; however, because the consumer price index or such other comparable economic indicator is primarily related to net income rather than rates, the board shall not use it as the sole factor in fixing rates of pilotage. Section 310.151(5)(c), Florida Statutes (2000).
In its Decision, the Board accepted the findings in the Investigative Committee Report with regard to this statutory criterion, which facts are found at pages 28 and 29 of the report and in the attachments thereto. In its report, the Investigative Committee found that the Consumer Price Index
("CPI") had increased 17.8 percent since January 1, 1993, the date of the last pilotage rate increase, and 22.9 percent since October 1991, the date of the Pilots' Association's last application for a rate increase. In reaching its conclusion that some increase in pilotage rates at the Port of Miami is justified, the Board noted in its Decision that it considered it compelling that the CPI had increased 17.8 percent since the last rate increase and that pilotage rates at the Port of Miami had not increased for seven years.
The record of the hearing held before the Division of Administrative Hearings does not contain any evidence sufficient to form a basis for findings of fact different from, or in addition to, the facts relied on by the Board in its Decision with respect to this criterion.
Taken in its entirety, the evidence presented by the Cargo Carriers Association and the Pilots' Association in this proceeding with respect to the statutory factors set forth in Section 310.1151(5)(b) and (c), Florida Statutes (2000), yielded findings of fact in addition to those found by the Board in its Decision. There was not sufficient credible and persuasive evidence presented by the Cargo Carriers Association to support a finding of fact contrary to the findings of the Board in its Decision.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding and of the parties thereto pursuant to Sections 120.569 and 120.57(1), Florida Statutes (2000). See Section 310.151(4)(a), Florida
Statutes (2000).
It is necessary at this point to discuss the authority of an administrative law judge of the Division of Administrative Hearings in proceedings involving the setting of rates of pilotage in the ports of this state. In Section 310.151, Florida Statutes, the legislature created the Board, established its composition, gave it the authority to adopt rules to implement the duties conferred on it in the section, and established a procedure by which applications for pilotage rate changes shall be filed, considered, and resolved by the Board. The Board is given the authority to "investigate and determine whether the requested rate change will result in fair, just, and reasonable rates of pilotage pursuant to rules prescribed by the board." Section 310.151(3), Florida Statutes (2000).
Once the Board has held a hearing, made a decision on the application for a rate change, and reduced its decision to writing, either the applicant or a person whose substantial interests will be affected by the decision may request a hearing "pursuant to the Administrative Procedures Act."
Section 310.151(4)(a), Florida Statutes (2000). The Board is to review the request for a hearing and,
if it concludes that the petitioner has raised a disputed issue of material fact, the board shall designate a hearing, which shall be conducted by formal proceeding before an administrative law judge assigned by the Division of Administrative Hearings pursuant to ss. 120.569 and 120.57(1), unless waived by all the parties. If the board concludes that the petitioner has not raised a disputed issue of material fact and does not designate the petition for hearing, that decision [of the Board] shall be considered final agency action for purposes of s. 120.68.
Id.
Pursuant to the rulemaking authority delegated to it
in Section 310.151(1)(c), Florida Statutes (2000), the Board enacted Rule 61E13-2.012, Florida Administrative Code, which provides as follows:
Since the determination of the actual rate of pilotage to be imposed at any port is a quasi-legislative act, the resolution of any disputed issue of material fact by a hearing officer assigned by the Division of Administrative Hearings shall not result in a recommendation from the hearing officer [now administrative law judge] as to the appropriate rate to be imposed at any port area in question. The hearing officer's [now administrative law judge's] recommendation shall only extend to resolving disputed issues of material fact which result from a party's disputing the underlying facts upon which the Board has suggested intended rates for the port area in question.
(Emphasis added.) The validity of this rule was upheld in Pilotage Rate Review Board v. South Florida Cargo Carriers Association, Inc., 738 So. 2d 406 (Fla. 3d DCA 1999).
In many respects, the Cargo Carriers Association in this proceeding has not disputed the facts underlying the Board's decision to grant a pilotage rate increase at the Port of Miami. Indeed, it adopted many of the facts set forth in the Investigative Committee Report and supplemented those with testimony from a member of the Investigative Committee. Rather, the Cargo Carriers Association disagrees in many respects with the judgment of the Board in determining that policy considerations, in light of the facts found in its Decision, suggest that a pilotage rate increase at the Port of Miami is appropriate. The correctness of the judgments of the Board in weighing the facts and in balancing the considerations set forth in the statutory criteria is an issue that cannot be resolved by an administrative law judge of the Division of Administrative Hearings. See South Florida Cargo Carriers Association, Inc. v. State of Florida, Department of Business and Professional Regulation, Pilotage Rate Review Board and Port Everglades Pilots' Association, 738 So. 2d 391 (Fla. 3d DCA 1999).
The Pilots' Association, as the applicant for a rate increase, has the burden of proving to the Board by a preponderance of the evidence that it is entitled to a pilotage
rate increase at the Port of Miami. See Department of Banking
and Finance, Division of Securities and Investor Protection v. Osborne Stern and Co., 670 So. 2d 932 (Fla. 1996); Department of Transportation v. J.W.C. Company, Inc., 396 So. 2d 778, 787, (Fla. 1st DCA 1981).
Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Pilotage Rate Review Board consider the additional facts established by the evidence presented at the hearing before the Division of Administrative Hearings in determining, in accordance with its interpretation of its statutory mandate, its expertise, and the appropriate policy considerations, whether the Decision on the Biscayne Bay Pilots' Association Pilotage Rate Increase Application in the Port of Miami, filed March 9, 2000, will result in fair, just, and reasonable pilotage rates at the Port of Miami.
DONE AND ENTERED this 11th day of January, 2001, in
Tallahassee, Leon County, Florida.
PATRICIA HART MALONO
Administrative Law Judge
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-3060
(850) 488-9675 SUNCOM 278-9675
Fax Filing (850) 921-6847 www.doah.state.fl.us
Filed with the Clerk of the Division of Administrative Hearings this 11th day of January, 2001.
ENDNOTES
Although the 1999 Florida Statutes were in effect at the time the Pilots' Association submitted its application for a rate increase, the 2000 edition of the Florida Statutes are applicable in this proceeding since the issue is whether the application should be granted or denied. See Lavernia v. Department of Professional Regulation, Board of Medicine, 616 So. 2d 53, 53-54 (Fla. 1st DCA 1993). As a result, citations will be made to the 1999 and 2000 editions of the Florida Statutes, as appropriate.
Section 310.151, Florida Statutes (2000), governs the setting of rates of pilotage for the ports of the State of Florida. Pursuant to the provisions of Section 310.151(2), Florida Statutes (2000), "[a]ny pilot, group of pilots, or other person or group of persons whose substantial interests are directly affected by the rates established by the board may apply for a change in [pilotage] rates."
Section 310.151(5), Florida Statutes (2000), sets forth the factors to be considered by the Board in determining whether the requested rate change should be granted or denied:
(5)(a) In determining whether the requested rate change will result in fair, just, and reasonable rates, the board shall
give primary consideration to the public interest in promoting and maintaining efficient, reliable, and safe piloting services.
The board shall also give consideration to the following factors:
The public interest in having qualified pilots available to respond promptly to vessels needing their service.
A determination of the average net income of pilots in the port, including the value of all benefits derived from service as a pilot. For the purposes of this subparagraph, "net income of pilots" refers to total pilotage fees collected in the port, minus reasonable operating expenses, divided by the number of licensed and active state pilots within the ports.
Reasonable operating expenses of pilots.
Pilotage rates in other ports.
The amount of time each pilot spends on actual piloting duty and the amount of time spent on other essential support services.
The prevailing compensation available to individuals in other maritime services of comparable professional skill and standing as that sought in pilots, it being recognized that in order to attract to the profession of piloting, and to hold the best and most qualified individuals as pilots, the overall compensation accorded pilots should be equal to or greater than that available to such individuals in comparable maritime employment.
The impact rate change may have in individual pilot compensation and whether such change will lead to a shortage of licensed state pilots, certificated deputy pilots, or qualified pilot applicants.
Projected changes in vessel traffic.
Cost of retirement and medical plans.
Physical risks inherent in piloting.
Special characteristics, dangers, and risks of the particular port.
Any other factors the board deems relevant in determining a just and reasonable rate.
The board may take into consideration the consumer price index or any other comparable economic indicator when fixing rates of pilotage; however, because the consumer price index or such other comparable economic indicator is primarily related to net income rather than rates, the board shall not use it as the sole factor in fixing rates of pilotage.
In an amendment codified as Section 310.151(4)(b), Florida Statutes (2000), the legislature provided that, in the event that an administrative proceeding is commenced pursuant to Sections 120.569 and 120.57(1), Florida Statutes, the proposed pilotage rate increases are to become effective immediately upon the decision of the Board and are to remain in effect during the pendency of the administrative proceeding. The amount of money representing the difference between the original rate and the increased rate is to be placed in an interest-bearing account until the Board enters its final order.
The findings of fact herein will be organized in accordance with the statutory criteria set forth in Section 310.151(5), Florida Statutes (2000), which section has been quoted in full in endnote 3, supra. Although the Investigative Committee Report and the Board addressed the factors set forth in
Section 310.151(5), Florida Statutes (1999), the factors were not modified during the 2000 legislative session.
Because the purpose of this administrative proceeding is "to resolve disputed issues of material fact which result from a party's disputing the underlying facts upon which the Board has suggested intended rates," Rule 61E13-2.012, Florida Administrative Code, it is appropriate to evaluate whether an issue of fact is in dispute by reference to the findings of fact in the Board's Decision rather than by reference to the Pilots' Association's application.
Specified portions of the Investigative Committee Report, with certain modifications, were incorporated into the Board's Decision. It would serve no useful purpose to reiterate all of the facts included in the Investigative Committee Report in this Recommended Order, so these facts have been summarized whenever necessary to provide the framework upon which the Board based
its decision as to the appropriate pilotage rates for the Port of Miami.
Piloting a vessel into port is considered one handle, and piloting a vessel out of port is considered one handle.
The sea buoy is the outermost navigation aid for vessels entering the Port of Miami, and it is in the general location of the sea buoy that Port of Miami pilots board vessels and disembark from them.
Royal Caribbean Cruise Line, the owner of the Enchantment of the Seas, decided to change the vessel's port of call from the Port of Miami to Port Everglades. Although the pilotage fees at the Port of Miami were part of the port costs that were, in turn, one of the cost factors considered in making that decision, the decision was made in April 1999, several months before the Pilots' Association submitted its application for a rate increase at the Port of Miami.
The Cargo Carriers Association did not present any evidence disputing the finding of the Investigative Committee that "[t]he most relevant, comparable profession [to that of a pilot] is a captain [also known as a master] on a large U.S.-flagged vessel." Accordingly, the testimony of Graham Burton regarding the compensation and benefits paid ships' masters employed by the Princess Cruise Lines has been considered and found to be of limited relevance since the ships of the Princess Cruise Line are not United States-flagged ships. In addition, Captain Burton's testimony regarding the compensation paid ships' masters by other cruise lines and by cargo lines is also discounted since there is no evidence that the ships of these were United States-flagged ships.
The Cargo Carriers Association does not dispute the finding that pilots are comparable to ships' masters. The dispute raised by the Cargo Carriers Association is whether, and to what extent, pilots' compensation should exceed that of ships' masters.
The testimony of Captain Burton regarding the earnings of a pilot at the Port of Los Angeles has been considered and found of limited relevance to the compensation paid to pilots at the Port of Miami since the pilots at the Port of Los Angeles are city employees with civil service protection.
There is nothing in this record quantifying the impact that the proposed increase in pilotage rates would have on this decision.
All fees noted in parentheses are for a standard large vessel.
The testimony of Captain Burton with respect to the navigation risks at the Port of Miami has been considered and found not persuasive; Captain Burton has only a superficial knowledge of the characteristics of the port, garnered from his experience as a ship's captain or staff captain entering the port under the guidance of a pilot.
COPIES FURNISHED:
William L. Hyde, Esquire Gunster, Yoakley, Valdes-Fauli
& Stewart, P. A.
215 South Monroe Street, Suite 830 Tallahassee, Florida 32301
John J. Rimes, III, Esquire Department of Legal Affairs The Capitol, Plaza Level 01
Tallahassee, Florida 32399-1050
Stephen Marc Slepin, Esquire Slepin & Slepin
1114 East Park Avenue Tallahassee, Florida 32301-2684
Madeline Smith, Executive Director Pilotage Rate Review Board Department of Business and
Professional Regulation 1940 North Monroe Street
Tallahassee, Florida 32399-0792
Barbara D. Auger, General Counsel Department of Business and
Professional Regulation 1940 North Monroe Street
Tallahassee, Florida 32399-0792
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
All parties have the right to submit written exceptions within
15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.
| Issue Date | Document | Summary |
|---|---|---|
| Mar. 26, 2002 | Agency Miscellaneous | |
| Jul. 16, 2001 | Agency Final Order | |
| Jan. 11, 2001 | Recommended Order | Pilotage Rate Review Board should consider the additional facts found in the Recommended Order in determining whether its proposed rate increase is fair, just, and reasonable. |
