STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CITY OF SUNRISE, )

)

Petitioner, )

)

vs. ) CASE NO. 91-6036

) INDIAN TRACE COMMUNITY DEVELOPMENT ) DISTRICT and SOUTH FLORIDA WATER ) MANAGEMENT DISTRICT, )

)

Respondents. )

)

RECOMMENDED ORDER

A hearing was held in this case, by telephone conference call, on November 27, 1991, before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings.

APPEARANCES

For the Petitioner: Phillip Gildan, Esquire

Elaine James, Esquire Nason, Gildan, Yeager, Gerson & White, P.A. Suite 1200

1645 Palm Beach Lakes Blvd. West Palm Beach, Florida 33401

For the Respondent: Donald J. Buettenmuller, Esquire ITCDD John Cole, Esquire

Bill Duke, Esquire

Gunster, Yoakley & Stewart, P.A. 777 S. Flagler Drive, Suite 500E West Palm Beach, Florida 33401

For SFWMD : Cecile I. Ross, Esquire Beth Ross, Esquire

South Florida Water Management District Post Office Box 24680

3301 Gun Club Road

West Palm Beach, Florida 33416 - 4680

This matter came before the undersigned on the parties' request for a pre- hearing conference to, inter-alia, resolve several motions filed by the parties at differing times up to the

date of hearing. Included among the motions filed are:

1. The City's motion for a stay of the proceedings until resolution of an allied matter currently before the Circuit Court.

2. SFWMD's motion to dismiss the City's Petition for lack of standing.

3. ITCDD's motion to dismiss the City's Petition for lack of standing.

4. The City's motion to strike SFWMD's motion to dismiss because of lack of timeliness.

5. The City's motion to strike SFWMD's Answer to its Petition for untimeliness.

6. SFWMD's alternative motion for clarification of City's Petition, and

7. ITCDD's motion to compel discovery and City's companion request for Protective Order.

At the telephone conference hearing referenced above, held on November 27, 1991, attended by all the aforementioned counsel and the undersigned, and recorded and transcribed, each counsel had unlimited opportunity to speak in support of his client's position on all the issues delineated in the list of motions considered.

Having read the motions submitted in advance of the hearing, and the memoranda in support of and in opposition thereto, and having heard and considered the oral arguments propounded by counsel at the hearing, it is

FOUND THAT

1. ITCDD currently receives 100% of its treated potable water from the City of Sunrise and delivers 100% of its wastewater to the City for treatment and disposal under the terms of a contract or contracts in existence for over 10 years, having been entered into on October 29, 1980.

   
   

2. To provide this product and service over the years, the City has expended substantial sums to provide the facilities, infrastructure, and staff to serve ITCDD and its other customers, and has significant bond financial obligations as a result thereof to which the revenues from the sale of product and service, including that to ITCDD, are pledged.

   
   

3. ITCDD has applied to the SFWMD for a water use permit to withdraw water from four proposed wells to be completed into the Floridan aquifer in Broward County. This is not the same aquifer utilized by the City's wells. The proposed wells will have an annual allocation of 1233.70 MGY, (3.38 MGD), and a maximum daily allocation of 5.754 million gallons. ITCDD also proposes to construct a reverse osmosis water treatment plant rated at 4.00 MGD, and an additional 2.00 million gallon ground level concrete storage tank to supplement the existing 1.5 million gallon storage tank. The two interconnects ITCDD currently has with the City can transmit a combined flow in excess of 2.90 MGD.

   
   

4. On August 28, 1991, the SFWMD staff issued a staff report covering the instant application in which it recommends approval of ITCDD's withdrawal of water in the amounts sought over a 5 year period to expire on September 12, 1996, subject to 27 limiting conditions.

   
   

5. Petitioner, City, has filed its Petition in opposition to the staff report contending that the proposed permit will allow ITCDD to directly duplicate the facilities and staffing of the City's facility; will allow it to directly compete with the City's utility service; will support ITCDD's intent to disregard its legal and public policy responsibilities not to construct

   duplicate and competing facilities; and will enable ITCDD to sever its customer relationship with the City thereby depriving the City's remaining customers of necessary revenues to meet the financial obligations incurred for the benefit of ITCDD and the expenses to be incurred to maintain the thereafter dormant facilities. The City claims this will result in the remaining City customers paying twice for the same capacity with a resulting significant increase in rates and charges paid by current and future City customers.

   
   

6. Section 3.1.1.1.5, Management of Water Use Permit Information Manual, Volume III, June, 1985, requires conflicting service claims between applicants to be resolved by the parties without intercession by the water management district. In February, 1991, the SFWMD staff informed ITCDD of the rule requirement and indicated it could not recommend allocation for the area if the conflict were not resolved. At some point in time, the issues involved were made the subject of a Circuit Court action between the parties which is currently in litigation.

   
   

7. In its Petition for a hearing under Section 120.57(1), Florida Statutes, the City disputes the allegation by ITCDD that it has a bulk user agreement with the City; it disputes that the ITCDD has legal control over the ability to supply potable water to the service area; it disputes the allegations in certain paragraphs on pages 5 and 6 of the staff report dealing with the City's ability to provide water from the Biscayne aquifer from which it draws, and other matters of a non-resource nature; and it disputes the ultimate conclusion by the staff that ITCDD's use as recommended would be a reasonable and beneficial use of the resource that would not impact adjacent existing legal uses and is in the public interest.

   
   

8. In paragraph F 2) - 6), City outlines certain "ultimate facts" on which it relies to support its opposition to ITCDD's application. These include:

   
   

   1. City has a considerable investment in capital facilities and considerable operations and maintenance expense relative to its service to ITCDD, and removal of ITCDD from the City's service territory will have a substantial negative impact on its remaining customers.

   2. ITCDD's duplication of facilities will have a material negative impact on raters and charges to current and future customers to approximately double the current rate.

   3. ITCDD is prohibited from constructing competing or duplicative facilities by law.

   4. ITCDD is not a party to the 1980 agreement between the City and IT Municipal Taxing District and has no rights under that contract.

   5. Even if it had, that contract does not permit ITCDD to construct facilities which compete with the City.

      
      

9. While in its Petition the City indicates it disputes certain water resource conclusions drawn by the SFWMD staff in its report, its discussion clearly aims toward economic and contractual considerations rather than water resource considerations. The Section 120.57(1) hearing provides for evaluation of the application under the statutory and regulatory conditions for issuance of

   a water use permit under Section 373.223, Florida Statutes, and Rule 40E-2.301,

   1. The statute, at subsection (1), requires an applicant to establish that the proposed use of water:

      
      

      1. Is a reasonable-beneficial use as defined in s. 373.019(4);

      2. Will not interfere with any presently existing use of water; and

      3. Is consistent with the public interest.

   
   

10. In addition, at Section 373.219(1), Florida Statutes, the statute indicates:

    
    

    The governing board or the department may require such permits for consumptive use of water and may impose such reasonable conditions as are necessary to assure that such use is consistent with the overall objectives of the district or department and is not harmful to the water resources of the area....

    
    

11. From the above it is clear that a permit sought under Chapter 373, Part II, Florida Statutes, is related to water resource considerations, and any criteria for evaluation must, perforce, be evaluated within the parameters of such considerations. Economic considerations, though perfectly valid for evaluation in another forum, are not addressable under Chapter 373 unless directly related to the preservation of water resources.

    
    

12. Petitioner has indicated its disagreement with certain conclusions drawn by the SFWMD staff in its report, as they relate to water resource preservation. This dispute, however, is not amplified or supported with any evidentiary argument or citation. Any argument put forth by Petitioner relates solely to economic concerns of the legal status of the parties which are not, as urged by Petitioner, pertinent here.

    
    

13. Standing is, of course, pertinent, and to be a party to an administrative challenge to the issuance of a permit, the claimant must be one whose "substantial interest will be affected by proposed agency action." To show its "substantial interest", the City must show, (1) that because of the proposed agency action, it will suffer an injury in fact, and (2) that this injury in fact is of a type or nature which the proceeding is designed to protect. Agrico Chemical Company v. Department of Environmental Regulation, 406 So.2d 478, 482 (Fla. 2DCA 1981), pet.rev.den., 415 So.2d 1359. It is the second part of this test, the zone of interest, where Petitioner falls short.

    
    

14. Going one step further, the courts have held that allegations of economic harm are insufficient to establish the requisite "substantial interest" to confer standing. Shared Services, Inc. v. Department of Health and Rehabilitative Services, 426 So.2d 56, 58 (Fla. 1DCA 1983). As was pointed out previously, Chapter 373 is a water resource allocation statute, and economic concerns of the nature involved here are clearly not within the zone of interest intended to be protected by this chapter.

    
    

15. Taken together, the pleadings indicate clearly that the City of Sunrise does not have the requisite standing to challenge the SFWMD's intended action approving ITCDD's application in this Section 120.57(1) hearing

notwithstanding it may have legitimate standing to do so elsewhere in another forum. That being determined, resolution of the other motions at hand is moot. It is, therefore:

RECOMMENDED THAT an Order be entered by the South Florida Water Management District dismissing without prejudice the City of Sunrise's Petition in opposition to ITCDD's application No. 910130- 13.

DONE and ENTERED in Tallahassee, Florida this 13th day of December, 1991.

ARNOLD H. POLLOCK

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 13th day of December, 1991.

COPIES FURNISHED:

Phillip Gildan, Esquire Elaine James, Esquire Suite 1200

1645 Palm Beach Lakes Blvd. West Palm Beach, Florida 33401

Donald J. Buettenmuller, Esquire John Cole, Esquire

Bill Duke, Esquire

777 South Flagler Drive, Suite 500E West Palm Beach, Florida 33401

Cecile I. Ross, Esquire Beth Ross, Esquire SFWMD

P.O. Box 24680 3301 Gun Club Road

West Palm Beach, Florida 33416-4680

Tilford C. Creel Executive Director SFWMD

P.O. Box 24680 3301 Gun Club Road

West Palm Beach, Florida 33416-4680

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 consult with the agency which will issue the Final Order in this case concerning its rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should b e filed with the agency which will issue the Final Order in this case.

Docket for Case No: 91-006036

Orders for Case No: 91-006036