The Issue Whether Petitioner's site is eligible for state- administered cleanup under Respondent's Early Detection Incentive Program.
Findings Of Fact Nana's Petroleum, Inc., owns and operates a service station at 251 East Main Street, Pahokee, Florida. The facility is located within two or three blocks of Lake Okeechobee, which is a Class I drinking water supply. On October 19, 1988, Petitioner applied pursuant to the Early Detection Incentive Program for state assistance due to a suspected discharge of gasoline at the facility. The application indicated that a monitoring well had approximately one-quarter inch of product in it, but that the source of that contamination, though suspected to be from a leak in a line, was unknown. As of the date of the final hearing in this cause, Petitioner still had not performed an investigation to determine the source of the contamination. Failure to investigate the source of a discharge results in the possibility of the discharge continuing. A continual discharge results in the loss of more product from the system, increases the threat to drinking water supplies, and creates other environmental concerns. A discharge of fuel has the ability to harm people or property due to the resulting contamination of groundwater. Once the contamination has reached the groundwater, it can migrate to adjacent surface waters or potable water wells. The failure to stop a discharge, therefore, results in a greater threat to groundwater and to drinking water due to the greater amounts of product in the groundwater. Inventory is taken by inserting a calibrated pole into the storage tank and measuring the level of product in the tank. Due to the angle of the pole, fluctuations in volume due to heating and cooling of the product, and other factors, accuracy is only possible to 1/8 of an inch. One-eighth of an inch equates to 17 gallons in a 10,000-gallon tank. Inventory is accurate only for determining whether large or medium leaks are occurring and is not accurate for the detection of small leaks. Reviewing inventory records is not an acceptable method of investigating the source of a discharge. Only in the last few months has Petitioner been making monthly monitoring system checks.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, therefore, RECOMMENDED that a Final Order be entered denying Petitioner's Early Detection Incentive Notification Application. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 26th day of February, 1990. LINDA M. RIGOT 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 26th day of February, 1990. APPENDIX TO RECOMMENDED ORDER DOAH CASE NO. 89-5912 Respondent's proposed findings of fact numbered 1-3 and 9 have been rejected as not constituting findings of fact but rather as constituting conclusions of law. Respondent's proposed findings of fact numbered 4-8, 10-17, 20, and 21 have been adopted either verbatim or in substance in this Recommended Order. Respondent's proposed findings of fact numbered 18 and 19 have been rejected as unnecessary for determination. COPIES FURNISHED: John W. Thornton 315 Southeast 8th Avenue Okeechobee, Florida 33472 E. Gary Early, Esquire Department of Environmental Regulation Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32399 Dale H. Twachtmann, Secretary Department of Environmental Regulation Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32399 Daniel H. Thompson, General Counsel Department of Environmental Regulation Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32399
The Issue Whether Alachua County Environmental Protection Department discriminated against Tilak B. Shrestha based upon his race or national origin, in violation of Title VII of the Federal Civil Rights Act of 1964 and the Florida Civil Rights Act of 1992, by releasing Mr. Shrestha from his temporary assignment through Temp Force with the Alachua County Environmental Protection Department and by not hiring Mr. Shrestha for the position of Senior Environmental Specialist within the Alachua County Environmental Protection Department.
Findings Of Fact The State of Florida funds the Petroleum Cleanup Program (Petroleum Program) which is focused on removing petroleum contaminants from various sites within the State of Florida. The Department of Environmental Protection (DEP) administers the Petroleum Program, also known as the Underground Storage Cleanup Program. In 12 counties, including Alachua, Florida contracts with the county to manage the Petroleum Program. The Alachua County Environmental Protection Department (Alachua DEP) manages the Petroleum Cleanup sites in Alachua County. Mr. Chris Bird has been the director of the Petroleum Program since 1993. He has worked with Alachua County since 1986. In the 1994-1995 fiscal year, the Florida Legislature was facing a deficit; therefore, the Legislature significantly reduced the funding for the Petroleum Program. As a result, DEP froze the Petroleum Program, and dropped several active sites. The lack of funding resulted in downsizing at both the county and state levels at the beginning of 1995. At the beginning of 1995, the Alachua DEP had three funded positions in the Petroleum Program. Mr. Alex Vieira occupied the position of full-time Professional Engineer. The Alachua DEP also had funding for an administrative position and a full-time Environmental Engineer/Geologist. The Environmental Engineer/Geologist position was vacant at the beginning of 1995. The Alachua DEP originally advertised for the position. However, when the State reduced funding for the Petroleum Program, the Alachua DEP decided not to fill the position with a permanent employee and ultimately froze this permanent position. In order for the Petroleum Program to continue at a minimum level of operation, the Alachua DEP hired temporary employees through Temp Force, a temporary employment agency. Temp Force served as an independent contractor for the Alachua DEP. Temp Force provided Mr. Tilak Shrestha and Mr. Mike Shuler to the Alachua DEP Petroleum Cleanup Program. Mr. Shuler began working at the Alachua DEP through Temp Force two months prior to Mr. Shrestha's Temp Force assignment to the Petroleum Program. At the time of the assignment through Temp Force, Shrestha was not credentialed as a Ph.D. Mr. Shrestha and Mr. Shuler were employees of Temp Force, received their paychecks from Temp Force and acquired no benefits from Alachua County. Mr. Shrestha worked as a Temp Force employee for six months at Alachua DEP and was assigned to various projects at the Alachua DEP. As supervisor for the Petroleum Program, Mr. Vieira assigned projects to both Mr. Shrestha and Mr. Shuler. Mr. Shrestha described his working conditions during his assignment through Temp Force with the Alachua DEP as "good, no complaints," and "good on average." In 1995, the Florida legislature ultimately reduced funding for the Petroleum Program from $1.2 million to approximately $250,000. When the Alachua DEP received notice of these funding cuts, Mr. Bird advised Mr. Vieira that he needed to release one of the Temp Force employees from his assignment with the Alachua DEP. Mr. Vieira retained Mr. Shuler and informed Mr. Shrestha that he would no longer be working on the Petroleum Cleanup assignment through Temp Force. Mr. Shrestha's assignment through Temp Force with the Alachua DEP was terminated on August 10, 1995. During Fall 1995, the legislature substantially changed the law and administration pertaining to the Petroleum Program, both at the county and state levels. In October 1995, Ms. Pegeen Hanrahan became the Petroleum Program supervisor following Mr. Vieira's resignation. Ms. Hanrahan earned a Bachelor's degree in Environmental Engineering and Sociology and a Master's degree in Environmental Engineering. She is a registered Professional Engineer and a certified Hazardous Materials Manager. She began working for Alachua County in 1992 as an Environmental Engineer and later served for three years as Hazardous Materials Program Supervisor for Alachua County. When Ms. Hanrahan became supervisor of the Petroleum Program in Fall 1995, the Petroleum Program had essentially entered a "stand-by" mode. The Alachua DEP declined to send any additional work to its sub-contractors. Therefore, the technical duties involved in the Petroleum Program were reduced and the administrative duties became more important. During the Fall of 1995, there were no permanent employees on staff. Mr. Shuler remained as the only temporary employee in the Petroleum Program and according to Ms. Hanrahan was doing a "perfectly adequate job." Based on the new and reduced Petroleum Program budget for the 1995-1996 fiscal year, the Alachua DEP acted in October 1995 to establish the position of Senior Environmental Specialist in lieu of the Environmental Engineer/Geologist position. The position was advertised in December 1995. The main role of the Senior Environmental Specialist was to assist the Professional Engineer in the area of the administration involved in the Petroleum Program. The duties included filing reports, tracking sites, and submitting task orders and invoices to the office in Tallahassee. Due to the increasing changes in the Petroleum Program, the Alachua DEP required a Senior Environmental Specialist who understood the Petroleum Program's administrative tasks, as well as the State policies pertaining to the Petroleum Program. The Senior Environmental Specialist candidate was required to have a technical background in fields including, but not limited to, engineering, biology or geology. The Professional Engineer, not the Specialist, was assigned the technical review of the Petroleum Program. An applicant's understanding of the technical and administrative duties was necessary. In 1995, the Alachua DEP advertised the position of Senior Environmental Specialist, which included printing an advertisement in the local newspaper, per the County regulations. The Alachua DEP described the administrative tasks of Senior Environmental Specialist to include: preparing reports; making recommendations; receiving and investigating complaints; conducting performance evaluations; counseling, hiring and terminating employees. The Alachua DEP described the knowledge, skills, and abilities of the Senior Environmental Specialist to include: thorough knowledge of the technical methods and procedures involved in the administration of environmental regulations, programs, and policies; knowledge of local, state, and federal rules, regulations, and ordinances related to environmental protection; ability to create concise, clear, and succinct technical reports; and ability to research technical problems, formulate recommendations, and compile related reports. The Alachua DEP described the minimum qualifications for the position of Senior Environmental Specialist as: Bachelor's degree in environmental or natural science, civil or environmental engineering, geology, or hydrology, or related field, and two years' professional level environmental-related experience; or any equivalent combination of related training and experience. The County received 14 applications for the position as Senior Environmental Specialist from applicants, which included Mr. Shrestha and Mr. Shuler. Ms. Hanrahan was supervisor of the Petroleum Program in January 1996 and responsible for the hiring of the Senior Environmental Specialist. She received an Application Referral Document from personnel, stating that each of the applicants met the County's minimum requirements for the position of Senior Environmental Specialist. Upon receipt of the re?sume's and applications, Ms. Hanrahan initially screened the applicants for those who had petroleum-related experience. She narrowed the applicants to four individuals, who included Mr. Shrestha, Mr. Shuler, and two others. On January 22, 1996, Ms. Hanrahan conducted a telephone interview of each of the four applicants who passed the initial screening. The telephone interview was customary hiring practice within the Alachua DEP. During the telephone interview, Ms. Hanrahan asked each applicant the same series of ten questions, designed to test the applicant's level of knowledge regarding technical and administrative aspects of the position of Senior Environmental Specialist. Mr. Shrestha answered five out of a possible eleven answers correctly. This was the second highest score out of the four applicants. Shuler achieved the highest score, answering eight-and-one-half out of eleven answers correctly. Three interview questions specifically addressed administrative issues. Question six asked, "What does RBCA stand for?" Question seven stated, "This year the Florida Petroleum Cleanup Program has adopted a new mechanism for review and approval of work on petroleum contaminated sites. Can you tell me what that program is called?" Question nine stated, "Give two examples of policy decisions under RBCA." Mr. Shrestha failed to answer question six, seven or nine correctly. Mr. Shrestha's failure to correctly answer each of the administrative questions indicated to Ms. Hanrahan that he was unaware of the changes within the Petroleum Program. Another purpose of the telephone interview was to assess the applicants under pressure. Ms. Hanrahan also sought to evaluate how the applicants responded to her authority. During the telephone interview, Mr. Shrestha challenged Ms. Hanrahan regarding the relevance of the questions to the position of Senior Environmental Specialist and she noted his argumentative attitude during the interview. He conceded at the hearing that he did ask her about the relevancy of the questions. Based upon his argumentative tone, Ms. Hanrahan questioned Mr. Shrestha about his ability to accept her supervisory decisions. She decided not to hire Mr. Shrestha for the position of Senior Environmental Specialist based on his limited knowledge of the administration of the Petroleum Program, a factor essential to the position of Senior Environmental Specialist, and his inability to accept her authority as supervisor. Ms. Hanrahan was also aware of critical statements that Mr. Shrestha allegedly had made to female co-workers during his assignment through Temp Force at the Alachua DEP. Ms. Robin Hallbourg is currently employed as Senior Environmental Specialist with the Alachua DEP. Ms. Hallbourg has been with the Alachua County DEP for 15 years. Ms. Hallbourg worked with Mr. Shrestha at the Alachua DEP during Mr. Shrestha's assignment through Temp Force. Ms. Hallbourg testified that Mr. Shrestha told her that "she should be home with her child" and that she "should allow a man to have her job." After this conversation, Ms. Hallbourg discussed his statements with others in the Alachua DEP, including Ms. Hanrahan. Ms. Hanrahan recalled the discussion with her. Ms. Hanrahan hired Mr. Shuler for the position of Senior Environmental Specialist because he proved himself to be the most qualified candidate during the interview process. Ms. Hanrahan kept an interview log on which she noted Mr. Shuler's strong qualifications for the position of Senior Environmental Specialist. She noted his "excellent experience in the Petroleum Cleanup Program and his significant applicable training and experience in program administration." Ms. Hanrahan also noted that his "application and interview showed strong computer skills." Mr. Shuler's Bachelor's degree in Microbiology met the education requirements for the position of Senior Environmental Specialist. Moreover, at the time of Shuler's application, there had been a growing emphasis placed on bi-remediation, which is currently a regularly used process. Given Ms. Hanrahan's education, training,and experience as a Professional Engineer, she determined that a Bachelor's degree in Microbiology was an appropriate background for the position. In addition, Mr. Shuler had the technical knowledge of processes, performance of groundwater sampling, and drilling, as well as other relevant technical knowledge pertaining to the position of Senior Environmental Specialist. Additionally, due to his continued assignment in the Alachua DEP, he was aware of the new administrative duties required of a Senior Environmental Specialist. Ms. Hanrahan had personally observed Mr. Shuler from October 1995 until January 1996, and was extremely satisfied with his performance. As part of the usual hiring process, Ms. Hanrahan submitted her interview log, personnel action form, and applications to the personnel department to support her hiring decision. Mr. Bird approved the hiring decision in his capacity as director, and the personnel department, budget department, and Equal Employment Office then approved the decision. Since his hire, Mr. Shuler has been commended by the Alachua DEP and his supervisors. Ms. Hanrahan informed Mr. Shrestha that he had not been hired for the position during a telephone conversation on January 23, 1996. She did not base her decision to hire Mr. Shuler over Mr. Shrestha on the basis of race or national origin. Ms. Hanrahan is fully aware of Alachua County's Equal Employment Opportunity policy through her position as advisor on the Equal Opportunity Advisory Committee. There is no evidence of any discriminatory hiring decision. In fact, on the same day that Ms. Hanrahan hired Mr. Shuler for the position of Senior Environmental Specialist, she also hired Mr. Gus Olmos for the position of Environmental Engineering Supervisor. Mr. Olmos is from Panama and is Hispanic. Moreover, Dr. Prasad Kuchibhotla is a Professional Engineer with a Bachelor's, Master's and Ph.D. in Chemical Engineering. He is from India and is Asian. Alachua County hired Dr. Kuchibhotla in 1997 and is the current Petroleum Cleanup Program Manager for Alachua DEP. Dr. Kuchibhotla currently has a Senior Environmental Specialist working for him within the Petroleum Program. As was the case in December 1995, the current Specialist's primary duty is to assist him with the detailed administrative tasks involved with the Petroleum Program. On January 27, 1997, Mr. Shrestha filed a formal Charge of Discrimination. The charge was date stamped as received by the Florida Commission on Human Relations on January 30, 1997. Mr. Shrestha is currently employed with Bell South in Atlanta, Georgia. He earns $47,000 per year and receives health benefits.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations enter a final order finding that Petitioner, Tilak B. Shrestha is not entitled to any relief relating to his charge of discrimination under Title VII of the Federal Civil Rights Act of 1964 and the Florida Civil Rights Act of 1992. DONE AND ENTERED this 2nd day of August, 2000, in Tallahassee, Leon County, Florida. WILLIAM R. PFEIFFER 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 2nd day of August, 2000. COPIES FURNISHED: Tilak B. Shrestha 3579-C Meadowglen Village Lane Doraville, Georgia 30340 Robert M. Ott, Esquire County Litigation Attorney Post Office Box 2877 Gainesville, Florida 32602 Sharon Moultry, Clerk Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32303-4149 Dana A. Baird, General Counsel Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32303-4149
The Issue There are three legal issues which remain for determination: (1) Whether Florida Petroleum has standing in this case; (2) Whether proposed rule 62-770.220(3)(b), requiring constructive notice to residents or business tenants of real property into which the temporary point of compliance is allowed to extend is an invalid exercise of delegated legislative authority within the meaning of Section 120.52(8)(c), Florida Statutes; and (3) Whether proposed rule 62-770.220(4), requiring additional constructive notice of the status of site rehabilitation is an invalid exercise of delegated legislative authority within the meaning of Section 120.52(8)(c), Florida Statutes.i
Findings Of Fact On December 23, 2004, the Department published a Notice of Proposed Rulemaking regarding amendments to Florida Administrative Code Chapter 62-770. In particular, proposed rule 62-770.220(3)(b) and (4), provides: Subsequent Notice of Contamination Beyond Source Property Boundaries for Establishment of a Temporary Point of Compliance (TPOC) - Prior to the Department authorizing a temporary extension of the point of compliance beyond the boundary of the source property (i.e., the location from which the contamination originates) in conjunction with Natural Attenuation Monitoring pursuant to Rule 62-770.690, F.A.C., or Active Remediation pursuant to Rule 62-770.700, F.A.C., the PRSP shall provide the following notices: * * * (b) Constructive notice to residents [if different from the real property owner(s) notified pursuant to paragraph 62- 770.220(3)(a), F.A.C.] and business tenants of any real property into which the point of compliance is allowed to extend. Such constructive notice, which shall include the same information as required in the actual notice, shall be provided by complying with the following: * * * Status Update 5-Year Notice - When utilizing a TPOC beyond the boundary of the source property to facilitate natural attenuation monitoring or active remediation, an additional notice concerning the status of the site rehabilitation shall be similarly provided every five years to [the classes of] those persons who received notice pursuant to subsection 62-770.220(3), F.A.C., unless in the intervening time, such persons have been informed that the contamination no longer affects the property into which the point of compliance was allowed to extend. * * * (The language in brackets was added pursuant to the Department's Notice of Change and "those" was deleted.) The proposed rule implements Section 376.3071, Florida Statutes. The specific authority for the proposed rule is Sections 376.303 and 376.3071, Florida Statutes. On February 2, 2005, the Environmental Regulation Commission held a public hearing on the proposed rules and approved the proposed rules with certain amendments. On February 14, 2005, Florida Petroleum filed a Petition for Determination of Invalidity of Proposed Rule (Petition) challenging the validity of proposed amendments to proposed rule 62-770.220(3)(b) and (4). The Petition was filed pursuant to Section 120.56(1) and (2), Florida Statutes, and in each instance, Florida Petroleum alleges that the proposed rule violates Section 120.52(8)(c), Florida Statutes. On March 4, 2005, the Department published a Notice of Change regarding the above-referenced Notice of Proposed Rulemaking. With respect to the pending proceeding, the Notice of Change reflects revisions to language of proposed rule 62- 770.220(4), which are not subject to challenge. See Finding of Fact 1. On May 16, 2005, without objection, official recognition was taken of the Department's Notice of Proposed Rulemaking and Notice of Change. Florida Petroleum is a Florida voluntary, non-profit trade association, which comprise, in part, approximately 194 Marketer Members who own and/or operate petroleum storage system facilities in Florida. Florida Petroleum’s purposes include providing representation on behalf of its members in legislative and regulatory matters before the Florida legislature and agencies. Florida Petroleum routinely represents its members in rule development proceeding and other regulatory matters before the Department of Environmental Protection, Department of Revenue, and Department of Agriculture and Consumer Services. Florida Petroleum’s By-Laws state that its purposes include advancing the business concerns of its members, pooling the energy and resources of its members, and communicating with elected officials at the national, state, and local levels of government. Towards those ends, Florida Petroleum has represented it members before the Florida Legislature in matters relating to the regulation of petroleum facilities under Chapter 376, Florida Statutes, and has appeared before the Department in rulemaking proceedings involving the regulation of petroleum cleanups, and the various state restoration funding assistance programs. The subject matter of the rule at issue is within the general scope of interest and activity of Florida Petroleum, in particular, its marketer members, who own or operate facilities that store petroleum products for consumption, use, or sale. Florida Petroleum submitted oral and written comments, recommendations, objections, and proposed amendments to the Department and the Environmental Regulation Commission in connection with the rules at issue in this case. A substantial number of Florida Petroleum marketer members are "persons responsible" for assessment and remediation of one or more petroleum-contaminated sites. Florida Administrative Code Chapter 62-770, governs the remediation of petroleum-contaminated sites. A substantial number of Florida Petroleum’s marketer members are "persons responsible" for assessment and remediation of sites identified by the Department as "confirmed" or "suspected" sources of contamination beyond the boundary of the facility (i.e., "off-site contamination"). In certain instances, the Department's rules allow for the use of No Further Action with Conditions procedures in cases of petroleum contamination where applicable regulatory requirements are met because the use of conditions, such as institutional and engineering controls, may be more cost- effective than active remediation. As of February 2005, the Department estimated that it had reports of approximately 23,000 petroleum-contaminated sites. In 2004, the Department received an estimated 539 Discharge Report Forms in connection with petroleum storage facilities. As of March 2005, the Department had information indicating that approximately 2,000 "off-site" properties have been affected by contamination. Assessment Reports filed with the Department indicate that a substantial number of these sites may have been affected by discharges of petroleum or petroleum products. Petroleum discharges will in all likelihood continue to occur in the future at petroleum facilities. Petroleum discharges will in all likelihood continue to affect off-site properties in the future.
The Issue The issues to be determined are whether: (1) a violation of section 556.107(1)(a), Florida Statutes, occurred; (2) relating to a “high-priority subsurface installation” under section 556.116(1)(b); (3) which proximately caused an “incident” under section 556.116(1)(c); (4) for which a fine may be imposed against the violator in an amount not to exceed $50,000.00.
Findings Of Fact Stipulated Facts Sunshine 811 is the free-access notification system established under the Underground Facility Damage Prevention and Safety Act (the Act). See §§ 556.101 – 556.116, Fla. Stat. (2017). Section 556.105(1)(a) requires an excavator before beginning any excavation or demolition to provide Sunshine 811 with certain information that will allow a utility company to mark the location of underground facilities in the area of the proposed excavation. On January 8, 2018, Francisco Plascencia, an employee and agent of Medalist, was operating a trackhoe excavator on the property located at or around 1380 SE Cove Road, Stuart, Florida. While Medalist was digging to uproot a tree, the trackhoe excavator ruptured a six-inch underground gas- distribution main owned and operated by Peoples Gas. Before beginning the excavation, Medalist did not “call 811” or otherwise notify Sunshine 811 about the excavation. Accordingly, the excavation site did not contain “locate marks” identifying on the surface of the earth the location of the six-inch underground gas main. The Parties Medalist is owned by Jeremy LeMaster who is a licensed building contractor. Since 2007, Medalist has built over 500 homes in Martin County. Peoples Gas is the utility company that owns and operates the underground gas-distribution main that is the subject of this proceeding. Peoples Gas is a member operator of Sunshine 811 and submitted the High Priority Subsurface Installation Incident Report and Commitment regarding the incident at 1380 SE Cove Road, Stuart, Florida. The Incident Joshua Turpie is the senior utility technician with Peoples Gas who performs line locates when Peoples Gas gets tickets from Sunshine 811. Mr. Turpie testified that if a contractor or homeowner calls Sunshine 811 before digging, it comes to him and he has a 48-hour window in which to mark the location of any underground gas line. This is done by placing flags, painting the ground and taking pictures. On the morning of January 8, 2018, Mr. Turpie responded to a location on Cove Road at the request of his supervisor, Scott Tinney. Mr. Tinney informed him that a drastic drop in gas pressure was occurring, and it seemed to be in the area of Mr. Turpie’s location. At the location, Mr. Turpie found fire trucks and police cars, and saw that a gas-distribution main was ruptured. After assessing the situation and further discussing it with his supervisor, who was now on-site, he assisted Peoples Gas contractor with the “make safe” operation. This entailed fully exposing the gas main and using a “squeeze off tool” to clamp the main at a location upstream of the rupture to stop the flow of gas. Mr. Turpie arrived on scene at 9:40 a.m. and the gas flow was stopped at 11:15 a.m. At the scene, Mr. Turpie also checked on his computer and saw that this particular gas- distribution main was designated as a high priority main because “it feeds basically everything in Stuart.” An outage at this type of main would have a high customer impact. This particular gas main serviced 50 percent residential and 50 percent commercial customers. For excavation work in the area of a high-priority gas main, Mr. Turpie would not only have flagged and marked the location, but also would have called the excavator and explained the high-priority nature of the gas main. In addition, a notification letter would also be sent to the excavator regarding the high-priority gas main and providing the contact information of relevant Peoples Gas employees. Peoples Gas would also have the opportunity to determine if it needed to place an employee on-site during excavation. A contractor for Peoples Gas repaired the gas main. Peoples Gas employees also “locked off” every customer’s meter. Four hundred and nine individual meters had to be physically locked off before restoration efforts could begin. Restoration involved re-introducing gas to the system, purging the lines of air, and physically turning on each meter, checking gas appliances, and checking for leaks. This process was labor intensive and involved deploying 36 Peoples Gas employees from around the state and two contractors from Miami. Peoples Gas set up a command center to which the employees from around the state reported. There, the teams were provided with outage lists of the metered customers in order to conduct the process of restoring service. Service restoration continued through the evening of January 9. On the morning of January 10, the deployed employees were sent back home and the local teams completed restoring service to residences. Community Impact At the location of the gas main rupture, first responders (i.e., fire rescue and police) set up a command center, redirected traffic away from that part of Cove Road, and evacuated nearby residences and a nearby school. The customers without service during the outage included two hospitals, four nursing homes, a fire station, schools, a correctional facility, a church, businesses, and residences. Property Damage and Service-Restoration Costs Ruth Weintraub is the Peoples Gas supervisor for Damage Prevention & Public Awareness. Ms. Weintraub testified that she did an accounting of the expenses incurred as a result of the gas line rupture. Ms. Weintraub calculated the amount based on: (i) lost gas in the line; (ii) labor; (iii) equipment; (iv) lodging and meals; (v) charges from the third•party contractors; and (vi) administrative costs. The amount was no less than $127,000.00, which would increase as Peoples Gas finalized its accounting. Medalist’s Actions Mr. LeMaster testified that he was alerted to the incident by a text from a field supervisor who had called 911 to report the event. Mr. LeMaster arrived at the scene within approximately 30 minutes after getting the text, and remained at the site until there was complete clearance. Mr. LeMaster testified that his employees are trained in Sunshine 811 procedures. “[T]hey don’t dig without having locates.” He surmised that Mr. Plascencia thought he was doing a good thing by using the trackhoe to remove a tree which was in the center of a staked driveway at the job site. Mr. Plascencia was not instructed to remove the tree. In fact, the only work to be done that day was the placement of silt fences. Prior to this incident, Medalist had never hit any underground lines and always contacted Sunshine 811 before digging. Mr. LeMaster testified that Mr. Plascencia was immediately terminated for not following company policy and procedures. Sunshine 811 Lance Horton is the manager for Pipeline Safety & Occupational Services at Peoples Gas. Mr. Horton also served on the Board of Directors of Sunshine 811. He explained that the Sunshine 811 call and locate procedure is “a damage prevention program in the effort . . . to protect underground facilities, not just gas but also electric, communication facilities, water, [and] sewer.” It is important to prevent “incidents such as this,” which put utility employees, first responders, and members of the public in peril.
Findings Of Fact Petitioner, Jerry's Oil, prepared Early Detection Incentive Program Notification Applications for two of its gas stations in Florida on August 13, 1987. One application was for a station located in Okeechobee, Florida, registered as DER Facility No. 478732808. The other application was for a station located in Tarpon Springs, Florida, registered as DER Facility No. 528732810. The application form had two purposes. The first purpose of the form was to notify the Department of Environmental Regulation of petroleum contamination problems. The second purpose was to provide information to the agency that could be used to determine the applicant's eligibility for the Early Detection Incentive (EDI) Program. The EDI Program provides funding and other state assistance with environmental cleanup of petroleum contamination problems to tank owners for a limited period of time. To be eligible for participation in the EDI Program, an applicant had to complete the application form provided by DER and submit it to the agency during the reporting period from July 1, 1986 through December 31, 1988. The application for the Okeechobee gas station reports that a discharge of unleaded gasoline was discovered at the site on July 8, 1987. The dispenser, which is part of the storage system, leaked because of a loose connection. The estimated number of gallons lost was unknown, but the system was repaired before the report was made to DER on August 13, 1987. The application for the Tarpon Springs gas station reports that a discharge of vehicular diesel was discovered at this site on July 12, 1987. There was a loose connection between a pipe and the dispenser. In addition, the pump hose leaked. The amount of gallons lost as a result of these equipment problems was unknown. The gasket on the pump was replaced, and the system was otherwise repaired prior to the report to DER. Petitioner completed these applications to report the discharges and to have the company's eligibility for the EDI program determined by DER. As part of his usual business practice, the owner of Jerry's Oil completed the applications and gave them to Delores M. Quinette. Ms. Quinette then made copies of the front page of each application for Petitioner's files. Ms. Quinette placed the applications together in one envelope addressed to the Department of Environmental Regulation at 2600 Blairstone Road, Tallahassee, Florida. The envelope indicated that this correspondence was directed to the attention of Laurie Ginger. The proper return address was also placed on the stamped envelope. On the same day, the envelope containing the applications was placed in the residential mailbox belonging to Delores M. Quinette at 1110 Pine Lake Drive South, Tampa, Florida 33612. The red flag on the mailbox was raised to alert the mailman that the mailbox contained outgoing mail. This mailing procedure was used by the Petitioner in the ordinary course of business as Ms. Quinette is an independent contractor who handles the paperwork for Petitioner from her home. On August 14, 1987, Ms. Quinette checked the mailbox to remove incoming mail. The envelope addressed to the DER was no longer in the mailbox. It was assumed that the mailman had taken the outgoing mail for delivery to the addresses indicated on the correspondence. The envelope containing the applications was never returned to Ms. Quinette by the U.S. Postal Service. Petitioner relied on this mailing procedure to notify DER of the petroleum discharges and its intention to apply for eligibility into the EDI program. DER's records relating to EDI Program applications do not reflect that these two applications were received within the designated reporting period or within a reasonable time thereafter. DER first become aware that the original applications had been sent in August 1987 during the month of September of 1991. This was over two and a half years after the reporting period had closed. Petitioner discovered that the original applications were never received by DER when inquiry was made by Petitioner's contractor about the company's EDI Program eligibility during site rehabilitation in September 1991. Copies of the front page of each application retained by Petitioner were then mailed to DER, along with an affidavit stating the original applications had been mailed on August 14, 1987. Upon receipt of these copies, DER advised Petitioner it was ineligible to receive EDI Program benefits because these applications were not timely filed. Petitioner takes the position that DER should look to the date the original applications were entrusted to the U.S. Postal Service instead of the date the copies were received by DER as the reporting date for the eligibility determination. Petitioner also contends that it is possible that DER might have lost applications actually received. Neither the receipt of the original applications by DER nor the agency's loss of the applications was proved at hearing.
Recommendation Based upon the foregoing, it is RECOMMENDED: That the applications for eligibility in the EDI Program submitted by Petitioner for DER Facility Nos. 528732810 and 478732808 be denied as they were not timely filed with the Department. That the doctrine of equitable tolling should not be applied to the reporting period deadline on Petitioner's behalf because the responsibility to make sure the applications were received by DER remained with Petitioner throughout the application process. DONE and ENTERED this 1st day of May, 1992, in Tallahassee, Leon County, Florida. VERONICA E. DONNELLY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 1st day of May, 1992. APPENDIX TO RECOMMENDED ORDER Petitioner's proposed findings of fact are addressed as follows: Accepted. See HO #1 - #12. Accepted. See HO #1 - #12, and #15. Accepted. See HO #14. Accepted. See HO #13, #14, #15 and #16. Accepted. See HO #17. First sentence accepted. Second and third sentences accepted. Fourth sentence rejected. Speculative, assumes facts not in evidence and without proper foundation. Respondent's proposed findings of fact are addressed as follows: Accepted. Accepted. See HO #1. 3. Accepted. See HO #1. 4. Accepted. See HO #2. 5. Accepted. 6. Accepted. See HO #2. 7. Accepted. 8. Accepted. 9. Accepted. See HO #14. 10. Accepted. See HO #15. 11. Accepted. 12. Accepted. 13. Accepted. 14. Accepted. See HO #13. 15. Accepted. See HO #15. 16. Accepted. Rejected. Irrelevant. Hearing Officer relied on testimony at hearing. Also, misrepresentation of testimony and events, contrary to fact. Accepted. See HO #16. Accepted. See HO #16. COPIES FURNISHED: WILLIAM B TAYLOR IV ESQ MacFARLANE FERGUSON ALLISON & KELLY PO BOX 1531 TAMPA FL 3 3601 BRIGETTE A FFOLKES ESQ ASST GENERAL COUNSEL DEPT OF ENVIRONMENTAL REGULATION 2600 BLAIRSTONE RD TALLAHASSEE FL 32399 2400 CAROL BROWNER, SECRETARY DEPT OF ENVIRONMENTAL REGULATION TWIN TOWERS OFFICE BLDG 2600 BLAIRSTONE RD TALLAHASSEE FL 32399 2400 DANIEL H THOMPSON ESQ GENERAL COUNSEL DEPT OF ENVIRONMENTAL REGULATION 2600 BLAIRSTONE ROAD TALLAHASSEE FL 32399 2400
Findings Of Fact Reimbursement Program The Florida Legislature created the reimbursement program to provide for rehabilitation of as many petroleum contamination sites as possible, as soon as possible. Section 376.3071(12)(a), Florida Statutes. The Legislature intended that those responsible persons who possessed adequate financial ability should conduct site rehabilitation and seek reimbursement in lieu of the state conducting the cleanup. Section 376.3071(12)(c), Florida Statutes (1993). When owners and operators of the site or their designees perform site remediation program tasks under any of the programs created by Chapter 376, Florida Statutes, those entities become entitled to reimbursement from the Inland Protection Trust Fund (IPTF) of their allowable costs at reasonable rates. Section 376.3071(12)(b), Florida Statutes. "Allowable" costs are those which are associated with work that is appropriate for cleanup tasks. Section 376.3071(12)(d), Florida Statutes, requires DEP to: Reimburse actual and reasonable costs for site rehabilitation; and Reimburse interest on the amount of reimbursable costs for applications filed after August 14, 1992, at a rate of 1 percent per month or the prime rate, which- ever is less. Interest shall be paid from the 61st day after an application is filed with the department until the application is paid, provided the department determines the application is sufficient; otherwise, interest shall be paid commencing on the date the application is made sufficient until the application is paid. . . . A site owner or operator may engage the services of firms to perform remediation activities on a site and may designate an entity to receive reimbursement for such work. Section 376.301(14), Florida Statutes. Chapter 17-773, Florida Administrative Code (as revised in April of 1993), contains DEP's rules which were in effect at the time Petitioners submitted the instant applications. This chapter is currently located in Chapter 62-773, Florida Administrative Code. Chapter 17-773, Florida Administrative Code establishes procedures and documentation required to receive reimbursement from the IPTF. Rule 17-773.100(4), Florida Administrative Code. Rule 17-773.100(5), Florida Administrative Code, provides in pertinent part: "review and approval of reimbursement applications shall be based upon the statutes, rules and written guidelines governing petroleum contamination site cleanup and reimbursement which were in effect at the time the work was performed or the records of activities and expenses were generated, as applicable. . . . In order to be reimbursable, an applicant must break charges in an application into applicable units and rates. Rule 17-773.100(5), Florida Administrative Code. DEP has a predominate rate schedule to determine whether an allowable cost is reasonable. DEP bases its predominate rates on a study of average rates that contractors charge for a particular task. Requests for reimbursement must apply to costs which are "integral" to site rehabilitation. Rule 17-773.100(2), Florida Administrative Code. "Integral" costs are those which are essential to completion of site rehabilitation. Rule 17-773.200(2)(11), Florida Administrative Code. After integral costs have been identified and incorporated on a units and rates basis in an invoice, the invoice may be marked up at two levels. These markups are subject to certain limitations established by DEP rule: There can be no more than two levels of markups or handling fees applied to contractor, subcontractor or vendor invoices (Rule 17-773.350(9), F.A.C.); There can be no markups or handling fees in excess of 15 percent for each level of allowable markup applied to contractor, subcontractor or vendor invoices (Rule 17-773.350(10), F.A.C.); and There can be no markups or handling fees applied to invoices between any two entities which have a financial, familial, or beneficial relationship with each other (Rule 17-773.350(11), F.A.C.). In order to be reimbursable, costs must have been actually "incurred." Rule 17-773.700, Florida Administrative Code. "Incurred" means that allowable costs have been paid. Rule 17-773.200(9), Florida Administrative Code. When the "person responsible for conducting site rehabilitation" (PRFCSR) has no financial interest in the site, DEP considers the following costs as incurred when the program task is complete: Reasonable rates, including profits associated with the work performed, claimed for the use of their own personnel or equip- ment with documentation pursuant to Rule 17-773.700(7), F.A.C.; and Allowable markups or handling fees applied to their paid contractor, subcontractor, or vendor invoices pursuant to Rule 17-773.350(9), (10), and (11), F.A.C. Rule 17-773.200(9), Florida Administrative Code. Other rules reference limitations on the ability of an entity to take a markup. Rule 17-773.600(2)(d), Florida Administrative Code, provides in pertinent part: . . . If the person responsible for conducting site rehabilitation manufactured the [capital expense item], or a markup is otherwise prohibited under Rule 17-773.350(9), (10) or (11), Florida Administrative Code, no markup of the equipment shall be allowed. Rule 17- 773.700(5), Florida Administrative Code, provides in pertinent part: Costs claimed in a reimbursement application for the employees, equipment or materials of the site owner, site operator or any entity which has a financial interest in the site or a familial or other beneficial relation- ship with the site owner or operator shall be considered to be in house and reimburse- ment shall be limited to actual costs only. No fee, markup, commission, percentage or other consideration shall be allowed. . . . Rule 17-773.700(7), Florida Administrative Code, provides in pertinent part as follows: Pursuant to Rule 17-773.200(9), Florida Administrative Code, reasonable rates, including profits, may be claimed for the personnel and equipment or other allowable expenses of the person responsible for conducting site rehabilitation as well as allowable markups on paid contractor subcon- tractor and vendor invoices and shall be considered incurred for the purpose of reimbursement provided: The person responsible for conducting site rehabilitation does not have a financial interest in the site pursuant to Rule 17-773.200(7), Florida Administrative Code, or a familial or other beneficial relationship with the site owner or operator; The activities performed were integral to the program task claimed pursuant to Rule 17-773.500, Florida Administrative Code; and Detailed invoices are provided by the person responsible for conducting site rehabilitation that include all subcon- tractor and vendor invoices . . . [which] must identify the person responsible for conducting site rehabilitation and clearly distinguish their costs from those for paid subcontractors or vendors. There are no other provisions in the applicable rules which pertain to markups. A contractor must pay all invoices generated by a subcontractor at 100 percent of their face value prior to submission of an application in order to qualify those invoices for reimbursement. When a contractor pays a subcontractor's invoices, the contractor paying those invoices normally may take one of the allowable levels of markup. Prior to submitting a reimbursement application, a funder or PRFCSR involved in the reimbursement chain must pay the contractor for its invoices and markup. Then, the funder may apply the second allowable markup and submit the reimbursement application for review by DEP and payment from the IPTF. DEP does not contest the second level of markup in these applications. DEP rules restrict reimbursement when parties within the usual "chain" of reimbursement (PRFCSR or funder, contractor and subcontractor) have financial, beneficial or familial relationships with each other or the site owner. The application form requires disclosure of such relationships through the Program Task and Site Identification Form. Rule 17-773.200(1), Florida Administrative Code, provides as follows: "Beneficial relationship (interest)" means a connection or association, excluding an arm's length contractual relationship, which benefits a person or company by yielding a profit, advantage or benefit, or entitlement thereto, exceeding five percent of the person's or company's annual gross income. Rule 17-773.200(6), Florida Administrative Code, provides in pertinent part: "Familial relationship (interest)" means a connection or association by family or relatives, in which a family member or a relative has a material interest. . . . Rule 17-773.200(7), Florida Administrative Code, provides as follows: "Financial relationship (interest)" means a connection or association through a material interest or sources of income which exceed five percent of annual gross income from a business entity. Banks, lending institutions, and other lenders that provide loans for site rehabilitation activities are not considered to have a financial interest in the site on that basis alone. However, as of the effective date of this rule, guarantors of loans to or co-makers of loans with persons signing as responsible party are considered to have a financial interest if the amount of the loan exceeds five percent of the net worth of either company. As used in this definition, sources of income shall not include any income derived through arm's- length contractual transactions. Rule 17-773.200(13), Florida Administrative Code, states as follows: "Material interest" means a direct or indirect interest or ownership of more than five percent of the total assets or capital stock of any business entity. The rules and written guidelines of DEP do not address activities, including financing arrangements, occurring outside of the usual chain of reimbursement, so long as an applicant does not include charges for such activities in an application. Heretofore, DEP has not deducted finance costs that an applicant does not include as a line item in a reimbursement application. Pursuant to Section 376.3071(l2)(m), Florida Statutes, DEP must perform financial audits "as necessary to ensure compliance with this rule and to certify site rehabilitation costs." Rule 17-773.300(1), Florida Administrative Code. DEP performs this audit function: (a) to establish that the PRFCSR incurred the cost; (b) to determine that adequate documentation supports the claimed costs as incurred; and (c) and to review the reasonableness and allowance of the costs. The audit staff interprets the term "incurred" to mean that the applicant paid the costs included in the reimbursement application. Pursuant to Rule 17-773.350(4)(e), Florida Administrative Code, "[i]nterest or carrying charges of any kind with the exception of those outlined in Rule 17-773.650(1), F.A.C." are not reimbursable. The exceptions to the payment of interest set forth in Rule 17-773.650(1), Florida Administrative Code, are not at issue here. An interest rate charge on short-term borrowed capital from an unrelated third-party source is a "cost of doing business." DEP's predominate rates are fully loaded. They include a variable for all direct and indirect business overhead costs such as rent, utilities and personnel costs. DEP includes the cost of short-term borrowed capital in the direct and indirect overhead components of DEP's fully-loaded personnel rates. Rule 17- 773.700(5)(a), Florida Administrative Code. However, DEP never intended for its predominate rate schedule to create an entitlement to reimbursement of claims which are not otherwise actual and reasonable costs of site rehabilitation. Petitioners PRFCSRs are entitled to make application for reimbursement of allowable markups and costs of site rehabilitation that they incur. In these consolidated cases, the site owners or operators designated either Petitioner ET or Petitioner SEI as PRFCSR. The PRFCSR is typically referred to as the "funder" in the reimbursement chain. Petitioner ET is a trust formed in 1993 and domiciled in Bermuda. It acts as a conduit for funds that finance activities associated with Florida's petroleum contamination site cleanup program. The named beneficiaries of the trust are those contractors and subcontractors entitled to payment of costs for activities integral to site rehabilitation and for allowable markups of such costs. The sole trustee of ET is Western Investors Fiduciary, Ltd. (WIFL). WIFL is also the owner and a beneficiary of ET. Any profit that ET derives from funding cleanup projects flows through WIFL to investors who provide funds to finance site rehabilitation. American Environmental Enterprises, Inc. (AEE discussed below) provided the investment funds for the reimbursement applications at issue here. WIFL is a limited liability corporation created and domiciled in Bermuda. The officers of WIFL are: William R. Robins, President; John G. Engler, Vice-President; and Peter Bougner, Secretary. The directors of WIFL are: William R. Robins, John G. Engler, Paul H. DeCoster, Alec R. Anderson and Nicholas Johnson. WIFL's directors are also its shareholders. Petitioner SEI is a corporation incorporated and operating under Florida law. Organized in 1994, SEI acts as a conduit for funds to finance activities associated with Florida's petroleum contamination site cleanup program. The officers and directors of SEI are: William R. Robins, President; John G. Engler, Executive Vice President; and Paul H. DeCoster, Secretary. William R. Robins is the sole shareholder of SEI. SEI was specifically created to meet the needs of American Factors Group, Inc.'s (AFG discussed below) Florida investors. Respondent DEP is the agency charged with the duty to administer the IPTF and Chapter 376, Florida Statutes. Financing Entities American Factors Group, Inc. (AFG) is a privately held corporation incorporated and operating under New Jersey law. AFG is not a party to this proceeding. AFG, acts as the servicing agent for contracts associated with factoring activities and other types of financing operations. AFG, through one of its divisions, Environmental Factors (EF), entered into financing contracts with entities in the reimbursement process: (a) Petitioners ET and SEI, funders; (b) Gator Environmental, Inc. (Gator), general contractor; and (c) Tower Environmental, Inc. (Tower), prime subcontractor. Through these agreements, EF or its assignee bought the rights of ET, SEI, Gator, and Tower to future reimbursement payments at a percentage of the face value of the relevant invoices. The officers of AFG are: William R. Robins, President; John G. Engler, Vice President; and Paul H. DeCoster, Secretary. Bleak House, Inc. (Texas) owns the stock of AFG. American Environmental Enterprises, Inc. (AEE) is incorporated and operating under Nevada law. AEE is not a party to this proceeding. AEE, as the assignee under the EF contracts, is a third-party provider of capital to various entities in the reimbursement process, including Petitioners. The officers of AEE are: William R. Robins, President; John G. Engler, Vice-President; and Paul H. DeCoster, Secretary. Bleak House, Inc., (Nevada) owns the stock of AEE. Bleak House, Inc., (Nevada) is incorporated and operating under Nevada law. Bleak House, Inc. (Texas) is incorporated and operating under Texas law. Officers of both corporations are William R. Robins, President; John G. Engler, Vice President; and Paul H. DeCoster, Secretary. Magazine Funding, Inc. owns the stock of both Bleak House corporations. Magazine Funding, Inc. is incorporated and operating under Nevada law. Officers of Magazine Funding, Inc. are William R. Robins, President; John G. Engler, Vice-President; and Paul H. DeCoster, Secretary. Family Food Garden, Inc. owns the stock of Magazine Funding, Inc. Family Food Garden, Inc. is incorporated and operating under Massachusetts law. Officers of Family Food Garden, Inc., are William R. Robins, President; and Paul H. DeCoster, Secretary. Six shareholders own the stock of Family Food Garden, Inc. None of these shareholders are related by familial ties to the officers or directors of the aforementioned companies or any relative thereof. Each of these companies -- ET, SEI, WIFL, AEE and AFG (including EF) share common officers and directors. Each of the companies maintain their own books and business records, file their own tax returns, and maintain records in accordance with the laws of the jurisdiction in which they were established. They operate pursuant to their respective bylaws or trust agreement. ET, WIFL, and SEI do not have common assets with AEE or AFG (including EF). ET, WIFL and SEI do not have a beneficial, financial, or familial relationship with AEE or AFG (including EF) as Rule 17-773.200, Florida Administrative Code, defines those terms. Despite the facial organizational and structural integrity of ET, WIFL, SEI, AEE and AFG, the officers and directors of AFG and/or AEE created Petitioners, in large part, for the benefit of AFG and/or AEE as a means to invest funds in Florida's petroleum contamination site cleanup program. The primary purpose of each funder is to maximize the profits of AFG and its investors. AFG has other investment vehicles (funders) which it uses at times depending on the needs of its investors. AFG waits until the last instance before deciding which entity it will designate as funder in any particular factoring scenario. AFG usually does not make that decision until the day AFG's designated funder issues a funder's authorization to the general contractor. At the hearing, Mr. Stephen Parrish, a vice president of AFG, testified as the party representative for ET and SEI. WIFL and SEI have no employees. EF or AFG responded to DEP's request for Petitioners to provide additional information about the financing scheme utilized here using stationary bearing EF's or AFG's letterhead. Nineteen of the letters written on ET's behalf refer to ET as an affiliate of AEE. At least five of the letters written on SEI's behalf refer to ET as the funder and AEE as ET's affiliate. The greater weight of the evidence indicates that AFG and/or AEE negotiated less than arms-length contractual agreements with ET, WIFL, and SEI. Petitioners admit that they are "affiliates" of AEE and AFG through contractual agreements. However, there are no written factoring contracts between Petitioners and AFG such as the ones that exist between AFG, Gator and Tower. The only documented evidence of agreements between Petitioners and AFG are transactional based bills of sale representing the sale to AEE of Petitioners' right to receive reimbursement from the IPTF. AFG created these bills of sale for bookkeeping purposes. AFG did not even go to the trouble of tailoring the form for the bills of sale for their stated purpose. For all practical purposes, Petitioners are under the management and control of AEE and AFG. Petitioners and AFG disclosed their affiliation in meetings with DEP staff and through correspondence and other documentation, including but not limited to: (a) letter to DEP dated July 13, 1994 from AFG's counsel; (b) Addendum to Certification Affidavit signed by a Certified Public Accountant in each application; (c) Funder's Authorization; (d) letters sent to DEP between August 14, 1995 and November 19, 1996. Factoring and the Factoring Transactions Factoring is the purchase and sale of an asset, such as an account receivable, at a discount. An account receivable reflects the costs that a business charges after rendering a service but before the entity responsible for payment pays for that service. When a contractor completes a rehabilitation task, the contractor's invoice is an account receivable until it receives payment. In these consolidated cases, AEE provided short-term operating capital to Gator and Tower at an interest rate equal to the discount percentage of the relevant invoice (account receivable). Gator and Tower did not sell their account receivables to AEE. Instead, AEE, as the assignee of EF, purchased a contractual right to receive Gator's and Tower's reimbursement payments. In exchange, AEE advanced Gator and Tower a discounted amount of their invoices. The discounted amount of an invoice represents a loan from AEE to Gator and Tower. The difference between the face amount of the invoice and the discounted amount of the invoice represents interest. A discount percentage and an interest rate are equivalent. The amount of the discount represents interest on the loan or advance provided by AEE. It is an interest expense to the contractor or subcontractor. The Factoring Agreements On or about April 25, 1994, EF and Tower entered into a Prime Subcontractor Factoring Agreement. On or about July 8, 1994, EF and Tower executed an addendum to the Prime Subcontractor Factoring Agreement. The addendum required Tower to sell to EF Tower's right to receive payments from Gator. In return, EF agreed to advance Tower a discounted amount equal to 97 percent of the face amount of Tower's invoices. Tower agreed to repay EF 100 percent of the face amount of the invoices upon receipt of payments from Gator. The discounted amount of each invoice represents a loan from AEE to Tower. A bill of sale evidenced the sale of Tower's right to receive payment on each application. On or about July 8, 1994, EF and Gator entered into a General Contractor Factoring Contract. On or about July 13, 1994, EF and Gator entered into an Addendum to General Contractor Factoring Agreement. This addendum required Gator to sell EF Gator's right to receive payments from ET or SEI. In return, EF agreed to advance Gator a discounted amount equal to 88 percent of the face amount of Gator's invoices. Gator agreed to repay EF 100 percent of the face amount of the invoices upon receipt of payments from the funder. The discounted amount of each invoice represents a loan from AEE to Gator. A bill of sale evidenced the sale of Gator's right to receive payment on each application. The financing of the pending reimbursement applications involved the following interrelated transactions though not necessarily in this order: AEE as the assignee of EF purchased the right of ET, SEI, Gator and Tower to receive reimbursement for their services at a discount. ET, SEI, Gator and Tower agreed to repay AEE in full. Tower prepared and submitted to Gator an invoice for services provided by Tower and its subcontractors. Tower also prepared and submitted to Gator a reimbursement application for the program task. AEE advanced Tower the agreed upon discount amount. Tower used these funds to pay its subcontractors and vendors. AEE advanced Gator the agreed upon discount amount. Gator used these funds to pay Tower. Tower repaid AEE in full. Gator prepared an invoice for services provided by Gator, Tower and Tower's subcon- tractors including a 15 percent markup and submitted it with the reimbursement application either to ET or SEI. AEE advanced ET or SEI the discounted amounts as agreed. ET or SEI paid Gator in the full amount of Gator's invoice plus markup. Gator repaid AEE in full. ET or SEI prepared an invoice for its services plus the services of Gator, Tower, and Tower's subcontractors and a 15 percent markup. ET or SEI submitted the reimbursement application to DEP. When ET or SEI receives reimbursement from the IPTF, they will remit the total payment to AEE. The on-site work on each project was complete or substantially complete prior to Gator's involvement. In regards to some applications, the relevant dates on the subcontract/purchase order, Gator invoice, and Tower invoice are the same. The amount of time between AEE's payment of the advances and Gator's and Tower's subsequent remittance of 100 percent of the face amount of their invoices to AEE varied from a few days to a few weeks. The Agency Statement--Factoring Petitioners submitted the subject applications to DEP between July 18, 1994 and February 17, 1995. The financing scheme utilized in these applications was unique. Prior to the receipt of these applications, DEP never had reviewed reimbursement applications using the type of factoring scheme at issue here. In fact, the instant cases present a scenario never contemplated by DEP when it promulgated its rules and written policies. In the instant applications, the "chain of reimbursement" included: ET and SEI as funders or PRFCSRs, Gator as the named general contractor, Tower as prime subcontractor, and numerous subcontractors and vendors. As stated above, DEP was also aware that AFG and AEE (including EF) were "affiliated" with ET and SEI and would ultimately receive all reimbursement payments from the IPTF. 56 When Petitioners submitted the subject applications, no rule or written policy disallowed reimbursement for the face amount of contractors' and subcontractors' invoices when they sold their right to payments, i.e. the receivables, at a discount. When Petitioners submitted the subject applications, DEP had rules that restricted the ability of an entity to apply markups on invoices when a familial, financial or beneficial affiliation existed between a contractor, subcontractor, PRFCSR and the site or site owner, or when such relationships existed amongst those entities in the chain of reimbursement. However, there were no rules or written guidelines restricting reimbursement, based upon financial transactions occurring outside of the chain of reimbursement, if the applicant did not pass the costs of such transactions to DEP in an reimbursement application. In that regard, DEP usually dealt only with what was apparent in an application. If an application had a line-item claim for interest, DEP would not pay that claim under the rule limiting the payment of interest. Otherwise, DEP generally did not deal with costs, including interest, for which the applicant did not seek reimbursement. The applications in the subject cases did not contain line-item claims for interest. However, the difference between the face value of the invoices and the amount for which Gator and Tower sold their right to receive reimbursement for those invoices clearly represents interest. Tower's invoices appear to represent work that was integral to site remediation which was broken down into appropriate Eunits and rates. There is no evidence that the prime subcontractor, subcontractors and vendors intentionally inflated their invoices to cover the cost of financing. However, they did agree to accept a lesser amount then the face amount of their invoices for their services prior to the filing of the applications. In September and October of 1993, Paul DeCoster wrote letters to DEP describing a proposed financing scheme in which AFG would purchase the account receivables of contractors engaged in site rehabilitation. Mr. DeCoster wrote a follow-up letter dated October 4, 1993. In this letter, Mr. DeCoster proposed that AFG would charge the contractor a finder's fee which would be in addition to the 15 percent financing "markup" taken by the investor providing the financing. This proposal referenced a funder, FEC, whose parent was AFG. The transactions between the entities in the instant applications did not involve a finder's fee or a funder identified as FEC. In October of 1993, Will Robins met with DEP staff to discuss the manner in which the reimbursement program would apply to a proposed financing scheme. In this proposal, AFG would charge contractors an application/initiation fee and/or a commitment fee. The transactions between the entities in the instant applications did not involve an application/initiation fee and/or a commitment fee. After that meeting, counsel for AFG sent DEP a letter dated November 4, 1993. The letter acknowledges that the existing rules did not "specifically address the types of situations that arise when providing capital for cleanup activities through funding groups such as AFG." The letter identifies ET as the proposed funder through which AFG would finance cleanups. AFG would receive the ultimate reimbursement payment from the IPTF. At that time DEP was concerned that the proposed application/initiation fee was a "kickback" which DEP should deducted from the funder's markup. In January of 1994, counsel for AFG wrote a letter to DEP describing a financing scheme which differs in some respects from the financing scheme at issue here. This letter states that AFG intended to purchase receivables of the funder and the general contractor at a discount. Under this plan, the general contractor and the funder would claim the two markups. The subcontractors would pay AFG a finder's fee. The letter reveals that AFG, its affiliates, and investors would recover the cash equivalent of both levels of markups plus a fee from subcontractors for funding the high costs or risky projects. The transactions between the entities in the instant applications did not involve a finder's fee. On July 13, 1994, counsel for AFG wrote DEP to explain some modifications in the details to the proposed plan for the purchase and sale of receivables at a discount. This letter informed DEP that AFG would have a financial affiliation with the funder (ET) which would exist outside the chain of reimbursement and which would have no effect on either the markups or the overall reimbursement amount reflected in any application. All contracts within the chain of reimbursement (between ET, SEI, Gator, Tower, and its subcontractors) would be negotiated in arms-length transactions. The letter states: In this plan the subcontractors will perform their work on the site and will prepare their invoices in a manner consistent with any publicly or privately financed cleanup. Those invoices will be complied and forwarded to the general contractor for its review and the general contractor will add on the markup allowed by rule to the subcontractor's bills. The reimbursement application will then be forwarded to the funder who will ensure that all bills have been paid and who will be identified as the "person responsible for conducting site rehabilitation" on the reimbursement application. The funder will take the second markup allowed by rule, and will submit the reimbursement application to the Department of Environmental Protection for processing. Reimbursement will ultimately be paid by the Department to the funder in accordance with the reimbursement application. At no step in this process will the Department relinquish any authority to review and approve either the scope and nature of the clean-up or the rates charged by the contractors and subcontractors. Commencing on August 31, 1994, DEP began to develop a policy regarding the use of factoring as a financing mechanism in the reimbursement program. DEP personnel exchanged numerous documents regarding the subject of factoring. In one of those memoranda dated September 2, 1994, Charles Williams, DEP's Reimbursement Administrator, indicated that "we absolutely need to have a Big Meeting to decide what to do once and for all." In November 1994, DEP provided AFG's counsel with an informal opinion of how DEP would handle a factored application as described by Will Robins of AFG in an earlier meeting with DEP staff. The statement was that the difference between the amount that a contractor accepted in payment for his services, which was a discounted amount after factoring, . . . and the face value of the invoice which was claimed and marked up in the application was determined to be a carrying charge or interest, which is specifically disallowed for reimbursement in the reimbursement rule. American Factors Group. Inc. and the Environmental Trust v. Department of Environmental Protection, DOAH Case No. 95-0343RU, Final Order issued July 24, 1995. DEP advised AFG's counsel that it would deal with factored applications involving other entities on a case by case basis. On December 20, 1994, John Ruddell, DEP's Director of the Division of Waste Management, sought permission from DEP's Policy Coordinating Committee to promulgate a rule amendment to Chapter 62-773, Florida Administrative Code (formally Chapter 17-773). A draft rule accompanied the request. Mr. Ruddell developed the draft rule in compliance with Chapter 94-311, Section 6, Laws of Florida, which required DEP to revise its reimbursement rule. The draft rule provided that nothing in this Chapter shall be construed to authorize reimbursement for the face amount of any bill or invoice representing incurred costs when the receivable has been sold at a discount. In all such cases, reimbursement shall be limited to the actual discounted amount accepted by the provider of the goods or services. . . . The draft rule had the effect of prohibiting factoring as a mechanism for financing site rehabilitation work. The draft rule did not single out any other financing mechanism. DEP did not promulgate that draft rule. DEP requested that Petitioners furnish additional information regarding the instant applications. Between March 1, 1995 and November 17, 1995, Petitioners responded to DEP's requests with letters bearing AFG's or EF's letterhead. The letters state that prior to filling the applications, ET (and in some cases SEI) paid Gator for the face amount of the invoices plus Gator's markup. Gator then paid the subcontractors for the face amount of their invoices. Prior to these payments, AEE, an affiliate of ET, purchased the right to receive the amount due to Gator from ET or SEI and the right to receive the amount due to subcontractors from Gator. In each case, AEE bought the right to receive at a discount. According to the financing scheme, ET or SEI received sufficient funds from AEE to make the payments to Gator. ET, in turn, was obligated to pay AEE following its receipt of the funds claimed in the reimbursement application. On or about April 21, 1995, Bruce French, Environmental Manager in DEP's Bureau of Waste Cleanup, developed a memorandum discussing the proper handling of factored and/or discounted reimbursement applications. Mr. French initially sent the memorandum to Charles Williams, DEP's Reimbursement Administrator in DEP's Bureau of Waste Cleanup. The memorandum states that: invoices from subcontractors, vendors, suppliers and/or the general contractor which were paid a factored (e.g., discounted) amount by a third party capital participant (e.g., funder) represents the actual amount incurred by that entity and subsequently by the general contractor. DEP subsequently disseminated the memorandum to all application reviewers to acquaint them with DEP's policy on invoices or applications involving factoring as the financing mechanism. DEP did not direct the policy on factoring towards any individual company. DEP intended it to apply to "any combination of a general contractor, management company, funder and responsible party" in any situation in which a third party capital provider paid those program participants or suppliers a factored (discounted) amount of their invoices. The policy memorandum directed DEP reviewers to deduct costs from an application in an amount equal to the difference in the face value of an invoice and the amount paid for the right to receive payment under that invoice. The language of the policy set forth in the April 21, 1995 memorandum was broad and did not condition DEP's position on factoring on any affiliation between any parties. Between August 14, 1995 and February 2, 1996, DEP took action on the 45 applications at issue here. As reflected in those notices, DEP denied reimbursement of costs claimed in those applications because of the factoring of the supporting invoices and because "the difference between the face amount of the supporting invoices and the amount factored represents interests or carrying charges which are specifically excluded from reimbursement pursuant to Rule 62- 773.350(4), F.A.C." DEP deducted from the cost of each application an amount equal to the amount of the discount on each relevant invoice. When DEP issued the denial letters, it had not adopted the policy against factoring by the rulemaking procedure required in Section 120.54, Florida Statutes. The notices reflected a basis of denial of costs that was consistent with DEP's policy as reflected in the December 20, 1994 Draft Rule and the April 21, 1995 memorandum. This non-rule policy, which generally applied to all factoring schemes was not apparent from the rules in effect at that time. The Agency Statement--Markup/Value Added Policy Funders and contractors are entitled to take a markup of paid contractor and subcontractor invoices for allowable costs at reasonable rates. The invoices must represent actual and reasonable costs which are integral to site remediation. Contractors usually are entitled to a first-tier 15 percent markup for supervising and/or coordinating on-site remediation, for investing capital while awaiting reimbursement by paying subcontractors' invoices, and for assuming liability for the performance of the subcontractors. Funders normally are entitled to a second-tier 15 percent markup as an incentive to provide funds to finance the work. Markups are expressly subject to limitations set forth in Section 17- 773.350(9), (10) and (11), Florida Administrative Code. There are no other specific or implied limitations on markups in the rules or written guidelines. Requiring each entity that receives a markup in the reimbursement chain to pay contractor, subcontractor, and vendor invoices helps ensure that each level in the reimbursement chain pays the entity at the next lowest level in full. In these cases, each level in the reimbursement application chain "technically" paid the entity at the next lowest level. DEP policy in effect at the time Petitioners submitted the instant applications for reimbursement was to allow markups of paid invoices at two levels. However, DEP was not aware of situations where general contractors claimed markups for work that was complete before they ever became involved in the projects. With regard to all of the pending reimbursement applications, Gator applied a 15 percent markup to all of Tower's invoices including the invoices of Tower's subcontractors and vendors. With regard to a minimum of 30 of the 45 sites, Gator clearly did not supervise, manage or direct any of the on-site remediation activities. In fact, Gator did not become involved until after Tower had undertaken and completed these tasks. In at least 30 of the instant cases, Tower was acting as the general contractor when all of the on-site remediation took place. However, Tower could not apply a 15 percent markup to the invoices for its own services. Gator made it possible for Petitioners to claim the markup on Tower's invoices. As to the 15 sites at which Gator allegedly had some type of involvement with on-site remediation activities, the record contains no evidence regarding the specific activities or the level of Gator's involvement on any particular project. Gator performed some type of minimal due diligence review of Tower's site work. Gator allegedly reviewed Tower's technical and administrative files, cross-referenced technical and administrative files with the applications which Tower prepared, made visits to some job sites, and prepared a deficiency letter to determine the appropriateness of the scope of Tower's work. However, all of these functions were repetitious of the work performed by Tower and the certified public accountant attesting to the Certification Affidavit. Tower was a qualified engineering consulting firm that employed its own engineers and geologists. Gator's employee that reviewed the technical information in Tower's files was not a Florida professional engineer. He was not qualified as a certified public accountant to determine whether a charge was within DEP's reasonable rates. The Gator employee was a Florida professional geologist but he did not sign and seal the deficiency letter as such. There is no reference in DEP's rules or written policies to a deficiency letter. AFG required Gator to prepare the deficiency letter within two days of the date on which EF provided Gator with the opportunity to review a completed task. This two-day turn around time allegedly afforded efficiency of payment. The deficiency letters were limited to the question of whether the scope of Tower's services were reimbursable. Gator did not begin its review of an reimbursement application until after Gator received an invoice from Tower. The relevant subcontract/purchase order issued by Gator to Tower, the Tower invoice and the Gator invoice often were prepared on the same day. Gator "technically" paid the invoices at the next lowest level with money that AEE advanced. When Gator received payments from ET or SEI, it immediately repaid AEE before ET or SEI submitted the applications to DEP or soon thereafter. Pursuant to the addenda to the factoring contracts, Tower, not Gator, contributed to a reserve trust account which AEE will use to cover any reimbursement shortfalls. Gator allegedly indemnified the funder and guaranteed its own work but did not assume a risk of loss on Tower's work. On most if not all of the applications, Gator performed no meaningful management or supervisory functions. Gator's primary purpose in these consolidated cases was not to afford AFG a level of comfort as to the appropriate scope of the individual program tasks but to ensure that third-party investors maximized their profits. On September 1, 1994, Restoration Assistance, Inc., an entity under contract with DEP to review reimbursement applications, issued a memorandum to its reviewers directing them to complete their review and do a "total denial" on "Gator Environmental packages." The memorandum advised the reviewers that "Bruce" was drafting canned language to use in DEP's denial statement. On or about April 21, 1995, DEP presented its reviewers with a memorandum setting forth an initial overview of a "value added" policy for markups taken by a "management company" involved in site remediation activities. The memorandum indicated that DEP would allow reimbursement of claims for actual project management work and value-added services. The memorandum further provided that DEP would allow markups to a management company which only provided cash-flow services for a majority of the program task period even if the management company performed no other service. However, DEP would deny a markup if the management company provided such services during a "one month time period." DEP intended for the April 21, 1995 memorandum to acquaint DEP reviewers with the emerging DEP policy on markups. DEP's rules and written guidelines do not address the distinction made in the April 21, 1995 memorandum regarding the timing during which a management company could provide cash flow services and still be entitled to a markup. On October 20, 1995, Charles Williams issued a DEP policy memorandum for reviewers to use in reviewing reimbursement applications. Through that memorandum, DEP finalized and implemented the "value added" policy. The memorandum states that if the "GC" [general contractor] was involved with the management of the project during the course of the actual work by subcontractors, [DEP] rules do not preclude them from applying a markup. However, if the "GC" came along after the work was completed by other contractors and their involvement was more of a due diligence exercise to faciltiate (sic) a funding arrangement by a third party, then the "GC" markup would not be justified, though a markup by the actual funder listed as the PRFCSR could be allowed." Prior to the establishment of the "value added" policy on October 20, 1995, DEP made no inquiry as to whether a contractor provided value added services which were not reflected in an application in order to be entitled to a markup. DEP applied the "value added" policy to all pending applications (including the ones at issue here) resulting in a deduction of Gator's markup in all of the subject cases. The Department of Banking and Finance reviewed and issued a report (Comptroller's Report) on the Petroleum Contamination Site Cleanup Reimbursement Program on November 29, 1994. This report addressed the issue of markups in the reimbursement program. The Comptroller's Report recognized that DEP found the multiple markup structure to be beneficial in that it "attracts the involvement of companies whose role in cleanup projects is limited to providing funds to finance the work [and] attracts investors who provide funds which might not otherwise be available--thus facilitating cleanup of contaminated sites." The report acknowledges that a prime contractor "might have only limited direct involvement in the cleanup, having engaged subcontractors for most or all of the actual work." The Comptroller's Report did not address whether a contractor would be entitled to a markup if it became involved after all site work was complete. The Petroleum Efficiency Task Force's (PETF) final report concerning financing for reimbursement contractors issued on August 17, 1994. This report discussed DEP's policy of allowing two markups on paid invoices. The report recognized that "funders must be able to rely on the skills and knowledge of contractors to minimize reimbursement shortfalls." The PETF recommended for future consideration that "the Department should provide in rulemaking that contractors who take the first-tier 15 percent markup on subcontracted work must adequately supervise the work." When the PETF issued this final report, there was no existing rule that established any level of on site supervision or any other specific criteria for applying one of the two allowable levels of markup, other than paying invoices for integral site rehabilitation work. DEP's rules and written guidelines did not substantively change with regard to the "value added" policy from the April 22, 1993 revision of Chapter 17-773, Florida Administrative Code, to the October 20, 1995 memorandum which established a non-rule limitation on the ability of an entity to apply a markup to paid invoices. The "value added" policy is not reflected in any rule or written guideline, and would not be made available to a participant in the reimbursement program who requested program information. The "value added" agency statement is a non-rule policy which has the effect of a rule. DEP intends to apply the policy in all cases where a contractor's service adds no value to a project. DEP did not anticipate the need for such a rule when it promulgated the current rules. The Agency Statement Standard During the 1994 Legislative Session, the Florida Legislature directed that "no later than January 1, 1995, DEP shall review and revise rules related to the pollutant storage tanks programs . . . ." Chapter 94-311, Section 6, Laws of Florida. DEP understood that legislative instruction to include rule revisions related to the reimbursement program. On April 7, 1994, the Office of Statewide Prosecution issued a Statewide Grand Jury Report. The final report concerning financing of reimbursement contractors was prepared for the Florida Petroleum Efficiency Task Force on August 17, 1994. The Office of Controller issued its report on the Petroleum Contamination Site Cleanup Reimbursement Program on November 29, 1994. All of these reports offered suggestions for changes to the reimbursement rule. DEP first learned about factoring from presentations by Paul DeCoster and Will Robins in 1993. After these meetings, Petitioner proposed several factoring plans as proposed schemes to finance petroleum contamination site cleanup projects. Petitioners did not finalize the exact financing scheme they intended to use until July of 1994. Petitioners filed the first applications on July 18, 1994. By that time, DEP was aware that the factoring company was affiliated with the funders. DEP was also aware that the factoring company would receive the difference between the face amount of an invoice and the discount amount of that invoice. However, DEP was not aware of the exact nature of the relationships between AFG, AEE, EF, ET, WIFL, SEI, Gator and Tower. DEP was unable to evaluate all aspects of Petitioners' factoring plan without supplemental information about the details of the purchase and sale of receivables as they related to each application. DEP requested additional information from the applicants to determine if the costs were actually incurred. As a result of the information that DEP received, it reviewed all transactions to determine whether the costs claimed in the applications were actual and reasonable. On December 20, 1994, John Ruddell, Director of DEP's Division of Waste Management, sought permission from DEP's Policy Coordinating Committee to promulgate a rule amendment to Chapter 62-773, Florida Administrative Code (formerly Chapter 17-773, Florida Administrative Code). A draft rule accompanied the request. DEP intended the draft rule to comply with the legislative mandate contained in Chapter 94-311, Section 6, Laws of Florida. By that time, Petitioners had filed 41 of the subject applications. The 1994 draft rule provided that if a program participant sold a receivable at a discount, reimbursement would be limited to the actual discounted amount accepted by the provider of the goods or services rendered. The draft rule eliminated markups of contractor and subcontractor invoices. The December 20, 1994 memorandum to DEP's Policy Coordinating Committee did not indicate any deficiency in the existing delegated legislative authority that would prevent DEP from implementing the changes to the draft rule. DEP policy coordinating committee declined to approve the initiation of rulemaking procedures. Instead, it directed DEP staff to draft a bill for the 1995 legislative session. DEP based this decision on a determination that it would take too long to correct the numerous problems through the rulemaking process. The 1995 Legislative Session made several changes to the reimbursement program, particularly as it related to the direction of future site remediation activities. Chapter 95-2, Laws of Florida, passed the 1995 Legislative Session and changed the program from reimbursement of completed work to requiring pre-approval of work before it commenced. The 1995 Legislative Session did not make any relevant amendment to the reimbursement payment procedures in Section 376.3071(12), Florida Statutes. During the period between adjournment of the 1995 Legislative Session and February 2, 1996, DEP took action on each of the 45 applications that are the subject of this proceeding. Meanwhile, DEP focused its attention on making the necessary changes to switch from a reimbursement program to the new pre- approval program. It is not unreasonable to believe that such a significant change in a large program would take an agency some time to educate itself and the program's participants, prepare documentation and forms, and take steps to begin implementation. On March 22, 1996, approximately six and one-half months (198 days) after the petition for administrative hearing in Case No. 95-4606, and almost 21 months after the effective date of Chapter 94-311, Laws of Florida, DEP published its notice of rule development in the Florida Administrative Weekly. DEP filed the notice of rule development specifically "in response to litigation pending before the Division of Administrative Hearings" in the 45 cases that are the subject of this proceeding. In these consolidated cases, DEP did not have sufficient time prior to March 22, 1996 to acquire the knowledge and experience reasonably necessary to address, through the rulemaking process, the policy statements relative to factoring and markups based on value added services. Certainly, related matters were not sufficiently resolved to enable DEP to initiate rulemaking to address the policies set forth in the March 21, 1995 and October 20, 1995 memoranda until the spring of 1996. DEP is currently using the rulemaking procedure expeditiously and in good faith to adopt rules which address these non-rule policies. Additionally, the record indicates that it was not possible for the agency to initiate rulemaking in time to give Petitioners advance notice of the new policies. Petitioners filed the last applications in February of 1995 before DEP had time to fully evaluate the factoring plan. The time it took DEP to develop the detail or precision in the establishment of the policies set forth in the March 21, 1995 and October 20, 1995 memoranda was reasonable under the circumstances.
Findings Of Fact Friends of Lloyd, Inc. is a Florida non-profit corporation formed for the purpose of protecting Jefferson County from harmful development. The Council of Neighborhood Associations of Tallahassee/Leon County (CONA) is a non- profit Florida corporation whose members are the neighborhood associations in Leon county; members of those associations reside in 42 Leon County neighborhoods dispersed throughout Leon County. CONA's purposes and goals include protection of the quality of life and environment in Leon County. The Thomasville Road Association's members are principally residents of Leon County. The Association was formed to promote responsible growth management in northern Leon County. None of the Petitioners are owners or "developers" of a Development of Regional Impact within the terms or scope of Chapter 380, Florida Statutes. Rather, Petitioners are members of non-profit organizations interested in the environment and growth management of Leon County. The Department of Community Affairs (the "Department") is the state land planning agency with the power and duty to administer and enforce Chapter 380, Florida Statutes, and the rules and regulations promulgated thereunder. Sections 380.031(18), and 380.032(1), Florida Statutes (1987). Texaco is a business entity that proposes to develop a "tank farm" near the community of Lloyd in Jefferson County, Florida. The Texaco tank farm is a "petroleum storage facility" as that term is used in Rule 28-24.021, F.A.C. Colonial is a business entity that proposes to develop a petroleum pipeline that will connect to the Texaco tank farm. The pipeline is designed to carry and contain petroleum products For purposes of standing, the parties have stipulated that certain environmental hazards can reasonably be expected to occur as a result of the existence of the pipeline/tank farm. No competent evidence was submitted regarding those hazards. As a result of the stipulation, Petitioners have each established injury-in-fact so that they are "adversely affected" by the challenged rule to an extent sufficient to confer upon them standing to maintain this action under Section 120.56, Florida Statutes. On September 7, 1989, one of the Petitioners sent Respondent a letter suggesting that the proposed tank farm development to be built in Jefferson County should be required to undergo review as a DRI. Enclosed with the letter was a proposed circuit court complaint pursuant to Section 403.412(2)(c), Florida Statutes. Petitioner expressed its intention of filing this circuit court action, but first provided Respondent a copy of the proposed complaint in accordance with the provisions of Section 403.412, Florida Statutes. In two letters dated September 8 and 25, 1989, Petitioner supplied additional information to Respondent concerning the tank farm project and contended that in making its determination as to whether the development must undergo DRI review, Respondent should consider the storage capacity of both the tank farm and the pipeline. On October 9, 1989, Respondent answered Petitioner's first letter, and stated that the proposed project was not required to undergo DRI review because the total storage capacity of the tanks was only seventy-eight percent (78%) of the threshold set out in Chapter 28-24, F.A.C. On October 13, 1989, Respondent answered Petitioner's second and third letters, stating that with respect to the pipeline, it has been long standing departmental policy to interpret "storage facilities" as meaning only the tanks, not the pipeline, when determining whether petroleum storage facilities meet the DRI thresholds set out in Chapter 28-24. The proposed tank farm would have nine tanks with a total capacity of 155,964 barrels, which is, as Respondent determined in its letters, approximately seventy-eight percent (78%) of the applicable DRI threshold for "petroleum storage facilities" set forth in Chapter 28-24, F.A.C. The proposed pipeline's capacity over its approximate forty-five mile length from Bainbridge, Georgia to the tank farm is approximately 34,000 barrels. The proposed pipeline's volume flow capacity from the Florida/Georgia state line to the site of the prosed tank farm is approximately 13,500 barrels over approximately 18 miles. If the pipeline's volume capacity from Bainbridge, Georgia is added to the tank farm's volume capacity, the resulting project would be approximately ninety-five percent (95%) of the applicable DRI threshold in Chapter 28-24. If the pipeline's volume capacity from the state line is added to the tank farm's volume capacity, the resulting project would be approximately eighty-five percent (85%) of the threshold. In either instance, the project would exceed the eighty percent (80%) threshold that may require it to undergo DRI review although the project would be Presumed not to be a DRI under the Statute. The Department does not require developments outside Chapter 28-24's enumeration to undergo DRI review. The Department has never treated petroleum Pipelines as "petroleum storage facilities," or as otherwise subject to DRI review. On Several occasions, the Department has applied the petroleum storage facility guideline and standard to petroleum tank farms without determining whether a pipeline was attached to the tank farm. On one prior occasion, the Department has explicitly stated that Petroleum Pipelines are not subject to DRI review. The Petitioners contend that Department's Position that pipelines are not "petroleum storage facilities" is an invalid policy because it has not been adopted as a rule. There is no dispute the Department's Position on this issue has not been promulgated as a rule. If a facility were represented to be a Petroleum pipeline, but was actually designed as and operating as a petroleum storage facility, the Department would apply the Petroleum storage facility DRI guideline and standard to that facility.
The Issue The issue to be determined is whether the applicant, Kanter Real Estate, LLC (Kanter), is entitled to issuance of an Oil and Gas Drilling Permit, No. OG 1366 (the Permit).
Findings Of Fact The Parties Kanter is a foreign limited liability company registered to do business in the State of Florida. Kanter owns 20,000 acres of property in western Broward County, on which it seeks authorization for the drilling of a vertical exploratory well. The exploratory well is to be located on a five-acre site that is subject to an ERP (the Well Site). The Department is the state agency with the power and duty to regulate activities related to the management and storage of surface waters pursuant to chapter 373, Florida Statutes, and to regulate oil and gas resources, including the permitting of activities related to the exploration for and extraction of such resources, pursuant to chapter 377, Florida Statutes. Miramar is a Florida municipal corporation located in Broward County, Florida. Broward County is a political subdivision of the State of Florida with jurisdiction extending to the Kanter property and the Well Site. The Application On July 2, 2015, Kanter submitted its Application for Permit to Drill (Application) to the Department. The proposed Well Site is on land to which Kanter owns the surface rights and subsurface mineral rights. The Application contemplates the drilling of an exploratory well to a depth of approximately 11,800 feet. The Application is not for a production well. The well is to be drilled, and ancillary activities are to be performed on a fill pad of approximately five acres, surrounded by a three-foot high perimeter berm on three sides and the L67-A levee on the fourth. The pad is the subject of an ERP which, as set forth in the Preliminary Statement, is not being challenged. The pad is designed to contain the 100-year, three-day storm. The engineering design incorporates a graded area, berm, and containment with a water control structure and a gated culvert to manipulate the water if necessary. The entire pad is to be covered by a 20 mil PVC liner, is sloped to the center, and includes a steel and concrete sump for the collection of any incidental spills. The pad was designed to contain the full volume of all liquids, including drilling fluid, fuel, and lubricating oil, that are in tanks and containers on the facility. The Application includes technical reports, seismic data, and information regarding the geology and existing producing oil wells of the Upper Sunniland Formation, which Kanter filed for the purpose of demonstrating an indicated likelihood of the presence of oil at the proposed site. The third Request for Additional Information (RAI) did not request additional information regarding the indicated likelihood of the presence of oil at the proposed site. After it submitted its response to the third RAI, Kanter notified the Department of its belief that additional requests were not authorized by law. As a result, the Department completed the processing of the Application without additional RAI’s. On November 16, 2016, the Department entered its Notice of Denial of the Oil and Gas Drilling Permit. The sole basis for denial was that Kanter failed to provide information showing a balance of considerations in favor of issuance pursuant to section 377.241.1/ There was no assertion that the Application failed to meet any standard established by applicable Department rules, Florida Administrative Code Chapters 62C-25 through 62C-30. In particular, the parties included the following stipulations of fact in the Joint Prehearing Stipulation which are, for purposes of this proceeding, deemed as established: The structure intended for the drilling or production of Kanter’s exploratory oil well is not located in any of the following: a municipality; in tidal waters within 3 miles of a municipality; on an improved beach; on any submerged land within a bay, estuary, or offshore waters; within one mile seaward of the coastline of the state; within one mile seaward of the boundary of a local, state or federal park or an aquatic or wildlife preserve; on the surface of a freshwater lake, river or stream; within one mile inland from the shoreline of the Gulf of Mexico, the Atlantic Ocean or any bay or estuary; or within one mile of any freshwater lake, river or stream. The location of Kanter’s proposed oil well is not: within the corporate limits of any municipality; in the tidal waters of the state, abutting or immediately adjacent to the corporate limits of a municipality or within 3 miles of such corporate limits extending from the line of mean high tide into such waters; on any improved beach, located outside of an incorporated town or municipality, or at a location in the tidal waters of the state abutting or immediately adjacent to an improved beach, or within 3 miles of an improved beach extending from the line of mean high tide into such tidal waters; south of 26°00'00? north latitude off Florida’s west coast and south of 27°00'00? north latitude off Florida’s east coast, within the boundaries of Florida’s territorial seas as defined in 43 U.S.C. 1301; north of 26°00'00? north latitude off Florida’s west coast to the western boundary of the state bordering Alabama as set forth in s. 1, Art. II of the State Constitution; or north of 27°00'00? north latitude off Florida’s east coast to the northern boundary of the state bordering Georgia as set forth in s. 1, Art. II of the State Constitution, within the boundaries of Florida’s territorial seas as defined in 43 U.S.C. 1301. 19. The proposed oil well site does not contain Florida panther habitat and is located outside of the primary and secondary habitat zones for the Florida panther. 21. There are no recorded archaeological sites or other historic resources recorded within the area of the proposed oil well site. Kanter submitted a payment of $8,972.00 for its oil and gas permit application on June 30, 2016 pursuant to Rule 62C- 26.002(5)(c), F.A.C. Kanter’s application includes sufficient information and commitments for performance bonds and securities. DEP and Intervenors do not claim that the application lacks the information required in rule 62C-26.002, F.A.C. Kanter’s application includes an organization report that satisfies the requirements of rule 62C-26.003(3), F.A.C. Kanter’s engineering aspects of the site plan for the proposed project site, are appropriate. Kanter’s survey submitted to DEP in support of its application includes a suitable location plat which meets the minimum technical standards for land surveys. Kanter’s application includes an appropriate description of the planned well completion. DEP and Intervenors do not claim that the drilling application lacks the information required by rule 62C-26.003, F.A.C. Kanter’s Application proposes using existing levees to provide access to the proposed Kanter well site. Kanter did not propose to construct additional roads for access. Kanter’s proposed well site is located 332 feet from the L67-A levee, which serves as a roadway for trucks used to perform operations and maintenance on the levees and canals in the area. Kanter’s application does not lack any information required by DEP with respect to the location of roads, pads, or other facilities; nor does it lack any information regarding the minimization of impacts with respect to the location of roads. DEP and Intervenors do not contend that the permit should be denied based upon the proposed “spacing” of the well, or drilling unit, as that term is used in rule 62C-26.004, F.A.C. Kanter’s application includes appropriate plans for the construction of mud tanks, reserve pits, and dikes. Kanter agrees to a reasonable permit condition requiring that if water is to be transported on-site, that it will add additional tanks for the purpose of meeting water needs that would arise during the drilling process. Kanter’s design of the integrated casing, cementing, drilling mud, and blowout prevention programs is based upon sound engineering principles, and takes into account all relevant geologic and engineering data and information. Kanter’s proposed casing plan includes an additional casing string proposed in its response to DEP’s Third Request for Additional Information. This casing plan meets or exceeds the requirements of 62C-27.005, F.A.C. Kanter’s proposed casing and cementing program, as modified, meets or exceeds all applicable statutory and rule criteria.[2/] Kanter’s response and documents provided in response to DEP’s 3rd RAI satisfactorily resolved DEP’s concern regarding the risk of passage of water between different confining layers and aquifers resulting from the physical act of drilling through the layers of water and the intervening soil or earth. Kanter’s application includes a sufficient lost circulation plan. Kanter’s application is not deficient with respect to specific construction requirements which are intended to prevent subsurface discharges. Kanter’s drilling fluids plan is appropriate and is not deficient. Kanter’s blowout prevention equipment and procedures are appropriate and are not deficient. Kanter’s plans for blowout prevention are not insufficient. Kanter’s proposed oil pad is above the 100 year flood elevation and under normally expected circumstances would not be inundated by water if constructed as proposed in Kanter’s application. Kanter’s application includes a Hydrogen Sulfide Safety Plan that includes standards which are consistent with the onshore oil and gas industry standards set forth in the American Petroleum Institutes’ Recommended Practice. DEP and Intervenors do not claim any insufficiencies with respect to Kanter’s Hydrogen Sulfide Gas Contingency Plan, the sufficiency of secondary containment, its construction plans for a protective berm around the drilling site and storage tank areas of sufficient height and impermeability to prevent the escape of pad fluid, its pollution prevention plan, its safety manual, or its spill prevention and cleanup plan. DEP and Intervenors do not contend that the permitting of the well would violate section 377.242(1), F.S., regarding permits for the drilling for, exploring for, or production of oil, gas, or other petroleum products which are to be extracted from below the surface of the land only through the well hole(s). DEP and Intervenors do not contend that Kanter’s application violates the applicable rule criteria for oil and gas permitting set forth in Chapters 62C-25 through 62C-30, Florida Administrative Code. In addition to the foregoing, Kanter is not seeking or requesting authorization to perform “fracking,” and has agreed to a permit condition that would prohibit fracking. As a result of the foregoing, the parties have agreed that the Application meets or exceeds all criteria for an exploratory oil well permit under chapters 62C-25 through 62C-30. The Property Kanter owns two parcels of land totaling 20,000 acres in the area of the proposed Well Site: a northern parcel consisting of approximately 11,000 acres and a southern parcel consisting of approximately 9,000 acres. Kanter assembled its holdings through a series of acquisitions by deeds from 1975 to 1996. The Well Site is to be located within the southern parcel. On August 7, 1944, Kanter’s predecessor in title, Dallas Investment Co., acquired by tax deed all interests in a parcel within the 9,000-acre southern parcel described as “All Section 23 Township 51 South, Range 38 East, 640 Acres,” including, without reservation, the oil, gas, minerals, and phosphate. The evidence of title submitted as part of the Application indicates that a “Kanter” entity first became possessed of rights in Section 23 in 1975. By virtue of a series of transactions extending into 1996, Kanter currently holds fee title to all surface rights, and title to all mineral rights, including rights to oil, gas, and other mineral interests, within Section 23 Township 51 South, Range 38 East. The Well Site specified in the Application is within Section 23, Township 51 South, Range 38 East. Kanter’s property is encumbered by a Flowage Easement that was granted to the Central and Southern Flood Control District in 1950, and is presently held by the South Florida Water Management District (SFWMD). The Flowage Easement guarantees Kanter access to the entire easement property “for the exploration or drilling for, or the developing, producing, storing or removing of oil, gas or other . . . in accordance with sound engineering principles.” Kanter has the legal property right to locate and drill the well, and the exploratory well is consistent with Kanter’s ownership interest. The Well Site is located in a 160-acre (quarter section) portion of the 640-acre tract described above, and is within a “routine drilling unit,” which is the block of land surrounding and assigned to a well. Fla. Admin. Code R. 62C-25.002(20) and 62C-25.002(40). The Kanter property, including the Well Site, is in the historic Everglades. Before efforts to drain portions of the Everglades for development and agricultural uses, water flowed naturally in a southerly direction through land dominated by sawgrass and scattered tree islands. The tree islands were generally shaped by the direction of the water flow. Beginning as early as the late 1800s, dramatically increasing after the hurricane of 1947, and extending well into the 1960s, canals, levees, dikes, and channels were constructed to drain, impound, or reroute the historic flows. Those efforts have led to the vast system of water control structures and features that presently exist in south Florida. The Well Site, and the Kanter property as a whole, is located in Water Conservation Area (WCA)-3. WCA-3 is located in western Broward County and northwestern Miami-Dade County. It was constructed as part of the Central and Southern Florida Flood Control project authorized by Congress in 1948, and was created primarily for flood control and water supply. In the early 1960s, two levees, L67-A and L67-C, were constructed on a line running in a northeast to southwest direction. When constructed, the levees separated WCA-3 into WCA-3A to the west and WCA-3B to the southeast. The Well Site is in WCA-3A.3/ The area between L67-A and L67-C, along with a levee along the Miami Canal, is known as the “Pocket.” There is no water control in the Pocket. Although there is a structure at the south end of the Pocket, it is in disrepair, is rarely -- if ever -- operated, and may, in fact, be inoperable. The Well Site is located within the Pocket, on the southern side of L67-A. L67-A and L67-C, and their associated internal and external canals, have dramatically disrupted sheet flow, altered hydrology, and degraded the natural habitat in the Pocket. Water inputs and outputs are entirely driven by rainfall into the Pocket, and evaporation and transpiration from the Pocket. From a hydrologic perspective, the Pocket is entirely isolated from WCA-3A and WCA-3B. The Pocket is impacted by invasive species, which have overrun the native species endemic to the area and transformed the area into a monoculture of cattails. Vegetation that grows in the Pocket dies in the Pocket. Therefore, there is a layer of decomposing vegetative muck, ooze, and sediment from knee deep to waist deep in the Pocket, which is atypical of a functioning Everglades system. L67-A and L67-C, and their associated internal and external canals, impede wildlife movement, interfering with or preventing life functions of many native wildlife species. The proposed Well Site, and the surrounding Kanter property, is in a rural area where future residential or business development is highly unlikely. The property is removed from urban and industrial areas and is not known to have been used for agriculture. The Department has previously permitted oil wells within the greater Everglades, in areas of a more pristine environmental nature, character, and location than the Pocket. The Raccoon Point wellfield is located 24 miles west of the Proposed Project Site within the Big Cypress National Preserve. It is within a more natural system and has not undergone significant hydrologic changes such as the construction of canals, levees, ditches, and dikes and, therefore, continues to experience a normal hydrologic flow. Mr. Gottfried testified that at Raccoon Point, “you can see the vegetation is maintaining itself because the fact that we don’t have levees, ditches canals, dikes, impacting the area. So you have a diversity of plant life. You have tree islands still. You have the normal flow going down.” The greater weight of evidence shows that the Kanter Well Site is far less ecologically sensitive than property at Raccoon Point on which the Department has previously permitted both exploration and production wells. The Biscayne Aquifer The Biscayne Aquifer exists in almost all of Miami- Dade County, most of Broward County and a portion of the southern end of Palm Beach County. It is thickest along the coast, and thinnest and shallowest on the west side of those counties. The western limit of the Biscayne Aquifer lies beneath the Well Site. The Biscayne Aquifer is a sole-source aquifer and primary drinking water source for southeast Florida. A network of drainage canals, including the L-30, L-31, L-33, and Miami Canals, lie to the east of WCA-3B, and east of the Well Site. Those canals penetrate into the substratum and form a hydrologic buffer for wellfields east of the Well Site, including that operated by Miramar, and isolate the portions of the Biscayne Aquifer near public wellfields from potential impacts originating from areas to their west. The canals provide a “much more hydraulically available source” of water for public wellfields than water from western zones of the Biscayne Aquifer, and in that way create a buffer between areas on either side of the canals. The Pocket is not a significant recharge zone for the Biscayne Aquifer. There is a confining unit comprised of organic soils, muck, and Lake Flint Marl separating the Pocket and the Well Site from the Fort Thompson formation of the Biscayne Aquifer. There is a layer of at least five feet of confining muck under the L67-A levee in the area of the Well Site, a layer that is thicker in the Pocket. The Well Site is not within any 30-day or 120-day protection zones in place for local water supply wells. The fact that the proposed well will penetrate the Biscayne Aquifer does not create a significant risk of contamination of the Biscayne Aquifer. The drilling itself is no different than that done for municipal disposal wells that penetrate through the aquifer much closer to areas of water production than is the Well Site. The extensive casing and cementing program to be undertaken by Kanter provides greater protection for the well, and thus for the aquifer, than is required by the Department’s rules. A question as to the “possibility” that oil could get into the groundwater was answered truthfully in the affirmative “in the definition of possible.” However, given the nature of the aquifer at the Well Site, the hydrological separation of the Well Site and well from the Biscayne Aquifer, both due to the on-site confining layer and to the intervening canals, the degree of casing and cementing, and the full containment provided by the pad, the testimony of Mr. Howard that “it would be very difficult to put even a fairly small amount of risk to the likelihood that oil leaking at that site might possibly actually end up in a well at Miramar” is accepted. The Sunniland Formation The Sunniland Formation is a geologic formation which exists in a region of South Florida known as the South Florida Basin. It is characterized by alternating series of hydrocarbon-containing source rock, dolomite, and limestone of varying porosity and permeability and evaporite anhydrite or mudstone seal deposits. It has Upper Sunniland and Lower Sunniland strata, and generally exists at a depth of up to 12,000 feet below land surface (bls) in the area of the Well Site. Underlying the Sunniland Formation is a formation generally referred to as the “basement.” The basement exists at a depth of 17,000-18,000 feet bls. Oil is produced from organic rich carbonate units within the Lower Cretaceous Sunniland Formation, also known as the Dark Shale Unit of the Sunniland Formation. The oil produced in the Sunniland Formation is generally a product of prehistoric deposits of algae. Over millennia, and under the right conditions of time and pressure, organic material is converted to hydrocarbon oil. The preponderance of the evidence demonstrates that active generating source rock capable of producing hydrocarbons exists in the Sunniland Formation beneath the Kanter property. The preponderance of the evidence also indicates that the oil generated in the Sunniland Formation is at a sufficient depth that it is preserved from microbial degradation, which generally occurs in shallower reservoirs. The Upper Sunniland Formation was formed in the Cretaceous geological period, between 106 and 100 million years ago. Over that period, sea levels rose and fell dramatically, allowing colonies of rudists (a now extinct reef-building clam) and oysters to repeatedly form and die off. Over time, the colonies formed bioherms, which are reef-like buildups of shell elevated off of the base of the sea floor. Over millennia, the bioherms were exposed to conditions, including wave action and exposure to air and rainwater, that enhanced the porosity of the component rudist and oyster shell. Those “patch reefs” were subsequently buried by other materials that formed an impermeable layer over the porous rudist and oyster mounds, and allowed those mounds to become “traps” for oil migrating up from lower layers. A trap is a geological feature that consists of a porous layer overlain by an impervious layer of rock that forms a seal. A trap was described, simplistically, as an upside down bowl. Oil, being lighter than water, floats. As oil is generated in source rock, it migrates up through subterranean water until it encounters a trapping formation with the ability to create a reservoir, and with an impervious layer above the porous layer to seal the trap and prevent further migration, thus allowing the “bowl” to fill. The reservoir is the layer or structure with sufficient porosity and permeability to allow oil to accumulate with its pores. The thickness of the layer determines the volume of oil that the reservoir is capable of retaining. Although rudist mounds are generally considered to be more favorable as traps due to typically higher porosity, oyster mound traps are correlated to producing wells in the Sunniland Formation and are primary producers in the Felda field and the Seminole field. The Lower Sunniland Formation is a fractured carbonate stratum, described by Mr. Aldrich as a rubble zone. It is not a traditional structural trap. Rather, it consists of fractured and crumbling rock thought to be created by basement shear zones or deep-seated fault zones. It has the same source rock as the Upper Sunniland. There is little information on traps in the Lower Sunniland, though there are two fields that produce from that formation. A “play” is a group of prospects or potential prospects that have the same source rock, the same reservoir rock, the same trap style, and the same seal rock to hold in the hydrocarbons. The producing oil fields in the Sunniland Formation, including Raccoon Point, Sunniland, Felda, West Felda, and Lake Trafford are part of a common play known as the Sunniland Trend. The Sunniland Trend is an area of limestone of greater porosity within the Sunniland Formation, and provides a reasonable extrapolation of areas that may be conducive to oil traps. The Sunniland Trend extends generally from Manatee County on the west coast of Florida southeasterly into Broward County and the northwestern portion of Miami-Dade County on the east coast of Florida. The trend corresponds to the ancient Cretaceous shoreline where rudist and oyster bioherms formed as described above. In 2003, the “Mitchell-Tapping” report, named after the husband and wife team, identified two separate trends within the Sunniland Trend, the rudist-dominant West Felda Trend, and the more oyster-based Felda Trend. Both are oil-producing strata. The Felda Trend is more applicable to the Kanter property. Throughout the Sunniland Trend, hydrocarbon reservoirs exist within brown dolomite deposits and rudist and oyster mounds. Dolomite is a porous limestone, and is the reservoir rock found at the productive Raccoon Point oil wellfield. The evidence indicates that a brown dolomite layer of approximately 20 feet underlies the Well Site, and extends in all directions from the Well Site. A preponderance of the evidence indicates that the Kanter property, including the Well Site, is within the Sunniland Trend and its Felda Trend subset.4/ Oil produced from wells in the Sunniland Trend is typically thick, and is not under pressure. The oil does not rise through a bore hole to the surface, but must be pumped. The Raccoon Point Field, which is the closest productive and producing wellfield to the proposed Well Site, is located approximately 24 miles to the west of the Well Site, within the Sunniland Trend. Raccoon Point contains numerous well sites, of which four or five are currently producing, and has produced in the range of 20 million barrels of oil since it began operation in the late 1970s. Cumulative production of oil from proven fields in the South Florida Basin, including fields in the Sunniland Formation, is estimated to be in excess of 160 million barrels. Estimates from the U.S. Geological Service (USGS) indicate that 25 new fields capable of producing five million barrels of oil each are expected to be found within the Lower Cretaceous Shoal Reef Oil Assessment Unit, which extends into the Kanter property. Estimates of the potential reserves reach as high as an additional 200 million barrels of oil. The Dollar Bay Formation Another formation that has potential for oil production is the Lower Cretaceous Dollar Bay Formation, also in the South Florida Basin. The Dollar Bay Formation exists beneath the Kanter property at a shallower depth than the Sunniland Formation, generally at a depth of 10,000 feet in the vicinity of the Well Site. Most of the Dollar Bay prospects are on the east side of the South Florida Basin. Most of the wells in the South Florida Basin are on the west side. Thus, there has not been much in the way of exploration in the Dollar Bay Formation, so there is a lack of data on traps. Dollar Bay has been identified as a known oil-bearing play by the USGS. It is a self-source play, so the source comes from the Dollar Bay Formation itself. Dollar Bay exists both as potential and mature rock. It has known areas of very high total organic content (TOC) source rock; logged reservoir in the formation; and seal rock. There have been three oil finds in the Dollar Bay formation, with at least one commercial production well. Kanter will have to drill through the Dollar Bay Formation to get to the Upper Sunniland formation, thus allowing for the collection of information as to the production potential of the prospect. Although Dollar Bay is not generally the main “target” of the Permit, its potential is not zero. Thus, consideration of the Dollar Bay Formation as a factor in the calculation of risk/success that goes into the decision to drill an exploratory well is appropriate. Initial Exploratory Activities In 1989, Shell Western E&P, Inc. (Shell), conducted extensive seismic exploration in south Florida. Among the areas subject to seismic mapping were two lines -- one line of 36,000 feet mapped along the L67-A levee, directly alongside the Well Site, and the other of approximately 10 miles in length along the Miami Canal levee. The lines intersect on the Kanter property just north of the Well Site. The proposed exploration well is proposed to extend less than 12,000 feet deep. The seismic mapping performed by Shell was capable of producing useful data to that depth. The seismic methodology utilized by Shell produced data with a high degree of vertical and spatial resolution. Given its quality, the Shell data is very reliable. Shell did not use the seismic data generated in the 1980s, and ultimately abandoned activity in the area in favor of larger prospects, leaving the smaller fields typical of south Florida for smaller independent oil companies. The Shell seismic data was purchased by Seismic Exchange, a data brokerage company. In 2014, Kanter purchased the seismic data from Seismic Exchange for the lines that ran through its property. With the purchase, Kanter received the original field tapes, the support data, including surveyors’ notes and observer sheets which describe how the data was acquired, and the recorded data. As a result of advances in computer analysis since the data was collected, the seismic data can be more easily and accurately evaluated. It is not unusual for companies to make decisions on whether to proceed with exploration wells with two lines of seismic data. Mr. Lakin reviewed the data, and concluded that it showed a very promising area in the vicinity of the L67-A levee that was, in his opinion, sufficient to continue with permitting an exploratory oil well. Mr. Lakin described the seismic information in support of the Application as “excellent data,” an assessment that is well-supported and accepted. Mr. Pollister reviewed the two lines of seismic data and opined that the information supports a conclusion that the site is a “great prospect” for producing oil in such quantities as to warrant the exploration and extraction of such products on a commercially profitable basis. Seismic Data Analysis The seismic lines purchased by Kanter consist of line 970, which runs southwest to northeast along the L67-A levee, and a portion of line 998, which runs from northwest to southeast along the Miami Canal levee. The lines intersect at the intersection of the two levees. The data depicts, among others, the seismic reflection from the strata of the Sunniland Trend, and the seismic reflection from the basement. The depiction of the Sunniland Trend shows a discernable rise in the level of the strata, underlain by a corresponding rise in the basement strata. This rise is known as an anticline. An anticline is a location along a geologic strata at which there is an upheaval that tends to form one of the simplest oil traps that one can find using seismic data. In the South Florida Basin, anticlines are typically associated with mounded bioherms. A “closed structure” is an anticline, or structural high, with a syncline, or dip, in every direction. A closed structure, though preferable, is not required in order for there to be an effective trap. Most of the Sunniland oil fields do not have complete closure. They are, instead, stratigraphic traps, in which the formation continues to dip up and does not “roll over.” Where the rock type changes from nonporous to porous and back to nonporous, oil can become trapped in the porous portion of the interval even without “closure.” Thus, even if the “bowl” is tilted, it can still act as a trap. Complete closure is not necessary in much of the Sunniland Trend given the presence of an effective anhydrite layer to form an effective seal.5/ The seismic data of the Kanter property depicts an anticline in the Sunniland Formation that is centered beneath the Well Site at a depth in the range of 12,000 feet bls. Coming off of the anticline is a discernable syncline, or dip in the underlying rock. Applying the analogies used by various witnesses, the anticline would represent the top of the inverted bowl, and the syncline would represent the lip of the bowl. The evidence of the syncline appears in both seismic lines. The Shell seismic data also shows an anhydrite layer above the Sunniland Formation anticline. The same anticline exists at the basement level at a depth of 17,000 to 18,000 feet bls. The existence of the Sunniland formation anticline supported by the basement anticline, along with a thinning of the interval between those formations at the center point, provides support for the data reliably depicting the existence of a valid anticline. A basement-supported anticline is a key indicator of an oil trap, and is a feature commonly relied upon by geophysicists as being indicative of a structure that is favorable for oil production. The seismic data shows approximately 65 feet of total relief from the bottom to the top of the anticline structure, with 50 feet being closed on the back side. The 50 feet of closed anticline appears to extend over approximately 900 acres. There is evidence of other anticlines as one moves northeast along line 970. However, that data is not as strong as that for the structure beneath the Well Site. Though it would constitute a “lead,” that more incomplete data would generally not itself support a current recommendation to drill and, in any event, those other areas are not the subject of the permit at issue. The anticline beneath the well site is a “prospect,” which is an area with geological characteristics that are reasonably predicted to be commercially profitable. In the opinion of Mr. Lakin, the prospect at the location of the proposed Well Site has “everything that I would want to have to recommend drilling the well,” without a need for additional seismic data. His opinion is supported by a preponderance of the evidence, and is credited. Confirmation of the geology and thickness of the reservoir is the purpose of the exploratory well, with the expectation that well logs will provide such confirmation. Risk Analysis Beginning in the 1970s, the oil and gas industry began to develop a business technique for assessing the risk, i.e., the chance of failure, to apply to decisions being made on drilling exploration wells. Since the seminal work by Bob McGill, a systematic science has developed. In 1992, a manual was published with works from several authors. The 1992 manual included a methodology developed by Rose & Associates for assessing risk on prospects. The original author, Pete Rose,6/ is one of the foremost authorities on exploration risk. The Rose assessment method is a very strong mathematical methodology to fairly evaluate a prospect. The Rose method takes aspects that could contribute to finding an oil prospect, evaluates each element, and places it in its perspective. The Rose prospect analysis has been refined over the years, and is generally accepted as an industry standard. The 1992 manual also included a methodology for assessing both plays and prospects developed by David White. The following year, Mr. White published a separate manual on play and prospect analysis. The play and prospect analysis is similar to the Rose method in that both apply mathematical formulas to factors shown to be indicative of the presence of oil. Play and prospect analysis has been applied by much of the oil and gas industry, is used by the USGS in combining play and prospect analysis, and is being incorporated by Rose & Associates in its classes. The evidence is convincing that the White play and prospect analysis taught by Mr. Aldrich is a reasonable and accepted methodology capable of assessing the risk inherent in exploratory drilling. Risk analysis for plays and prospects consists of four primary factors: the trap; the reservoir; the source; and preservation and recovery. Each of the four factors has three separate characteristics. Numeric scores are assigned to each of the factors based on seismic data; published maps and materials; well data, subsurface data, and evidence from other plays and prospects; and other available information. Chance of success is calculated based on the quantity and quality of the data supporting the various factors to determine the likelihood that the prospect will produce flowable hydrocarbons. The analysis and scoring performed by Mr. Aldrich is found to be a reasonable and factually supported assessment of the risk associated with each of the prospects that exist beneath the proposed Well Site and that are the subject of the Application.7/ However, Mr. Aldrich included in his calculation an assessment of the Lower Sunniland Formation. The proposed well is to terminate at a depth of 11,800 feet bls, which is within the Upper Sunniland, but above the Lower Sunniland. Thus, although the Lower Sunniland would share the same source rock, the exploration well will not provide confirmation of the presence of oil. Therefore, it is more appropriate to perform the mathematical calculation to determine the likelihood of success without consideration of the Lower Sunniland prospect. To summarize Mr. Aldrich’s calculation, he assigned a four-percent chance of success at the Well Site for the Dollar Bay prospect. The assignment of the numeric scores for the Dollar Bay factors was reasonable and supported by the evidence. Mr. Aldrich assigned a 20-percent chance of success at the Well Site for the Upper Sunniland play. The assignment of the numeric scores for the Upper Sunniland factors was reasonable and supported by the evidence. In order to calculate the overall chance of success for the proposed Kanter exploratory well, the assessment method requires consideration of the “flip side” of the calculated chances of success, i.e., the chance of failure for each of the prospects. A four-percent chance of success for Dollar Bay means there is a 96-percent (0.96) chance of failure, i.e., that a commercial zone will not be discovered; and with a 20-percent chance of success for the Upper Sunniland, there is an 80-percent (0.80) chance of failure. Multiplying those factors, i.e., .96 x .80, results in a product of .77, or 77 percent, which is the chance that the well will be completely dry in all three zones. Thus, under the industry-accepted means of risk assessment, the 77-percent chance of failure means that there is a 23-percent chance of success, i.e., that at least one zone will be productive. A 23-percent chance that an exploratory well will be productive, though lower than the figure calculated by Mr. Aldrich,8/ is, in the field of oil exploration and production, a very high chance of success, well above the seven-percent average for prospecting wells previously permitted by the Department (as testified to by Mr. Linero) and exceeding the 10- to 15-percent chance of success that most large oil companies are looking for in order to proceed with an exploratory well drilling project (as testified to by Mr. Preston). Thus, the data for the Kanter Well Site demonstrates that there is a strong indication of a likelihood of the presence of oil at the Well Site. Commercial Profitability Commercial profitability takes into account all of the costs involved in a project, including transportation and development costs. Mr. Aldrich testified that the Kanter project would be commercially self-supporting if it produced 100,000 barrels at $50.00 per barrel. His testimony was unrebutted, and is accepted. The evidence in this case supports a finding that reserves could range from an optimistic estimate of 3 to 10 million barrels, to a very (perhaps unreasonably) conservative estimate of 200 barrels per acre over 900 acres, or 180,000 barrels. In either event, the preponderance of the evidence adduced at the hearing establishes an indicated likelihood of the presence of oil in such quantities as to warrant its exploration and extraction on a commercially profitable basis.9/
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Environmental Protection enter a final order: Approving the Application for Oil and Gas Drilling Permit No. OG 1366 with the conditions agreed upon and stipulated to by Petitioner, including a condition requiring that if water is to be transported on-site, it will add additional tanks for the purpose of meeting water needs that would arise during the drilling process, and a condition prohibiting fracking; and Approving the application for Environmental Resource Permit No. 06-0336409-001. DONE AND ENTERED this 10th day of October, 2017, in Tallahassee, Leon County, Florida. S E. GARY EARLY 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 10th day of October, 2017.
Findings Of Fact Lee County's Proposed Resource Recovery Facility Lee County has been investigating alternate methods of solid waste disposal since 1979. In 1989, Lee County adopted a Solid Waste Master Plan to guide the County's solid waste management and disposal activities for the next 40 years. The County Commission, consultants and staff concluded that the County's long term needs would be best served by an integrated solid waste management system, which would include an aggressive recycling and materials recovery program, plus composting, landfilling, and the use of a resource recovery (waste-to- energy) facility. In June 1990, Lee County filed an application for site certification with the Florida Department of Environmental Regulation (DER) for the proposed resource recovery facility (Facility). The County also filed an application with DER for a Prevention of Significant Deterioration (PSD) permit for the Facility. Lee County's Facility will produce electricity from municipal solid waste that otherwise would be discarded in a landfill. Solid waste will be brought into the Facility by truck and deposited in a large concrete pit. The refuse will be thoroughly mixed in the pit and then placed by crane in a charging hopper, which will lead into a furnace. The combustion of refuse in the furnace will create heat, which will be used to produce steam, which will be used in a steam turbine to generate electricity. The County's Facility will include the energy recovery system, a scale house, cooling tower, a stack, a 138 kV transmission line, and a stormwater management system. The Facility will have two combustion units with a combined processing capacity of approximately 1200 tons per day (tpd). Theoretically, the Facility could be expanded in the future with a third 600 tpd combustion unit to reach an ultimate site capacity of 1800 tpd. The Facility will generate approximately 40 megawatts (MW) of electricity at 1200 tpd and approximately 60 MW if expanded to 1800 tpd. The Facility will generate more than 4.28 billion kilowatt hours of electricity during its minimum 20 year life. By using solid waste to produce electricity, the County will save nonrenewable resources such as oil or coal that otherwise would be needed for power production. The energy produced from garbage will offset the need for more than 7,000,000 barrels of oil. Assuming oil is worth $20 per barrel, approximately $140 million worth of oil will be saved. The Facility will help Lee County address its solid waste disposal crisis. The Facility will reduce the volume of waste materials up to 90%. With less waste, less landfill space will be required and less land will be used for landfills. The threat of groundwater contamination also will be reduced because the ash from the Facility will be much less toxic than municipal solid waste (MSW). The leachate from ash will be much less toxic than leachate from MSW. The Facility will compliment Lee County's aggressive recycling and materials recovery programs. The Facility will only process those waste materials that are left after recycling is completed. Moreover, ferrous metals will be recovered at the Facility and recycled. The Facility will provide regional benefits. It will serve the residents of both Lee County and Hendry County pursuant to an interlocal agreement between the two counties. It will serve a combined population of approximately 400,000 people initially, which is projected to grow to approximately one million people within 20 years. The Facility will have positive economic impacts. Over 325 people will be employed during the Facility's construction. The Facility will provide jobs for 54 full-time employees during normal operations. The annual payroll of $2.5 million will contribute more than $33 million to the local economy over 20 years. The construction costs of approximately $130 million will result in a positive regional economic impact of approximately $398 million. The site is undeveloped. It has been heavily impacted by past logging and agricultural activities, including ditching and cattle grazing. The site has been extensively invaded by exotic tree species such as melaleuca and Brazilian pepper. Vegetative diversity is low, offering few habitat niches for feeding or reproduction by wildlife. As a result, the numbers and diversity of wildlife on the site are extremely low due to the poor habitat conditions. There are no DER jurisdictional wetland areas on the site. There are isolated wetlands within the jurisdiction of SFWMD. No jurisdictional wetlands will be affected by the construction of the resource recovery facility structure, which will be constructed in a previously disturbed sector of the site which is vegetated with wax myrtle. No more than 2.7 acres of wetlands will be affected by the construction of the new 138 kV transmission line, which is necessary to connect the Facility to FPL's adjacent Buckingham substation. The proposed location of the new transmission line next to an existing dirt road minimizes potential wetland impacts from the transmission line. The County will provide several forms of mitigation for wetland impacts. Under the agreed conditions of certification, the County will create new wetlands at whatever mitigation ratio SFWMD deems appropriate. In addition, the County will restore the historic hydroperiod to a stressed 9.9 acre wetland tract located on the southeast portion of the site. Finally, the County will eradicate nuisance plant specimens now found on the site and continue removal of new specimens as part of an ongoing program of habitat enhancement. These mitigation activities will improve wetlands and wildlife habitat on the site compared to current conditions. These activities will increase habitat diversity, which should result in an increase in wildlife numbers and diversity on the site. The county plans to construct the Facility approximately 1500 feet from Buckingham Road, maintaining an existing wooded area as a visual buffer between the road and the Facility. Approximately 88% (137 acres) of the site will remain as undeveloped buffer zones. All of the primary activities at the Facility will occur inside a fully enclosed building, which will be maintained under negative air pressure for control of noise, dust, and odors. Based upon experience at similar fully-enclosed resource recovery facilities, it is not likely that noise, dust, or odor levels at the site will be elevated by operation of the Facility. The planned surface water management system for the site includes a wet detention area for stormwater which is eight times larger than that required under the application rules of SFWMD. This wet detention area is supplemented by a dry pretreatment system approximately 4.5 times larger than required. After treatment, stormwater will be discharged into a currently stressed wetland area for additional treatment; the discharge will assist in restoring the original hydroperiod of the area. The primary source of water to be used in the Facility will be the City of Fort Myers' domestic wastewater treatment plant, which currently discharges advanced-treated wastewater to the Caloosahatchee River. The Facility's cooling tower will use approximately 1.1 million gallons per day (mgd) of treated wastewater. DER and SFWMD strongly encourage reuse of wastewater in this fashion, and the use will reduce the levels of nutrients which would otherwise be discharged into the Caloosahatchee by the City of Fort Myers treatment plant. The Facility will use approximately 15,000 gallons per day (gpd) of potable water for boiler makeup and household-type uses. This water will be drawn from two wells located on site, which can also supply backup water for use during emergencies. Use of potable water as backup for cooling is limited to ten days per year. The Facility will not discharge any wastewater into groundwater or surface waters. Wastewater generated at the Facility will be recycled to the extent practicable and then routed by pipeline to the City of Fort Myers' wastewater treatment plant. The Facility is not expected to cause or contribute to groundwater contamination. A groundwater monitoring system will ensure that the Facility does not impact groundwater. Likewise, a surface water monitoring program will ensure that surface water quality is not affected. The Facility will not be authorized to burn hazardous waste, biohazardous waste, medical waste, or sewage sludge. County franchise agreements with waste haulers, the only persons authorized to bring waste to the Facility, prohibit the disposal of such wastes at the Facility. Spotters stationed at the scale house, tipping floor, and charging hopper will inspect the waste stream to ensure that proscribed wastes are not burned. Proscribed wastes will be segregated upon discovery and removed by a licensed hazardous waste hauler. The municipal waste stream contains a number of substances, such as nail polish, paints, pesticides and solvents, which are denominated as "household hazardous waste." It is anticipated that such products will be found in the MSW entering the Facility. The County intends to minimize the volume of such wastes by operating a household hazardous waste collection center open to all of the County's residents. Ash is produced as the by-product of MSW incineration. Ash produced by the Facility will be wetted in a water-filled tank, then taken by conveyor within the building to an enclosed ash-handling area to be hauled away by enclosed truck to a licensed landfill for disposal. The Facility will not be allowed to commence operation until the County identifies a licensed landfill able and willing to accept ash from the Facility. Ash from the Facility is not considered a hazardous waste for regulatory purposes. Status of the Project Lee County will own the Facility. Ogden-Martin (Ogden) will build and operate the Facility for 20 years pursuant to a contract Ogden executed with the County in 1990. Ogden was selected because it submitted the lowest and best bid for these services in a competitive bidding process. Ogden is one of the largest and best vendors of resource recovery facilities in the United States. Ogden currently operates three resource recovery facilities in Florida and twelve in the United States. Ogden uses the Martin technology which has been used successfully at more than 140 facilities around the world. Lee County already has secured $197 million in escrow financing for the construction of the Facility, which will take approximately 27 months to complete. The County hopes to have the Facility in operation in the spring of 1994. EPA's 1991 New Source Performance Standards In February 1991, the United States Environmental Protection Agency (EPA) promulgated New Source Performance Standards which established stringent minimum requirements for the construction and operation of new resource recovery facilities, including Lee County's Facility. Among other things, EPA's 1991 New Source Performance Standards (NSPS): (a) establish specific emission limits for a wide array of pollutants, including dioxin; (b) require facility operators to be trained and certified; and (c) require resource recovery facilities to install, calibrate and maintain continuous emission monitors that monitor the facility's operations around the clock. The 1991 NSPS are applicable to the Facility. Best Available Control Technology In accordance with DER and EPA procedures, Lee County conducted a detailed evaluation of the Best Available Control Technology (BACT) for the control of the Facility's airborne emissions. The BACT analysis included an evaluation of all feasible and available air pollution control technologies at existing and proposed resource recovery facilities in the United States and overseas. The energy, economic, and environmental impacts of each technology were quantified and compared on a pollutant-by-pollutant basis. The analysis resulted in a determination of the BACT and appropriate emission limit for each pollutant. The County's analysis demonstrated that the Best Available Control Technology for the Facility is: (a) a spray dryer scrubber; (b) a fabric filter; (c) a selective non-catalytic reduction (SNCR) system; and (d) good combustion practices. This BACT determination is consistent with EPA's 1991 NSPS, which were established on the basis that spray dryer scrubbers, fabric filters, and SNCR were the best demonstrated technology for resource recovery facilities. The dry scrubber system is used to control sulfur dioxide (SO2) emissions as well as those of other acid gases such as hydrogen chloride and hydrogen fluoride. The system involves the injection of slaked lime to neutralize acid gases in the exhaust gas stream. Because the lime injection process effectively cools the gas stream, the scrubber system also effectively removes heavy metals except mercury; these metals adsorb to particulate matter which is removed by the fabric filter baghouse. Nitrogen oxides (NOx) are controlled by SNCR, which involves the injection of ammonia or urea into the post- combustion zone of the boiler to dissociate NOx, which is formed at high combustion temperatures, into nitrogen and water vapor. Good combustion practices minimize emissions of substances produced by incomplete combustion of solid waste, including carbon monoxide (CO), unburned hydrocarbons, soot, and toxic organic compounds such as dioxins, furans, and polycyclic organic matter (POM). The adherence to good combustion practices will assure that emissions of total dioxins and furans will not exceed the NSPS standard. Lee County considered the possibility of using a wet scrubber system, but the wet scrubber was rejected because it suffers from a variety of problems. Wet scrubbers have never been selected as BACT for any resource recovery facility in the United States. Wet scrubbers are not BACT in this case. Control Technology for Mercury The mercury emissions from the Facility will be minimized by at least four factors. First, many sources of mercury in municipal solid waste have been or soon will be eliminated. EPA has banned the use of mercury in paints and pesticides. In addition, there has been a significant national effort to reformulate consumer products and thereby eliminate mercury in the waste stream. For example, battery manufacturers nationwide have substantially reduced the mercury content of household batteries and it is expected that household batteries will be virtually mercury-free by 1995 (i.e., one year after the Facility becomes operational). This development is particularly important because as much as 90% of the mercury in municipal solid waste is contained in household batteries. Second, Lee County has implemented a battery collection program to reduce the number of household batteries in the waste stream and thereby further reduce the amount of mercury that might enter the Facility. The County has 46 drop-off stations at retail stores for the collection of button cell batteries. The County has worked with the School Board to educate students about the need to collect household batteries. The County currently is working on a curbside program for the collection of household batteries. As a result of these efforts, Lee County collected more than 40,000 batteries in just three months in 1991. Third, if there is mercury in the refuse entering the Facility, it will be controlled in part by the Facility's spray dryer scrubber and fabric filter, which may reduce mercury emissions by as much as 70%. Indeed, in a November 1990 case EPA stated that a spray dryer scrubber and fabric filter represented the most stringent control mechanisms for mercury. Fourth, Lee County will utilize an additional pollution control device to control mercury emissions. Specifically, Lee County will use a reagent injection system which will inject activated carbon, sodium sulfide, or other reagent into the flue gases. The mercury will adhere to the reagent and then be removed from the flue gases by the fabric filter. The reagent injection system should be very effective at capturing mercury and it also should reduce some other emissions (e.g., dioxins). The reagent injection system has been used in Europe, but it has never been used on a full-time basis on any resource recovery facility in the United States. This technology is not required under any state or federal regulatory program. The Facility's reagent injection system for mercury will provide the highest degree of mercury control that is technologically possible at this time. As a result of the County's extraordinary efforts to control mercury, the mercury emissions from the facility will be among the lowest in the world. Emission Limits For Mercury In August 1991, EPA completed a series of experiments with a reagent injection system at a resource recovery facility in Stanislaus, California. EPA will use its new test data from Stanislaus and its existing mercury data base to establish numerical limits for mercury emissions from new resource recovery facilities. EPA's new emission limits for mercury must be promulgated by November 15, 1991, pursuant to the 1990 amendments to the Clean Air Act. The new emission limits will be based on Maximum Achievable Control Technology (MACT), which will be even more stringent than BACT. EPA's mercury emission limits for "new facilities" are not applicable to Lee County's Facility, but Lee County has stipulated that it will comply with the new EPA emission limits for mercury when they are promulgated. DER's proposed conditions of certification provide that the Facility's maximum mercury emission rate "shall not exceed" 6.0 x 10-4 lbs/MMBtu or the new EPA limit, whichever is more stringent. The conditions of certification also expressly provide that DER can reduce the County's emission limit for mercury if a reduction is shown to be necessary in the future. The mercury emission limit in the conditions of certification is equivalent to approximately 560 micrograms per dry standard cubic meter (ug/dscm). To ensure consistent compliance with DER's "not to exceed" emission limit, Lee County's contract with Ogden-Martin requires Ogden to meet an emission limit of 150 ug/dscm. The County wanted Ogden to guarantee a lower emission limit to ensure that the Facility would never violate the conditions of certification. The County also wanted to ensure that Ogden would use its best efforts to reduce mercury emissions to the maximum extent possible. EPA's new test data from Stanislaus will provide a scientific basis for a new mercury emission limit that can be reasonably achieved with MACT. Until EPA's data are published, however, it would be imprudent and inappropriate to establish a mercury emission limit for the Facility that is lower than the level proposed by DER in the conditions of certification. The proposed mercury emission limit for the Facility represents a reasonable upper limit, given the available test data, and it rests on sound engineering judgment. Mercury emission rates of 130 ug/dscm or 80% removal recently were proposed in two pending cases in New York, but there are no reliable data available at this time to confirm that such levels can be consistently achieved. SFCARE contends that the BACT analysis should have set the Facility's mercury emission limit at 50 ug/dscm or 90% removal, however this limit is not supported by the evidence of record. SFCARE's proposed emission limits have never been established as BACT for any resource recovery facility in the United States. SFCARE's witness (Craig Volland) admitted that vendors for air pollution control equipment tend to exaggerate about the capabilities of their products, but no vendor in the world would guarantee that its equipment would meet his proposed emission limit of 50 ug/dscm. No vendor in the United States would guarantee the 90% removal limit. Another SFCARE witness (Richard Cook) conceded that he was unaware of any resource recovery facility that could achieve SFCARE's proposed emission limits for mercury. Nonetheless, SFCARE believes the County's mercury control system can reduce mercury emissions by 90% and limit them to 50 ug/dscm. To the extent that SFCARE is correct, the State of Florida can be reasonably assured that the mercury emissions from the Facility will be far below the levels established in the conditions of certification. Lee County's Air Quality Analyses The County's analyses of the Facility's impacts on air quality were performed in accordance with all of the applicable air quality regulations. Further, the County's analyses demonstrate that the Facility will operate in compliance with those regulations. Lee County's analyses were based on a series of "worst case" assumptions that intentionally maximized and over-predicted the Facility's potential impacts on air quality. For example, Lee County analyzed the air quality impacts associated with an 1800 tpd facility, even though the County only plans to build a 1200 tpd facility. The County also assumed that the Facility would operate 100% of the time, even though resource recovery facilities normally operate only 85 to 95% of the time. The County assumed that the Facility would emit every pollutant at the maximum permitted emission rate, continuously throughout the year, even though it would be impossible for this to occur. The County used a screening analysis to identify the operating conditions (e.g., loading rates, refuse Btu values) that would cause the maximum ground level impacts and then the County used those "worst case" operating conditions in all subsequent air quality analyses. Lee County also utilized a conservative approach (i.e, one designed to over-predict actual impacts) when determining the ambient air quality at the Site. The County used ambient air quality data from areas of heavy urban or industrial growth, which reflect levels of air pollution that are much greater than the levels expected at the County's Site. The County used EPA and DER approved computer models to evaluate the Facility's air quality impacts. These computer models have been tested extensively in the field to confirm that the models will over-predict a facility's maximum impacts. In accordance with DER's recommendation, the computer models used five years of consecutive hourly meteorological data from Fort Myers to calculate the Facility's impacts on air quality. As a result, the models will over-predict the Facility's maximum potential impacts at any time under any meteorological conditions. Ambient Air Quality Standards Primary ambient air quality standards are established by EPA to protect public health "with an adequate margin of safety." Primary standards are designed to protect the health of the most susceptible groups of the population, including children, the elderly, asthmatics and those with respiratory problems. Secondary ambient air quality standards are designed to protect the public welfare against "any known or anticipated adverse effects" from air pollution. Florida has adopted the national ambient air quality standards, except in some instances where Florida has adopted standards that are more protective. The Facility's maximum impacts are extremely small when compared to the national ambient air quality standards (NAAQS) and Florida ambient air quality standards (FAAQS). The Facility's maximum impacts are less than one percent of any NAAQS or FAAQS. For example, the maximum impact from an 1800 tpd Facility would be only 0.8% of the health-based standard for lead. The County analyzed the Facility's maximum predicted impacts together with the maximum background levels for the ambient air, which take into account the impacts of all existing sources of air pollution. In the worst case, the combined impact of the Facility and all existing sources is only 60% of the standard for particulate matter, and only 0.05% of the impact results from the Facility's emissions. In all other instances, the combined impact of the Facility and all existing sources ranges from 7% to 46% of the NAAQS and FAAQS. Non-Criteria Pollutants Non-criteria pollutants are those substances for which EPA has not adopted ambient air quality standards. Non-criteria pollutants include mercury and dioxin. DER has identified certain levels (i.e., "no threat" thresholds) below which no adverse impacts are anticipated from non- criteria pollutants. In this case, the Facility's maximum impacts for non-criteria pollutants are 10 to 100 times less than DER's no-threat thresholds. The Facility's maximum impacts were compared to health-based standards and guidelines adopted by New York, North Carolina, Kentucky, and the American Conference of Governmental and Industrial Hygienists. The Facility's maximum impacts for non-criteria pollutants were far below all of the applicable criteria. The dioxin emissions from the Facility will be well below all of the health-based standards and guidelines that have been established by DER, EPA, the World Health Organization, and the European Community. The Facility's maximum impacts will be about 1,000 times less than the ambient air quality standard for dioxin that was established by Connecticut, the first state to adopt an ambient air quality standard for dioxin. Prevention of Significant Deterioration EPA and DER enforce the Prevention of Significant Deterioration (PSD) program, which is designed to protect existing air quality. The PSD program limits airborne emissions by establishing maximum allowable increments that can be consumed in Class I, II, and III areas by potential sources of air pollution. Lee County and all adjacent areas are designated as PSD Class II areas, except for the Everglades National Park, which is a Class I area. The Facility will consume no more than 2.8% of any of the applicable PSD Class II increments. It will consume between 0.02 and 3.2% of the PSD Class I increments at the nearest location in the Everglades National Park, which is approximately 88 kilometers (55 miles) south-southeast of the Site. At the request of the National Park Service, Lee County evaluated the Facility's impacts on the closest border of the Big Cypress National Preserve, which is 61 kilometers (38 miles) southeast of the Site. The Facility's maximum impacts in the Big Cypress area will range from 0.02 to 4.4% of the Class I increments. Health Risk Analyses The environmental and human health effects of resource recovery facilities have been studied extensively. In 1987, EPA evaluated the data from resource recovery facilities around the world and then submitted a nine volume report to Congress, including a one volume health risk assessment. EPA conducted another comprehensive evaluation of resource recovery facilities when preparing the 1991 New Source Performance Standards. Based on these studies, EPA has concluded that well-designed, well-constructed and well-operated resource recovery facilities pose no unacceptable levels of risk to human health or the environment. The World Health Organization has reached the same conclusion. Similarly, the Florida Department of Environmental Regulation and the California Air Resources Board funded an extensive "worst case" health risk assessment of Pinellas County's 3000 tpd resource recovery facility. They concluded that the impacts from the Pinellas County facility were "minimal." In light of this extensive data base, EPA and DER do not require applicants to conduct health risk assessments for proposed resource recovery facilities. Nonetheless, Lee County analyzed the potential health impacts of the Facility's emissions. The County's analyses demonstrated that the maximum predicted impacts from the Facility will be far below any level that might cause any human health problems. Lee County evaluated the Facility's effects on human health and the environment by using standard health risk assessment techniques that were developed by EPA and other agencies. The evaluation was performed by Dr. Paul Chrostowski, a nationally recognized expert who teaches courses concerning health risk assessments for EPA and state regulatory agencies. Lee County's evaluation was based on a series of very conservative assumptions about the project that were intentionally designed to greatly over-predict the potential risks associated with the Facility's emissions. For example, the County's evaluation was based on the assumption that the Facility will operate at 1800 tpd, 100% of the time, for 70 years, even though Lee County only intends to build a 1200 tpd facility, which will operate approximately 85-95% of the time, over a useful life of approximately 30 years. The Facility's maximum impacts will occur relatively close to the Site in an undeveloped agricultural area, but the County assumed that hypothetical people would be located at the point of maximum impact for 24 hours a day, 365 days a year, for 70 years. The County assumed that these hypothetical individuals would never leave the area of maximum impact or even go indoors, where air conditioning would reduce the Facility's impacts. The County also used EPA's potency factor for dioxin when evaluating the Facility's potential impacts, even though EPA's value is too high and is approximately 200 times greater than the potency factor used by the Florida Department of Health and Rehabilitative Services. Health risk assessments result in a statistical probability that a hypothetical person might get some form of cancer (not a fatal cancer). For regulatory purposes, EPA considers acceptable risks to range from 1 in 10,000 up to 1 in 1,000,000. Even after using all of its conservative assumptions, the County found that the probability of a person getting any type of cancer from dioxin inhalation was only 3 in 100,000,000. The health risk would be reduced by a factor of up to 100 if the County used more reasonable exposure assumptions. The calculated risk would be reduced by an additional factor of 200 if the County used the potency factor for dioxin that is used by the Florida Department of Health and Rehabilitative Services. In any event, a risk of 3 in 100,000,000 indicates that the Facility will not cause any cases of cancer from dioxin inhalation. In general, there is a 10:1 ratio between all potential exposure pathways and the inhalation pathway for dioxin. Accordingly, the risk from all exposure pathways for dioxin would be 3 in 10,000,000. This risk is well below any level of concern for regulatory purposes. To put these risks in perspective, it should be recognized that a 1 in 1,000,000 risk would be experienced if a person smoked two cigarettes at any time during his or her life. A risk of 1 in 1,000,000 also would be encountered if a person drank one liter of wine during his or her entire lifetime. Hence, the risk from drinking one liter of wine or smoking two cigarettes during a person's lifetime is approximately 10 times greater than the risk that would be experienced if a person located at the point of maximum impact received 70 years of uninterrupted exposure to the maximum predicted dioxin emissions from an 1800 tpd facility. When the risks are considered in this context, it is clear that the Facility's dioxin emissions will pose no meaningful risk to human health. Similarly, the Facility's mercury emissions pose no threat to human health. The Center for Disease Control (CDC) has developed "minimal risk levels" for short term and long term exposure to mercury. If a person's exposure is below the minimal risk level, the CDC does not anticipate any adverse health effects. In this case, the maximum short-term impact from the Facility's mercury emissions at 1800 tpd will be about 1,000 times less than the CDC's minimal risk level for short term exposure. The Facility's maximum annual impact will be many thousands of times lower than the CDC's minimal risk level for long- term exposure. Environmental Impacts of Mercury Emissions The County also conducted a very conservative "worst case" analysis of the Facility's maximum impacts on Florida's ecosystems. Using standard EPA approved techniques, the County identified two environmentally sensitive areas where the Facility's impacts might have the greatest effects: (a) Lake Tarpon in the Ding Darling Refuge on Sanibel Island; and (b) the northern reaches of the Caloosahatchee River in Lee County. Since the Everglades National Park (Everglades) and Big Cypress Refuge (Big Cypress) are much further away from the Site, the potential impacts on the Everglades and Big Cypress will be much smaller than the impacts on the areas selected for study. The Facility's potential impacts on the Everglades and Big Cypress also will be minimized because the prevailing winds normally will blow the Facility's emissions away from those areas. The County identified the wildlife species of greatest concern to be the Florida panther, the bald eagle, the wood stork, and the snail kite. The County selected the snail kite and wood stork for the closest scrutiny because they are the species that are the most likely to be affected by the Facility's emissions. Here, too, Lee County's analyses were based on very conservative assumptions. Among other things, the County assumed that: the Facility will operate continuously at 1800 tpd for 70 years; Lake Tarpon and the Caloosahatchee River will receive the Facility's maximum impacts; (c) virtually all of the Facility's emissions will be deposited on the soil and then washed into the water bodies under investigation; (d) the snail kite and wood stork will only feed in the two areas that are under investigation; (e) the birds' food (i.e., snails for the snail kite; fish for the wood stork) will stay in one location where it will receive maximum exposure; and (f) the fish and snails will live 70 years and accumulate mercury over that period. The County also used the lowest sensitivity levels that could be found for any bird species and then applied a toxicological safety factor of 20. The County's analyses demonstrated that after 70 years of Facility operations at 1800 tpd, the mercury concentration in snails would be three times less than any levels that might cause an impact on the snail kite. Wood storks would be exposed to even less risk than snail kites because the bioaccumulation of mercury in fish would be less than the bioaccumulation of mercury in snails. Since eagles also eat fish, this same conclusion is true for eagles. Bald eagles and panthers would be at even less risk than snail kites or wood storks because they feed over a larger range than snail kites or wood storks. Panthers and eagles would not get all of their food from the area of maximum impact near the Site. Panthers and eagles are very mobile and they would not remain for a long period of time in the areas where the Facility's maximum impacts would occur. Panthers can range over hundreds of square miles of land. Indeed, one young panther once moved through the general area near the Site, but since then it has spent most of its time roaming through Hendry County and Collier County. The panther's activities have taken it approximately 20 miles northeast and 50 miles southeast of the Site. Since the Facility's impacts will be lowest to the southeast and east, the Facility's impacts will be much smaller in those areas where the panther is located than in the areas that were studied by Lee County. Parenthetically, dioxin concentrations resulting from the Facility's emissions would be up to one billion times less than the levels of concern for dioxin in snails, fish, or their predator species. The County's analyses demonstrate that the Facility, when considered individually or when combined with other existing sources of mercury, will not have any adverse impacts on threatened or endangered species in southwest Florida. There is a very wide margin of safety for these species because the Facility's emissions will be extremely small. Soil Deposition Lee County evaluated the possibility that the Facility's emissions would be deposited on the soil and accumulate over time. To evaluate this issue, the County assumed that there would be 70 years of soil deposition resulting from the Facility's maximum emissions at 1800 tpd. The Facility's maximum impact on lead concentrations in the soil after 70 years would be 2 x 10-4 parts per million (ppm). In the southeastern United States, lead occurs naturally in the soils at levels up to 40 ppm. Children do not experience any effects from lead until soil concentrations reach at least 200 ppm. EPA sets a safe level of 500 ppm. Similarly, after 70 years of worst case impacts, the Facility's contribution to arsenic concentrations in the soil would be 3 x 10-6 ppm. Naturally occurring levels of arsenic in Florida's soil range up to 15 ppm. The Facility's maximum contribution to beryllium concentrations in the soil would be about 1,000,000 times less than the levels that naturally occur in Florida soils. The Facility's maximum contribution to mercury levels in the soil would be 2 x 10-4 ppm. By comparison, sugar cane contains approximately 1.2 ppm of mercury. In all of these worst case analyses, the 1800 tpd Facility's maximum contribution to soil concentrations would be at least 100 times below any level that the EPA or CDC has associated with health impacts. Indeed, the Facility's contributions to these soil concentrations could not be measured with any known analytical technique. Air Quality Monitoring Lee County will utilize sophisticated operational safeguards to ensure that the Facility is operated properly. The Facility will have continuous emission monitors (CEM) to continuously measure the levels of carbon monoxide, nitrogen oxide, sulfur dioxide, and oxygen in the Facility's emissions. Opacity and other parameters also will be monitored with CEMs. These monitors will be connected to visible and audible alarms in the Facility's main control room, which will alert the Facility operators to potential problems. The data collected by the CEMs will be reported regularly to DER. Shortly after the Facility completes construction, Lee County will conduct an initial stack test to demonstrate compliance with the various emission limits established in the conditions of certification. Lee County will conduct annual stack tests thereafter, even though annual stack tests are not required at most resource recovery facilities. The Southwest Florida Regional Planning Council suggested that Lee County should monitor mercury emissions on a monthly "or other appropriate basis." There are several reasons why annual, not monthly, stack tests for mercury will be most appropriate for the Facility. First, monthly stack tests at the Facility would cost a minimum of $300,000 each year. Second, there are no resource recovery facilities in the United States that are required to conduct monthly or even quarterly stack tests for mercury. Third, there will be a substantially larger data base for mercury compiled prior to the commencement of operations at the Facility in 1994. Fourth, DER has recommended annual stack tests. Fifth, DER could require more frequent testing in the future if DER concluded that additional tests were necessary. SFCARE contends that ambient air quality monitoring should be conducted on or around the Site. This proposal is rejected because ambient air monitoring would be of no scientific value. The Facility's maximum impacts at 1800 tpd will be so small that they could not be measured with an EPA approved ambient air monitoring system located at the point of maximum impact or anywhere else in Lee County. For this reason, state and federal regulations will not require ambient air quality monitoring at or near the Site. Facility operations can be better evaluated by using CEMs and stack tests to measure the Facility's emissions, rather than ambient air monitors. Lee County's Recycling Programs Lee County has a very aggressive and innovative recycling program. Lee County expects to achieve the state recycling goal of 30% by 1994. Moreover, the County Commission established a county recycling goal of 40% and the County is doing everything practicable to achieve its 40% goal. Lee County's residential curbside recycling program will serve 100% of the County by the end of 1991. The County expects to have 50% of the County's commercial businesses in its recycling program by 1992 and 100% of the businesses by 1994. The County already collects used oil, automobile batteries, and telephone books. The County is implementing a mulching program for horticultural wastes. The County's recycling rates are among the best in the State of Florida. The County's overall recycling program is among the best in the nation. The County received an award from EPA for its innovative approach to recycling. Among other things, the County has a contract with Goodwill Industries that allows Goodwill to process and market all of the recyclable materials collected in the County's curbside program. The County recently awarded $1,200,000 to Goodwill for an automated materials separation facility for recyclables. The County also awarded $600,000 to Goodwill for an intrusion molding plant that will utilize PET and HDPE plastics to create plastic lumber. The County recently used a $100,000 DER grant to construct a facility for the collection and disposal of household hazardous wastes. The County recently received a DER recycling grant for $619,000 and a DER tire recycling grant for $209,000. Although the County has an innovative recycling and materials recovery program, the County only wants to use demonstrated technologies. The County does not want to gamble its public funds on experimental technologies that might not work. The County does not want to invest in a program like the Agripost composting facility in Miami, which was a "dismal failure" and cost more than $25 million. Some citizens suggested that Lee County should recycle 60% or more of the waste stream, but such proposals are not feasible. Some materials cannot be recycled. Other materials are not marketable and cannot be reused. Facility Sizing When the County filed its PSD and PPSA applications in June 1990, the County wanted authorization to construct an 1800 tpd facility that could be expanded to 2400 tpd. On May 1, 1991, the County Commission decided to reduce the size of the Facility to 1200 tpd, with expansion capabilities to 1800 tpd. The County Commission reduced the size of the Facility because the County wanted to maximize its recycling programs and minimize its reliance on the Facility. As a result of the County's decision, it will be very expensive to expand the Facility. The County has created a strong financial disincentive against expansion of the Facility. Resource recovery facilities normally are designed with excess capacity to provide for future growth. In this case, however, the Facility will be full when it begins commercial operations, unless the County achieves a 30% recycling rate. Even if the County achieves a 30% recycling rate, the Facility will be full within two years after it commences operation. Source Separation As BACT SFCARE contends that the BACT determination in this case should require additional recycling or source separation (i.e., the removal of certain materials from the waste stream prior to their disposal at the resource recovery facility). SFCARE's proposal is rejected. Recycling and source separation programs do not significantly affect the emissions from resource recovery facilities, with two exceptions. Removing household batteries from the waste can reduce mercury emissions. Removing lead-acid batteries, as required by Florida law, can reduce lead emissions. In this case, Lee County already has taken steps to remove these two types of batteries from the waste stream. In general, however, recycling and source separation programs have not been demonstrated to reduce emissions from resource recovery facilities and, therefore, such programs do not constitute Best Available Control Technology. In a 1989 case involving a resource recovery facility in Spokane, Washington, EPA concluded that source separation had not been demonstrated to be BACT. In the 1991 NSPS for resource recovery facilities, EPA stated that there are no reliable data to demonstrate that recycling or source separation requirements should be imposed as part of the NSPS. Consequently, recycling, source separation, and similar requirements have never been imposed as part of a BACT determination by EPA or any state agency in the United States. The available data indicate that additional source separation programs (i.e., over and above what the County already proposes) would not be cost effective and would not produce any meaningful reductions in the Facility's emissions. For example, several studies have shown that the removal of plastics from the waste will not reduce dioxin or other emissions. BACT determinations require a quantitative analysis of the energy, economic and environmental impacts associated with any proposed BACT technology. In this case, SFCARE did not perform any analyses of the energy, economic, or environmental impacts of its proposals concerning recycling or source separation. Indeed, SFCARE has not specifically explained what additional recycling or source separation should be done in this case, what these activities would cost, or what environmental benefits (if any) would result. Thus, SFCARE's proposal is fatally defective. SFCARE SFCARE has approximately 600 people on its mailing list, but the actual number of SFCARE members is unknown. The members of SFCARE fish, jog, and otherwise enjoy the natural resources of Lee County; however, SFCARE's President readily admitted that SFCARE's members are just like all of the other citizens in Lee County in this regard. The Facility will be approximately five miles from the nearest home of any SFCARE member. The evidence demonstrated that the Facility's impacts on the public will be negligible. The Facility's impacts on the members of SFCARE will be no different than its impacts on other members of the community. Several members of SFCARE complained of personal illnesses or physical infirmities, but here, too, the members of SFCARE are like any other typical cross-section of the community. The evidence did not demonstrate that any member of SFCARE would be affected in any manner that would be different than the public at large. Notice of Certification Hearing On July 27, 1990, Lee County published a large notice in the Fort Myers News-Press to announce that Lee County had filed its application for site certification. On July 23, 1991, Lee County published a full page notice in the Fort Myers News-Press concerning the Facility and the certification hearing. Notice of the certification hearing was published by DER in the Florida Administrative Weekly on August 2, 1991--37 days before the hearing started. DER issued a news release concerning the certification hearing on August 9, 1991. Substantial public notice of the certification hearing also was provided by the press and media coverage in the area. Notice of the certification hearing and copies of the DER report about the Facility were provided to EPA, the Federal Lands Manager, and other appropriate officials in compliance with DER rules. Notice of the certification hearing and the copies of the DER report were available for public inspection at several locations in Lee County 30 days prior to the public comment portion of the certification hearing. Ultimate Findings of Fact Lee County has utilized all reasonable and available methods to ensure that the location, construction, and operation of its proposed Facility will produce minimal impacts on human health, the environment, the ecology of the land and its wildlife, and the ecology of state waters and their aquatic life. The evidence establishes that the proposed Facility will comply with all of the applicable and substantive environmental regulations of all of the local, regional, and state agencies involved in the PPSA process. The operational safeguards proposed by Lee County, together with the conditions of certification proposed by the regulatory agencies, are more than sufficient to protect Florida's citizens and its environment. The Facility will create electrical power while providing a regional solution to the solid waste needs of Lee County and Hendry County. The beneficial impacts of the Facility are substantial, while the environmental impacts resulting from the Facility's construction and operation are negligible. Indeed, the Facility will not have any meaningful impacts on Florida's air, water, soil, or wildlife. The conditions of certification attached hereto as Appendix A are reasonable and appropriate to ensure that the construction and operation of the Facility will have minimal impacts on the environment and natural resources of the state and on the welfare of the citizens of Florida. Additionally, the County has agreed to comply with these conditions of certification.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Siting Board enter a Final Order and therein: Grant site certification for the Lee County Solid Waste Resource Recovery Facility, subject to the conditions of certification attached hereto as Appendix A; Order that the Department of Environmental Regulation issue PSD construction permit authorizing construction of the Lee County Solid Waste Resource Recovery Facility in accordance with the DER BACT determination and subject to the conditions of certification attached hereto as Appendix A; and Deny and dismiss the Motion to Intervene filed by SFCARE. RECOMMENDED this 9th day of December, 1991, at Tallahassee, Florida. DIANE K. KIESLING, 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 9th day of December, 1991.
The Issue Are the Respondents legally liable for petroleum contamination of soil and groundwater at the Economy Tire Service Station, 1858 Main Street, Sarasota, Florida and, if so, should the Respondents be required to perform the Corrective Actions included in the Notice of Violation and Orders for Corrective Action issued on February 19, 1993, by Petitioner, Department of Environmental Protection?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: The Department is the administrative agency charged with the responsibility of administering and enforcing the provisions of Chapter 376, Florida Statutes, and the rules promulgated thereunder in Title 17, Florida Administrative Code. Bryant A. Meeks, Trustee, is the owner of the property situated at 1858 Main Street, Sarasota, Florida (Property). Meeks is a person within the meaning of Section 376.301(12), Florida Statutes. Stanley M. Butler is the operator of Economy Tire Service (Business) on the Property, and has continually operated the Business on the property, beginning on November 26, 1980. The Property is specifically identified in a Quit-Claim Deed dated September 10, 1980, conveying all of the interest of O. M. Bailey in and to the Property, to Bryant A. Meeks and Jacqueline F. Meeks. The Property is legally described as: "the East one-half of Lot 3 and all of Lot 4, Subdivision of Lot 15, Block H, PLAT OF SARASOTA, as per plat thereof recorded in Plat Book 1, Page 166, Manatee County Records; and being the same property conveyed by Special Warranty Deed dated July 1, 1979, executed by BP Oil Corporation, a Delaware Corp., recorded in Deed Book 1012, Page 1905, Public Records of Sarasota County Florida." On December 1, 1977, SWT, Inc., purchased the Business from William E. Mitchell and Margaret G. Mitchell. Meeks was President of SWT, Inc. 6 After the acquisition of the Business by SWT, Inc., Meeks hired Butler to operate the Business. On July 17, 1979, Meeks, and his wife, Jacqueline F. Meeks, acquired an undivided one-half interest in the Property by Special warranty Deed from American Petrofina Company of Texas. O. M. Bailey acquired the remaining undivided one-half interest in the Property in the same deed. By Quit-Claim Deed dated September 10, 1980, O. M. Bailey conveyed all of his right, title and interest in the Property to Bryant A. Meeks and Jacqueline F. Meeks. On November 26, 1980, SWT, Inc. sold the Business, including fixed assets, inventory and accounts receivable to Butler. The sale included four underground petroleum storage tanks situated on the Property. On December 1, 1980, Stanley M. Butler and Dixie J. Butler leased the Property from Bryant A. Meeks and Jacqueline F. Meeks for a term of ten years, with an option to renew the lease and an option to purchase the Property. The lease was extended for ten years on January 4, 1991. The lease requires Butler to comply with "all statutes, ordinances, rules, orders, regulations and requirements of Federal, State and City Government and any and all their Departments and Bureaus applicable to said premises..." By Trust Deed dated September 23, 1983, Bryant A. Meeks and Jacqueline F. Meeks conveyed their right, title and interest in the Property to Bryant A. Meeks as Trustee, under the Bryant A. Meeks, Jr., Trust dated August 24, 1983. The Property remains under the ownership of Bryant A. Meeks, Trustee. At all times material to this proceeding, the Business on the Property has consisted of automobile service station, selling various grades of gasoline, diesel fuel, tires and automobile repairs. At all times material to this proceeding, there were four 3,000 gallon, carbon steel, underground petroleum storage tanks, one underground waste oil tank of unknown size (Tank Five) and two underground kerosene tanks of unknown size (Tank Six and Tank Seven) The four underground gasoline tanks shall be collectively referred to as "Gasoline Tanks" and individually as Tank One through Tank Four moving in a northerly direction, with Tank One being adjacent to the service bays on the Property and Tank Four being adjacent to Main Street. Tank Five is located just south of the office adjacent to the east side of the service bays. Tank Six and Tank Seven are located south of the pump island and just north of the office and service bays. The Gasoline Tanks have been continuously owned by Butler since Butler first acquired the Business on November 26, 1980. Butler did not purchase Tank Five, Tank Six and Tank Seven at the time he purchased the Business. At all times material to this proceeding, the Gasoline Tanks contained various grades of gasoline including regular leaded, unleaded and premium unleaded gasoline, as well as diesel fuel. At all times material to this proceeding, the Property was a facility within the meaning of Section 376.301(7), Florida Statutes. In the summer of 1978, it was determined that Tank Four was the source of water pumped into a customer's automobile gas tank. Tank Four was tested and found to be leaking. Tank Four was disconnected from service without removing all of the gasoline product. During this time, Butler advised Meeks that Tank Four was leaking, notwithstanding Meeks' testimony to the contrary. When Meeks purchased the undivided one-half interest in the Property in July 1979, Butler again advised Meeks that Tank Four had been disconnected due to a leakage, notwithstanding Meeks' testimony to the contrary. Meeks advised Butler that the Property had been purchased "as is". Since November 26, 1980, Butler has been an Operator of the Facility within the meaning of Section 376.301(10), Florida Statutes. Butler switched suppliers in 1981 and his new supplier, Amoco Oil, offered to fiberglass line Tank Four. The contractor hired by Amoco Oil pumped out the petroleum product left in the Tank Four when it had been disconnected. The contractor determined that Tank Four could not be fiberglass lined due to the holes in the tank. On May 21, 1984, there was a complaint by the Sarasota Fire Department of gasoline odors from the Facility. The gasoline vapors resulted from a leak in the underground air lines in conjunction with gasoline being discharged from Tank Four because of perforations in the tank before it was pumped out in 1981. The Department notified Butler of this finding and requested that Butler perform a hydrologic study to determine the extent of contamination. Apparently, Butler never had this hydrologic study performed. On October 12, 1984, Butler was given a warning notice by the Department that he was in violation of Chapter 403, Florida Statutes, and regulations promulgated thereunder. Additionally, the Department advised Butler to commence an contamination assessment which would require a Contamination Assessment Report to be submitted to the Department. The record does not reflect that a contamination assessment was commenced or that a Contamination Assessment Report was submitted to the Department. The Department has been aware of Meeks' ownership of the Property since October 1984. Butler registered the Gasoline Tanks and the Waste Oil Tank with the Department in March, 1986. In 1989, Butler installed four monitoring wells at the Facility adjacent to the Gasoline Tanks. On July 27, 1989, another complaint concerning gasoline odors was reported. On August 17, 1989, a written notice was mailed to Butler by the Department advising Butler that he was in violation of Chapters 403 and 376, Florida Statutes. There is no evidence that the Department sent Meeks a notice of such violation. During an inspection of the Facility in April 1990, the inspector found that: (a) the Gasoline Tanks had not been upgraded and retrofitted as required by Department rule; (b) the Gasoline Tanks did not have the requisite overfill and overspill protection as required by Department rule; (c) there was petroleum product in all four monitoring wells, with well no. 1 having a high petroleum odor and a detectable petroleum odor in wells nos. 2, 3, and 4; (d) the organic vapor analyzer readings taken in each of the monitoring wells indicated hydrocarbon vapors in excess of 5,000 parts per million and; (d) a tightness test had not been performed at the Facility in accordance with Department rules, and in response to the Discharge Notification Form filed by Butler on November 13, 1989. It was not until the fall of 1990 that Meeks received a notice from the Department concerning the contamination of the Property and that Meeks would be liable for cleaning up the contamination. However, Meeks failed to present sufficient evidence that he had been prejudiced by the Department's delay in notifying him of the contamination due to the unavailability of witnesses or records. There was no showing that Meeks had made any attempt, unsuccessful or otherwise, to secure witnesses and records concerning the condition of the Property before his acquisition in 1979 and 1980. During an inspection of the Facility in February 1991, the inspector found that: (a) one of the Gasoline Tanks was full of water; (b) the Gasoline Tanks had not been upgraded and retrofitted as required by Department rule and; (c) the Gasoline Tanks did not have the requisite overfill and overspill protection as required by Department rule. Amoco Oil removed all of the petroleum product from Tanks One, Two and Three in October 1991. Butler then contracted with Dickerhoof to inspect the Gasoline Tanks and reline them with fiberglass. After inspecting Tank One and Tank Two, Dickerhoof determined that these tanks could not be relined because of their condition. There were pin holes on the inside of the tanks in addition to split seams and perforations in the tops of the tanks. Butler decided not to inspect Tank Three since he could not operate with only one tank. Tank Four had been taken out of service earlier. On October 22, 1991, Eugene Cherno, Environmental Supervisor, Pollution Control Division, Sarasota County Government advised Butler not to return the Gasoline Tanks to service due to their poor condition. During an inspection of the Facility in May 1992, one-half inch of free product with a fairly strong petroleum odor was bailed from the southwest monitoring well. The color and condition of the free product indicated that the petroleum discharge had occurred within one to four years before the free product was removed. There was a slight petroleum odor in the remaining three monitoring wells. In July 1992 Butler contracted with James Nuwer to remove and replace the Gasoline Tanks and gas lines with new underground storage tanks and gas lines. Upon removing the Gasoline Tanks, Nuwer found small holes in Tanks One, Two and Three and somewhat larger holes in Tank Four. All of the Gasoline Tanks were corroded and had perforations on the welded seams. On July 10, 1992, when the Gasoline Tanks were excavated there was a strong petroleum odor permeating the entire area around the facility even though the petroleum product had previously been pumped out of the Gasoline Tanks. The soil removed in the process of excavating the Gasoline Tanks was a porous sand type soil. During the excavation and replacement of the Gasoline Tanks, Environmental Science and Engineering, Inc. (ESE), on behalf of Butler, prepared a UST Closure Environmental Assessment Report (Closure Assessment Report). During the excavation activities, ESE monitored the soils removed from the excavation using an organic vapor analyzer (OVA), equipped with flame ionization detector (FID). The OVA/FID measures total vapors, including methane, in the parts per million (ppm) range. An unfiltered and filtered screening was performed on each sample to evaluate the total organic vapor and methane concentration. The methane concentration was subtracted from the total organic vapor concentration to evaluate the soil for excess soil contamination. Soil vapor screening was performed in accordance with procedures defined in Rule 17-770.200(2), Florida Administrative Code. Twenty-one soil samples were collected for OVA/FID screening. The results of the OVA/FID screening show the total OVA reading in all 21 samples being greater than 1000 ppm. After subtracting the methane reading from total OVA reading, the samples ranged from a total OVA reading of 890 ppm to 1000 ppm. Pursuant to Rule 17-770.200(2), Florida Administrative Code, soils excessively contaminated by gasoline or diesel fuel will cause a total hydrocarbon reading of 500 ppm for gasoline and 50 ppm for diesel fuel using OVA/FID screening. Based on these results, the soil on the Property is excessively contaminated as that term is defined in Rule 17-770.200(2), Florida Administrative Code. ESE collected groundwater samples from monitoring wells nos. 1, 2, and The analytical results indicate the detection of both purgeable aromatic and polynuclear aromatic hydrocarbons in the groundwater samples from monitoring wells 1, 2, and 3. In each groundwater sample the benzene, total volatile organic aromatic (TVOA) and methy-tertiary-butyl-ether (MTBE) are reported in concentration presented as micrograms/liter (ug/L) as follows: MW1 MW2 MW3 Benzene 2,140 ug/L 737 ug/L 732 ug/L TVOA's 3,160 ug/L 2,080 ug/L 1,430 ug/L MTBE's 6,090 ug/L 5,980 ug/L 2,940 ug/L These levels exceed the Site Rehabilitation Levels (SRL's) for benzene, TVOA and MTBE of 1 ug/L, 50 ug/L and 50 ug/L, respectively, established in Rule 17- 770.730(5)(a), Florida Administrative Code. Monitoring well no. 4 was not sampled because free product was observed on the groundwater in the well, demonstrating contamination. ESE was unable to determine the extent of the excessively contaminated soils at the Facility due to limiting site conditions. The excavated excessively contaminated soils were transported to the Sarasota County Landfill for bio-treatment. Tank Five, Tank Six and Tank Seven are unmaintained underground storage tanks on the Property that have not been properly closed. On February 19, 1993, the Department issued a Notice Of Violation And Orders For Corrective Action against Meeks and Butler concerning the contamination of the Property on which the Facility is located. At a meeting on March 26, 1993, with Meeks, Butler and representatives of the Department present, the matter of the cost of cleaning up the contamination was discussed by those present. Meeks contends that at this meeting a Department representative advised those present that the Department would pay for the cleanup of the contamination but would not pay for the removal of the three underground storage tanks remaining on the Property. Meeks further contends, that in reliance on this commitment he did not pursue an eviction action against Butler. Meeks presented no evidence on how his not pursuing the eviction action against Butler was detrimental to him. A second meeting was held on July 14, 1993, where only Meeks and Department representatives were present. Meeks contends that another Department representative advised him that the Department could not honor the previous commitment to pay for the cleanup. There is insufficient evidence to show that a Department representative made a commitment for the Department to pay for the contamination cleanup on the Property. However, assuming that a commitment was made, there is insufficient evidence to show that Meeks' reliance on that commitment resulted in Meeks foregoing his eviction action against Butler. Furthermore, even if Meeks did rely on the commitment to forego his eviction action against Butler, there is insufficient evidence to show that his change in position was detrimental or that his reliance on the commitment for any reason resulted in a change of position that was detrimental to Meeks. There is sufficient evidence to show that a Contamination Assessment should be completed at the Facility to determine the extent of the petroleum contamination on the Property. There is sufficient evidence to show that one or more of the Gasoline Tanks have discharged gasoline or diesel fuel to the soils and groundwater on the Property. There is sufficient evidence to show that Tank One, Tank Two and Tank Three discharged either gasoline or diesel fuel to the soils and groundwater on the Property during the several years before the removal of the petroleum product from those tanks in October 1991. Likewise, there is sufficient evidence to show that Tank Four discharged gasoline to the soils and groundwater on the Property from the summer of 1978, when it was taken out of service, until the remaining gasoline was pumped out in 1981. The Respondents presented no evidence that some or all of the contamination was attributable to someone other than the Respondents. While it might be inferred that the Department incurred expenses and costs while investigating this matter, the Department presented no evidence to support any expenses or costs for its investigation.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, accordingly, Recommended that the Respondents shall take the following specific corrective actions to address the violations: Respondents shall, within 60 days of receipt of the Final Order, properly close the three unmaintained underground storage tank systems remaining on the Property in accordance with Rule 17-761.800(2), Florida Administrative Code Respondents shall, at time of the closure of the unmaintained underground storage tank systems, conduct a closure assessment in accordance with Rule 17.761.800(3), Florida Administrative Code, and shall submit the closure assessment report to the proper authority within 60 days of the date of the closure. Respondents shall, within 30 days of receipt of the Final Order, initiate a contamination assessment, as required in Rule 17-770.600(1), Florida Administrative Code. Respondents shall conduct a petroleum contamination cleanup in accordance with Rule 17-770, Florida Administrative Code, in the manner and within the time frames specified therein. DONE and ENTERED this 21st day of December, 1994, in Tallahassee, Florida. WILLIAM R. CAVE 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 21st day of December, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NOS. 93-2020 AND 93-6637 The following constitutes my specific rulings, pursuant to Section 120.59(2), Florida Statutes, on all of the proposed findings of fact submitted by the parties in this case. Petitioner's Proposed Findings of Fact; 1. Petitioner's proposed findings of fact 1 through 74 are adopted in substance as modified in Findings of Fact 1 through 50; otherwise they are not supported by the evidence in the record, or are unnecessary or subordinate, or are neither material nor relevant. Respondent Meeks' Proposed Findings of Fact: Respondent Meeks' proposed findings of fact 1 through 14, and 16 through 19 are adopted in substance as modified in Findings of Fact 1 through 50; otherwise they are not supported by the evidence in the record, or are unnecessary or subordinate, or are neither material nor relevant. Respondent Meeks' proposed finding of fact 16 is not supported by the evidence in the record. Respondent Meeks' proposed findings of fact 20 and 21 are not supported by the evidence in the record, but see Findings of Fact 43, 44 and 45. Respondent Butler's Proposed Findings of Fact: Respondent Butler did not file any proposed findings of fact. COPIES FURNISHED: Heidi Davis, Esquire Peter Fodor, Esquire Department of Environmental Protection 2600 Blair Stone Road Tallahassee, Florida 32399-2400 Michael S. Drews, Esquire Richard E. Nelson, Esquire 2070 Ringling Boulevard Sarasota, Florida 34237 Stanley M. Butler, Pro se c/o Economy Tire Service 1858 Main Street Sarasota, Florida 34236 Kenneth Plante, General Counsel Department of Environmental Protection 2600 Blair Stone Road Tallahassee, Florida 32399-2400 Virginia B. Wetherell, Secretary Department of Environmental Protection 2600 Blair Stone Road Tallahassee, Florida 32399-2400
