Findings Of Fact On November 15, 1982, Petitioner applied to Respondent to take the January 31, 1983, pilot's examination for the Port of Miami. Prior to that time, Petitioner had served as an apprentice pilot in the Port of Miami from January 1, 1967, through January 1, 1971. Petitioner was terminated from his position as an apprentice pilot with the Port of Miami in 1971, and has not piloted any ships in the Port of Miami or any other port in the state since that time. At the time of his application to take the pilot's examination, Petitioner was over 18 years of age, had been awarded a high school diploma, and was in good physical and mental health. Petitioner had also obtained a valid first class unlimited pilot's license issued by the United States Coast Guard in 1971. In addition to Petitioner, three other persons, William A. Arata, Stephen E. Nadeau, and Robert K. Brownell, also applied to take the January 31, 1983, pilot's examination for the Port of Miami. Arata submitted his application to sit for the examination on November 19, 1982. At that time, Arata had been licensed as a deputy pilot for the Port of Miami since January 28, 1980. In addition, he possessed an unlimited first class pilot'S license for the Port of Miami and had successfully completed the deputy pilot training program for that port. On November 24, 1982, Nadeau submitted his application to sit for the January 31, 1983, pilot's examination. Nadeau had been licensed as a deputy pilot in the Port of Miami since July 23, 1980, possessed an unlimited first class pilot's license for the Port of Miami, and had successfully completed the Port of Miami deputy pilot training program. Brownell applied on November 29, 1982, to sit for the same pilot's examination. At that time, Brownell had been licensed as a deputy pilot for the Port of Miami since July 31, 1980, also possessed an unlimited first class pilot's license for the Port of Miami, and had successfully completed the Port of Miami deputy pilot training program. In accordance with the provisions of Section 310.071, Florida Statutes, the applications of Petitioner, Arata, Nadeau, and Brownell were submitted to the Department of Professional Regulation which, in turn, submitted those applications to Respondent for a determination of eligibility to sit for the licensing examination. Respondent ultimately determined and advised the Department of Professional Regulation that all four applicants were qualified to sit for the licensing examination. All four applicants took the examination on January 31, 1983, and each of them received a passing grade. In accordance with Rule 21-8.09, Florida Administrative Code, the Department of Professional Regulation ranked the grades received by the applicants from highest to lowest. Petitioner received the lowest grade of the four applicants. Accordingly, since Respondent had certified three openings to be filled for licensed state pilots in the Port of Miami, the Department of Professional Regulation, act some time between February 1, 1983, and May 6, 1983, issued state pilot licenses for the Port of Miami to Captains Arata, Nadeau, and Brownell. There is in force in the Port of Miami a Deputy Pilot Training Program which has been approved by Respondent. The minimum time required for completion of the program, which is a prerequisite for applying for a state pilot's license, is two years. One of the requirements of the program is that participants obtain a first class unlimited pilot's license from the United States Coast Guard. This license allows the holder to pilot coastwise vessels which sail under the American flag. A state pilot's license standing alone permits the holder only to pilot ships sailing under foreign flags. In order to acquire a first class unlimited pilot's license, an applicant must possess another maritime license, such as a master's or male's license, must meet age and sea experience requirements, and must pass an examination prepared and administered by the United States Coast Guard. In addition, a condition to obtaining a first class unlimited pilot's license is that the applicant must possess a radar observer's certificate. The Florida State Pilot's Association, Inc., is a nonprofit corporation composed of 59 licensed state pilots from every port in Florida with the exception of Jacksonville and Fort Pierce. Captains Arata, Nadeau, and Brornell are members of that organization. The purpose of the organization is to represent the interests of its members at local, state, and federal levels.
Findings Of Fact Petitioner, Ferdinand C. Irrgang, was employed by the Department of Agriculture and Consumer Services, Division of Forestry on May 9, 1988 as a single engine airplane pilot. At the time of hire, Petitioner's pay grade was 17 in the Florida career service system. He earned the base pay for grade 17 plus 10 percent, or about $19,000 per annum. In 1989, at the request of the Department of General Services (DGS) which also employs pilots to fly State owned aircraft, the Department of Administration conducted a market survey to determine whether the State's classes of airplane pilots were paid competitively, especially the multi-engine and jet aircraft pilots. The survey indicated that labor market conditions reflected that minimum base pay should be raised. In its survey, the Department of Administration (DOA) did not evaluate whether the duties of the Division of Forestry pilots had changed, or whether they were certified firefighters. Although personnel within the Department of Agriculture and Consumer Services (DACS) believed that pilots' duties and responsibilities had changed over time, requests for new or revised job classifications for single engine airplane pilots within the agency were denied in 1989 and the Department of Agriculture did not join in the request for a survey submitted by DGS to DOA. However, effective July 3, 1989, the Department of Administration (now the Department of Management Services) approved a job title revision and an upward pay grade adjustment for all State pilots, including those employed at DGS, DACS and other agencies. As a result, the class of single engine airplane pilots, of which Respondent was a member, was retitled as "single engine reciprocal aircraft pilots" and a pay grade adjustment from pay grade 17 to pay grade 18 was approved. Respondent, and all other pilots in his class, did not receive pay raises as a result of the class pay range adjustment, unless their present salary was below the new minimum base pay. In such cases they received pay adjustments up to the new minimum. Respondent's pay grade on July 3, 1989 was below the new minimum pay for grade 18 and the adjustment in his pay resulted in an increase of about $15.00 per pay period. The Department of Agriculture and Consumer Services sought title and position pay range adjustments for forestry center managers in May 1989. The request was made when DACS determined that these managers positions had evolved over time and became more complex. The Department determined that the position developed a larger and more dispersed staff with additional responsibilities. DACS sought to have the title changed to forestry district manager, as well as a pay range adjustment. The title and pay grade adjustment request for district managers was denied while Adis Vila was Secretary of the Department of Administration. The official denial came on July 13, 1989, after Andy McMullian III became Acting Secretary. On July 19, 1989, a request was made to the Acting Secretary to change the policy for pay grade adjustments such that all employees would receive "difference pay" as set forth in Rule 22A-2.006(3) which was approved. A second request for a job title change and pay grade adjustment for forestry district managers was sent to the DOA. This request was granted on August 17, 1989. Under the State system, a promotion, by definition, results in placement into a position in a higher pay range. However, a promotion, which also indicates more complex or expanded duties or responsibilities, does not automatically result in a pay increase. The positions of aircraft pilots and Division of Forestry district managers are distinct in a number of ways beyond the responsibilities of the positions. State airplane pilots are a universal class, hired by a number of agencies; forestry district managers are a unique class used by only the Department of Agriculture. Pilots are covered by the Fair Labor Standards Act and district managers are not, pilots being eligible for overtime pay while managers are not. Single engine reciprocal airplane pilots with the Division of Forestry may have more dangerous duties than other single engine pilots, such as low- level flying, fire control, and off-airport landings. Unlike other single engine reciprocal airplane pilots, they are certified firefighters; however, they are in the same class as all other single engine reciprocal airplane pilots for the State, with one exception for certified law enforcement pilots. Under the various Secretaries of the Department of Administration, there have been different philosophies of compensation, and different applications of present Rule 60K-2.006. Adis Vila (Vila) was Secretary to the Department of Administration from April 24, 1987 until June 30, 1989; Andy McMullian, III (McMullian) was Secretary of the Department from July 1, 1989 to November 1, 1989; and Aletta Shutes (Shutes) was Secretary of the Department from November 1, 1989 to January 31, 1991. Vila's philosophy was to give pay raises as pay ranges were adjusted when there was a significant change in the responsibilities of the position. Her philosophy was performance based. She sought to further the goal of the Martinez administration of conserving public tax dollars. Vila's application of the rule was to pay employees who received below the minimum of a new pay range up to the new minimum, insuring that employees were paid within the pay range without further adjustments. In that manner, Irrgang's salary was adjusted. Under Vila's administration, over 700 employees in over twenty classes did not receive pay adjustments when pay ranges were adjusted upward unless they received below the new minimum. Under interim Acting Secretary McMullian, an alternative application of the rules was applied. When pay ranges were adjusted upward, employees' salaries were adjusted upward in an amount equal to the difference between the minimums of the old and new pay ranges. In that manner, district managers' pay was adjusted, which was the usual application of the rule applied under the Graham and Askew administrations. McMullian's application of the rule was based upon the fact that employees had not received pay raises for a year and a half, and employees' salaries were stagnant. The Department's interpretation of Rule 60K-2.006 is that it authorizes pay increases when pay ranges are adjusted upward, but the rule does not mandate pay increases. The Department interprets the rule so that it permits managerial discretion by the various Secretaries of the Department in its application. Factors related to the application of the rule, and the Department's interpretation that the rule authorizes, but does not mandate pay increases, include whether funding is available, whether there are significant changes in responsibilities for employees in a class, whether there are labor market changes, or whether there are recruitment and retention problems. The turnover rate for single engine airplane pilots since 1989 has been approximately four percent. The State turnover rate for all employees has been over eight percent which indicates that the State has not experienced a recruitment and retention problem with single engine reciprocal airplane pilots. The Department's interpretation and application of Rule 60K-2.006 does not conflict with the collective bargaining agreement between the State and AFSCME, which controls the terms and conditions of Irrgang's employment. The Department's application of the rule, which has resulted in some classes of employees receiving pay increases when pay ranges have been adjusted, and other classes of employees not receiving pay increases, is not grievable under the contract that covers the terms of Irrgang's employment.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Petitioner's request for retroactive pay be denied. The collateral issue of the Petitioner's recalculation of potential future retirement benefits is, therefore, moot. DONE and ENTERED this 15th day of June, 1993, in Tallahassee, Florida. DANIEL M. KILBRIDE 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 15th day of June, 1993. APPENDIX The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on proposed findings of fact submitted by the parties. Proposed findings of fact submitted by Petitioner. Accepted in substance: paragraphs 1, 2, 3, 4, 5, 6, 7 (in part), 8, 9, 11, 12, 13, 14, 15, 16, 17, 18, 20, 26 (in part), 31. Rejected as argument: paragraphs 7 (in part), 26 (in part), 27, 28, 29. Rejected as subsumed, irrelevant or immaterial: paragraphs 10, 19, 21, 22, 23, 24, 25, 29, 32, 33, 34. Proposed findings of fact submitted by Respondent. Accepted in substance: paragraphs 1, 2, 3, 4, 5, 6, 7 (in part), 8, 9, 10, 11, 12, 13, 14 (in part), 16, 17, 18, 19, 20, 21, 22, 23, 24, 25. Rejected as argument or comment on the evidence: paragraphs 7 (in part), 14 (in part). Rejected as subsumed, irrelevant or immaterial: paragraph 15. COPIES FURNISHED: William H. Lindner, Secretary Department of Management Services Knight Building, Suite 307 Koger Executive Center 2737 Centerview Drive Tallahassee, FL 32399-0950 Susan B. Kirkland, Esquire General Counsel Department of Management Services Knight Building, Suite 309 Koger Executive Center 2737 Centerview Drive Tallahassee, FL 32399-0950 Robert B. Button, Esquire Department of Management Services Knight Building, Suite 308 Koger Executive Center 2737 Centerview Drive Tallahassee, FL 32399-0950 Dana H. Hankins, Esquire 1115 E. Concord Street Orlando, FL 32803
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.
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.
Recommendation 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.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: On August 14, 1980, respondent Warwick G. Cahill applied to the Board of Pilot Commissioners for certification to take the examination to become a deputy pilot. To the questions on the application "Have you ever been a party in a criminal proceeding?" and "Have you ever been arrested?," respondent answered "No." On April 16, 1975, respondent was arrested and charged with "driving under the influence" in violation of Section 316.028, Florida Statutes. He was convicted of the misdemeanor charge, his driver's license was suspended for ninety days, he was fined $150.00 and he was placed on probation for six months. Respondent's record shows no prior or subsequent involvement in any criminal or traffic court proceedings. On November 24, 1976, respondent applied for tug employment with the St. Phillip Towing Company. On that application, the following responses were made to the question: "Have you ever been arrested?": Yes, one time, on charges of DWI. On August 4, 1980, Rickie Wayne Baggett applied to the Board of Pilot Commissioners to take the same pilot's examination for which the respondent had applied. To the question, "Have you ever been arrested?," Mr. Baggett answered "Yes," explaining that he had been arrested for driving while intoxicated and his license had been suspended for one year. In the space provided for him to state his driver's license number, Mr. Baggett noted that it had been suspended for one year. At a meeting held on September 5, 1980, the Board of Pilot Commissioners considered the applications of respondent and Mr. Baggett, along with others, to take the October 17, 1980, examination for certificated deputy pilot. The Board unanimously approved a motion to give conditional approval to the applicants Baggett and Cahill pending the receipt of information confirming their maritime background. At a later date, both Baggett and respondent were certified as eligible to take the October 17, 1980 pilot's examination. An investigator with the Department of Professional Regulation who has routinely investigated matters pertaining to licensed pilots since March of 1980 has never been requested to investigate any pilot for a DWI-related offense. The respondent's DWI offense was discovered during an investigation concerning an unrelated matter. While fully aware of the fact that he had been arrested for a driving while intoxicated charge, respondent Cahill claims to have forgotten about the arrest at the time he made application for examination and did not realize that such was a criminal proceeding. Mr. Cahill was born in Australia, came to the United States in 1972 and is a naturalized citizen.
Recommendation Based upon the findings of fact and conclusions of law recited above, it is RECOMMENDED that the Administrative Complaint filed on November 9, 1981, as amended on March 16, 1982, be DISMISSED. Respectfully submitted and entered this 21st day of July, 1982, in Tallahassee, Florida. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of July, 1982. COPIES FURNISHED: W. B. Ewers, Esquire Suite 204 2170 S. E. 17th Street Ft. Lauderdale, Florida 33316 C. Steven Yerrid, Esquire Holland & Knight Post Office Box 1288 Tampa, Florida 33601 Jane Raker, Executive Director Board of Pilot Commissioners 130 North Monroe Street Tallahassee, Florida 32301
The Issue Whether the application of the Fort Pierce Pilots Association for an increase in the pilotage rates for the Port of Fort Pierce should be granted in whole or in part, or denied.
Findings Of Fact Based on the testimony and documentary evidence presented at the hearings on April 26- 28 and August 23, 2011, and on the entire record of this proceeding, the following findings of fact are made: The Parties Petitioner ACL is the largest user of the Port of Fort Pierce (the Port). ACL operates three vessels on a regular "liner" schedule operating six days per week from the Port to a few foreign ports. Approximately 95 percent of the vessel traffic at the Port is generated by these three vessels. ACL is affected by the rates of pilotage set for the Port since it is required by chapter 310, Florida Statutes, to utilize and compensate a state-licensed pilot each time one of its vessels enters or departs the Port. The rates that must be paid by ACL are established by Respondent, Department of Business and Professional Regulation, Pilotage Rate Review Committee. Accordingly, ACL is substantially affected by and has standing to maintain this challenge to the former Board's preliminary decision set forth in the Notice of Intent. Petitioner IRT owns the terminal at the Port, as well as warehouses, offices and equipment at the Port. The pilotage rate increase preliminarily approved by the Board in the Notice of Intent will make the pilotage rates at the Port higher for the small vessels which can utilize the Port than the rates these same size vessels would pay at the Port of Palm Beach, Port Canaveral and/or Port Everglades. This is significant because IRT competes to attract new business from vessel owners and/or operators whose vessels call on South Florida. Accordingly, IRT is substantially affected by and has standing to maintain this challenge to the Board's preliminary decision set forth in the Notice of Intent. The Pilotage Rate Review Committee (formerly the Pilotage Rate Review Board), Department of Business and Professional Regulation (DBPR), is a state agency created by section 310.151, Florida Statutes. It is established as part of the Board of Pilot Commissioners, and consists of seven members. With regard to an application for a change in pilotage rates, the Committee must investigate and determine whether a rate change will result in fair, just and reasonable rates of pilotage pursuant to chapter 310, Florida Statutes, and rules implementing those provisions. The decisions of the Committee however, are made independent of the Board of Pilot Commissioners, and are not appealable to the Board of Pilot Commissioners. Intervenor Fort Pierce Pilots Association (FPPA) is an association of harbor pilots with one member, William Wetzel, LLC. Captain William Wetzel is, in turn, the sole member of William Wetzel, LLC and is the state-licensed pilot for the Port. The FPPA, through Captain Wetzel and occasionally a cross-licensed pilot from the Port of Palm Beach, perform the pilotage services at the Port. The Florida State Pilots Association, Inc. (FSPA) has a business address in Tallahassee, Florida. FSPA is a voluntary organization representing the interests of Florida’s 97 state- licensed harbor pilots, who participate in the FSPA through the 11 local pilot associations that serve Florida’s deepwater ports. The Piloting Profession Chapter 310, Florida Statutes, sets forth a comprehensive body of regulation addressing the practice of piloting in this state. The purpose of such regulation, as elsewhere in the country, is to ensure the efficient movement of maritime commerce while guarding against vessel incidents that could injure persons and property, as well as the state’s economy and environment. From this standpoint, the most dangerous part of any sea voyage for the ship and for the public at large is when the ship is moving into or out of port. In the maritime industry, the crew of a vessel, which is employed by the ship’s owner or operator, is under significant pressure to bring that vessel into and out of port efficiently and without delays. In light of the risks posed if those economic interests were to override public safety, Florida, and every other state with a significant maritime industry, requires vessels to utilize the services of an independent state-licensed pilot. The pilot is a mariner with many years of experience who is thoroughly familiar with every facet of a particular port and who has the skills necessary to maneuver a wide variety of ships. Because the pilot is not employed by the vessel owner, the pilot can exercise independent judgment, free from the pressures normally associated with the ship’s business operations. The value added by the pilot in terms of safety is widely recognized throughout the maritime industry, as evidenced by the fact that even ships calling on U.S. ports for which a pilot is not required by state law, i.e., U.S.-flagged vessels, routinely use the services of the port’s state-licensed pilots. The risks faced by pilots are unique. Pilots are transferred from their pilot boat out at sea onto and off of large moving vessels. Once the pilot boat maneuvers alongside the vessel, the pilot typically boards the ship by stepping from the pilot boat onto a ladder hanging from the ship’s side. Unfortunately, pilots are frequently injured and sometimes killed in the course of this dangerous transfer, particularly in bad weather. One expert in the piloting profession testified that over the course of a 30-year career, a pilot has a one-in-20 chance of being killed in a boarding accident. Once on board, the pilot must familiarize himself or herself with the ship’s navigational equipment, performance characteristics, and mechanical condition. The pilot conducts a conference with the ship’s master, during which the two exchange technical information on the ship, as well as details of the planned passage. If the vessel is fit for the transit, the pilot then “takes the conn,” assuming navigational control of the vessel and directing the ship’s movements by giving verbal commands on steering and engine power to the ship’s crew. The crew will have varying levels of maritime experience and often speak little or no English. The pilot must deal with a wide variety of ships and equipment. The vast majority of ocean-going vessels are flagged in foreign countries rather than the U.S., thus avoiding a great deal of regulation, as well as taxation. Piloting Selection and Training A mariner wanting to become a state pilot in Florida must await an opening declared by the state’s Board of Pilot Commissioners in one or more ports where he or she has an interest in serving. If the mariner is determined to have sufficient experience and qualifications, the next step in the process of deputy pilot selection is successful completion of a very difficult written examination, designed and administered by the State of Florida. This comprehensive two-day examination encompasses International & Inland Rules of the Road, Seamanship & Shiphandling, Federal & State Pilotage Laws, and port-specific Chart Work & Local Knowledge, and requires the candidate to reproduce from memory a complete and accurate chart of the port and its channels. These examinations are extremely difficult, and candidates will have typically spent several months and hundreds of hours in preparation. Only about 20 percent of those who sit for the exam will pass. The examination, however, is not one where the applicant is only required to achieve a minimum score to demonstrate basic competency. Rather, in Florida, the goal of the deputy pilot candidate is to achieve the top score among all candidates taking the exam. This is because the DBPR Secretary will be presented with a list of the top five scores on the exam and will typically appoint as the deputy pilot the person scoring highest. Once the DBPR Secretary has selected a deputy pilot to fill an opening at a Florida port, the deputy is issued a 12-month temporary certificate. The temporary certificate becomes permanent when the deputy has proven suitable in all respects for continued training as a state pilot. Once in receipt of the temporary certificate, the deputy pilot then begins a minimum two-year training program at the port, as approved and monitored by the Board of Pilot Commissioners. Under the supervision of the fully licensed pilots of the port, this training program allows the deputy pilot to initially handle smaller vessels of limited size and tonnage, with gradual increases in size and tonnage over time. While in training, the deputy earns only a portion of what a full pilot would earn. The Board of Pilot Commissioners approves each deputy pilot’s advancement to a higher level in the training program, after thorough review of the records and the recommendations of the local pilots in the port. Some deputy pilots “wash out” of training and fail to complete the program, never becoming pilots. Upon completion of all training, the deputy pilot must pass yet another rigorous exam administered by the state before he or she can be appointed and licensed by DBPR as a full state pilot for the specific port in which the deputy pilot has trained. The Rate Application and Review Process On or about March 30, 2009, the FPPA submitted an application (the Application) to the former Board, requesting an increase in pilotage rates at the Port. The Application sought an increase in the rates of pilotage at the Port over a four- year period, as follows: 157% in year one, 13.9% in year two, 16.7% in year three and 18.7% in year four. The total requested increase from year one to year five was 206%, from a $150.00 minimum fee before the Application, to a $608.00 minimum fee after the final requested year four rate increase. As prescribed by statute and the Committee’s rules, two contract consultants were assigned to be the Investigative Committee. One consultant, Richard Law, is a CPA, and has served as an investigative consultant on pilotage rate proceedings for DBPR for 16 years. The other consultant, Galen Dunton, is a retired Coast Guard commander with 18 years of experience as an investigative consultant for DBPR in pilotage matters. The Investigative Committee made its initial visit to the Port on July 10, 2009. During this process of investigation, several interested persons provided comments in opposition to the requested rate increase. Following the investigation, the Investigative Committee submitted its findings to the former Board on September 8, 2009. The FPPA requested the following pilotage rate increases in its application: Draft Charge $12.50 Year 1 $26.60 Year 2 $30.25 Year 3 $35.20 Year 4 $41.20 (min. of 10 feet) Tonnage $.015 (min. of 1667 GT) $.060 $.0685 $.080 $.098 Total Min. Fee $150.00 $386.00 $439.50 $512.00 $608.00 % Increase 157% 13.9% 16.7% 18.7% On December 11, 2009, at a Board public meeting, a number of interested persons provided comments and testimony in opposition to and in support of, the requested change in rates. Captain Wetzel, as well as representatives of both Petitioners, addressed the Board. The Investigative Committee included in its Report findings and comments relating to each of the criteria enumerated in section 310.151(5), Florida Statutes (2009). The Board reviewed the Investigative Committee’s findings and the statutory criteria and approved the requested rate increase for Year 1 only. The increases requested for Years 2, 3 and 4 were denied. The statutory criteria reviewed by both the Investigative Committee and the Board (now Committee) consisted of the following: (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. § 310.151(5), Fla. Stat. On March 31, 2010, the Board issued a Notice of Intent to approve in part and deny in part the application by FPPA to increase the pilotage rates at the Port. In its decision, the Board determined findings of fact with respect to each of the criteria listed in section 310.151(5), Florida Statutes. In granting the FPPA’s requested rate increase for the first year the Board approved the following charges at the Port, effective May 1, 2010: A draft charge of $26.60 per draft foot, measured up to the next 1/10th foot, with a minimum charge for ten (10) feet; i.e., $266.00; A tonnage charge of $.0600 per Gross Registered Ton (GRT) with a minimum charge for 2000 GRT, i.e., $120.00; Docking/undocking fees are eliminated; Shifting rates are increased as follows: Same Slip - $250.00 Different Slip - $386.00 A towed barge charge of .0300 per GRT with no minimum charge. Pursuant to section 310.151(5)(a), the Committee “shall give primary consideration to the public interest in promoting and maintaining efficient, reliable, and safe piloting services” when dealing with a requested pilotage rate change. However, the Board is also required to consider additional specific factors in determining whether to approve or deny a requested rate change. Statutory Pilotage Rate Review Criteria The public interest in having qualified pilots available to respond promptly to vessels needing their service. (section 310.151(5)(b)1, Florida Statutes) In its Notice of Intent, the Board accepted the findings of the Investigative Committee as reflected on page C-1 of the Investigative Committee Report. Among other things, the Investigative Committee observed with respect to this criterion: The pilots are essential to the safe movement of vessels within the pilotage waters of the State. In addition to their navigation and supervisory skills, they must be knowledgeable of local weather, hazards, silting, speed and direction of currents, and timing and direction of tidal movements. They provide development of safety and operational guidelines for the port operation and participate in the process of port and professional regulations. Petitioners assert that this record does not support a finding that the use of a state-licensed pilot at the Port is "essential" to safety at the port. Petitioners argue that the captains of ACL's three small vessels have more experience entering and exiting the Port than does Captain Wetzel, and that the use of a state-licensed pilot, although mandated by law, does not increase safety for ACL's vessels, the Port, or the public at large. Petitioner's contention in this regard is rejected. As noted above, harbor pilots must not only possess excellent navigational skills, they must also be knowledgeable of a host of constantly-changing variables that affect the safe transit of vessels within their home port. Moreover, even if the current captains of ACL's three vessels have more experience entering and exiting the Port than does Captain Wetzel, there is no assurance that those same captains will continue in the employ of ACL in the future. The record of the hearing held before DOAH does not contain any evidence to form a basis for findings of fact different from, or in addition to, the facts relied on by the Board in its Notice of Intent with respect to this criterion. 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) There are approximately 1,200 state-licensed harbor pilots in the United States. The average compensation for a state-licensed pilot nationally is about $400,000.00 per year. However, state regulatory boards do not set pilot compensation, they set pilotage rates. Thus, a pilot’s compensation depends upon how much revenue is generated by the vessel traffic in that port, net of operating expenses. The pilot in a small port like Ft. Pierce would not be expected to make the same amount as a pilot in a larger port, such as Miami or Tampa. In these larger ports, large draft and tonnage vessels generate higher pilotage fees and this revenue supplements the cost of bringing in smaller vessels. In Ft. Pierce, that is not possible because of the physical limitations of the Port, which will not accommodate large vessels. Higher minimum rates therefore have to be set in Ft. Pierce because of the small size of the vessels, and to compensate a Palm Beach pilot (cross-licensed for Ft. Pierce) for making the two-hour plus drive to Ft. Pierce to handle a vessel if the Ft. Pierce pilot is unavailable for some reason. In its Notice of Intent, the Board accepted the findings of the Investigative Committee, as reflected on page C-2 of the Investigative Committee Report, as corrected at the public hearing, which set the pilot’s net income for years 2007 and 2008 at $112,800.00 and $92,700.00 respectively. In the "Analysis and Decision" section of the Notice of Intent, the Board also stated: Further, the pilots are charged with maintaining or securing adequate pilot boats, office facilities and equipment, and other equipment and support services necessary for a modern, dependable piloting operation. Although the Pilot currently has an arrangement with the Port’s largest user regarding the use of a converted crew boat, the evidence presented to the Board shows that in some aspects this assignment has been less than satisfactory. The Board opines that an increase in pilotage rates sufficient to permit the Pilot to procure an adequate pilot boat and/or secure such services is warranted. (Notice of Intent, p. 10, 11) Compared to the typical piloting operation in which the pilots in a port provide their own pilot boat to ferry them to and from transiting ships, the Investigative Committee determined that Captain Wetzel’s operating expenses were very low, since ACL had been providing the pilot boat in Ft. Pierce. In its Notice of Intent, the Board approved the first year schedule of rate increases only, specifically noting that the increase was intended in part to address the unsatisfactory pilot boat arrangement between FPPA and ACL: Based upon these findings, the Board determines that the proposed three-year schedule of rate increases sought by the Pilot should not be granted in its entirety at this time. The Board finds that a more modest increase to account for the progressively higher operating costs, inflation, and to permit the Pilot to obtain or secure pilot boat services, will provide fair, just and reasonable rates, and will continue to ensure that sufficient back-up pilots will be available to serve Fort Pierce. Accordingly, the Board approves the requested first-year schedule of increase only. (Notice of Intent, p. 12) The FPPA application projected the pilot boat as an expense of $325,000.00, with annual depreciation of $32,500.00. After the issuance of the Board’s decision in March 2010, granting only the first year of the FPPA’s requested rate increase, circumstances dictated that the FPPA purchase a less expensive pilot boat than the one anticipated in the FPPA rate application.2/ Specifically, when Captain Wetzel began to look for a suitable pilot boat, he was significantly hindered by the pending challenge to the Board’s decision. Pursuant to section 310.151(4)(b), the difference between the old rate and the new rate for each vessel movement was being deposited into an escrow account pending resolution of the Petitioners’ challenge, so the increased cash flow could not be relied upon by a lender to secure the loan necessary to obtain the desired $325,000.00 boat. Captain Wetzel and the Petitioners discussed the possibility of continuing to use the Kacey Lynn (owned by I.R.T) as a pilot boat, but negotiations were unsuccessful. Captain Wetzel then had to obtain his own pilot boat and settle on getting a much less expensive one that will not be as durable or long-lived as necessary. Ultimately, FPPA purchased a temporary pilot boat from Ameracat for about $92,000.00 and it was delivered to Captain Wetzel in mid-May 2010. As noted, the evidence established that the type of pilot boat purchased by Captain Wetzel will have a shorter lifespan than a typical pilot boat, because it will not be able to withstand the banging and pounding that occurs when a pilot boat comes alongside a commercial vessel. In order to purchase the Ameracat pilot boat, Captain Wetzel had to withdraw money from his retirement account so he could pay cash for the boat. Petitioners do not take issue with the Board’s decision that an increase in pilotage rates in Ft. Pierce is warranted so that Captain Wetzel can procure an adequate pilot boat. However, they contend that Captain Wetzel’s decision to purchase a pilot boat that cost significantly less than the one contemplated in the Application results in undue income to Captain Wetzel, which should result in the rates being decreased to reflect reduced expenses, including the boat’s purchase price, maintenance costs and interest expense. As will be discussed in greater detail infra, FPPA’s projected costs as set forth in the Application were accurate at the time submitted. The evidence of record does not support a finding that Captain Wetzel intended to mislead the Board in the projected cost of $325,000.00 for a pilot boat, or that he does not intend to purchase a more durable replacement once the escrowed funds from the approved rate increase are released. Rather, given the circumstances of the administrative challenge to the rate increase, Captain Wetzel acted reasonably and of necessity in purchasing a less expensive, temporary pilot boat. Petitioners' contention that Captain Wetzel’s purchase of a pilot boat costing less than the one projected in his rate application will result in undue income to Captain Wetzel (justifying elimination or reduction in the approved rates) is not supported by the greater weight of evidence in this record, and is rejected. The record of the hearing held before DOAH 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 Notice of Intent with respect to this criterion, except as specifically set forth in the preceding paragraphs. Reasonable Operating Expenses of Pilots (section 310.151(5)(b)3, Florida Statutes) In its Notice of Intent, the Board accepted the findings of the Investigative Committee shown on pages C-2 and C-3 of the Report. The record of the hearing held before DOAH 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. Prior to the rate increase under challenge in this proceeding, the pilotage rates in effect at the Port were unchanged since their initial adoption in 1980 -– a minimum draft and tonnage charge of $150.00 plus a docking/undocking fee of $60.00, for a total minimum pilotage fee of $210.00. In late 2007, ACL stopped having the pilot perform docking and undocking of ACL’s vessels and discontinued payment of the corresponding $60.00 fee to the pilot, reducing the effective minimum pilotage fee for ACL and most other vessels to $150.00. A rate increase application in 2003 filed by the previous Ft. Pierce pilot was withdrawn, based upon an informal, unwritten agreement that Petitioners would provide an old crew boat formerly used on the Great Lakes (the Kacey Lynn) to ferry the pilot to and from vessels at no cost, dropping the $75.00 fee previously charged to the pilot for each use of the crew boat. At that time, the Port was primarily being served by cross-licensed pilots from other ports, as the permanent pilot in Ft. Pierce was injured and unable to continue working. In light of the circumstances, the cross-licensed pilots were not eager to invest in a pilot boat and other infrastructure, so use of the Kacey Lynn, while not ideally suited for safely transferring the pilot to or from a transiting ship, was a useful accommodation while a new permanent pilot was sought for Ft. Pierce. For non-ACL vessels, IRT billed the owners of some of those vessels from $75.00 up to $150.00 for the use of the Kacey Lynn to ferry the pilot to or from a ship. In the only other Florida port in which the pilots do not provide their own pilot boats, Pensacola, the pilot is ferried to and from transiting ships by a tug company that charges $400.00 per trip. As set forth in its application, FPPA’s projected pilot boat cost of $325,000.00 with $32,500.00 per year depreciation is reasonable, especially when compared to the costs of pilot boats serving other ports. Credible testimony established that a pilot boat in a major port would cost $1.2 million to $2 million, with annual maintenance costs typically at 5% of the purchase price. The pilot association in Jacksonville, Florida, recently spent $1.2 million on a pilot boat, while pilots in Miami purchased a pilot boat several years ago for approximately $600,000.00. More recently, the Miami pilots association rebuilt two of their pilot boats at a cost of approximately $350,000.00. In comparison to the cost of pilot boats in other ports, FPPA’s projected operating costs as set forth in its application are relatively conservative. As noted above, Captain Wetzel's purchase of a temporary pilot boat (with correspondingly lower operating expenses) for use during the pendency of this administrative challenge does not render the projected operating expenses in the application unreasonable. Pilotage Rates in Other Ports (section 310.151(5)(b)4, Florida Statutes In the Notice of Intent, the Board accepted the findings of the Investigative Committee as reflected on pages C- 4 through C-7 of the Investigative Committee Report. The record of the hearing held before DOAH 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 Notice of Intent with respect to this criterion, except as specifically set forth in the following paragraphs. Petitioners assert that Table 4 on page C-6 of the Investigative Committee Report understates the FPPA's revenue per handle hour by overstating the FPPA's average "handle time." "Handle time" is generally defined as the time "that the pilot takes the conn to the time he relinquishes it", i.e., the time that the pilot is actually directing the guidance of the navigation of a vessel. According to Petitioners, the average handle time for pilots operating in the Port is closer to 30 minutes per handle than the 1.5 hours per handle used by the Investigative Committee. When a handle time of 30 minutes per handle is applied, Petitioners argue, the FPPA is currently earning $370.00 per handle hour, rather than the $123.00 per handle hour shown in the Investigative Committee Report.3/ There is evidence in this record that until recently, there has not been a statewide standard for measuring handle times. Although the Board of the Florida State Pilots Association recently adopted a definition, the data appearing in Table 4 of the Investigative Committee Report relies upon older historical data (2007 and 2008), which in some cases may be outdated due to the change in the size of ships using various ports.4/ As such, it would be inappropriate to compare the Ft. Pierce revenue per handle hour using a handle time of 30 minutes without also updating the handle times of the other ports used in the comparison. Approval of the Year 1 rate increase would not create a competitive disadvantage at the Port. The pilotage fee is a very small and relatively insignificant factor in the overall decision on whether to bring a ship into a particular port. In light of the considerable operating costs of a commercial vessel, the $175.00 difference between the new minimum pilotage fee in Ft. Pierce and the lower minimum pilotage fee in Palm Beach (the closest competing port) would not be significant enough to warrant shifting a subject vessel from Ft. Pierce to Palm Beach. 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 In the Notice of Intent the Board accepted the findings of the Investigative Committee as reflected on pages C7 and C8 of the Investigative Committee Report. The record of the hearing held before DOAH does not contain any evidence to form a basis for findings of fact different from, or as a supplement 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. Time spent on actual piloting duty includes handle time, transit time to and from the vessel, and administrative time related to that handle. Time spent on other essential support services generally involve matters pertaining to the port in question, e.g., dealing with the Coast Guard on port security or safety issues, dealing with the Army Corp of Engineers regarding the ship channel, etc. In its Report, the Investigative Committee considered "handle time' to be the time the pilot is actually engaged in traveling to a ship, piloting the ship, and returning to home port, i.e., dock to dock. The Investigative Committee did not attempt to verify the historical data regarding handle time but did utilize a shorter figure of 1.5 hours per handle.5/ No compelling evidence was presented that indicates that this 1.5 hour handle time figure was grossly incorrect. While ACL operates a “liner service” with a published schedule that its ships adhere to most of the time, actual arrival and departure times for ACL ships frequently vary from this schedule. Moreover, the pilot must be available to respond to vessels requiring his assistance 24-hours a day, seven days a week. Although the Petitioners argue that actual handle time might make a part-time job for the Ft. Pierce pilot, it does not matter if it is an hour or two hours, it is still a huge time commitment throughout each week to be available and on call to serve the needs of the port. The Investigative Committee also observed: The schedule varies for each day of the week. On Mondays, Wednesdays and Fridays he must “mobilize” early in the mornings to meet vessels arriving at 7:00 A.M. and then re-mobilize later in the afternoon to handle the 5:00 P.M. departures. Consequently, the two-step mobilizations increase his daily time requirements by an amount greater than the average handle times. The schedule also requires additional standby time between some of the back-to-back handles. (Investigative Committee Report, P. C-7) The prevailing compensation available to individuals in other maritime services of comparable professional skill and standing. (section 310.151(5)(b)5, Florida Statutes) In its Notice of Intent, the Board accepted the findings of the Investigative Committee, reflected on page C-8 of the Investigative Committee Report, supplemented as follows: As was discussed in the Port Everglades Order, supra, the Board accepts the proposition that the pre-pilot career path is the same for persons who remain as senior bridge officers on American-flagged ships and for those who become pilots. As was noted in the Port Everglades Order, however, pilots are not employees but are rather professional consultants and self-employed business persons who take the risks and accept the benefits of such status. In addition, section 310.151(5)(b)6, F.S., sets the wage rate of “comparable professions” as the floor for pilot income – not the ceiling. As was also noted in the Port Everglades and Tampa Orders, the Board has accepted that the wage rate of senior masters on American-flagged ships varies greatly and, thus, the Board can find no specific number to use as the only acceptable “floor” for pilot compensation. The Board, thus, uses the range of masters’ salaries as a range of “floors” on pilots’ income to be applied depending on the amount of vessel traffic at a port, the characteristics of a port, and the need for pilotage services at a port. Thus, a pilot’s berth at the major ports, such as the Port of Tampa Bay, Port Everglades, Miami, Jacksonville or Palm Beach would be considered as akin to the most prestigious, responsible, and highly paid masters’ berths (Master, Mates and Pilots scale – c. $220,000.00 - $230,000.00 per year) while lesser ports, with correspondingly lesser amounts of traffic and need for pilotage services would have a lower “floor” for income. Nonetheless, the Board also finds that the pilotage rates need to be sufficient to ensure that licensed pilots remain willing and financially able to serve the ports of this State. As reflected in the Report of the Investigative Committee, the current Pilot’s schedule has grown to a full-time position, with no backup pilot available. Thus, the Pilot must rely on cross-licensed pilots from Palm Beach for backup, who currently earn substantially more at their home port. Accordingly, the Board finds that the rates must be increased sufficiently to continue to attract cross-licensed pilots to serve as back up at Fort Pierce, and eventually, if traffic warrants, candidates for a deputy pilot position. (Notice of Intent, pages 7, 8) The record of the hearing held before DOAH 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 Notice of Intent with respect to this criterion, except as specifically set forth in the following paragraphs. While background as a master or mate is useful, a pilot must possess superior close-quarter ship handling skills and the ability to handle a wide variety of vessels. Foreign licensed mariners are not allowed to become a pilot in Florida. There was contradictory evidence on the prevailing annual compensation for masters serving on US-flagged ships of comparable skill and standing to Florida state-licensed pilots, ranging from $143,000.00 - $181,000.00 (inclusive of wages and benefits) to $300,000.00 for union personnel. However, it is significant that these are salaried positions that do not require the employee to invest in infrastructure or training, or to directly participate in the economic risks of the business. Petitioners argue that there are other maritime industry positions, in addition to master of a U.S.-flagged vessel, which are comparable in professional skill and standing as that of a Florida state-licensed pilot. Specifically, Petitioners assert that masters and deck officers of inland vessels and U.S.-flagged integrated tug and barge units (ITBs) require a comparable level of professional skill and standing. Petitioners' witness on this issue opined that the master of an "upper end" inland vessel (e.g., jumbo barge) would make a salary ranging from $116,000.00 to $131,000.00, while a deck officer would make less than $100,000.00. Similarly, the annual salary for the master of a "premier" ITB would range from $106,000.00 to $132,000.00, while senior mates would have total compensation of less than $100,000.00. Generally, pilots receive about 50% more in total compensation than masters on US-flagged ships. This disparity is necessary in order to motivate the most desirable professional mariners (a master or chief mate with 10-12 years of experience) to leave their current maritime employment, including giving up valuable pension benefits, to take on the risks of self-employment as a pilot. This career change entails significant physical risks, civil and criminal liability risks in the event of accidents, investment in infrastructure, management of a business, etc. While Petitioner may be correct that masters and deck officers in other maritime industries are generally compensated less than state-licensed pilots, those employees bear none of the risks of self-employment. The pool of professional U.S. mariners qualified to move into the pilot career path is relatively small -– a little over 2,000, and ports across the U.S. compete against each other to attract the best individuals to piloting. Indeed, ports within Florida compete with each other for the best qualified candidates. While large Florida ports historically would have had 20-30 applicants for a pilot opening, the number of applicants for even large ports like Miami and Jacksonville has decreased in the last 4-5 years. Most recently there were only 11 mariners testing for two openings at Jacksonville and eight mariners testing for three openings in Miami. The pilot in a small port like Ft. Pierce would not be expected to receive the same compensation as the master of a large container ship (or a pilot in a large Florida port like Tampa or Miami), but the compensation must still be high enough to attract and retain a qualified pilot and to pay for cross- licensed pilots as back-up. Pilots in the port of Palm Beach, where each of the five pilots recently worked about 600 handles per year (similar to the number of pilot handles in Ft. Pierce), netted annual income of approximately $150,000.00. Even in a best case scenario, Captain Wetzel’s net income would only match those of Palm Beach pilots, and it is more likely that, due to increased expenses, it will still fall below that level even with the approved rate increase. 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) In the Notice of Intent, the Board accepted the findings of the Investigative Committee as reflected on page C-9 of the Investigative Committee Report. The record of the hearing held before DOAH does not contain any evidence to form a basis for findings of fact different from, or in addition to, the facts relied on by the Board in its Notice of Intent with respect to this criterion. At the hearing before the former Board, Petitioners disputed the need for any pilotage rate increase to enable the FPPA to purchase and operate its own pilot boat. As of the time of the administrative hearing, the pilot had already purchased a temporary pilot boat, and Petitioners assert that the increase approved by the former Board should be reduced to cover the expenses relating to the pilot boat actually purchased, and operating such boat, but not provide for an increase in net revenue (compensation) to the pilot. For the reasons stated in paragraphs 34-40 above, the Petitioners' contention in this regard is rejected as not supported by the greater weight of the evidence. In addition, the undersigned notes that the operating expense projections contained in the Application were merely that. . . projections. Moreover, the expense projections, including the $325,000.00 expenditure for a pilot boat, were expressly predicated upon approval of the rate increases requested in the application.6/ Although an applicant must certify that the statements contained in a pilotage rate change application are true and correct when made, expense projections set forth in an application are not binding on the applicant, and the Board (now Committee) has no authority to compel the expenditure of specific funds identified in an application. Given the Board's denial of the requested rate increases (with the exception of Year 1) it was not unreasonable for Captain Wetzel to refrain from making the specific expenditures projected in the application, particularly for a $325,000.00 pilot boat. As noted above, the projections when made were reasonable, but changed circumstances necessitated adjustment of those expenditures. In the Notice of Intent, the Board did not "earmark" a specific portion of the revenue increase for the purchase of a pilot boat, but rather recognized the need for "a modest increase to account for the progressively higher operating costs, inflation, and to permit the Pilot to obtain or secure pilot boat services . . ." (Notice of Intent, p. 12) Projected changes in vessel traffic. (section 310.151(5)(b)8, Florida Statutes) Cost of retirement and medical plans. (section 310.151(5)(b)9, Florida Statutes) Physical risks inherent in piloting. (section 310.151(5)(b)10, Florida Statutes) Special characteristics, dangers, and risks of the particular port. (section 310.151(5)(b)11, Florida Statutes) Any other factors the board deems relevant in determining a just and reasonable rate. (section 310.151(5)(b)12, Florida Statutes) 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) The record of the hearing held before DOAH 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 Notice of Intent with respect to the criteria set forth in 310.151(5)(b)8-12, and 310.151(5)(c), above. Taken in its entirety, the evidence presented by the Petitioners, Respondent and Intervenors in this proceeding with respect to the statutory factors set forth in section 310.151(5)(b) and (c), yielded findings of fact in addition to those found by the Board in its Notice of Intent. There was not sufficient credible and persuasive evidence presented by the Petitioners to support any findings of fact materially contrary to the findings of the Board in its Notice of Intent.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Pilotage Rate Review Committee 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 PFFA Pilotage Rate Increase Application in the Port of Ft. Pierce, filed March 30, 2009, will result in fair, just, and reasonable pilotage rates at the Port of Ft. Pierce. DONE AND ENTERED this 31st day of January, 2012, in Tallahassee, Leon County, Florida. S W. DAVID WATKINS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 31st day of January, 2012.
The Issue Whether the Department of Children and Family Services should approve a plan submitted by Sharon George, the mother, primary caregiver, and representative of Petitioner, under the Choice and Control Pilot Project.
Findings Of Fact Threasa Garrett is a 29 year-old woman with brain damage and severe mental retardation. She is petite and appears to be much younger than her actual age. Ms. Garrett cannot articulate her needs and cannot perform most of the activities of daily living such as feeding, bathing and other hygiene, and dressing. She must be closely supervised at all times, as she is unable to recognize danger. She attempts to eat nonfood items if not prevented from so doing. She has the propensity to wander about. Ms. Garrett has been severely retarded most of her life. Her mother, Mrs. George, has been her primary caregiver. The caregiving for Ms. Garrett has been long term and extremely demanding. One of the means employed by Mrs. George to deal with Ms. Garrett's propensity to wander is by using a harness and tether. The harness fits around Ms. Garrett's upper torso and is attached to a tether in the back. Ms. Garrett is a client of the Developmental Disabilities Program of DCFS. The Developmental Disabilities Program provides and coordinates the provision of goods and services to developmentally disabled clients such as Petitioner. The Choice and Control Pilot Project is an experimental program operated by the Developmental Disabilities Program. The purpose of the Pilot Project is to allow families of developmentally disabled clients greater flexibility and a greater role in procuring and providing services for their developmentally disabled family members. A feature of the Pilot Program which is material to this case is that, with the approval of DCFS, the family members of the DCFS client can provide services to the client, and be paid to do so with state moneys. In order to participate in the Pilot Project, the family member must sign and agree to abide by the terms of the Pilot Project Agreement. This agreement requires that the participant must comply with project guidelines including purchasing guidelines. Two purchasing guidelines which are material to this case are guideline number four, "[the] provider must be capable and qualified" and guideline number 5, "[h]ealth and safety needs must be met." DCFS based its denial letter on its determination that Petitioner's request does not meet these two purchasing guidelines. Petitioner will be able to continue to be a client of and to receive services from the Developmental Disabilities Program despite DCFS' denial of Mrs. George's request to receive funding from the Pilot Project. On July 14, 2000, Mrs. George decided to go to northern Alabama. The reason for her trip is not clear in the record. The weather was hot and Mrs. George feared that Threasa would not do well in the heat of her vehicle. She based this fear on past experiences in which Threasa experienced health problems when overheated. Mrs. George left Threasa at the home of Donna Garrett, Threasa's sister. Mrs. George was aware that her daughter, Donna, had a job which would require her to leave the home at 6:30 a.m. the morning of July 14, 2000, and was not expected to return until approximately 1:00 p.m. that day. Mrs. George planned to be gone on her trip the whole day. Around noon, law enforcement personnel were summoned to Donna Garrett's home by someone who came to the home to perform pest control there. The officer gained entry to the home and saw Threasa alone wearing the harness and tethered to a couch. Petitioner was soaked with urine. DCFS sent a child protective investigator to the scene because the officer thought she was a child. When Threasa's actual age was established, an adult protective investigator was summoned. The adult protective investigator was concerned about the harness and tether, and that Threasa had been left alone in the home. Additionally, he was concerned that she had no food or water, and no access to a telephone to call for help. He arranged to send Threasa to a location where she would be supervised. After discussing this with family members who did not want her sent to an institutional setting, Ms. Garrett was sent to her grandfather's house with a family member. The Department's decision to deny Mrs. George's application was based primarily on the incident of July 14, 2000. That is, that Threasa had been left alone unsupervised for a number of hours with no means of escape in the event of an emergency. Additionally, as Mrs. George had indicated to DCFS that she would make the same choice again, DCFS was concerned that such an incident would happen again. Mrs. George's explanation for her actions were that Threasa had been tethered for her safety (so she would not roam and hurt herself), that food had not been left for her as she is unable to feed herself safely, that no telephone was needed because Threasa cannot communicate meaningfully, is unable to use a telephone, and a telephone wire could endanger Threasa. Mrs. George was confident that Threasa would be safe if left alone for a number of hours under these conditions and based this confidence on her years of caring for Threasa and on Mrs. George's religious beliefs.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED: That the Respondent enter a final order rejecting Petitioner's request to be paid for services under the Pilot Project. DONE AND ENTERED this 30th day of October, 2001, in Tallahassee, Leon County, Florida. BARBARA J. STAROS 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 30th day of October, 2001.
The Issue The issue presented is whether Rule 61E13-2.012, Florida Administrative Code, is an invalid exercise of delegated legislative authority.
Findings Of Fact l. Petitioner South Florida Cargo Carriers Association, Inc., is a Florida not-for-profit corporation with its principal office in Miami, Florida. Petitioner's purpose 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, life, and property of all persons be protected to the fullest extent possible consistent with sound financial principles. Petitioner consists of the following companies: members of the Florida-Caribbean Cruise Association; Maersk, Inc.; Seaboard Marine; Kirk; SeaLand; Zim; Cari Freight; Thompson Shipping, and Burmuth. Intervenor Florida State Pilots Association, Inc., is a Florida not-for-profit corporation. It is a voluntary organization whose membership is comprised of all individual pilot associations serving the various ports of the State of Florida, as well as approximately 100 pilots licensed by the State of Florida. Among other things, Intervenor advances and defends the interests of its membership on the state level. The Port Everglades Pilots' Association (hereinafter "PEPA") is an association composed of present and retired harbor pilots that is treated as a partnership for tax purposes and which performs the pilotage services at Port Everglades. PEPA and its affiliates Port Everglades Pilots, Inc., and PEP, Inc., are located in Fort Lauderdale. The purpose of PEPA is to provide pilotage services in Port Everglades in a safe and efficient manner and in compliance with the provisions of Chapter 310, Florida Statutes, the rules promulgated thereunder, and any other provisions of law governing the provision of pilotage services. As such, PEPA is entitled to charge pilotage rates as provided in Section 310.151, Florida Statutes, and, as further provided therein, to seek rate changes by filing a petition with the Department of Business and Professional Regulation, Pilotage Rate Review Board. A number of Petitioner's members are affected by the rates of pilotage set for Port Everglades, inasmuch as they are required by Chapter 310, Florida Statutes, to utilize and compensate the pilots whose rates are established by the Board, and they are utilizing and compensating pilots in accordance with the rates currently established for Port Everglades. In January 1997 PEPA submitted to the Board an application for an increase in the pilotage rates for Port Everglades. In February 1997 Petitioner submitted its own application for a decrease in the rates of pilotage for Port Everglades. On May 20, 1997, the Board held a public hearing on both applications. At the conclusion thereof, the Board preliminarily determined to grant PEPA's application for a rate increase in its entirety and to deny Petitioner's application for a rate decrease. The Board's preliminary determination was reduced to writing on July 3, 1997. On July 28, 1997, Petitioner filed with the Board a Petition for Formal Administrative Hearing challenging the Board's decision to grant PEPA's application and to deny Petitioner's application. The Board thereafter transmitted that Petition to the Division of Administrative Hearings. The Board's transmittal letter filed August 7, 1997, cautioned the Division not to carry out its full statutory functions because: it is the Board's position , as expressed in rule 61E13-2.012(3), F.A.C., that the resolution of any disputed issue of fact by an [Administrative Law Judge] cannot result in a recommendation from that ALJ as to what the rate should be. The ALJ's recommendation should only extend to resolving the disputed issues of material fact. Subsequently, and based upon the resolved issues of fact, the Pilotage Rate Review Board will set the appropriate rates. On August 18, 1997, Petitioner filed its Petition Seeking an Administrative Determination of the Invalidity of an Existing Rule, challenging Rule 61E13-2.012(3), Florida Administrative Code, pursuant to Section 120.56(3), Florida Statutes. Petitioner has standing to file and maintain this rule challenge proceeding. Intervenor has standing to intervene in this rule challenge proceeding. Rule 61E13-2.012(3), Florida Administrative Code, was adopted before October 1, 1996. It was included on a list submitted by the Pilotage Rate Review Board in accordance with Section 120.536(2), Florida Statutes. It was subsequently amended by the Board, effective October 14, 1997, so as to delete all portions of the Rule except for Subsection (3) which is now the entire Rule.
