The Issue Whether Petitioner's site located at 2188 N.W. 20th Street, Miami, Florida, is eligible to participate in the Early Detection Incentive Program.
Findings Of Fact Petitioner is the owner of a gasoline service station located at 2188 N.W. 20th Street, Miami, Florida 33142. Tomas Pequeno, Sr., is the President and owner of X.O. # 1 Corporation. International Petroleum currently operates the facility located at 2188 N.W. 20th Street, Miami, Florida 33142 pursuant to a lease agreement with X.O. #1 Corporation. The mailing address of the subject facility and of X.O. #1 Corporation is 12190 S.W. 99th Street, Miami, Florida 33186. Aurelio Rodriguez is part owner of International Petroleum and has been the manager and operator of the facility in question since 1988. Since 1988 Tomas Pequeno, Sr., has delegated authority to his son, Tomas Pequeno, Jr., to act on his behalf with regard to the business of X.O. #1 Corporation and the facility located at 2188 N.W. 20th Street, Miami, Florida 33142. At the subject facility there are six underground storage tanks which receive and dispense petroleum products. These underground storage tanks are owned by X.O. #1 Corporation and constitute part of the property leased to International Petroleum. At all times pertinent to this proceeding, there were functioning monitoring wells on the premises for the purpose of detecting leaks in the underground storage system. At the formal hearing, Tomas Pequeno, Jr., testified that on September 21, 1987, an odor of petroleum in one of the monitoring wells on the subject site was detected during a routine inspection of the premises. Mr. Pequeno, Jr., was advised by the inspector that there might be a leak in the system. On November 17, 1987, Mr. Pequeno, Jr., caused the tanks on the premises to be relined. No leaks were detected by the tests that were conducted following the relining of the tanks. Paragraph 9 of the Pretrial Stipulation filed by the parties on July 24, 1991, is as follows: 9. That the date of discovery of petroleum contamination at this facility was September 21, 1987, as indicated by Tomas Pequeno. On December 9, 1988, Petitioner submitted to Respondent an "Early Detection Incentive Program Notification Application" which was signed by Tomas Pequeno, Sr., as president of X.O. #1 Corporation. This form had been completed by Tomas Pequeno, Jr., and given to his father for his execution. This form represented that contamination at the site was detected September 21, 1987, by a manual test of the monitoring wells, that the number of gallons lost was unknown, that the petroleum contamination was due to leaking storage tanks, and that the system had been repaired. The cause of the leak in the piping and the cause of the leak in the tanks were stated as being unknown. Mr. Pequeno, Jr., testified at the formal hearing that: "There was never a discharge from that site and there is not a discharge right now at this moment." Mr. Pequeno, Jr., also answered in the affirmative to the following question: "Mr. Pequeno, are you testifying there is no contamination at this facility?" 1/ Mr. Pequeno, Jr., testified further that he submitted the Early Detection Incentive Program Notification Application as a precaution in the event contamination was discovered. The testimony of Mr. Pequeno, Jr., at the formal hearing contradicted the representations made on the Early Detection Incentive Program Notification Application. At all times pertinent to this proceeding both Mr. Pequeno, Jr., and Mr. Rodriguez were aware that the primary purpose of a monitoring well is to detect leaks from a petroleum storage system. At all times pertinent to this proceeding both Mr. Pequeno, Jr., and Mr. Rodriguez were aware of the existence of the monitoring wells on the subject site. The Dade County Department of Environmental Management (DERM) had asked the operator of the facility to submit monitoring reports. 2/ Mr. Rodriguez was unable to recall when DERM first requested the monitoring reports, but it is clear from his testimony that the request was made several months before the hearing. The operator knew that monitoring system checks were required and had been requested by DERM to provide reports of those monitoring system checks. The failure to conduct regular, periodic monitoring system checks creates the risk that a leak in a petroleum storage system will continue undetected. Neither the operator nor the owner monitored the underground petroleum storage system on a regular basis until July of 1991, when the operator began to monitor the system on a regular basis and began to keep a log of the results. Since September 21, 1987, Petitioner was aware that a sample of water from one of the monitoring wells (monitoring well #9) at the subject facility consistently contained the odor of petroleum. At the time of the formal hearing, monitoring well #9 still contained the odor of petroleum. On January 26, 1989, Mr. Rodriguez, as the operator of the facility, received a copy of the Pollutant Storage Tank System Inspection Report form completed by a DERM inspector. This report placed the operator of the facility on notice that evidence of a discharge of pollutants had been discovered at the facility. On March 3, 1989, DERM sent to Petitioner by certified mail a letter which provided, in pertinent part, as follows: The Department of Environmental Resources Management acknowledges that you have applied for a state administered cleanup under the "Early Detection Incentive Program" ... . However, a review of the Department's records reveals that the source of contamination has not been determined. Therefore, the discharge of hazardous materials from the underground storage system to the adjacent soils or waters may be continuing. * * * ... [Y]ou are required to: Immediately upon receipt of this letter, CEASE and DESIST from any further unauthorized discharges to the ground and/or groundwater of Dade County. Immediately upon receipt of this letter, hydrostatically test, and repair any leaks to all underground tanks and transmission lines at the subject site. Within thirty (30) days of receipt of this letter, submit to this Department certifica- tion that all underground tanks and transmis- sion lines at the subject site are tight and are not discharging contaminants to the environment. ... The letter dated March 3, 1989, was received by Petitioner on March 7, 1989. By that letter, Petitioner was placed on notice that there was a risk that a discharge of hazardous materials from the underground storage system to the adjacent soils and waters was continuing. By that letter, Petitioner was also placed on notice that DERM required that it hydrostatically test all underground tanks and transmission lines at the subject site in order to determine if leaks existed in the tanks and lines. By that letter, Petitioner was also placed on notice that DERM required that Petitioner certify that all underground tanks and transmission lines at the subject site are tight and are not discharging contaminants to the environment. Mr. Pequeno, Jr., believed that by having the tanks relined and repaired in November 1987, Petitioner had complied with the requests made in DERM's letter of March 3, 1989. On March 13, 1989, Mr. Pequeno, Jr., called DERM to determine whether the tests that were conducted following the relining and the repair of the tanks in November 1987, satisfied the requirements contained in DERM's letter of March 3, 1989. When Mr. Pequeno, Jr., did not get a response to his inquiry, he assumed that Petitioner was in compliance. Petitioner took no steps until two years later to hydrostatically test its underground tanks and transmission lines. On March 21, 1991, Petitioner had a tank tightness test conducted at the facility. The tank system tightness test conducted on March 21, 1991, indicated that five tanks did not test tight. There was no evidence that Petitioner has filed a certification with DERM that all underground tanks and transmission lines at the subject site are tight and are not discharging contaminants to the environment. No fuel transmission line tightness test has been conducted pursuant to DERM's March 3, 1989, request. As of the date of the formal hearing, Petitioner had not performed a complete investigation to determine the source of contamination as DERM had requested. The underground storage system at the subject site were continuously used for the storage and dispensing of petroleum products from September 21, 1987, to the date of the formal hearing. At all times pertinent to this proceeding deliveries of petroleum products were made to the tanks which had been identified by Petitioner as leaking. Petitioner's failure to conduct a complete investigation to determine the source of contamination, its failure to repair the tanks which failed the tank tightness, and its continued use of these tanks, create the risk that a discharge of hazardous materials may be continuing at the present time. By letter dated February 13, 1991, Respondent denied Petitioner's eligibility to participate in the Early Detection Incentive Notification Program. This letter provided, in pertinent part, as follows: The Department of Environmental Regulation has completed its eligibility review of your Early Detection Incentive Notification Application. Based upon information given in this application and a compliance verification evaluation, the Department has determined that this site is not eligible for state-administered cleanup pursuant to Section 376.3071(9), Florida Statutes (1986) for the following reasons: Failure to have storage tanks tightness tested. Request was made by the Department of Environ- mental Resources Management (DERM) on March 3, 1989. This shall be construed to be gross negligence in the maintenance of a storage system. According to Section 376.3071(9)(b)3, Florida Statutes, sites shall not be eligible for state- administered cleanup where the owner or operator has been grossly negligent in the maintenance of a petroleum storage system. By Pre-Trial Stipulation filed July 24, 1991, the parties entered into certain factual stipulations and framed the following two issues of law to be resolved: Whether X.O. #1 Corporation was grossly negligent as defined under Section 376.3071(9)(b)3, Florida Statutes, for failing to immediately investigate and abate the source of a petroleum contamination by conducting a tank and line tightness test pursuant to a request by DERM (Dade County Department of Environmental Resources Management). Whether X.O. #1 Corporation was grossly negligent as defined under Section 376.3071(9)(b)3, Florida Statues, for failing to make monthly monitoring system checks where such systems are in place.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered by the Florida Department of Environmental Regulation which denies the application of Petitioner to participate in the Early Detection Incentive Program for its facilities located at 2188 N.W. 20th Street, Miami, Florida 33142. RECOMMENDED in Tallahassee, Leon County, Florida, this 25th day of September, 1991. CLAUDE B. ARRINGTON 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 25th day of September, 1991.
Findings Of Fact The Department (DER) is the regulatory agency of Florida charged with the duty and authority to administer and enforce Chapter 403 and Sections 376.30-376.319, Florida Statutes, and rules and regulations promulgated thereunder. Hendry is a Florida corporation that has been conducting business in excess of 60 years. The two main aspects of its business are the dredging operation and the shipyard. Hendry's site can be loosely described as an industrial site. The shipyard division performs approximately one-half its work for governmental entities, particularly the U.S. Coast Guard, which operations are largely ship refurbishing. Hendry has a Coast Guard certificate enabling it to receive mixtures containing oil and oily water waste. A significant portion of Hendry's ship refurbishing work involves repairing/replacing steel on ships which has deteriorated due to salt water exposure. That work frequently requires cutting, welding and burning. Prior to commencing the refurbrushing work, the ships must be certified as safe. In certifying a ship as being safe, the bilge area is pumped of used oil or waste oil which collects in standing waste water and oil. Also, before that works commences, the ship is defueled. Currently, Hendry's practice is to subcontract the pumping of waste oil from the ships bilge, which waste oil is pumped directly into the tanker truck of the subcontractor. Hendry no longer pumps or stores waste oil on site. In the past, the waste oil and water from the ship's bilge was pumped from the ship through a pipeline from the dry dock across the property to a 10,000 gallon above-ground storage tank. During December 1987, the U.S. Coast Guard observed a fuel spill on the water at Petitioner's facility. Based on that observation, Respondent conducted site inspections of Petitioner's facility during March and April 1988. The fuel spill was occasioned by Petitioner's refurbishment of a tuna boat at its site. Petitioner subsequently received a warning notice regarding alleged violations in its petroleum storage tanks and contamination. The transfer pipeline is of steel construction. Between 1980 and 1984, the pipeline leaked. In 1984, the pipeline was rerun with PVC line and in 1986, it was refitted with 4 inch steel pipe. The 10,000 gallon above-ground tank is located in Area 1. The removal of waste oil occasionally resulted in accidental spills. After 1985, a smaller, above-ground tank was installed adjacent to the 10,000 gallon tank to provide a storage tank for draining off water from the 10,000 gallon tank. The small tank was used to receive only water drained from the 10,000 gallon tank. Prior to installation of the small tank, a retention pond was used to drain water from the 10,000 gallon tank. The retention pond had a 2 foot berm with a visqueen liner. In October 1988, Hendry submitted an EDI Program Notification Application, a prerequisite for EDI reimbursement eligibility, under the program for costs associated with cleanup of certain petroleum contamination. In May 1989, Hendry submitted a document entitled Preliminary Contamination Assessment III Specific Areas--Task IV Rattlesnake Terminal Facility--Westshore Boulevard, Hillsborough County prepared by Mortensen Engineering, Inc. That document included reports of analysis of oil and groundwater samples taken from the site in January, March and April 1989, demonstrating extensive contamination of soil and groundwater including "free product" in monitoring wells MW-2, MW-4 and MW-4A. By letter dated November 9, 1989, the Department informed Hendry of its determination that the facility had been denied EDI reimbursement based on specific enumerated findings. Hendry entered into a stipulation with the Department on October 16, 1990, "regarding the conduct of this case and the basis for denial. " Attached to the stipulation is a sketch of the facility grounds showing a rough division of the area into four separate areas. Area 1 has two waste tanks. One was a large 10,000 gallon closed tank approximately 20 feet high and 12 feet in diameter; the other contained a volume of approximately 1,500-2,000 gallons and was an open tank. Petitioner's practice was to pump bilge in the dry dock area, located west of "Area 2" and direct the waste through underground pipes to the 10,000 gallon tank. The smaller tank was used to "bleed" water from the larger tank. Bilge waste is approximately two-thirds water. Area 2 was the location of Hendry's diesel tank farm. In the stipulation, the Department agreed to withdraw two of the seven specific grounds for the denial, namely denial of site access and failure to report discharges. Likewise, Hendry agreed to withdraw "Area 4" from its application for EDI eligibility. In the stipulation, Hendry was informed of a then recent amendment to Section 376.3071(9), which offered certain applicants who had been earlier determined ineligible for participation in the EDI program, standards and procedures for obtaining reconsideration of eligibility. The amendment required the facility to come into compliance, certify that compliance and request reconsideration prior to March 31, 1991. Additionally, compliance was to be verified by a Department inspection. Pursuant to paragraph 5(b) of the stipulation, these standards and procedures were specifically to be applied to Areas 2 and 3 at the facility. Hendry did not make a written request for reconsideration of the denial of eligibility with respect to Areas 2 and 3 on or before March 31, 1991 or at anytime subsequently. Hendry also did not come into compliance with the underground or above-ground storage tanks system regulations on or before March 31, 1991 in that Hendry failed to register a 560-gallon above-ground diesel storage tank which was onsite on that date as required by Rule 17-762.400, Florida Administrative Code. Hendry also failed to notify the Department of the Hillsborough County Environmental Protection Commission (HCEPC), as the administrator of a designated local program at least thirty days prior to closure of the storage tank system, pursuant to Subsection 376.3073, Florida Statutes. These determinations were made on April 1, 1991 by Hector Diaz, inspector in the HCEPC tanks program. Hendry submitted a registration form for the 560-gallon tank on November 18, 1991, which was of course subsequent to the March 31, 1991 deadline. Hendry stored petroleum products and waste material including petroleum constituents in the above-ground tanks until approximately March 25, 1991 when it initiated tank removal. Hendry's above-ground storage tanks, which were in use at its facility for approximately three years after extensive soil contamination was documented, were without secondary containment. In November 1991, Hendry submitted a document entitled Supplemental Preliminary Contamination Assessment Report, prepared by Keifer-Block Environmental Services, Inc. (Supplemental PCAR). The stated purpose of the study was solely to determine whether hazardous constituents were present in groundwater in Areas 2 and 3. The report included laboratory analysis of groundwater samples taken from the site in August 1991 including monitoring wells located in Area 3. The results of these analysis reflect that Area 3 is contaminated solely with heavy metals, lead and chromium. No petroleum hydrocarbon contamination was detected in Area 3. In the area adjacent to Area 2, seven of eight monitoring wells show chromium or lead contamination. Hendry had, and continues to have, a practice of removing paint from vessels by blasting them with a gritty material known as "black beauty." This practice takes place in the dry dock area near Areas 2 and 3. The waste blast grit/paint chip mixture is vacuumed or shoveled into wheelbarrels or a frontend loader and dumped into an open pile. Occasionally, the waste blast grit/paint mixture is blown about or spilled. Waste "black beauty" has been observed scattered on the ground throughout the facility. Paints sometime contain heavy metals, specifically, lead and chromium. The concentrations and distribution of lead and chromium contamination at the site are consistent with Hendry's long-standing practice of grit-- blasting paint from ships and other vessels and allowing the metal-contaminated paint and waste mixture to fall to the ground. Areas 2 and 3 are contaminated with substances other than petroleum or petroleum products, namely heavy metals. Costs associated with cleanup of lead and chromium are not reimburseable under the EDI program. Paragraph 5(c) of the stipulation allowed Hendry an opportunity to establish eligibility for Area 1 by providing information regarding operating practices at two above-ground storage tanks and a retention pond in that area demonstrating that contamination in that area is predominantly from leaks or unintentional spills of petroleum products from the tanks in that area. Hendry did not provide the required information. On January 27, 1992, Hendry submitted to the Department an affidavit executed by its principal, Aaron Hendry, which Hendry contends fulfills the requirements of paragraph 5(c) of the stipulation. Hendry, the principal who executed the affidavit, is an affiant with a legal and financial interest in the outcome of the EDI eligibility determination. The executed affidavit did not contain specific information with respect to "operating practices at the tanks and retention ponds as required by the stipulation." Specifically, the affidavit is silent as to: What the tanks were made of; When, how and by whom they were installed; What piping, leak detection or overfill protection was associated with them; What repairs or alterations had been made to them; What inventory reconciliation methods were used; Where the materials came from which was put into the tanks; In what manner, how often, and by whom material was put into the tanks; In what manner, how often, and by whom material was removed from the tanks; Disposition of material removed from the tanks; When, how, by whom and why the retention pond was dug; How and for what period of time the retention pond was used; How, often and by whom inspections of the tanks were conducted; When and how leaks occurred and were discovered at the tanks; When and how spills occurred and were discovered at the tanks; What records, including reports to state or local agencies, insurance claims, newspaper accounts, and so forth were kept with respect to leaks or spills at the tanks; What cleanup efforts were made at the time of any leaks or spills; Documentation related to registration of the tanks with state or local agencies; and Documentation with respect to any removal of the tanks, including any description of the condition of the tanks when, or if, removed. For years, the facility's retention pit was used as a "waste pit" namely, a rectangular hole in the ground, approximately 30 feet by 120 feet by 3 feet, for direct discharge of bilge waste piped from vessels at the dry dock area to the waste pit, prior to installation of the storage tank systems. After installation of the large tank in Area 1, the retention pit was used to bleed water from the bilge tank. In the past, the Department has denied eligibility to facilities where a retention pond was used for disposal of petroleum related waste and cleanup of contamination resulting from use of a retention pond. Hendry's affidavit nor other documentation submitted to the Department prior to the EDI redetermination or at hearing establishes that the bilge waste taken from the storage tanks was "a liquid fuel commodity" or recycled into such a commodity. By letter dated June 9, 1992, the Department notified Hendry that reconsideration of its EDI eligibility request for Areas 2 and 3 was denied and that the affidavit of Aaron Hendry submitted with respect to Area 1 did not satisfy the requirements of the stipulation. Thereafter, Hendry challenged the Department's denial of reconsideration and EDI eligibility which joins the issue for this proceeding. The hazardous waste allegation discovered during an inspection of Hendry's facility on April 14, 1988, resulted in a consent order which was entered as a final order of the Department on November 21, 1990. The consent order allowed Hendry an opportunity to demonstrate that not all areas at the facility were hazardous waste disposal areas and, thus, not all areas would be subject to closure and cleanup under the permitting requirements of Subsection 403.722, Florida Statutes and the remediation standards set forth in Chapter 17-730, Florida Administrative Code. To establish appropriate remediation standards and procedures which would be applicable to various areas, Hendry was required to prepare a property diagram designating areas at the property exhibiting any of the following types of contamination: Areas contaminated solely by petroleum or petroleum products or used oil which is not hazardous waste; Areas contaminated by materials which are not hazardous waste; Areas contaminated by the past or present disposal of hazardous waste. The consent order allows contamination assessment and remediation pursuant to the standards and procedures set forth in Chapter 17-770, Florida Administrative Code, for areas contaminated solely by petroleum or petroleum products. (Petitioner's Exhibit 5, paragraph 11.) The consent order requires contamination assessment and remediation pursuant to the Department's corrective action and groundwater contamination cases for all areas at the facility contaminated by used oil which is not hazardous waste or by hazardous material. (Petitioner's Exhibit 5, paragraph 12.) The consent order requires contamination assessment and remediation pursuant to a closure permit with a contingent post-closure plan to close the areas at the facility contaminated by the disposal of hazardous waste. In response to the consent order to delineate areas on the property exhibiting various types of contamination, Hendry submitted the supplemental PCAR. By letter dated March 19, 1992, the Department responded to the supplemental PCAR with a determination that: Area 1 can be assessed and remediated through the standards set forth in Chapter 17-770, Florida Administrative Code. Contamination in Areas 2 and 3 includes heavy metals, which are hazardous materials. Thus, Areas 2 and 3 should be assessed and remediated through the corrective action process for groundwater contamination cases. A hazardous waste facility closure permit application should be submitted for assessment and remediation of Area 4, which, because of the presence of Dichloroethylene, a hazardous substance and chlorinated solvent, should be expanded to include the location of monitoring well MW KBMW-2. Hendry had a practice of cleaning electrical motors by placing such motors on the ground outside the electrical repair shop near Area 4. The motors were sprayed with Trichloroethylene, a waste solvent, which was allowed to runoff into the soil. At the time of this practice, the intention was to leave the solvent contamination unchecked. The Department, pursuant to directives from the United States Environmental Protection Agency (EPA), characterizes the disposition of hazardous waste to the environment as a result of intentional, ongoing industrial practices as "disposal of hazardous waste" within the meaning of Subsection 475.703(21), Florida Statutes and 40 CFR 260.10. The consent order allowed Hendry an opportunity to challenge the Department's determination with respect to delineation of the various areas by filing a petition per paragraph 21 of the order for formal administrative hearings. Hendry filed its petition with respect to the March 19, 1992 letter, which petition is the subject of DOAH Case No. 92-2312.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that: Respondent, Department of Environmental Regulation, issue a Final Order in these consolidated cases concluding that 1) the contamination areas at issue herein are not eligible for EDI reimbursement under Subsections 376.3071(9) and (12), Florida Statutes; 2) that Petitioner cleanup the contamination in Areas 1, 2 and 3 under the guidance document entitled "Corrective Actions for Groundwater Contamination Cases"; and 3) that Area 4 be expanded to include the location of monitoring well MW KBMW-2 and closed through a hazardous waste closure/post closure permit application process. DONE AND ENTERED this 26th day of April, 1993, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL 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 April, 1993. APPENDIX Rulings on Petitioner's proposed findings of fact: Paragraph 14, partially adopted in Paragraph 13, Recommended Order. Paragraph 19, rejected, contrary to the greater weight of evidence and speculative. Paragraph 20, rejected, unnecessary. Paragraph 21, rejected, contrary to the greater weight of evidence, Paragraphs 24-28, Recommended Order. Paragraph 22, partially adopted, Paragraphs 13 and 14, Recommended Order. Paragraph 23, partially adopted, Paragraph 15, Recommended Order. Paragraph 29, partially adopted, Paragraph 18, Recommended Order. Paragraphs 31, 32, 35, 48, 49, 51, 52, 60, 62 and 73 rejected, unnecessary. Paragraph 33, adopted in part, Paragraph 23, Recommended Order. Paragraph 38, adopted in part, Paragraph 23, Recommended Order. Paragraph 41, rejected, contrary to the greater weight of evidence and the two cases cited at hearing where Respondent exercises his discretion are distinguishable from Petitioner's failure to timely apply. Paragraph 43, rejected, unnecessary and/or argument. Paragraph 45, rejected, contrary to the greater weight of evidence. Paragraph 50, rejected, contrary to the greater weight of evidence, Paragraphs 37-39, Recommended Order. Paragraph 54, rejected, not probative. Paragraph 55, rejected, not probative. Paragraphs 56 and 57, rejected, contrary to the greater weight of evidence, Paragraphs 30 and 31, Recommended Order. Paragraphs 58 and 59, rejected, contrary to the greater weight of evidence, Paragraphs 23 and 24, Recommended Order. Paragraph 61, rejected, speculative and unnecessary. Paragraph 63, rejected, speculative. Paragraph 67, rejected, not probative. Paragraph 68, rejected, contrary to the greater weight of evidence, Paragraphs 30 and 31, Recommended Order. Paragraph 69, rejected, not probative. Paragraph 70, adopted in part, Paragraph 23, Recommended Order. Paragraph 72, rejected, irrelevant and not necessary to the issues posed. Paragraph 74, rejected, contrary to the greater weight of evidence and unnecessary. Paragraph 75, rejected, contrary to the greater weight of evidence, Paragraph 53, Recommended Order. Paragraph 76, rejected, contrary to the greater weight of evidence, Paragraph 53, Recommended Order. Paragraph 77, rejected, contrary to the greater weight of evidence, Paragraph 53, Recommended Order. Paragraphs 78 and 79, rejected, irrelevant and unnecessary. Paragraph 80, rejected, not probative. Rulings in Respondent's proposed findings of fact: Paragraphs 2 and 3, adopted in part, Paragraph 9, Recommended Order. Paragraph 12, adopted in part, Paragraph 23, Recommended Order. Paragraph 23, adopted in part, Paragraph 32, Recommended Order. Paragraph 27, adopted in part, Paragraphs 38 and 39, Recommended Order. Paragraph 30, rejected, unnecessary. COPIES FURNISHED: Thomas J. Patka, Esquire Rory C. Ryan, Esquire HOLLAND & KNIGHT 200 South Orange Ave - Suite 2600 Post Office Box 1526 Orlando, Florida 32802 Agusta P. Posner, Esquire Lisa Duchene, Esquire Department of Environmental Regulation 2600 Blair Stone Road Tallahassee, Florida 32399 2400 Virginia B. Wetherell Secretary Department of Environmental Regulation 2600 Blair Stone Road Tallahassee, Florida 32399 2400 Daniel H. Thompson, Esquire Acting General Counsel Department of Environmental Regulation 2600 Blair Stone Road Tallahassee, Florida 32399 2400
The Issue Whether proposed amendments to Rules 17-761.200, 17-761.500 and 17- 761.510, Florida Administrative Code, are arbitrary and capricious, and therefore, constitute an invalid exercise of delegated legislative authority? Whether the economic impact statement accompanying the proposed amendments to Chapter 17-761, Florida Administrative Code, was adequate? Whether the Department of Environmental Regulation properly considered the impacts of the proposed amendments to Chapter 17-761, Florida Administrative Code, on small and minority business pursuant to Sections 120.54(2)(a) and (3)(b), Florida Statutes?
Findings Of Fact The Parties. The Department is an agency of the State of Florida. The Department is responsible for, among other things, regulating underground petroleum storage tank systems in the State of Florida. Chapter 376, Florida Statutes. FPMA is a voluntary, nonprofit trade association comprised of 190 voting members who sell and distribute petroleum products on a wholesale and retail basis in Florida. FPMA also includes nonvoting associate members who provide equipment and technical services to FPMA members. FPMA's members include entities which are "small businesses" (approximately 18 to 20%) within the meaning of Section 288.703(1), Florida Statutes, and/or who sell petroleum products to customers that store petroleum products and constitute "small businesses." A substantial number of FPMA's members also include owners and operators of petroleum storage facilities with bare steel tanks and/or with storage tanks that currently are not equipped with secondary containment. A substantial number of FPMA's members operate in rural areas. FPMA's purposes include providing representation before the Florida Legislature and agencies. Background and History. The Water Quality Assurance Act, Chapter 83-310, Laws of Florida, was enacted by the Legislature in 1983. This Act gave the Department the authority to promulgate rules regulating the construction, maintenance, installation and removal of underground storage tanks. Section 376.303(1)(a), Florida Statutes. The Act also preempted local regulation of the prevention and removal of pollutant discharges unless a local ordinance had been adopted prior to September 1, 1984, or the local effort is approved by the Department. Section 376.317, Florida Statutes. Dade County, Florida, had adopted an Underground Storage Facilities Ordinance, Ordinance 83-108. Ordinance 83-108 imposed storage tank requirements depending on the location in Dade County relative to identified wellfield protection areas and zones of influence around potable well supplies. Ordinance 83-108 requires replacement of underground petroleum storage tanks by certain dates depending on when existing tanks were installed. The Ordinance also takes into account whether a tank is made of corrosion resistant materials. See proposed finding of fact 3 of the Petitioner's Proposed Final Order for some of the specific requirements of Ordinance 83-108. Dade County Ordinance 91-33 amended the requirements of Ordinance 83- 108. Ordinance 91-33 requires secondary containment for new underground petroleum storage tanks installed in Dade County 180 days after the effective date of Ordinance 91-33 but does not require the replacement of existing single- walled tanks not located in a zone of influence or which are on property served by a public utility. Broward County, Florida, adopted Chapter 27-10, in May, 1984, regulating underground storage tanks. Chapter 27-10 contains less stringent requirements than those required by the rules at issue in this proceeding. See proposed finding of fact 5 of the Petitioner's Proposed Final Order for some of the specific requirements of Chapter 27-10. In May, 1984, the Department promulgated Chapter 17-61, Florida Administrative Code. These rules regulated underground (and aboveground) storage tanks on a statewide basis, with two exceptions (Dade and Broward Counties). Rule 17-61.060(2)(b), Florida Administrative Code, required that new underground storage tanks and piping be constructed of corrosion-resistant materials, and be installed with overfill protection and monitoring systems. This Rule also prohibited the use of new bare steel tanks and integral piping containing motor vehicle fuels. Rule 17-61.060(2)(c), Florida Administrative Code, required that existing underground storage tanks be retrofitted with monitoring systems and overfill protection beginning December 31, 1986, and ending December 31, 1989, depending on the age of the tank. Rule 17-61.060(2)(c) and (3), Florida Administrative Code, also required that existing bare steel underground tanks and piping be replaced with corrosion-resistant systems on a schedule beginning December 31, 1989, and ending December 31, 1998, depending on the age of the tank. As an alternative, bare steel tanks could be retrofitted with internal lining or cathodic protection, and bare piping could be retrofitted with cathodic protection. Rule 17-61.060(2)(b)-(c) and (3), Florida Administrative Code. In adopting Chapter 17-61, Florida Administrative Code, the Department exempted facilities which did not receive, store, or use more than 1,000 gallons in any calendar month or more than 10,000 gallons in any calendar year. Rule 17-61.040(1), Florida Administrative Code. In adopting this exemption the Department indicated that "[v]ery small users are considered to pose a smaller risk and are not anticipated to contribute as significantly to contamination of groundwater across the state." The Department also indicated that the businesses being exempted included agricultural businesses, small businesses and other commercial activities and governmental installations. Finally, the Department indicated that it had developed the retrofitting schedules to allow for the exhaustion of the useful life of existing systems. In October, 1985, Alachua County, Florida, filed a petition with the Department for approval of its local storage tank ordinances, Ordinances 85-7 and 85-13. Alachua County required secondary containment for underground storage systems. The Department approved the ordinances conditioned upon Alachua County amending them to take into account concerns the Department expressed concerning the ordinances. In particular, the Department questioned whether Alachua County should require secondary containment for all of the County without taking into account the differences in the groundwater throughout the County. The Department also questioned the schedule for requiring secondary containment. For more specific complaints raised by the Department see proposed finding of fact 8 of the Petitioner's Proposed Final Order. Alachua County subsequently adopted a new storage tank ordinance, Ordinance 87-10. Ordinance 87-10 required secondary containment for new facilities and extended the retrofit schedule for existing facilities. The extended schedule took into account to hydrogeology of the location of the storage tank and the proximity to public water supply wells. Existing corrosion-resistent tanks were allowed twenty years from installation if overfill protection and leak detection were installed. Congress banned the installation of most new bare steel storage tanks. They were banned by the Resource Conservation and Recovery Act. The United States Environmental Protection Agency (hereinafter referred to as the "EPA"), was ordered to adopt regulations governing underground storage tanks. On September 28, 1988, the EPA promulgated 40 CFR 280. These regulations required, among other things, that: new underground storage tanks be constructed of corrosion-resistant materials; existing bare steel tanks must be upgraded by December 22, 1990; and, existing tanks may be replaced by corrosion- resistant materials, may be internally lined or protected by cathodic protection. The EPA also promulgated 40 CFR 281, authorizing the approval by the EPA of state storage tank programs which are no less stringent that the EPA's requirements. On June 8, 1990, the Environmental Regulation Commission adopted Chapter 17-761, Florida Administrative Code. These rules, which were adopted to bring Florida's storage tank program into compliance with the regulations adopted by the EPA in 1988, imposed new construction requirements on underground storage systems. In light of the fact that some of the requirements of Chapter 17-761, Florida Administrative Code, were more stringent than those imposed by the EPA, the Governor and Cabinet were required by Section 403.804, Florida Statutes, to approve the rules. On October 9, 1990, the Governor and Cabinet considered the new rules. ManaSota-88, Inc., appeared at the meeting and requested that the Governor and Cabinet limit the definition of secondary containment to double- walled tanks and piping, and to move up the date requiring secondary containment for the installation of new and replacement tanks from December 31, 1998, to December, 1990. The Governor and Cabinet approved Chapter 17-761, Florida Administrative Code (hereinafter referred to as the "Existing Rules"), and "recommended" that the Environmental Regulation Commission "review" ManaSota-88, Inc.'s, recommendations. On January 10, 1991, the Department held a public workshop before the Environmental Regulation Commission to receive public comment on several alternative changes to the Existing Rules developed as a result of ManaSota-88, Inc.'s, suggestions to the Governor and Cabinet. New information concerning the environmental or technological necessity of amending the Existing Rules was not provided at the workshop. On February 8, 1991, the Department caused notice of rule making to be published in Volume 17, Number 16, Florida Administrative Code, amending the Existing Rules (the proposed amendments will hereinafter be referred to as the "Proposed Amendments"). On March 1, 1991, FPMA filed a Petition to Determine Invalidity of Proposed Rules challenging the validity of the Proposed Amendments. On March 14, 1991, the Environmental Regulation Commission, following a public hearing, adopted the Proposed Amendments with certain changes not relevant to this proceeding. Members of the FPMA testified at the public hearing. The Requirements of the Existing Rules and the Changes Thereto of the Proposed Amendments. Generally, the Existing Rules require owners and operators of underground vehicular fuel storage tanks to upgrade their underground storage tank systems to include secondary containment according to a schedule which takes into account the date of installation of an existing storage tank or whether the tank is a new storage tank. "Secondary containment" under the Existing Rules is defined as a system used to improve release detection and release prevention and includes double-walled tanks, double-walled integral piping systems or a single-walled tank or integral piping system protected by an outside liner. For petroleum storage systems, secondary containment consists of a primary container composed of fiberglass or steel. The primary container is surrounded by an outer wall or liner. New Underground Storage Tanks. Under the Existing Rules new underground storage tanks (other than those used to store hazardous substances) installed between December 10, 1990, and December 31, 1998, may be single-walled tanks if they are corrosion- resistant. A storage tank is considered to be corrosion-resistant under the Existing Rules if it is a single-walled fiberglass tank, a tank with an internal lining or a tank with cathodic protection. New underground storage tanks installed after December 31, 1998, must be constructed with secondary containment under the Existing Rules. Under the Existing Rules, any new underground storage tank installed as a replacement for an underground storage tank during the existing life of the tank could be a single-walled tank if it was corrosion-resistant. The Existing Rules also provide that new storage tanks may not be installed within 50 feet of an existing potable water supply well. Secondary containment must be installed for any new, upgraded or replacement tank located within 300 feet of an existing private, public or noncommunity water supply system. These requirements were not changed by the Proposed Amendments. Under the Proposed Amendments, all new underground storage tanks installed after December 31, 1991, must be installed with secondary containment. New tanks that are corrosion resistant are not allowed under the Proposed Amendments. Replacement tanks under the Proposed Amendments also must be installed with secondary containment. Existing Underground Storage Tanks. Existing single-walled underground storage tanks must be replaced with secondary containment under the Existing Rules by certain dates, which depend on whether the existing tank has corrosion protection. The replacement dates recognize the useful life of the existing tanks being replaced. Under the Existing Rules, an existing underground storage tank was to be upgraded with an internal lining if the integrity of the tank is assured, it is tightness tested and it otherwise meets applicable standards. As an alternative, an existing tank was to be upgraded with cathodic protection if the structural integrity of the tank is certified after inspection and the tank is tightness tested. Finally, an existing tank could be upgraded with a combination of internal lining and cathodic protection. Cathodic protection is a device that utilizes an electrochemical process to protect the external surface of a metal tank against corrosion. Depending on the useful life of an existing underground storage tank, the Existing Rules require that existing tanks that were corrosion resistant or internally lined be replaced with secondary containment by December 31, 2012, 2015 or 2018. Existing underground storage tanks which are upgraded with cathodic protection must be replaced with secondary containment under the Existing Rules by December 31, 1989. Pursuant to the Proposed Amendments, existing steel tanks that have not been lined or that do not have cathodic protection prior to December 31, 1991, must be replaced with secondary containment by December 31, 1992, 1995 or 1998, depending on the age of the tank. Existing underground storage tanks that are made of corrosion resistent materials, that have been lined or that were initially installed with cathodic protection prior to December 31, 1991, must be replaced with secondary containment by December 31, 2009, under the Proposed Amendments. Existing tanks with field-installed cathodic protection must be replaced with secondary containment, depending on the age of the tank, by December 31, 1992, 1995 or 1998, under the Proposed Amendments. Under the Existing Rules and the Proposed Amendments, underground petroleum storage tanks are ultimately required to be installed with secondary containment. The Existing Rules allow the use of alternative forms of protection (corrosion resistant single-walled tanks, liners and/or cathodic protection) during a period of time beginning on the effective date of the Existing Rules and ending December 31, 2018. The Proposed Amendments substantially speed up the time schedule for secondary containment. The alternative forms of protection allowed under the Existing Rules may still be used, but only if installed before December 31, 1991. Justification for the Proposed Amendments. Petroleum storage systems, including underground storage tanks, can and do leak petroleum for a number of reasons, including failure of tanks and lines. There are 2,295 permitted petroleum storage facilities in Dade County. Of these facilities, approximately 1,614, or just over 70%, have petroleum contamination. The Dade County Department of Environmental Resources Management conducted a study of the cause of the petroleum contamination at 50 randomly selected permitted petroleum storage facilities. Based upon a review of these 50 sites, the source of contamination at 13 of the sites (26%) was discernible. The source of contamination at the other 37 sites could not be determined. Of the 13 sites for which the Dade County Department of Environmental Resources Management was able to determine the source of contamination, tank failures were identified as the source of contamination at 10 of the sites (20% of the total sites reviewed) and lines were the source of contamination at the other 3 sites. Five of the tank failures involved bare steel tanks, one involved a fiberglass coated steel tank, two were fiberglass tanks and one was a fiberglass tank with a liner. None of the 13 tank failures were attributable to double-walled steel or double-walled fiberglass tanks. There are in excess of 10,000 petroleum contamination sites located throughout the State of Florida that have been reported to the Department. These sites have been ranked by the Department based on fire and explosion hazards and the proximity of the contamination sites to drinking water wells. Some of the contamination sites reported to the Department for cleanup have been caused by leaking underground petroleum storage tanks. The Department's petroleum contamination cleanup standards are based on whether groundwater is considered to be of G-II quality. A G-II classification for groundwater includes all groundwater in aquifers suitable for potable water use. Such aquifers are considered to have a total dissolved solids content of less than 10,000 mg/1. Groundwater in Florida of G-II quality includes groundwater in both the surficial aquifers and the Floridan aquifer. The Department considers the quality of water in any aquifer that will produce water as having potential resource value regardless of whether it is currently used for potable drinking water. Therefore, contamination in such aquifers must be cleaned up to G-II quality. Petroleum contamination in Florida has affected every aquifer of G-II quality in the State. Ninety-two percent of Florida's drinking water is provided by groundwater. The Inland Protection Trust Fund was created in October, 1986, to provide funds for the cleanup of petroleum contamination (benzine) sites in Florida. Since that time, the Department has spent approximately $1,600,000.00 for the restoration and replacement of petroleum contaminated potable drinking water. Since October, 1986, 225 water supply wells (public and private) in Florida have been contaminated with benzine to the extent that action was necessary to correct the contamination. Eight of the 225 wells were used for municipal water. These 8 wells have been restored or replaced. Approximately 44 potable drinking water wells serving mobile homes, restaurants and service stations, (or noncommunity public water systems), and 143 private wells have been contaminated with petroleum and have been restored or replaced. Use of secondary containment systems of storing petroleum allows monitoring of the interstitial space between the primary container and the secondary external barrier of the storage tank. Interstitial monitoring methods include: (a) placing a probe inside the space which detects and responds to the product stored or vapors therefrom; (b) filling the space with liquid and monitoring the level of the liquid; and (c) creating and monitoring a vacuum in the space, which allows monitoring of both walls. There is a high probability that the use of secondary containment will facilitate the detection of petroleum leaks in a storage tank before the petroleum escapes the secondary containment into the environment. Interstitial monitoring in a secondary containment system greatly reduces the number of factors which can interfere with petroleum leak detection. For example, interstitial monitoring provides an opportunity to distinguish new leaks from existing contamination. Secondary containment represents the best underground petroleum storage tank technology currently available. Leak detection for a single-walled tank provides detection of a leak of petroleum contamination after the contamination has entered the environment. Double-walled secondary containment tanks are stronger than single- walled tanks. Therefore, double-walled tanks are less prone to flex and, consequently, are less prone to crack than a single-walled tank. Each wall of a double-walled tank provides protection from physical damage for the other wall not provided in single-walled tanks. Cathodic protection provides protection from external corrosion of metal storage tanks. It does not, however, provide leak detection in the manner that secondary containment does. Cathodic protection systems are generally not warranted because their effectiveness depends on the operation and maintenance of the system by the tank owner. Internal linings are used for either preventive maintenance or to repair existing underground storage systems. Internal linings do not prevent external corrosion unless cathodic protection is also provided. Internal linings provide a barrier to petroleum release. Internal linings extend the life of a storage tank system for at least 10 years. If the tank is also cathodically protected, the life of the tank is warranted for 20 years. Internal linings do not provide leak detection in the manner that secondary containment does. The Proposed Amendments Represent a Change in Policy. The record of the process of developing and adopting the Existing Rules indicates that the alternative forms of protection (use of corrosion- resistent tanks, internal linings and cathodic protection) included in the Existing Rules afford some protection to Florida's groundwater from petroleum contamination. In proposing the Existing Rules the Department supported the provisions of the Existing Rules concerning the use of alternative forms of protection and the schedules for implementing the use of secondary containment contained therein. At the time that the Existing Rules were presented to the Governor and Cabinet, the Department did not recommend that secondary containment be required in the manner that it has now provided for under the Proposed Amendments. In adopting the Proposed Amendments, the Department has not developed or obtained any additional information in support of the Proposed Amendments. Nor did ManaSota 88, Inc., provide any such information. The reason why the Department initiated the process of adopting the Proposed Amendments was that the Governor and Cabinet directed the Department to consider whether changes to the Existing Rules were needed. The foregoing findings of fact do not support a finding that the Proposed Amendments are arbitrary and capricious. At best, the record of the process of developing and adopting the Existing Rules and the requirements of the Existing Rules prove that a policy decision was made by the Department that the requirements of the Existing Rules were an acceptable method of dealing with petroleum contamination from underground storage tanks in Florida. The fact that the policy decision evidenced in the Existing Rules was made, however, does not prove that a policy decision to require the use of other methods of protection, i.e., secondary containment, is arbitrary and capricious. The record of the adoption of the Existing Rules does raise some question as to the propriety of adopting the more stringent requirements of the Proposed Amendments. That record, however, also adds support to the policy decision to adopt the more stringent requirements. First, although the Department accepted the use of alternative forms of protection when the Existing Rules were adopted, it still evidenced a policy decision that secondary containment is the preferred method of protecting Florida's waters. Additionally, the acceptance by the Governor and Cabinet of the policy decision evidenced in the Existing Rules was conditioned on a reconsideration of the use of the alternative forms of protection (at least for new tanks) which evidenced a willingness on the part of the Governor and Cabinet to make policy decisions which would more stringently protect Florida's waters. Although it is true that the Alachua, Broward and Dade County ordinances and the EPA's regulations are less stringent than the Proposed Amendments, these laws also support the use of secondary containment as the preferred method of protecting the environment from contamination from underground petroleum storage tanks. The evidence proved that there a range of methods available to provide varying degrees of protection to Florida's waters. The use of corrosion- resistant tanks, internal linings and/or cathodic protection provides better protection to Florida's waters than bare steel underground storage tanks. Therefore, these methods of protection are within the range of acceptable methods of protecting Florida's waters. The evidence also proved, however, that secondary containment is not only within the range of acceptable methods of providing protection to Florida's waters, but that it is the best method currently available. The evidence failed to prove that the policy decision of the Department evidenced in the Proposed Amendments is not within the range of reasonable methods of dealing with petroleum contamination of Florida's waters authorized and required by the Florida Legislature. Therefore, the decision to require the use of secondary containment of the Proposed Amendments is not arbitrary and capricious. The Economic Impact Statement and the Economic and Environmental Impact Statement. The Department, as required by Section 120.54(2), Florida Statutes, prepared an economic impact statement (hereafter referred to as the "EIS"), for the Proposed Amendments. The EIS was prepared by Clyde Diao, the Department's expert in environmental economics. The Department, as required by Section 403.804(2), Florida Statutes, also prepared an Economic and Environmental Impact Statement (hereinafter referred to as the "EEIS"). The EEIS consisted of a study of the economic impact of the Proposed Amendments and included the costs and benefits to the public of the Proposed Amendments. Dr. Diao also prepared the EEIS. The EIS and EEIS contain identical information, except that the EEIS also contains an analysis of the environmental impact of the Proposed Amendments. The following findings of fact only refer the EIS. To the extent relevant to this proceeding, the findings of fact concerning the EIS also apply to the EEIS except to the extent indicated otherwise. It is estimated in the EIS that the additional costs the Department may incur as a result of adopting the Proposed Amendments are expected to be minimal. The weight of the evidence failed to prove that this estimate impaired the fairness of the proceedings adopting the Proposed Amendments or the correctness of the Proposed Amendments. The following conclusions were included in the EIS concerning the impact of the Proposed Amendments on the installation of new underground storage tanks: It is recognized that the Proposed Amendments require that new tanks installed after December 31, 1991, have secondary containment instead of requiring secondary containment for new tanks installed after December 31, 1998, as provided under the Existing Rules. It is projected that even if new tanks were not required to have secondary containment until after December 1998, "investors intending to install underground storage tanks would most likely prefer to install secondary containment right away because it is more economical in the long run." In making this projection the Department recognized that "the immediate economic impact of having secondary containment might be greater than installing tanks with no secondary containment, . . ." but concluded that "long-run cost would likely be lower." In concluding that the long-run cost would be lower, the Department considered the difference in the cost of installing a tank with secondary containment with the cost of installing single-walled fiberglass tanks and steel tanks with cathodic protection. The Department estimated that the additional cost would be "in the range of 13.5% to 46.8% depending upon the type of tank used. . . ." It is pointed out that this additional cost, however, will "be a onetime expense to the facilities since they don't have to replace the double- walled tanks anymore." The Department, in concluding that the long-run cost would be lower, also relied upon its conclusion that insurance and monitoring cost associated with tanks installed with secondary containment would be lower in the long-run. The EIS indicates that the cost of insurance for a double-walled tank or a tank with a liner beneath it is about $200.00 per year as compared with $560.00 per year for a tank with no secondary containment. The EIS also indicates that the cost of groundwater monitoring wells or vapor monitoring devices of approximately $8,500.00 will be avoided by using tanks with secondary containment which will be required to have an interstitial monitoring device which cost approximately $1,000.00. Finally, the Department took into account the additional cost of ultimately replacing new underground storage tanks installed without secondary containment which will be incurred under the Existing Rules or the Proposed Amendments if secondary containment is not provided immediately in reaching its conclusion that it will be cheaper in the long-run to install new tanks with secondary containment. The Department included a cost comparison of the long-run cost of installing tanks with and without secondary containment in Annex I and Annex II to the EIS. Finally, the Department made the following finding in the EIS concerning the installation of new tanks: The only problem with requiring secondary containment by the end of 1991 instead of 1998 is that it gives the new underground storage tank owners a shorter period of time to generate the funds to install secondary containment. Smaller firms with lower financial leverage might have difficulty obtaining additional funds necessary to cover the incremental costs. This new requirement could have adverse effects on smaller gas stations that are already planned to be constructed in rural or remote areas where the market is very limited. The weight of the evidence failed to prove that these estimates impaired the fairness of the proceedings adopting the Proposed Amendments or the correctness of the Proposed Amendments. The Department did not make any specific findings in the EIS concerning the additional cost for new tanks which will be incurred in the short-term because of the acceleration of the date for which secondary containment will be required under the Proposed Amendments. See however, finding of fact 70.b., and 75.c., supra. The following conclusions were included in the EIS concerning the impact of the Proposed Amendments on existing tanks: The Department recognizes that "[t]he proposed requirements for existing underground storage tanks could have adverse economic impacts on some facilities, especially those with no corrosion protection and which were installed in 1981-1984 period." In reaching this conclusion, the Department recognized that owners of these tanks would not be able to "recoup their investments before the economic life of the tanks is reached." The Department's conclusion concerning the inability of facilities to recoup the useful life of existing underground storage tanks reasonably applies to almost all existing tanks. The Department recognized that approximately 731 of the owners of existing tanks (2,193 total tanks) constructed during the periods 1970-1975 and 1976-1980 will have to install secondary containment by 1992, and approximately 926 of such owners (2,778 total tanks) will have to install secondary containment by 1995, under the Proposed Amendments instead of the years 2012 and 2015, respectively, under the Existing Rules. These dates are extended to the year 2009 if corrosion protection is installed by December 31, 1991. The EIS indicates that the cost of adding corrosion protection is $2,500.00 to $4,000.00 per tank ($7,500.00 to $12,000.00 for a three tank facility). The EIS indicates that existing tank owners who do not install corrosion protection before December 31, 1991, "might experience economic hardship." The EIS estimates that, for "a typical facility with three tanks having a capacity of 10,000 gallons per tank, the replacement cost could be very high ranging from $101,500 to $107,000." This cost is compared to the $4,500.00 cost of adding internal lining or cathodic protection to an existing tank. The total cost of providing secondary containment for existing retailers is estimated to "range from $75 million to $79 million in 1992 and $94 million to $100 million in 1995." The EIS indicates the total cost could be higher if inflation is taken into account. Based upon these findings, the Department indicates in the EIS that "this could have some adverse economic impacts on some facilities which are currently struggling to survive under present economic conditions but are hoping to improve their business operations in the future." The Department recognizes that large suppliers will not experience the same difficulties as smaller facilities because of existing resources and the ability to pass on the additional costs to individual dealers. The Department also recognizes in the EIS that: smaller firms (gas stations) which are the recipient of this price hike could experience heavy financial strain. Since they operate in a highly competitive industry, they cannot just pass on any increase in the price of their products to the consumers without losing a certain part of their market share. Existing small gas stations without corrosion protection operating in rural areas where the market is small, might really be hurt financially by adoption of the proposed revisions. . . . The Department did not specifically address the costs of, or specify the total cost expected to be incurred for, replacing existing tanks with secondary containment in 1998, including those with field installed cathodic protection. Nor did the EIS specifically address cost which may be incurred by non-retail facilities in complying with the Proposed Amendments. The discussion in the EIS of some of the cost associated with existing tanks are more equivocal than the discussions of those costs in some of the internal documents utilized by the Department. The uses of "could" and "might" as opposed to "will" and "likely" did not impair the fairness of the proceedings adopting the Proposed Amendments or the correctness of the Proposed Amendments. The following conclusions were included in the EIS concerning the impact on competition and employment of the Proposed Amendments: The EIS indicates that the Proposed Amendments "might have some impacts on competition among existing underground storage tank owners and operators." In particular, the EIS indicates that some facilities "would have to either partly operate or shutdown their business for a while until the construction is done." During the time that facilities are partly operating or shutdown the Department projects that other facilities would have a competitive advantage and that employment would be adversely impacted. The EIS also indicates that smaller gas stations would be competitively disadvantaged by larger facilities because of their limited capitalization. The EIS concludes that "[s]ome [smaller facilities] may encounter difficulty in complying with secondary containment requirements." The EIS also indicates that competition will be enhanced between sellers/manufacturers of secondary containment materials at a much earlier date because the demand for such materials would increase much earlier. This same conclusion is reached with regard to businesses providing installation services associated with secondary containment. The EIS does not specifically address some of the costs which smaller facilities may be expected to occur as a result of the competitive advantage larger facilities will probably have in the short-run as a result of the Proposed Amendments. The EIS does not specifically discuss the competitive disadvantage to facilities which must replace tanks in 1995 or 1998. The EIS does not discuss the effect on competition between providers and installers of cathodic protection, single-walled corrosion resistant tanks or tank liners. The following conclusions were included in the EIS concerning the economic and environmental benefits of the Proposed Amendments: The Department indicates that "the new requirements would enhance protection of human health as well as to ground water resources of the State." Recognizing that it is difficult to quantify the economic benefits of the Proposed Amendments, the EIS indicates that "it can be strongly argued that the benefits would outweigh the costs in the long-run." It is concluded that the Proposed Amendments will prevent health hazards and groundwater contamination instead of relying on remedial solutions. The Department estimates that it is more economical to the public and to facility owners and operators to prevent contamination than to clean up contamination. It is estimated that the average cost of cleanup is approximately $200,000.00 per site. The Department also estimates that there are 56,018 underground storage tanks in Florida. Of these tanks, it is estimated that 10,500 are leaking underground fuel tanks, some of which are causing groundwater contamination. The Department has also estimated that 2,500 to 2,600 potable wells in Florida have been contaminated by petroleum storage systems. Because the groundwater level in Florida is very close to the surface, the Department indicates that discharge from a leaking tank will easily travel into the groundwater. The Department concludes that the Proposed Amendments will increase the protection of groundwater from potential contamination. The evidence failed to prove what the exact number of potable wells in Florida that have been contaminated by petroleum leaks. The evidence also failed to prove how many of the known petroleum contamination sites are attributable to underground storage tank leaks as opposed to other sources of leaks, i.e., overfill or pipe leaks. The weight of the evidence, however, failed to prove that the conclusions of the Department concerning the benefits of the Proposed Amendments are not reasonable or are so misstated as to be unreliable. The conclusions reached by the Department in the EIS concerning the benefits of the Proposed Amendments are consistent with the Legislatures intent set out in Chapter 376, Florida Statutes. The Department never conducts an econometric study in preparation of economic impact statements for proposed rules. Nor did the Department prepare such a detailed study in preparing the EIS in this case. As a consequence, there were a number of items of cost or amounts of cost which the Department did not specifically include in the EIS. Taking all of the facts concerning the EIS as a whole, based upon the conclusion that most of the economic impacts of the Proposed Amendments are fairly obvious and based upon the expression of Legislative intent found in Chapter 376, Florida Statutes, it is concluded that the evidence failed to prove that the EIS was so inadequate as to have impaired the fairness of the process or the correctness of the Proposed Amendments. Consideration of Small Businesses. In preparing the EIS, the Department assumed that a "small business" was any business with a net worth of $1,000,000.00 or less and which employed 25 or fewer employees. Small businesses in the petroleum industry often buy products from larger companies and are in competition with larger companies. It is recognized by the Department in several places in the EIS that small businesses will be adversely affected by the Proposed Amendments: It is recognized that small businesses will have difficulty raising capital and/or obtaining financing for the installation of secondary containment under the shorter time schedules of the Proposed Amendments; It is recognized that small businesses will have difficulty passing the cost of complying with the Proposed Amendments they incur on to consumers like larger facilities will likely be able to do; It is recognized that small businesses will be at a competitive disadvantage with larger facilities which are better able to obtain the funds necessary to pay the cost of complying with the Proposed Amendments; and It is recognized that rural facilities, which generally tend to be smaller facilities, will be adversely effected by the Proposed Amendments. The EIS does not specifically identify the number of small businesses which will be affected by the Proposed Amendments or the amount of additional cost small businesses can expect to incur. Although the majority of the cost which will be incurred by small businesses in complying with the Proposed Amendments will be the same as those for larger businesses, the effect on competition of small businesses will be greater. Therefore, the effect of the Proposed Rules will have somewhat of a disproportionate impact on small businesses. This impact, despite the Department's assertion in this case that there will be no disproportionate impact, is recognized in the EIS. As required by Section 120.54(2)(a), Florida Statutes, a number of options concerning secondary containment requirements with varying impacts on small businesses were considered at the Environmental Regulation Commission meeting of January 10, 1991. The express purpose of this meeting was to consider such options. The options specifically addressed during the meeting are set out in proposed findings of fact 98 and 99 of the Department's Recommended Final Order. Among the options obviously considered, are those which are contained in the Existing Rules which FPMA has argued should not be changed. Testimony was presented by representatives of the FPMA and others before the Environmental Regulation Commission at the January 10, 1991, meeting and at the March 14, 1991 public workshop concerning the impact of the Proposed Amendments on small businesses. The weight of the evidence failed to prove that the adverse impact on small businesses will be so great that the Department should have tiered the Proposed Amendments to reduce the impact on small businesses. The weight of the evidence failed to prove that small businesses do not contribute significantly to the problem the Proposed Amendments are designed to regulate. The Proposed Amendments do allow some flexibility by providing that facilities that provide the alternative forms of protection prior to December 31, 1991, need not provide secondary containment until after December 31, 1992, 1995, 1998 or 2009. Not all facilities will be able to take advantage of this flexibility because not all facilities can meet the December 31, 1991, deadline. The Department of Commerce's Review of the Proposed Amendments. The Department mailed a copy of the Proposed Amendments to the Department of Commerce, Bureau of Business Assistance, on February 8, 1991. A copy of the Proposed Amendments was logged into the Small and Minority Business Advocate's Office (hereinafter referred to as the "Advocate's Office") on February 12, 1991. Between February 12, 1991, and February 15, 1991, Jonathan Elimimian, an economic legislative analyst in the Advocate's Office, received a copy of the Proposed Amendments from the Bureau of Business Assistance. The evidence failed to prove what happened to the copy of the Proposed Amendments logged into the Advocate's office on February 12, 1991. Dr. Elimimian reviewed the Proposed Amendments and prepared two analyses. In his first analysis, he concluded that the economic impact on small and minority business "is very significant" and that: [m]ost importantly the existing small and minority businesses already operating underground storage tank systems will close their door to business because of economic hardships that might result form the proposed revised rule. To make the situation worst [sic] for small and minority businesses, the scheduled replacement of underground storage tanks shifted from the year 2012 to 12/31/95 makes it further difficult for small and minority underground storage tank owners to raise capital to carry out the expense involved in the changes and still be able to remain competitive or survive. The economic impact is direct and is not productive to small and minority businesses in the field. These findings are not inconsistent or different from the conclusions reached by the Department in the EIS. The findings of Dr. Elimimian were not provided to the Department. Nor was any other correspondence sent to the Department by the Advocate's Office. Instead, as was the practice of the Advocate's Office prior to the employment of the current Small and Minority Business Advocate (hereinafter referred to as the "Advocate"), Dr. Elimimian's review was simply filed in the Advocate Office's files. The weight of the evidence failed to prove that the Department failed to follow any of the procedural requirements of Section 120.54(3)(b), Florida Statutes, concerning the Advocate's Office. In light of the fact that the Advocate did not provide the Department with any comments, the Department did not fail to consider the Advocate's comments or take any action required under Section 120.54(3)(b), Florida Statutes. The weight of the evidence failed to prove whether the Advocate had any "evidence and argument . . . [or] alternatives regarding the impact of the rule on small business" concerning the Proposed Amendments. The weight of the evidence also failed to prove that the Advocate had any "evidence and argument . . . [or] alternatives regarding the impact of the rule on small business" which was not considered by the Department, the Environmental Regulation Commission or the Governor and Cabinet. Therefore, the weight of the evidence failed to prove that the fairness of the proceedings adopting the Proposed Amendments or the correctness of the Proposed Amendments were impaired by the Advocate's failure to comment of the Proposed Amendments pursuant to Section 120.54(3)(b), Florida Statutes.
Findings Of Fact Respondent issued an invitation to bid for the project. The bidders were reminded that the bids were due March 9, 1995. The bid opening was to occur on March 10, 1995. Under the general conditions to the invitation, (at paragraph 7), in the interest of the State, the Respondent reserved the right to reject all bids that it received. That same reservation was announced at paragraph 1.8.1 to the invitation. In addition to the general reminder that the Respondent had the right to reject all bids, paragraph 1.14 to the invitation describes cancellation privileges available to the Respondent. That paragraph provided that the obligations under the invitation would be subject to and contingent upon the availability of moneys lawfully appropriated to pay for the services. Paragraph 1.1 to the invitation described the project as one involving removal and disposal of existing tanks and contents of those tanks at three locations. The locations were Floral City, Cocoa, and Kissimmee, Florida. The project demands at Floral City were for removal and disposal of a 10,000 gallon above-ground "tack coat" tank and surficial "tack coat" material and removal and disposal of a 500 gallon tank. The work at Cocoa involved removal and disposal of a 10,000 gallon above-ground "tack coat" tank, removal and disposal of a 500 gallon tank and removal and disposal of a 1,000 gallon kerosene tank. Finally, the Kissimmee work involved removal and disposal of a 500 gallon above-ground "tack coat" tank and surficial "tack coat" material. In Exhibit "A" to the invitation, describing the scope of services for storage tank removal and disposal, paragraph 2.0 identified more specifically the services that the bidder was to provide. In Exhibit "A", at subparagraph B.1 to paragraph 2, the bidder was instructed that the work included removal and proper disposal of the tank contents and any related material in the vicinity of the tanks. In Exhibit "A", at subparagraph B.3 to paragraph 2, the bidder was instructed that the work included removal and proper disposal of all tanks and associated piping. In Exhibit "A", at subparagraph B.4 to paragraph 2.0, the bidder was instructed that any records and analytical results that the bidder might generate from a storage tank closure assessment should be sent to the State of Florida, Department of Environmental Protection, Storage Tank Regulation Section with a copy of those reports being provided to Respondent's project manager. In Exhibit "A", scope of services for storage tank removal and disposal, at subparagraph A to paragraph 5.0, further instructions were given concerning the manner in which the tank contents would be removed. In Exhibit "A" at subparagraph B to paragraph 5.0, more specific instructions were given concerning tank disposal. In Exhibit "A" at subparagraph H.5 to paragraph 5.0, the bidders were reminded that a laboratory analysis report concerning the contents of the tanks was available upon request from the project manager, David Schappell. The laboratory analysis referred to was one performed on August 31, 1994, by Ardaman and Associates, Inc. Paragraph 1.9 makes reference to budget constraints involved with the project in which a budgetary ceiling of $45,000 is announced in the materials sent to the prospective bidders. In reality the $45,000 amount was in a circumstance that contemplated an additional site for tank removal and disposal and installation of new tanks in substitution for the removed tanks in Respondent's maintenance facility at Orlando, Florida. The Orlando work is not described in the invitation to bid. The appropriate reference for the budgetary ceiling contemplated by the invitation to bid is $20,000 for the three sites that are described in the project. Although Respondent through appropriate personnel realized that the $45,000 amount stated was not correct, that official, Helen Lund, purchasing and contracting agent for Respondent, did not arrange to correct the amount before issuing the invitation to bid. Ms. Lund simply failed to realize that the $45,000 budgetary ceiling was still set forth in the invitation when the invitation was made. Had she realized this mistake an addendum would have been sent to the prospective bidders to correct the figure to become $20,000. At hearing, Respondent presented its reasons for establishing a budgetary ceiling of $20,000. Petitioner was allowed to question that estimate. Subsequently, that issue will be discussed in greater detail. Paragraph 1.7.5 reminds the bidders that any necessary authorizations and/or licenses to provide the services sought in the project should be obtained by the bid due date and time and no later than the point at which a contract would be awarded. Paragraph 1.8.2 explains to the bidders what is necessary to offer a responsive bid. In her job Ms. Lund prepares and assembles bid documents, sends those out to the prospective vendors, and conducts bid openings. In this case David Schappell, Assistant District Drainage and Permits Engineer for Respondent's District V, Deland, Florida, discussed the tank removal project with Ms. Lund. In turn Ms. Lund prepared the bid blank/ITB in its boiler-plate language. Mr. Schappell prepared the invitation to bid concerning the scope of services to be provided by the bidders. Ms. Lund mailed out eight invitations to bid. She received responses from Petitioner and Chemical Development Corp. The bid from Chemical Development Corp. was rejected for failure to meet the licensing requirements set forth in paragraph 1.7.5. That left the Petitioner's bid which was considered responsive. Nonetheless Respondent decided to reject that bid for reasons that the price submitted for performing these services was too high when compared to the $20,000 estimate by the Respondent. Petitioner's bid price was $38,252. In addition, Petitioner was concerned that it would have to submit an exceptional purchase request and get the approval from the State of Florida, Department of Management Services, to enter into a contract in a setting in which there was only one responsive bidder. Finally, Petitioner was also concerned about the disparity between the price submitted by Chemical Development Corp. at $11,520 and the $38,252 price from Petitioner as indicating some possible problem associated with the scope of work contemplated in the project and the understanding which the bidders had about the work to be performed. Petitioner obtained a copy of the laboratory analysis from Ardaman and Associates to assist in preparing its response to the invitation to bid. The principal focus in the Ardaman test was to determine constituents related to TCLP as this would determine whether the tank contents constituted hazardous waste. Results from the Ardaman test revealed that in removing material from the tank at Floral City one would be confronted with chromium concentrations of 1.6 mgl. The threshold limits for chromium concentration as set forth in the Code of Federal Regulation, Title 40, Section 261.24, for determining hazardous characteristics of those materials is 5.0 mgl. The sampling conducted by Ardaman also revealed a pH of 9.0. According to Ardaman, that ph did not indicate that the "tank coat" is corrosive. The Ardaman test did not detect reactive cyanide and sulfide. The test did not reveal characteristic ignitability. In summary, the Ardaman report concluded that the Floral City facility tank did not exhibit the characteristics of a hazardous substance as determined by the TCLP method, and by the ignitability and corrosivity testing. Petitioner proceeded on the basis that the Ardaman results indicated that the tank contents did not constitute hazardous waste and could be disposed of as other than hazardous waste material. Theoretically, Petitioner believed that disposal could be made in a landfill that would take the type of material found in the tank. As Petitioner points out, the Ardaman test did not speak to the possible disposal of the tank material as a fuel source or through incineration. From the results set forth in the Ardaman report, Petitioner erroneously assumed that Respondent intended to limit the method of disposal to placement in a landfill facility. While the Ardaman report speaks to the issue of whether the material constitutes hazardous waste, the remaining provisions within the invitation to bid leave open the opportunity for the bidders to make additional tests on those materials in deciding the proper disposal method. The provisions in the invitation do not select a proper disposal method and the results in the Ardaman report do not create the inference that Respondent's choice for disposal is by placement in a landfill. In Petitioner's research, it concluded that the material in the tanks could not be disposed of by incineration given the nature of this material compared to the type of material that could be destroyed at a facility which used incineration as a disposal method. Petitioner was persuaded that there might be some possibility to burn the material as a fuel source, but was not confident that this could be done without performing more tests. Petitioner was unable to find a landfill site that was near Respondent's Cocoa and Kissimmee facilities that would accept the tank contents. Petitioner intended to transport the material from the Cocoa and Kissimmee sites to Floral City and use Floral City as a staging area to consolidate the contents from the tanks. Having in mind consolidation, Petitioner discussed the possibility that it might make disposal in solid waste facilities in Sumter County, Florida. Petitioner was told that Sumter County facilities would not accept the material. Petitioner collected a sample of the tank material and had it analyzed by Howco Environmental in an attempt to ascertain the commercial value for the tank contents. Howco is a company that tests materials to ascertain whether those materials can be used as a fuel source and then uses the material as a fuel source. In a test, Howco determined that the tank material had no commercial value. Petitioner contacted two paving companies to determine whether the paving companies could reuse the tank material in the paving process. Those companies indicated that they could not reuse the material in the paving process. Terry Newman, who owns Petitioner, holds a B.S. in geology and has worked for the Suwannee River Water Management District, Collier County Pollution Control Department and the Alachua County Pollution Control Department as a hydro-geologist. Ms. Newman reviewed the Ardaman report and spoke about the report to a chemist in a laboratory which her firm uses. Through this review and discussion and based upon the information set forth in the Ardaman report, she concluded that the only disposal method available was to place the tank contents in a lined landfill. Ultimately the bid that was submitted by Petitioner was based upon making an arrangement with a sub-contractor to transport the material to Jacksonville for disposal. The transport method was that which would be used for transporting hazardous waste. In this arrangement the material is taken from the tank and put in a container for transport and off-loaded at the landfill. The tank itself would be disposed of in the conventional manner. The subcontractor which the Petitioner intended to use for transporting the contents within the tanks was a hazardous waste carrier. Mr. Schappell established that the Orlando project which was originally part of the $45,000 pre-bid estimate would cost approximately $25,000 to remove two single-wall steel tanks, one holding diesel fuel and the other gasoline, and replace those tanks with double-wall tanks. That estimate was not shown to be one based upon fraud, illegality, dishonesty, arbitrariness or caprice. Since the Orlando project was not pursued, this left $20,000 as the estimate to do the work in the three sites described in the invitation to bid. Prior to the invitation to bid, Respondent had solicited a price quotation, unrelated to a competitive bidding process, for the work at Floral City. ACTS Construction Co., Inc., submitted a price of $12,825 to include $1,875 for tank closure. The present project does not include a requirement for tank closure. This quotation from ACTS Construction Co., Inc. was from a contractor who had done similar work in removal of tanks, thereby creating proper confidence in Mr. Schappell that the quotation from ACTS was a reasonable quotation. A total of six vendors were invited to offer price quotations for the work at Floral City unrelated to the present project. Those six vendors were given access to the Ardaman report. There were a wide range of responses to the request for quotations and different ideas concerning methods of disposal. The overall price quotations ranged from the amount quoted by ACTS to an amount of approximately $20,000 by Westinghouse Company. Based upon the prices quoted by ACTS, Westinghouse, and others, Mr. Schappell determined that the pre-bid estimate for the work to be done at Floral City in the present project would be based upon the ACTS price quotation. The remaining work to be done at Cocoa and Kissimmee, in the present project, was given a pre-bid price of approximately $7,000. The estimate for Kissimmee and Cocoa was based upon having removed somewhat similar tanks, in somewhat similar conditions, from Respondent's maintenance yards at Oviedo, Leesburg, Ocala, and Cocoa. Respondent's pre-bid estimate of project costs amounting to $20,000, as established by Mr. Schappell, is a reasonable pre-bid estimate. It was not arrived at by illegal, fraudulent, dishonest, arbitrary, or capricious means. Mr. Schappell established that the Ardaman report was solely provided to offer assistance to the bidders in responding to the invitation. The language in the invitation to bid contemplates that limited use. The Ardaman report did not enter into the decision by Mr. Schappell in placing a pre-bid estimate on the work to be done. Mr. Schappell established that the "tack coat" in the tanks is a bituminous material to be applied as a sealer over the lime rock or soil cement which the Respondent places as a base for road construction. The "tack coat" also has an adhesive property which helps to retain the asphalt material that is placed on top of the lime rock and soil cement. The condition of the tank material in around the time that the bid invitation was made, was such that the material would be nearly viscous or liquid on warm summer days and in the winter would be solid. Its condition at other times was somewhat in between. Mr. Schappell properly points out that the invitation to bid relies upon the bidders' expertise in determining proper disposal methods and whether that disposal might involve reusing the tanks contents. Mr. Schappell established that in addition to the fact that the Petitioner's price far exceeded the pre-bid estimate, there was a concern about the price differential between the Chemical Development Corp. bid and that presented by Petitioner and the expectation that if the project was re-bid more vendors would express an interest in bidding.
Recommendation Based upon the findings of fact and the conclusions of law, it is, RECOMMENDED: That the final order be entered which dismisses Petitioner's protest to Respondent's decision to reject all bids. DONE and ENTERED this 16th day of June, 1995, in Tallahassee, Florida. CHARLES C. ADAMS, 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 16th day of June, 1995. APPENDIX The following discussion is given concerning the proposed findings of fact by the parties: Petitioner's Facts: The first sentence to Page 2 is subordinate to facts found. Respondent's Facts: Respondents facts are subordinate to facts found. COPIES FURNISHED: Randy Wiggins, President RAN Contracting & Engineering, Inc. 3056 Palm Avenue, Suite 1 Ft. Myers, FL 33916 Thomas H. Duffy, Esquire Department of Transportation Haydon Burns Building, M.S.-58 605 Suwannee Street Tallahassee, FL 32399-0458 Sharon Roehm, President Chemical Development Corporation 910 Pinellas Bayway #102 Terra Verde, FL 33715 Ben G. Watts, Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, FL 32399-0450
The Issue Whether the Petitioners are eligible for restoration coverage under the Abandoned Tank Restoration Program (ATRP) with regard to the remediation of petroleum contamination at DEP Facility No. 588631316, located in Venice, Florida.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: The Petitioners are the operators of Gulf Car Care (DEP Facility No. 588631316) located at 207 South Tamiami Trail, Venice, Florida. The Department is the agency charged with the responsibility of administering the Abandoned Tank Restoration Program. The Petitioners' ATRP Application was dated May 17, 1992 and received by the Department on June 17, 1992. The Petitioners' ATRP Application indicates that two 2,000-gallon underground storage tanks (UST's) were located at the facility and that one of those tanks was utilized for the storage of diesel fuel while the other tank was utilized for the storage of gasoline. Petitioners' ATRP Application indicates that two 4,000-gallon UST's and two 6,000-gallon UST's were also located at the facility and were utilized for the storage of gasoline. At least some, if not all, of the UST's identified in Petitioners' ATRP Application continued to store petroleum products for consumption, use or sale after March 1, 1990, and in fact, continued to store petroleum products for consumption, use or sale until some time in April, 1990. Petitioner Parr was operated on for colon cancer in late 1989 and Petitioner Homer suffered a heart attack on March 3, 1990. Petitioners contend that because of Petitioner Parr's illness the Petitioners were unable to make a decision to remove the petroleum storage system from service until after March 1, 1990. The petroleum storage system at the facility has been closed in accordance with Department's applicable rules.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department enter a Final Order denying the Petitioners' application for eligibility or restoration coverage under the Abandoned Tank Restoration Program. RECOMMENDED this day 21st of April, 1994, at 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 April, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-6555 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. Petitioners, Harold R, Parr and George H, Homer, Sr. Petitioners did not submit any proposed findings of fact per se. However, based on the record, including the testimony of the Petitioners, it does not appear that the Petitioners would disagree with any of the Findings of Fact presented in this Recommended Order. Respondent, Department's Proposed Findings of Fact. 1. The following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parenthesis is the Finding(s) of Fact which so adopts the proposed finding(s) of fact: 1(1); 2(3); 3-4(4); 5-6(5); 7- 9(6); 10-11(7) and 12(8). COPIES FURNISHED: Harold R. Parr 913 E. Shanon Court Venice, Florida 34293 George H. Homer, Sr. 3674 Roslyn Road Venice, Florida 34293 W. Douglas Beason, Esquire Department of Environmental Protection Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32399-2400 Virginia B. Wetherell, Secretary Department of Environmental Protection Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32399-2400 Kenneth Plante, General Counsel Department of Environmental Protection Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32399-2400
The Issue Whether the costs incurred by the Department of Environmental Protection, Bureau of Emergency Response (Department) in connection with its response to Incident Number 95-SE-0248 may be recovered from Petitioners pursuant to Chapters 376 and 403, Florida Statutes.
Findings Of Fact The Department is a state regulatory agency charged with the responsibility of administering and enforcing the provisions of Chapters 376 and 403, Florida Statutes. Spill Response, Inc. (Spill Response) is a corporation which was formed in approximately 1986 or 1987, and is presently inactive and without any assets. At all times material to the instant case, George Gordon has been the sole owner, president and director of Spill Response, and, as such, has directed the operations of the corporation. Spill Response was previously in the oil spill response business, as its name suggests. At such time, it had an office in Port Everglades and stored its equipment on fenced and gated property located at 3211 Southwest 50th Avenue, Davie, Florida, on which approximately a dozen large aboveground petroleum storage tanks (surrounded by concrete containment areas) also were situated. At all times material to the instant case, the property located at 3211 Southwest 50th Avenue, Davie, Florida (FPR site) has been owned by Florida Petroleum Reprocessors, Inc. (FPR), an inactive corporation that previously was in the waste oil recovery business. The FPR site, which is presently FPR's only asset, is the subject of a pending foreclosure action initiated by Charles Green, who, at all times material to the instant case, has held a first mortgage on the property. At all times material to the instant case, George Gordon has been the president and director of FPR, and, as such, has directed the operations of the corporation. In the latter part of 1994, the storage tanks on the FPR site were no longer in commercial use. At that time, Gordon, on behalf of FPR, hired Fred Rice to clean and maintain the site in preparation for its closure. Rice was instructed to remove the petroleum residue and sludge from the tanks and from the containment areas. Rice engaged in these petroleum and sludge-removal activities on a part-time basis until the spring of 1995, when he stopped working on the project after not having received timely payment for work he had performed. Rice placed the petroleum residue and sludge that he had removed, as well the rags and other materials that he had used in the removal process, in 55-gallon drums. He filled approximately six or seven such drums. A number of other 55-gallon drums containing petroleum residue and sludge (that some person or persons other than Rice had filled) were already on the FPR site. Rice put the six or seven drums that he had filled on a truck that was parked on the site and had “Spill Response, Inc.” and “Florida Petroleum Reprocessors, Inc.” markings on its sides. The truck was owned by Spill Response and had been on the site for some time. It had no battery and was inoperable. Rice told Gordon that he had put the drums he had filled with petroleum residue and sludge on the Spill Response truck. The next time Gordon went the FPR site, in late May of 1995, he discovered that the locks on the gates had been changed and that there were vehicles and equipment on the property that did not belong there. Gordon telephoned the Davie Police Department to complain about the unauthorized use of the FPR site. A police officer was dispatched to the site to investigate. When the officer arrived on the scene, he encountered Gordon outside one of the gates. Although the gate was locked, Gordon and the officer gained access to the site by squeezing through an opening in the gate. Upon entering the site, they looked around. Based upon what they saw, they correctly "figured out" that Certified Crane and Rigging, Inc., d/b/a Certified Equipment Management Company (Certified) was storing its crane equipment and trucks on the site. At all times material to the instant case, Certified has been owned and operated by William "Skip" Walton. Walton is an acquaintance of the aforementioned Charles Green, the holder of the first mortgage on the FPR site. Certified's telephone number was painted on the equipment and vehicles it was storing on the FPR site. The police officer called the number and spoke with Walton. Following his telephone conversation with Walton, the officer informed Gordon that Walton had indicated, during the conversation, that he was leasing the FPR site from Green. Gordon advised the officer that he did not want to press criminal charges (for trespassing) against either Certified or Walton. Gordon subsequently telephoned Green. Green told Gordon that it was true that he had leased the FPR site to Walton. Green explained to Gordon that he "needed to earn some money from the property." (It had been some time since Green had received any mortgage payments from FPR or Gordon.) Gordon contacted his attorney to discuss with her what legal action, if any, he could take to regain possession of the FPR site and be compensated for the unauthorized use of the property. Gordon's attorney advised him that he "would have recourse if [he] wished to pursu[e] the matter in court," but that it might not be cost-effective for him to do so. Gordon took no action, "in court" or otherwise, to regain possession and control of the FPR site; nor did he take any action to retake possession and control of the Spill Response truck or the filled drums that were in the truck and elsewhere on the site. Furthermore, he made no effort to make sure that the drums and their contents were stored and disposed of properly, believing that the proper storage and disposal of these items were now the responsibility of the new occupant of the site. He did not return to the FPR site for over a year. On or about June 6, 1995, the Department was notified (after its regular business hours) that the Spill Response truck had been discovered abandoned on the side of the road a few blocks from the FPR site. The following day,1 Ann Meador, an Environmental Specialist III with the Department, went to the location where the truck had been abandoned and served as the Department's on- scene coordinator. The truck was in poor condition and still inoperable. It had been brought (not driven) to the location by someone other than Gordon. The truck contained 37 sealed 55-gallon drums, which were in poor condition (but not yet leaking) and had oil residue on the outside. It could not be reliably determined exactly what was in the drums without removing them from the truck and examining and analyzing their contents. Meador made arrangements for OHM Remediation Services Corporation (OHM), with whom the Department had a contract to perform such services on an emergency basis, to assist in the removal of the drums from the truck. OHM personnel (with "Level B" protective clothing and equipment) responded to the scene and removed all 37 drums from the Spill Response truck. After the drums were unsealed, their contents were examined and sampled to the extent possible2 (as were the contents of three additional drums which were filled with the "Level B" protective clothing and equipment that OHM personnel had used during the cleanup operation and then discarded). Each of the drums was assigned a number for identification purposes. To save time and money, samples from some of the drums were composited. The drums were then overpacked and taken to the Department’s hazardous waste storage facility in West Palm Beach, Florida. The Department paid OHM $7,046.93 from the Water Quality Assurance Trust Fund for the services OHM performed. In requesting OHM to perform these services and in paying OHM $7,046.93 for having done so, the Department acted reasonably and prudently. The amount it paid OHM was not excessive. The Department hired Laidlaw Environmental Services (Laidlaw) to analyze the samples that OHM had collected and to then properly dispose of the drums and their contents. Laidlaw's analysis revealed the following: drums numbered 1, 2, 3, 4, 5, 9, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 30, 34, 35, 36, 37, and 38 contained oily sludges, oil, oil mixed with water, or oily residues; drum numbered 6 contained benzene and had a flash point between 73 and 140 degrees Fahrenheit; drum numbered 29 contained benzene and lead and had a flash point of less than 73 degrees Fahrenheit; drums numbered 10 and 11 contained benzene and lead; drums numbered 7, 8, 31, 32, 33 and 39 contained benzene, lead, and cadmium. Laidlaw properly disposed of the drums based upon the results of its analysis. The Department paid Laidlaw $21,163.90 from the Water Quality Assurance Trust Fund for the services it performed. In requesting Laidlaw to perform these services and in paying Laidlaw $21,163.90 for having done so, the Department acted reasonably and prudently. The amount it paid Laidlaw was not excessive. The Department reasonably incurred other expenses (also paid from the Water Quality Assurance Trust Fund) totaling $129.82 in connection with its response to the report it had received concerning the abandonment of the Spill Response truck. The total amount the Department paid from the Water Quality Assurance Trust Fund to have the drums on the truck properly removed and disposed of was $28,340.65. It was not until Gordon received a letter from the Department advising him of the costs the Department had incurred and requesting that Spill Response and he reimburse the Department for these costs that Gordon became aware of the fact that the truck and the drums had been moved from the FPR site.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered by the Department finding that it is entitled to recover from Petitioners, pursuant to Chapters 376 and 403, Florida Statutes, the $28,340.65 in costs the Department reasonably incurred in connection with its response to Incident Number 95-SE-0248. DONE AND ENTERED this 8th day of June, 1998, in Tallahassee, Leon County, Florida. STUART M. LERNER 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 Filed with the Clerk of the Division of Administrative Hearings this 8th day of June, 1998.
The Issue Whether DNR should establish an exceptional drilling unit or units in order to prevent waste and to avoid the . . . risks . . . from . . . an excessive number of wells, Section 377.25(2), Florida Statutes (1983)? The respondents expressly declined to raise any question as to the petitioners' standing or party status.
Findings Of Fact Petitioner W. J. Jordan and apparently all the other petitioners are owners of mineral rights under the northwest quarter of the southeast quarter of Section 13, Township 5 North, Range 29 West, Santa Rosa County, Florida. T. R. Miller owns the mineral rights under the northeast quarter of the southeast quarter of Section 13 and has leased them to Smackco. Near the center of the southeast quarter of Section 13 (the existing unit) respondent Smackco drilled the L. W. Roberts 13-4 well. NOT COMMERCIALLY PRODUCTIVE Smackco drilled the L. W. Roberts 13-4 well down to the Norphlet formation and went 49 feet further, into the Norphlet sands, before giving up its efforts to extract oil from the well. Although Smackco did find a mixture containing 28 to 30 percent hydrocarbons, the hydrostatic head precluded commercial production. If the well had come in, royalties would have inured to the benefit of petitioners, T. R. Miller, and the owners of the mineral rights under the southern half of the existing unit. Although the evidence showed that extracting oil from the L. W. Roberts 13-4 well was not commercially feasible now, it did not establish that the price of oil will never rise to the point that production would make economic sense. ADDITIONAL DATA At least three other oil wells have been drilled at the Mount Carmel Prospect in Township 5 North, Range 29 West, Santa Rosa County, Florida. In keeping with applicable statutes and rules, these wells are also located at or near the center of their respective quarter sections. Except where no governmental sections are laid out (offshore or in Spanish land grants), or where all rights affected by a change are in one ownership, DNR has adhered to the concededly arbitrary use of quarter sections as drilling units. Information gained from the wells drilled at the Mt. Carmel Prospect, and from seismic tests performed there formed the basis for uncontroverted expert opinion that a sandy mass, known to geologists as the Norphlet structure, lies almost three miles below the earth's surface; and that a pool of oil floats on salt water within the Norphlet structure, as shown in the Appendix to this order. The L. W. Roberts 13-4 is on the northern edge of the pool that the geologists hypothesize. The geophysicist's testimony that the Jay fault running northwest southeast and the smaller almost perpendicular fault running off to the northeast lie approximately as depicted in the Appendix was also uncontroverted. These faults may act as walls keeping oil on one side. The faults themselves do not hold oil. THE NEXT WELL If a new well were drilled in the center of the northwest quarter of Section 16, at a point one half mile due south of the L. W. Roberts 13-4, see Appendix, it would be near the western edge of the pool of oil, if the geologists are right. (If the geologists are wrong, drilling there might mean hitting the fault zone, as happened with the Franks Pittman well.) Drilling a quarter mile north, at the center of the first proposed drilling unit, would reduce the risk of hitting the fault, and might make commercial production of a substantial amount of oil possible. DRAINAGE LIKELY Smackco's geophysicist conceded that hydrocarbons at the L. W. Roberts 13-4 and hydrocarbons under the northwest quarter of the existing unit "very possibly" will migrate to a well in the center of the proposed drilling unit, if hydrocarbons are extracted in large quantities there. A well of the kind and to the depth contemplated can be expected to drain 160 acres more or less. The geologists cannot know precisely what the situation is three miles down on the basis of the information they have at hand. They may be mistaken now about the location of oil just as they were when they recommended earlier well sites in the Mt. Carmel Prospect.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That DNR deny Smackco's petition for exceptional drilling units. DONE and ENTERED this 2nd day of March, 1984, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of March, 1984. COPIES FURNISHED: James Reddick, Esquire and Dan Stewart, Esquire Suite 5 808 Caroline Street, Southeast Milton, Florida 32570 J. Nixon Daniel, III, Esquire and Spencer Mitchem, Esquire Beggs & Lane Post Office Box 12950 Pensacola, Florida 32576-2950 Charles J. Hardee, Esquire Department of Natural Resources 3900 Commonwealth Boulevard Tallahassee, Florida 32303 Elton Gissendanner, Director Department of Natural Resources Executive Suite 3900 Commonwealth Building Tallahassee, Florida 32303 * NOTE: Original Recommended Order has an appendix map which is available for review in the Division's Clerk's Office.
Findings Of Fact Based upon the prehearing statement, the testimony of the witnesses, and the documentary evidence received at the hearing, the following findings of fact are made: The Petitioner is a Florida corporation in good standing, authorized to do business in this state. The Petitioner owns and controls the site which is the subject matter of these proceedings. Such site is located in Brevard County, Florida. The Department has identified the subject site as DER facility no. 05- 8500985 (the facility). At all times material to this case, the facility consisted of: three underground storage tanks (UST), one 3000 gallon UST used for storing diesel fuel, one 1000 gallon UST used for storing diesel fuel, and one 1000 gallon UST used for storing gasoline; five monitoring wells; and pipes and pumps related to the foregoing system. The facility constituted a storage tank system as defined in Section 376.301, Florida Statutes, and Rule 17-761.200(38), Florida Administrative Code. The Petitioner holds, and is named insured for, third party pollution liability insurance applicable to the facility. Such insurance was issued pursuant to Section 376.3072, Florida Statutes. The policy for the foregoing insurance, policy no. FPL7622040, was in force from March 22, 1991 through March 22, 1992. The Department issued a notice of eligibility for restoration insurance to Petitioner for the above-described facility. Based upon the foregoing, the Petitioner is a participating owner or operator as defined in Chapter 17-769, Florida Administrative Code. Pursuant to Section 376.3073, Florida Statutes, Brevard County operates a local program that has been approved by the Department. Such local program is managed by the Brevard County Office of Natural Resources Management (County). In July, 1990, a discharge of diesel fuel occurred at the Petitioner's facility. Petitioner's employees estimated that approximately twenty gallons of diesel fuel filled the pump box overflowed from the pump box across the seawall into the adjacent waters. Upon discovering the discharge, Petitioner shut down diesel fuel dispensing until repairs could be made to the apparent cause of the leak. Additionally, the diesel fuel remaining in the pump box and on top of the tank area was removed. Contaminated soil in the pump box was also removed. The apparent cause of the discharge described above was attributed to cracked pipe fittings which were repaired by Glover Oil Co. within a few days of the discharge. No detailed inspection was made to the system to determine if additional sources of discharge existed. Petitioner did not complete a discharge reporting form (DRF) for the above-described incident until April 18, 1991. The April DRF was completed after Petitioner was directed to do so by Ms. DiStasio, an inspector employed by the County. From August, 1990 until May, 1991, at least one monitoring well at the Petitioner's facility showed free product accumulating in the well pipe. The exact amounts of the free product found are unknown, but reports estimated the level at 100 centimeters. From August, 1990 until September, 1991, the Petitioner did not undertake any measure to explore the origin of the free product found in the monitoring well. Further, the Petitioner did not report the monitoring well testing results as a suspected or confirmed discharge. In April, 1991, an inspection of the Petitioner's facility was performed by Ms. DiStasio. That inspection resulted in a letter to the Petitioner that outlined several violations at the facility. Among those violations listed was the Petitioner's failure to report a suspected or confirmed discharge. At the time of the April, 1991 inspection, Petitioner had reported neither the July, 1990 discharge (a known discharge) nor the monitoring well test results (at the minimum a suspected discharge). In connection with the July, 1990 discharge, following the repairs made by Glover Oil, Petitioner did not have the system pressure tested. Only the area visible from the pump box was checked for leakage. In July, 1991, when Ms. DiStasio performed a re-inspection of the facility, she found Petitioner had not (in the interim period, April through July, 1991) taken any steps to test the system or to remove the fuels from the suspect tanks. Since the free product continued to appear in the monitoring well, a pressure test of the system would have definitively answered the discharge question. Alternatively, the removal of the fuels would have prevented further seepage until the system could be pressure tested. On August 6, 1991, the Petitioner issued a letter that advised the County that it had stopped dispensing fuel at the facility. The tanks were not drained, however, until on or about September 11, 1991. Further, the August, 1991, letter acknowledged that the Petitioner "had proposals for initial remedial cleanup related to diesel contamination in the tank field area." Obviously, the Petitioner must have contemplated a need for such cleanup. On September 11, 1991, at the Petitioner's request, Petroleum Equipment Contractors, Inc. attempted to pressure test the 3000 gallon diesel tank. The purpose of the pressure test was to determine if the diesel system had a leak. The company could not even run the test on the tank because of the defective system. A similar test on the Petitioner's gasoline tank passed without incident. Once the Petitioner learned the results of the test, it initiated Initial Remedial Action (IRA) as described on the IRA report filed by Universal Engineering Sciences. The IRA consisted of the removal of the excessively contaminated soil, approximately 74 cubic yards, and the removal of the USTs. The foregoing work was completed on or about September 15, 1991. On October 4, 1991, the Petitioner filed a discharge reporting form dated October 2, 1991, that identified September 11, 1991, as the date of discovery for the discharge. This discharge discovery was allegedly made incidental to the diesel tank pressure testing failure. No reference was made to the months of monitoring well reports showing a free product. On October 8, 1991, Ms. DiStasio prepared a Florida Petroleum Liability Insurance and Restoration Program Compliance Checklist that reported the Petitioner was not in compliance with applicable statutes and rules. When Petitioner applied for restoration coverage under the statute on January 31, 1992, such request was denied by the Department on March 6, 1992. The basis for the denial was as follows: Failure to notify the Department of a positive response to sampling within three working days of testing, pursuant to the rule in effect at the time of the initial response (17-61.050(1), Florida Administrative Code). An inspection by Brevard County on April 17, 1991, revealed that free product had been detected in one monitoring well since July 1990. The discharge reporting form was not submitted until October 2, 1991.
Recommendation Based on the foregoing, it is RECOMMENDED: That the Department of Environmental Regulation enter a final order denying Petitioner's claim for restoration coverage under the Florida Petroleum Liability Insurance and Restoration Program. DONE and ENTERED this 31st day of December, 1992, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH 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 31st day of December, 1992. APPENDIX TO CASE NO. 92-2121 RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE PETITIONER: Paragraphs 1, 2, 8, 12, 15, 16, 17, and 18 are accepted. Except as found above, paragraph 3 is rejected as not supported by the record cited. It is accepted that Brevard County acted as the local agent in this case. Paragraph 4 is rejected as not supported by the record. With regard to paragraph 5, substituting "A" for "The" and "confirmed" for "discovered" the paragraph can be accepted; otherwise rejected as contrary to the record. Similarly, with the substitution of the word "confirmation" for "discovery" in Paragraph 6, the paragraph can be accepted; otherwise rejected as contrary to the record. No suitable explanation was offered by the Petitioner for why, if a discharge were not reasonably suspected, it retained the company to immediately remove the USTs upon the failed pressure testing. Clearly, the Club had a notion the tanks were a discharge problem. Paragraph 7 is rejected as contrary to the weight of the evidence. While there was some confusion as to the exact volume of free product in the monitoring well, there was clear evidence that such was reported for many months prior to the confirmation in September, 1991. Further, the main confusion regarding the product found in the well was not as to its existence, but as to the individual's knowledge of the metric measurement of it. One hundred centimeters of product in a two or three inch pipe would not be a minute amount. Except as addressed in the foregoing findings, paragraph 9 is rejected as contrary to the weight of the evidence. Petitioner did not undertake all repairs necessary to abate a discharge problem. Paragraph 10 is rejected as not supported by the weight of credible evidence or irrelevant. Clearly, as early as August, 1990, Petitioner knew or should have known of a discharge problem based upon the monitoring well report; that all of the discharge did not necessarily flow from the fittings that had been repaired is irrelevant. Further, Petitioner did no testing to verify that the replaced fittings had solved the discharge problem (especially in light of the well reports). Paragraph 11 is rejected as an inaccurate restatement of the exhibit. Paragraph 13 is rejected as contrary to the weight of the evidence. Incidentally, the hearing in this case was in the year 1992. Paragraph 14 is rejected as contrary to the weight of credible evidence. RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE RESPONDENT: Paragraphs 1 through 11 are accepted. Paragraph 12 is rejected as a misstatement of the exhibit cited. Paragraphs 13 through 27 are accepted. COPIES FURNISHED: Brigette A. Ffolkes Assistant General Counsel Department of Environmental Regulation Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32399-2400 Scott E. Wilt MAGUIRE, VOORHIS & WELLS, P.A. 2 South Orange Plaza P.O. Box 633 Orlando, Florida 32802 Carol Browner, Secretary Department of Environmental Regulation Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32399-2400 Daniel H. Thompson, General Counsel Department of Environmental Regulation Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32399-2400
