The Issue At issue in this proceeding is the reasonable cost to be reimbursed Petitioner, under the provisions of Section 376.3071(12), Florida Statutes, for the development of a Monitoring Only Plan (MOP) program for the Dagam Oil Company (DEP Facility No. 138504146), at 331 23rd Street, Miami Beach, Florida.
Findings Of Fact Background Petitioner, Panhandle Industries, Inc., is a Florida corporation engaged in the business of consulting, engineering and construction. George M. Hidle, a professional geologist licensed in the State of Florida, is the president and sole owner of the Petitioner corporation. In September 1992, Dagam Oil Company, doing business as Sierra Fina, employed Petitioner to do environmental assessment work and prepare a Contamination Assessment Report (CAR) under the then existing Rule 17-770.630, Florida Administrative Code, for a site located at 331 23rd Street, Miami Beach, Florida (DEP Facility No. 138504146).4 That CAR was submitted to DERM (Metropolitan Dade County, Department of Environmental Resources Management) July 13, 1993. (Petitioner's Exhibit 1.) Pertinent to this case, the CAR provides the following background or historical information: . . . PHYSICAL SETTING . . . Sierra Fina is located at 331 23rd Street in Miami Beach, Florida . . . The facility is bordered to the north by Collins Canal, to the east by the light commercial properties, and to the south/southeast by property that once contained Chevron and Fina service stations. . . . * * * . . . FACILITY HISTORY AND OPERATION Sierra Fina was built in 1963. The station originally operated as a Sunoco service station with a 3 bay garage. Dagam Oil Company purchased the facility in March 1981 from Charles Rosenblatt. At the time the station had five underground fuel tanks. . . . * * * . . . PREVIOUS INVESTIGATIONS Dagam Oil Company contracted with another environmental company in November 1988 to collect groundwater samples from . . . five monitoring wells at the facility. Groundwater samples were collected on November 9, 1988 and analyzed by EPA Method 602. Monitoring well MW-3 was also analyzed by EPA Method 610. All five of the wells had hydrocarbon contaminant concentrations in excess of state guidelines. . . . A discharge notification form was mailed to the DER and DERM on December 9, 1988, the date of receipt of the analytical results from the November 9, 1988 groundwater sampling event. . . . * * * . . . INITIAL REMEDIAL ACTIONS [IRA] [The F]ive underground storage tanks [and associated piping] were removed from the facility during March and April 1989 [, and replaced with four new cathodically protected underground petroleum storage tanks]. Approximately 400 cubic yards of contaminated soil was also removed at that time. On March 31, 1989 a composite sample of the soil was collected for analysis . . . Because of limited space at the station, the contaminated soil was hauled to a Metro Trucking Inc. storage yard located at 112th Avenue and 143 Street in Miami. The contaminated soil was landfarmed at this Metro Trucking facility for a period of seven months, during which time the soil was spread onto visqueen and tilled on a regular basis. On November 21, 1989 the soil was resampled and analyzed . . . Results of this second round of analyses met clean fill criteria. Also at the time of tank replacement, a sheen of free floating hydrocarbons was observed on water in the tank pit. A vac truck was used to skim this product from the pit prior to tank replacement. Approximately 2100 gallons of oily water were removed, transported, and disposed of by Cliff Berry, Inc. . . . Other than these IRA activities, no other assessment or remediation work had been performed at the facility until Petitioner was employed in September 1992. Petitioner's CAR concluded that: Soil and groundwater at Sierra Fina are contaminated with gasoline and diesel hydrocarbons. Excessively contaminated soil is confined to an area at the western end of the station building that is approximately 20 feet in width by 30 feet in length, extending down to a water table of between 6 and 8 feet below land surface. No free phase floating product is present on the groundwater underlying this facility. However, dissolved hydrocarbon contamination is present in the groundwater. A dissolved hydrocarbon plume is present in the western half of the site. This plume measures 80 feet in length by 60 feet in width and extends to a depth of less than 22 feet below land surface, yielding approximately 134,640 gallons of hydrocarbon contaminated water. Volume calculations are based on an average depth to groundwater of 7 feet below land surface and an effective soil porosity of 25%. The highest benzene (53.3 ppb) and total napthalenes (752 ppb) concentrations were detected in MW-12. * * * Groundwater within the Biscayne Aquifer beneath Sierra Fina is nonpotable because of salt water intrusion from the Atlantic Ocean. For this reason there are no private or public potable wells in the area. Contamination at Sierra Fina is limited onsite to the western half of the station, and poses no threats to sensitive receptors in the area, with the possible exception of Collins Canal. The cause of hydrocarbon contamination was never determined; however, the most probable source, i.e. previous petroleum tanks and lines, were removed in March and April of 1989. Based on these findings and the data presented about or elsewhere in this report, it is known that soil and groundwater contamination does exist at this facility in concentrations that exceed guidelines specified in Section 17- 770.730(5)FAC; however, the levels of contamination may not warrant the need for any extensive remediation activities at this site. Petitioner's CAR was approved by DERM on October 8, 1993, and Petitioner was directed to submit a Remedial Action Plan (RAP) within 60 days.5 At the time, Mr. Hidle (Petitioner) was aware that the levels of contamination were low or near target levels, and that it was likely that the contamination levels would decrease naturally over time. Consequently, Petitioner elected to seek approval of a Monitor Only Plan (MOP), as opposed to a RAP. Such choice was favored based on the nature and location of the contaminants. In this regard, it was observed that the soil contamination consisted of both gasoline and diesel fuel, with much of the contaminated soil abutting or underneath the building. Excavation and removal of the soil was not an alternative because it would undermine the structural integrity of the building. Moreover, given the fuel mix, vapor extraction was not a viable option. Given Petitioner's choice to pursue approval of a MOP, it gave notice to the Department and DERM on October 18, 1993, as well as November 12, 1993, and December 2, 1993, of its intention to undertake groundwater sampling and soil sampling on the site. Groundwater sampling was undertaken by Mr. Hidle between 1:30 p.m., November 30, 1993, and 2:30 a.m., December 1, 1993,6 at which time he drew water samples for laboratory analysis from 10 monitor wells (MW) and one deep well (DW). A duplicate sample was also retrieved at MWs 12R and 14, and equipment blanks were also obtained for laboratory analysis. Between 8:25 p.m., December 4, 1993, and 3:40 a.m. December 5, 1993,7 Mr. Hidle and a senior technician (Martin Hidle) augured 6 soil borings for use in preparing the MOP and collected one soil sample for laboratory analysis. Petitioner delivered the water samples to the laboratory (Envirodyne, Inc.) on December 2, 1993, and the soil sample on December 6, 1993, for analysis. The laboratory completed its analysis of the water samples on December 13, 1993, and of the soil sample on December 14, 1993, and rendered its written reports (analysis) to Petitioner.8 Upon receipt of the laboratory data, Mr. Hidle completed his preparation of the MOP. (Petitioner's Exhibit 4.) That MOP contained the following conclusions and recommendations: The initial dissolved hydrocarbon plume dimensions were based on data from groundwater sampling events of January and February 1993. Laboratory results from a more recent sampling event (11/30/93) indicate that plume size and hydrocarbon compound concentrations therein have decreased substantially (Table 4-2). Maximum groundwater contaminant concentrations decreased as follows: benzene from 53.3 ppb to 11.1 ppb; BTEX from 111.7 ppb to 20.6 ppb; total naphthalenes from 752 ppb to 246.1 ppb. During the contamination assessment program task a small area of contaminated soil was found to be abutting the western end of the station building (CAR, Fig. 3-1, p. 35). Because of the presence of diesel compounds in the groundwater, it was assumed during preparation of the CAR that the soil too was contaminated with diesel. In early December 1993 PI Environmental personnel installed six additional soil borings (Figure 3-1, SB-16 through SB-21) and collected one soil sample for laboratory analyses. The soil borings were augered in the immediate area of the previously defined contaminated soil plume, and soil samples were analyzed in the field by using a Foxboro OVA 128. Soil samples were collected vertically every two feet, beginning at one foot below ground surface and continuing until the water table was encountered. A soil sample was collected from boring SB-17 at a depth of six feet below land surface. A net OVA reading of 160 ppm was observed from a duplicate sample taken from the same depth. The soil sample was tested by EPA Methods 3540/8100 (diesel compounds) and 9073 (TRPH). Laboratory results indicated that all diesel compounds were below laboratory detection limits, and the TRPH concentration was below normal background readings. Soil contamination was reclassified as being gasoline in origin, because no diesel compounds were detected in the soil sample from SB-17. Section 17-770.200(2) Florida Administrative Code defines excessively contaminated soil, associated with gasoline contamination, as those that have a net OVA/FID reading equal to or greater than 500 ppm. From December 1993 sampling event, a maximum net OVA/FID reading of 316 ppm was obtained from a sample that was collected at five fee below land surface in SB-17. Based on these results, no excessively contaminated soil was found during the most recent sampling event. It is the recommendation of PI Environmental Inc. that a Monitoring Only Plan be implemented at Sierra Fina. This recommendation is based on the following findings: 1) Absence in the study area of any potable water wells within the Biscayne Aquifer because of salt water intrusion from the Atlantic Ocean 2) Absence of free phase hydrocarbons 3) Absence of excessively contaminated soil 4) Substantial decrease in concentrations of dissolved hydrocarbon compounds within the groundwater during the last year, and 5) relatively low levels of hydrocarbon contamination in the groundwater, i.e., based on the November 30, 1993 sampling event, maximum benzene of 11.1 ppb, maximum BTEX of 20.6 ppb, and maximum total naphthalenes of 246.1 ppb. It is our recommendation that groundwater from monitoring wells MW-8, MW-12R, MW-6, and MW-17 be sampled on a quarterly basis. Groundwater from the source area wells, MW-8 and MW-12R, should be analyzed quarterly by EPA Methods 602 and 610. Groundwater from the perimeter wells, MW-6 and MW-17, should be analyzed quarterly by EPB Method 602 and semiannually by EPA Methods 602 and 610. Petitioner submitted the MOP to DERM on January 24, 1994. Pertinent to this case, it is observed that the MOP was a brief document, consisting of only 13 pages of textual material, much of which was a restatement of material contained in the CAR. The balance of the report consisted of 5 "Figures" (three of which were contained in the CAR and one of which is an updated version of a CAR Figure); 2 "Tables" (an update of the Water Table Elevation table contained in the CAR to include the November 30, 1993, data, and an update of the Summary of Groundwater Analyses contained in the CAR to include the November 30, 1993, and December 1, 1993, data); 6 "Geologic Log[s]" (a restating of the soil boring results noted in the field notes for December 4 and 5, 1993); copies of the laboratory (Envirodyne, Inc.'s) reports of groundwater analysis; and the laboratory's report on the soil analysis. In all, while apparently adequate and nicely presented, the MOP does not address a complex or unique issue, and does not evidence the expenditure, or need to expend, an inordinate amount of effort to produce. Petitioner's MOP was disapproved by DERM on May 11, 1994, for the following reasons: A complete round of groundwater analyses, no greater than six months old, is required. Therefore, all wells at this site must be sampled for EPA Method 418.1, and monitoring wells numbered MW-6, MW-9, MW-10, MW-11, MW-13, MW-16, and MW-17 must be sampled for EPA Method 610. Because diesel contamination is present at this site, soil OVA readings above 50 ppm are considered to indicate excessively contaminated soil. Based on this OVA readings obtained for your Contamination Assessment Report (CAR) and this MOP, excessively contaminated soil does exist at this site. Since this coil could be a continuing source of contamination, it must be removed prior to the approval of a MOP. Consequently, Petitioner was directed to submit an addendum to the MOP to address those issues. On June 1, 1994, Petitioner gave notice to the Department and DERM of its intent to collect groundwater samples to address issues raised by DERM's MOP review letter. These samples were collected by Mr. Hidle and a technician (Leo Iannone) between 1:15 p.m. and 10:00 p.m., June 15, 1994.9 Petitioner delivered the water samples to the laboratory (Envirodyne, Inc.) on June 16, 1994. The laboratory completed its analysis and delivered its written reports to Petitioner on or about June 23, 1994. Upon receipt of the laboratory data, Mr. Hidle completed the Monitoring Only Plan Addendum (Petitioner's Exhibit 8), and submitted it to DERM on July 5, 1994. The addendum addressed the additional groundwater analysis that was performed, and with regard to the diesel contamination it observed, as follows: Soil analytical results (MOP, Page 62) are below laboratory detection limits for EPA 610 compounds; however, because groundwater at this facility is contaminated with both gasoline and diesel, we are concurring with DERM by reclassifying excessively contaminated soil as any soil that exhibits net OVA/FID readings of 50 ppm or greater, per Chapter 17-770 FAC. OVA/FID soil analyses were performed in accordance to Panhandle Industries, Inc. approved Comp QAP. Net OVA/FID soil results obtained during the CAR program task are shown in Figure 1-5. A maximum net OVA/FID reading of 887 ppm was obtained during CAR soil assessment activities which ended on November 29, 1992. Figure 1-6 shows net OVA/FID results obtained during the MOP program task. These MOP analyses are current through December 5, 1993. A maximum net OVA/FID of 316 ppm was obtained during this latter event. As is shown in comparison of Figures 1-5 and 1-6, it can be seen that the size of the soil contaminant plume and OVA/FID net soil readings therein have decreased significantly since initiation of the CAR. Also, by observing Figure 1-6, which has a scale of 1" = 20', it is evident that very little soil, if any can be excavated without jeopardizing the structural integrity of the station building. Furthermore, there exist the possibility that some soil contamination may underlie the building itself; therefore, soil excavation would most likely result in only partial removal of the contaminated soil plume. The addendum concluded by recommending that the MOP be implemented as originally proposed, but with additional monitoring to assure a continuing decline in contamination. The addendum, like the MOP, was a brief document and contains only 6 pages of textual material. The balance of the addendum contains 6 "Figures" (all of which appeared in the CAR or MOP); 2 "Tables" (an update of the Water Table Elevations table contained in the MOP to include June 15, 1994, data, and an update of the Summary of Groundwater Analyses contained in the MOP to include the June 15, 1994, data); and the laboratory reports of groundwater analyses. As with the MOP, the addendum did not appear to address any complex or unique issues, and did not evidence the expenditure, or need to expend, an inordinate amount of time to produce. On August 16, 1994, and August 26, 1994, DERM and the Department, respectively, approved the "monitoring only" proposal. The request for reimbursement Petitioner submitted its reimbursement application on or about August 23, 1994, and it was apparently complete on or about April 18, 1996. (Petitioner's Exhibit 11). That application sought recovery of the following sums for the items noted: 6. REMEDIAL ACTION PLAN [MOP and MOP Addendum] PREPARATION . . . Personnel 31442.55 Capital Expense Items Rentals 1127.45 Mileage 68.05 Shipping 35.00 Well Drilling Permits Analysis 3680.00 Miscellaneous 1601.25 REMEDIAL ACTION PLAN PREPARATION TOTAL 37954.30 * * * 13. REIMBURSEMENT APPLICATION PREPARATION Supplementary Forms Personnel 795.00 Capital Expense Items Rentals 15.00 Mileage .80 Shipping 86.81 Well Drilling Permits Analysis Miscellaneous 60.75 APPLICATION PREPARATION TOTAL 958.36 CERTIFIED PUBLIC ACCOUNTANT REVIEW FEE 500.00 APPLICATION GRAND TOTAL 39412.66 By letter (Order of Determination of Reimbursement) of June 27, 1996, the Department responded to Petitioner's reimbursement request as follows: We have completed review of your Reimbursement Application for expenses incurred during the Remedial Action Plan/Monitoring Only Plan program task at this site and have determined that $13,198.70 of the total $39,412.66 requested is allowable for reimbursement. This amount will be paid to the person responsible for conducting site rehabilitation when processing is completed by the Comptroller's Office. Some adjustments to the amount of reimbursement requested have been made. The following list details these adjustments. Citations refer to the specific sections of the enclosed Reimbursement Application Summary Sheets: 1. $24,766.25 in Section 6A, $259.95 in Section 6C, $28.20 in Section 6D and $63.25 in Section 6I were deducted because the total personnel hours (413.15 hours) and the total cost of $39,412.66 claimed for performing a limited scope of work consisting of 78.34 hours of field activities, two rounds of analyses (59 samples) and two letter reports have been determined to be excessive. However, actual field activities (including a reasonable amount of preparation), two rounds of analyses and a reasonable amount of personnel time to prepare two letter reports have been allowed. 2. $162.50 in Section 6A, $9.00 in Section 6E and $331.15 in Section 6I were deducted for costs associated with providing backup for the Contamination Assessment reimbursement application. These costs are not reimbursable in this application which is for the Remedial Action Plan/Monitoring Only Plan program task. $184.80 in Section 6A and $394.56 in Section 6I were deducted for field supplies, ice, conducting database modifications and purchasing office supplies, which are considered to be overhead. These costs are not justified in addition to the loaded personnel rates which already include overhead and profit. $11.76 in Section 6I was deducted because the rate for reproduction ($0.99 per page) has been determined to be excessive. However, $0.15 (per page) has been allowed based on the predominant rate claimed in other reimbursement applications for similar rates. $19.56 in Section 13E was deducted for costs added to the application preparation claimed as a markup. Reimbursement for application preparation is limited to actual costs only. $17.02 was added to the application grand total to cover the cost of reproducing the reimbursement application and invoices and shipping the replacements to the Department. (Petitioner's Exhibit 12.) Petitioner filed a timely challenge to contest the Department's decision. That challenge disputed the Department's action, as set forth in paragraphs numbered 1 through 4 of the letter, but Petitioner did not then, or at hearing, dispute the Department's action with regard to the matters contained in paragraphs numbered 5 and 6 of the Department's letter. (Petitioner's Exhibit 13). Subsequently, at hearing, Petitioner withdrew its request for reimbursement regarding the items contained in paragraph 3 of the Department's letter. (Transcript, page 101). The claim for the cost of preparing the reimbursement application Petitioner's claim for the cost of preparation of the reimbursement application totalled $1,458.36 (including the certified public accountant review fee). The Department proposed to deduct $19.56 (in Section 13E), and to add $17.02 to cover certain costs, as noted in the Department's letter. (Petitioner's Exhibits 12 and 13). Petitioner offered no objection to the Department's decision and, therefore, Petitioner should be awarded $1,455.82, without the need for further discussion, as the cost of preparing the reimbursement application. The claim for the cost of preparation of the MOP and MOP Addendum Petitioner's application for reimbursement claimed 413.15 personnel hours ($31,442.55) were dedicated to the development of the MOP (329.42 hours/$25,500.95) and the MOP Addendum (83.73 hours/$5,941.60). (Respondent's Exhibit 7, and Transcript, pages 188-190). In its initial review, the Department approved 55.67 hours ($3,790.45) for the MOP and 41.92 hours ($2,538.55) for the MOP Addendum, for a total award of $6,329.00. Subsequently, the Department resolved to accept as reasonable, 89 hours ($6,308.00) for the MOP and 83.73 hours ($5,941.60) for the MOP Addendum, for a total award of $12,249.60 for personnel costs.10 The 83.73 hours ($5,941.60) agreed to by the Department for the MOP Addendum was the precise amount Petitioner requested in its reimbursement application; however, the 89 hours ($6,308.00) accepted by the Department for the MOP is clearly less than the 329.42 hours ($25,500.95) Petitioner had requested. With regard to the difference, the Department views the request as excessive. In contrast, Petitioner contends the time requested was reasonable. Here, the Department's view has merit. To support the reasonableness of the hours (labor) claimed, Petitioner pointed to the "Daily Time Log[s]" which were contained within the reimbursement application, and which it contended contain an accurate recording of the hours worked and the task performed. (Petitioner's Exhibits 11, and Transcript, pages 29 through 31). According to Mr. Hidle, all employees of the company were required to keep a notepad on which they were to record the job (customer), hours worked, and task performed. At some future date, perhaps up to a week or more, those entries were ostensibly transferred to the "Daily Time Log." (Transcript, pages 29 through 31, and page 84). Consequently, Mr. Hidle contends Petitioner's "Daily Time Log[s]" may be relied upon to accurately reflect the hours actually worked, and that those hours were reasonably expended. Here, considering the record, Mr. Hidle's testimony is rejected as not credible or, stated otherwise, inherently improbable and unworthy of belief. In so concluding, it is observed that there is nothing of record, either in the exhibits or testimony offered at hearing, that could possibly explain the dichotomy between the number of hours claimed for development of the MOP (329.42) and the number of hours claimed for development of the MOP Addendum (83.73). Notably, neither project was particularly complex, and the tasks performed were reasonably alike. Similarly, it is inherently improbable, given the limited field work and the product produced (the MOP), that production of the MOP could require 329.42 hours or, stated differently, eight and one-quarter weeks, at 40 hours per week. Finally, most of the entries for which substantial blocks of time are assigned contain only vague or general terms to describe the task, such as "literature review," "MOP/RAP preparation," "file review," and "schedule/plan/coordinate RAP/MOP." Such practice renders it impossible to determine what work was actually done, whether the work was duplicative, and whether the time was actually expended or reasonable. Given the record, it must be concluded that the proof offered by Petitioner to support the number of hours claimed for development of the MOP is not credible or persuasive, and that it would be pure speculation to attempt to derive any calculation or meaningful estimate based on such proof. In the end, Petitioner must bear the responsibility for such failure. While Petitioner's proof offers no credible basis upon which to derive the number of hours dedicated to the MOP and their reasonableness, Petitioner obviously dedicated time to the MOP, and to the extent the record provides a reasonable basis on which to predicate an award, it is appropriate to do so. Here, given the lack of credibility of Petitioner's "Daily time Log[s]," as well as the testimony of Mr. Hidle, to provide a basis on which to derive the number of hours actually worked, and then test those hours against the standard of reasonableness, the only option is to award the 89 hours or $6,308.00, which the Department agrees were reasonably expended. Finally, with regard to the miscellaneous cost items, as opposed to personnel hours, rejected by the Department's letter of June 27, 1996, it must be resolved that Petitioner failed to offer, at hearing, any compelling proof that the items rejected by the Department were reasonable expenditures incurred in development of the monitor only program. Consequently, the following sections of Petitioner's reimbursement application have been reduced by the sums stated: $295.95 deducted from Section 6C; $28.20 deducted from Section 6D; $9.00 deducted from Section 6E; and $800.72 deducted from Section 6I. The award for reimbursement Given the proof, Petitioner should be awarded the following sums, for the items indicated, as reimbursement for preparation of the MOP and MOP Addendum: Personnel $12,249.60 Capital Expense Items Rentals 867.50 Mileage 39.85 Shipping 26.00 Well Drilling Permits Analysis 3680.00 Miscellaneous 800.53 TOTAL 17,663.48 For expenses involved in preparation of the reimbursement application, Petitioner should be awarded the following sums for the items indicated: Personnel $ 795.00 Capital Expense Items Rentals 15.00 Mileage .80 Shipping 67.25 Well Drilling Permits Analysis Miscellaneous 77.77 APPLICATION PREPARATION TOTAL 955.82 CERTIFIED PUBLIC ACCOUNTANT REVIEW FEE 500.00 TOTAL FOR APPLICATION PREPARATION 1,455.82 In all, Petitioner should be accorded a total reimbursement of $19,119.30.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered which awards Petitioner the sum of $19,119.30, as reimbursable costs. DONE AND ENTERED this 22nd day of February, 1999, in Tallahassee, Leon County, Florida. WILLIAM J. KENDRICK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 22nd day of February, 1999.
The Issue The issues presented in the case are whether Respondents P & L Salvage and Marlene Ballard are liable for violations of state statutes and rules, as alleged in the amended NOV, and, if so, whether the proposed corrective action is appropriate, and whether the proposed civil penalties and costs should be paid by Respondents.
Findings Of Fact The Parties The Department is the state agency charged with the power and duty to administer and enforce the provisions of Chapters 376 and 403, Florida Statutes, and the rules promulgated in Florida Administrative Code Title 62. Respondent P & L Salvage, Inc., is a Florida corporation. P & L Salvage owned and operated an automobile salvage yard at 4535 and 4537 West 45th Street in West Palm Beach, Florida (the “property,” “facility,” or “site”). The property comprises less than two acres. Respondent Marlene Ballard is a Florida resident and the president, treasurer, secretary, and director of P & L Salvage, Inc. Historical Use of the Site Beginning in the 1960s, the site was used as an auto salvage yard, first under the name Johnny’s Junkyard and later as General Truck Parts. In 1981, the owner of the salvage yard, Marie Arant, sold the facility. The record is not clear about the exact identity of the purchaser. The Alliance report, referred to later, states that the property was purchased by “the Ballard family.” The record evidence is insufficient to prove that Marlene Ballard ever owned the salvage yard. The parties agree that the salvage yard was operated for a time as P & L Salvage, which was unincorporated. Then, in January 1990, the site was purchased by Respondent P & L Salvage, Inc., which owned the site continuously until January 2007. Marlene Ballard lived in a house on the site from the 1980s until the property was sold in 2007. A separate building at the site was used as P & L Salvage’s office. The general operation of the salvage yard was to bring junk cars and trucks to the site, remove fluids from the vehicles, remove parts for sale, and then crush the dismantled vehicles in a hydraulic crusher to prepare them for transport and sale as scrap metal. The automotive fluids removed from the junked cars were stored on the site in 55-gallon drums for later disposal. Respondents presented evidence to show that the person who had the most knowledge of and managed the day-to-day operations in the salvage yard was an employee named John Boyd. When John Boyd ceased employment at the salvage yard, Marlene Ballard’s son, Thomas Ballard, took over the management of the yard. Respondents contend that no evidence was presented that Marlene Ballard conducted or participated in any activities that resulted in contamination, or that she had authority to prevent any potential contamination that might have occurred. However, Ms. Ballard was familiar with the activities in the yard, having worked and lived on the site for many years. She did the bookkeeping and signed payroll checks. All employees answered to Ms. Ballard. She contracted for environmental assessment and remediation work, and signed the hazardous waste manifests. She was acquainted with the contamination that could and did occur at the salvage yard. Eagle Sanitation, Inc., which operated a roll-off container business, leased the site from September 2005 until January 2007. Eagle Sanitation also obtained an option to purchase the property. At first, Eagle Sanitation only leased about a quarter of the site because there were many junk autos, tires, and other salvage debris still on the site in September 2005. For several months, Thomas Ballard continued to sell auto parts and scrap from the site, and to clear the site. Eagle Sanitation did not have complete use of the site until early in 2006. Eagle Sanitation’s business consisted of delivering roll-off containers for a fee to contractors and others for the disposal of construction debris and other solid waste, and then picking up the containers and arranging for disposal at the county landfill or, in some cases, recycling of the materials. Roll-off containers at the site were usually empty, but sometimes trucks with full containers would be parked at the site overnight or over the weekend. During its lease of the site, Eagle Sanitation did not collect used oil or gasoline and did not provide roll-off containers to automotive businesses. No claim was made that Eagle Sanitation caused any contamination found at the site. Contamination at the Site In 1989, Marlene Ballard contracted with Goldcoast Engineering & Testing Company (Goldcoast) to perform a “Phase II” environmental audit. Goldcoast collected and analyzed groundwater and soil samples and produced a report. Cadmium, chromium, and lead were found in the soil samples collected by Goldcoast. Some petroleum contamination was also detected in soils. These pollutants are all associated with automotive fluids. The Goldcoast report states that groundwater samples did not indicate the presence of pollutants in concentrations above any state standard. The Goldcoast report did not address the timing of discharges of contaminating substances that occurred at the site, except that such discharges had to have occurred before the report was issued in 1989. That is before the property was purchased by P & L Salvage, Inc. During an unannounced inspection of the salvage yard by two Department employees on August 15, 1997, oil and other automotive fluids were observed on the ground at the site in the “disassembly area” and around the crusher. There were also stains on the ground that appeared to have been made by automotive fluids. No samples of the fluids were taken or analyzed at the time of the inspection. The Department inspectors told Marlene Ballard to cease discharging fluids onto the ground, but no enforcement action was initiated by the Department. Ms. Ballard was also told that she should consider removing the soil where the discharged fluids and staining were observed. In early 1998, RS Environmental was hired to excavate and remove soils from the site. This evidence was presumably presented by Respondents to indicate that they remediated the contaminated soils observed by the Department inspectors, but no details were offered about the area excavated to make this clear. In 2004, in conjunction with a proposed sale of the site, another Phase II investigation of the site was done by Professional Services Industries, Inc. (PSI), and a report was issued by PSI in May 2004. The PSI report is hearsay and, as such, cannot support a finding of fact regarding the matters stated in the report. Presumably as a result of its knowledge of the PSI report, the Department issued a certified letter to Ms. Ballard on June 24, 2005, informing her that the Department was aware of methyl tert-butyl ethylene (MTBE) contamination at the facility. MTBE is an octane enhancer added to gasoline. The Department’s June 2005 letter advised Ms. Ballard that Florida Administrative Code Chapter 62-780 required “responsible parties” to file a site assessment report (SAR) within 270 days of becoming aware of such contamination. The letter also informed Ms. Ballard of the proximity of the City of Riviera Beach’s wellfield and the threat that represented to public drinking water. The June 2005 letter was returned to the Department unsigned. In October 2005, the Department arranged to have the letter to Marlene Ballard served by the Palm Beach County Sheriff’s Office. The Department received a confirmation of service document that shows the letter was served by a deputy on October 14, 2005, but this document is hearsay and does not support a finding that Ms. Ballard had knowledge of the contents of the letter. The Department did not receive an SAR within 270 days, but no enforcement action was immediately initiated. On December 15, 2006, the Department issued a six- count NOV to P & L. Salvage, Inc. P & L Salvage requested a hearing and the matter was referred to DOAH. In January 2007, in conjunction with Eagle Sanitation’s proposed sale of its purchase option to Prime Realty Capital, LLC, Alliance Consulting & Environmental Services, Inc., (Alliance) conducted a site assessment at the site and produced an SAR in April 2007. At that time, as indicated above, P & L Salvage had ceased operations at the site and Eagle Sanitation was operating its roll-off container business there. The SAR states that in January 2007, “[a]pproximately 80 yards of black stained oily-solidified shallow sands were excavated [by Eagle Sanitation] from the central and northeastern portions of the site, where car crushing, fluid draining and battery removal were historically conducted.” The soil contained lead, iron, chromium, cadmium, and arsenic, but testing did not show the excavated soils constituted hazardous materials and, therefore, the soils were disposed at the county landfill. The area of soils where the Department inspectors in 1997 observed automotive fluids and staining appears to have been included in the soils that were excavated and removed in 2007. The Department presented no evidence to the contrary. Testing by Alliance of other soils at the site showed “no significant petroleum metals concentrations” and Alliance did not recommend the removal of other soils. The presence of an MTBE “plume” of approximately 30,000 square feet (horizontal dimension) was also described in the SAR. The plume is in the area where the crusher was located. Several groundwater samples from the site showed MTBE in concentrations above the target cleanup limit. The City of Riviera Beach operates a public water supply wellfield near the site. The closest water well is approximately 250 feet from the site. The SAR concludes that “the potential exists for the MTBE plume to be pulled downward” toward the well, and recommends that a risk assessment be performed. Alliance recommended in the SAR that the MTBE contamination be remediated with “in-situ bioremediation” with oxygen enhancement. No remediation has occurred on the site since the date of the Alliance report. The Alliance report did not address the timing of contaminating discharges that occurred at the site. To the extent that Alliance reported contamination in 2007 that was not reported in the 1989 Goldcoast report, that is not sufficient, standing alone, to meet the Department’s burden of proof to show that P & L Salvage, Inc., caused “new” contamination after 1989. Competent evidence was not presented that the Alliance report describes “new” contamination. The authors of the reports were not called as witnesses. No expert testimony was presented on whether the data in the reports can establish the timing of contaminating discharges. It is not the role of the Administrative Law Judge, nor does he have the requisite expertise, to compare the environmental assessments conducted by Goldcoast and Alliance and make judgments about whether some of the contamination reported by Alliance had to have occurred after 1989. Although the Department’s expert, Paul Wierzbicki, testified that it was his opinion that the contamination was attributable to the “operations of the P & L Salvage yard facility,” he was answering a question about “what caused the contamination” and, in context, his testimony only confirmed that the type of contamination shown in the photographs and reported in the site assessment reports was the type of contamination associated with auto salvage yards. Mr. Wiezbicki’s testimony is not evidence which can support a finding that the contamination at the site, other than the automotive fluids and stained soils observed by the Department inspectors in 1997, was caused by P & L Salvage, Inc.1 On June 12, 2007, after reviewing the Site Assessment Report, the Department issued a letter to Marlene Ballard, requesting additional data and analysis. At the hearing, the Department presented a responding letter from Alliance dated June 21, 2007. It was disputed whether the Alliance letter is evidence of Ms. Ballard’s receipt and knowledge of the Department’s June 12, letter. However, even if Ms. Ballard did not know about the Department’s letter in June 2007, she certainly became aware of the letter in the course of this proceeding. The amended NOV issued in January 2008 mentions the letter, and the letter was listed as an exhibit in the parties’ June 4, 2008 Pre-hearing Stipulation. On January 24, 2008, the Department issued an amended NOV which dropped three counts from the original NOV and added two new counts. Most significantly, the amended NOV added Marlene Ballard and Thomas Ballard as Respondents. P & L Salvage and Marlene Ballard responded to the amended NOV with petitions for hearing. Thomas Ballard did not respond. At the hearing, the Department presented testimony of employees that were involved in this enforcement action regarding the value of their time expended on various tasks associated with this case. Bridget Armstrong spent eight hours inspecting the site of the contamination, eight hours drafting the NOV and consent order, approximately 30 hours reviewing technical documents, and 15 hours corresponding with Respondents. Ms. Armstrong’s salary at the time was about $20.00 per hour. Paul Wierzbicki spent 16 hours investigating facilities in the area, reviewing the contamination assessment reports, and overseeing the enforcement activity of his subordinates. Mr. Wierzbicki was paid $33.00 per hour. Kathleen Winston spent 10 hours reviewing a site assessment report and drafting correspondence. Ms. Winston’s salary at the time was $23.56 per hour. Geetha Selvendren spent 4-to-5 hours reviewing the site assessment report. She was paid $19.00 per hour at the time. Finally, Joseph Lurix spent three hours reviewing documents. His salary at the time was $34.97 per hour.
The Issue Whether the Petitioner's application to participate in the Drycleaning Solvent Cleanup Program with regard to its Kendale Lakes facility should be granted or denied.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: The Department of Environmental Protection is the state agency responsible for administering the Drycleaning Solvent Cleanup Program set out in Section 376.3078, Florida Statutes (1995). Dryclean USA is a Florida corporation and is the owner of commercial real property located at 14099 Southwest 88th Street in Miami, Florida. Dryclean USA is an operator of a drycleaning facility at that location, as those terms are defined in Sections 376.301(8) and (21), Florida Statutes. The facility, known as the Kendale Lakes facility, has been operated by Dryclean USA as a drycleaning facility for approximately twenty years. Drycleaning establishments use solvent in the cleaning process. Tetrachloroethylene, also known as perchloroethylene, is a commonly used drycleaning solvent and is considered a hazardous substance. Tetrachloroethylene is saturated in water at 150,000 parts per billion. The drycleaning process produces lint that can contain tetrachloroethylene; contact water, which is water that has, at some point during the drycleaning cycle, come into contact with tetrachloroethylene; and sludge from the mechanism that separates pure tetrachloroethylene from water and solid materials produced during the drycleaning process. In addition, tetrachloroethylene accumulates in the filters used in the drycleaning machine. These substances must be disposed of as hazardous waste. Steiner Atlantic Corporation is one of the largest distributors of drycleaning equipment in the country, and Dryclean USA purchases its equipment from this company. The drycleaning machine in the Kendale Lakes facility was purchased from Steiner Atlantic and has been in use at the Kendale Lakes facility since 1991. The machine is a third-generation machine that uses closed-loop technology. Tetrachloroethylene is introduced into the system from a pressurized container that is connected to the drycleaning machine through quick-disconnect valves. The tetrachloroethylene is pumped directed into the machine so that it does not come into contact with the air. Once the cleaning cycle is completed, tetrachloroethylene and water are extracted from the clothes, heated, and turned into a vapor. The vapor is routed across condensing coils that chill the vapor and turn it back into a liquid. The liquid goes into a separator, where the tetrachloroethylene and the water are separated; the tetrachloroethylene is returned to the drycleaning machine and the water, called separator water, is collected in a hazardous waste drum, which is hauled off the site by a company which is licensed to dispose of hazardous waste. Steiner Atlantic develops training programs for its customers and for a number of years has worked with Dryclean USA to develop training programs for Dryclean USA managers and employees. The Dryclean USA training programs are among the most extensive programs that Steiner Atlantic has developed and rank among the best in the country. The training for Dryclean USA managers both now and in 1995 consists of an intensive three-week program. In addition to courses on how to manage the business, Dryclean USA managers are trained in the operation and maintenance of all the equipment in the drycleaning facility, including the drycleaning machine, and in the legal requirements for handing hazardous waste. The program also includes training in environmental and safety issues, as well as hands-on instruction on the proper handling of tetrachloroethylene and equipment that comes into contact with tetrachloroethylene. Managers are provided with on-going training in addition to the initial training program. Dryclean USA also has a training program in hazardous waste management for all of its employees, and this program was in place in 1995. All of Dryclean USA's employees receive this training from in-house training personnel or from district managers, and the employees must read a training manual, watch a video, and pass several tests that deal with handling hazardous waste. The employees are taught that tetrachloroethylene and substances contaminated with tetrachloroethylene must be disposed of in hazardous waste containers, which are then hauled away and disposed of by a hazardous waste disposal company. Managers at the Dryclean USA facilities are responsible for ensuring that tetrachloroethylene and substances contaminated with tetrachloroethylene are disposed of properly. All Dryclean USA employees receive training in handling spills of tetrachloroethylene and substances contaminated with tetrachloroethylene, although the manager is the person responsible for ensuring-that spills are handled correctly and in accordance with the following procedures. First, all employees who will not participate in cleaning up the spill are evacuated from the premises. Certain designated employees, including the manager, use the spill kit provided in each facility to contain and absorb the spill. The spill kit consists of safety equipment for the employees handling the spill and of absorbent cloth, such as comforters or blankets, to absorb the tetrachloroethylene. The cloth used to absorb the spill is put through the drycleaning cycle to extract the tetrachloroethylene. Dryclean USA requires that all spills, no matter how small, be immediately reported to the Dryclean USA maintenance department, which promptly dispatches an engineer to assist with the spill if it is the result of an equipment malfunction. Additionally, the employees are required to keep internal records of any spill that is less than one quart and to report to the state any spill in excess of one quart. These procedures are set out both in the Dryclean USA Written Hazard Communication Program manual provided to all employees and in the Dryclean USA Emergency Contingency Plan posted on the bulletin board at each Dryclean USA facility. No spills were reported at the Kendale Lakes facility in April or May 1995. In addition to the training given to managers and other employees, the maintenance manager of Dryclean USA is also the environmental officer, and he performs semi-annual audits of each facility operated by Dryclean USA with respect to health, safety, and environmental standards. During these audits, the environmental officer ensures that the employees of each facility are aware of the procedures for the routine collection and disposition of substances contaminated with tetrachloroethylene and of the emergency contingency plan for handling spills of tetrachloroethylene and substances contaminated with tetrachloroethylene. No deficiencies were found at the Kendale Lakes facility during the 1995 audits. In 1994, the soil and groundwater at the Kendale Lakes facility was found to be contaminated by tetrachloroethylene. At that time, Dryclean USA was leasing the property, but, upon learning of the contamination, it purchased the property. Dryclean USA notified DERM of the contamination, and, in the spring of 1994, it retained the U.S. Environmental Group, an environmental consulting firm that, among other things, performs contamination assessments and develops and institutes remediation plans for sites contaminated with tetrachloroethylene. U.S. Environmental Group prepared a contamination assessment report delineating the area of contamination in the soil and groundwater around the Kendale Lakes facility. It also developed and implemented an interim remedial measures plan for both soil and groundwater contamination. Neither DERM nor U.S. Environmental Group nor any other agency or entity has identified the source of the contamination at the Kendale Lakes site. When U.S. Environmental Group began its assessment of the contamination in 1994, it did not find any discharge occurring from the drycleaning system in place at that time and so concluded that the contamination was historical. DERM assigned Nicholas Simmons as project manager for the Kendale Lakes site. In the spring of 1995, Mr. Simmons held the position of Hydrogeologist II in DERM's hazardous waste remediation program. His primary responsibilities in this position were to review contamination assessment reports, remedial action plans, and other documents relating to contaminated sites in Dade County and to make recommendations as to whether the reports and plans should be approved or disapproved. He was project manager for a number of sites contaminated with drycleaning solvents. Before he became a Hydrogeologist II with DERM, Mr. Simmons was a Pollution Control Inspector I with that agency, and his responsibilities included making field inspections of industrial facilities in Dade County, including drycleaning establishments. During his time as a pollution control inspector, Mr. Simmons visited approximately 20 to 30 drycleaning sites, although he did not personally inspect all of them. On April 28, 1995, Mr. Simmons made a visit to the Kendale Lakes facility in his capacity as DERM project manager to observe U.S. Environmental Group install a new monitoring well inside the facility. While at the facility, Mr. Simmons decided to make a cursory inspection to see if he could locate a source of the contamination at the site. He was unsuccessful in this respect, but he found several "items of concern" at the facility, none of which constituted a violation of any federal, state, or local laws, rules, or regulations or involved a discharge of tetrachloroethylene into the soil or groundwater. One "item of concern" he identified during his April 28 inspection was what appeared to be a leak from a pipe connected to the drycleaning machine. The liquid dripping from the pipe was clear and was dripping into a three-gallon bucket. Mr. Simmons did not take a sample of the liquid to determine if it was contaminated with tetrachloroethylene, nor did he observe the method of disposal of the liquid. The temporary manager, who was manager at the Kendale Lakes facility only one day per week, told him that he presumed the liquid was disposed of as hazardous waste. Mr. Simmons prepared a memorandum dated April 28, 1995, to Mark Pettit, a DERM code enforcement officer, in which he reported in detail the inspection, the observations he made, and the conversations he had with Dryclean USA employees during his visit to the Kendale Lakes facility on that date. Mr. Simmons visited the Kendale Lakes site again on May 2, 1995, to observe U.S. Environmental Group install equipment for a soil vapor extraction pilot test. Mr. Simmons took the opportunity to re-inspect the facility. Monica Resconi, the manager of the Kendale Lakes facility, was present during this inspection. In addition, Eddie Rodriguez, then-president of Dryclean USA, was present during most of the May 2 inspection. Mr. Simmons observed that clear liquid was still dripping from the pipe connected to the drycleaning machine into a small bucket. Mr. Simmons asked for and received permission from Ms. Resconi and Mr. Rodriguez to take a sample of the liquid in the bucket, and he submitted it for testing to the DERM laboratory. The laboratory analysis established that the sample contained 220.5 parts per billion of tetrachloroethylene. Mr. Simmons did not ask Ms. Resconi or Mr. Rodriguez how this liquid was disposed of, and he did not observe anyone actually disposing of the liquid. During Mr. Simmons' May 2 visit to the Kendale Lakes facility, he also observed a whitish liquid in a drum labeled "Hazardous Waste" that was located close to the drycleaning machine. A hose connected the drycleaning machine and the drum, but Mr. Simmons did not know whether there was liquid traveling through the hose or whether liquid would travel from the machine to the drum or vice versa. He also observed what appeared to be the same liquid in a puddle on the floor. He asked Ms. Resconi what the liquid was, and she put her hand into the puddle and identified the liquid as water. She wiped it up with a rag. Mr. Simmons did not observe her disposing of the rag, and he did not take a sample of either the liquid in the drum or the liquid on the floor. When Mr. Simmons showed Mr. Rodriguez the dripping liquid he had first observed on April 28 and the area where he had observed the puddle of whitish liquid, Mr. Rodriguez immediately called the maintenance manager for Dryclean USA, and a maintenance technician and the maintenance supervisor were promptly sent to the Kendale Lakes facility. They reported to the maintenance manager that the liquid dripping from the pipe was water that had condensed on the outside of a refrigerator pipe because some of the insulation was missing. They also reported that there were no other leaks from the drycleaning machine. When he inspected the machine the following day, the maintenance manager found that the insulation on the pipe had been replaced and that the pipe was no longer dripping. He also found no other leaks in the drycleaning machine. Finally, Mr. Simmons observed a yellow bucket just inside the back door of the facility during his May 2 inspection. The bucket contained dirty water and a mop with a green handle. He asked Ms. Resconi what the bucket contained, and she explained that it was water that had been used to mop the floor of the facility. When he asked how this water was disposed of, Ms. Resconi stated that it was thrown out the back door. Mr. Simmons asked for and received permission from Ms. Resconi and Mr. Rodriguez to collect a sample of the water in the bucket, but the sample he took was not acceptable for analysis and was discarded. For some time prior to Mr. Rodriguez's meeting with Mr. Simmons, Dryclean USA's policy regarding the disposal of mop water required that water used to mop the front, or store area, of the facility be discarded down the toilet and that water used to mop the back area of the facility where the drycleaning equipment was located be discarded in hazardous waste containers. When Mr. Simmons told Mr. Rodriguez on May 2 that he was concerned that the water in the mop bucket might contain tetrachloroethylene, Mr. Rodriguez responded by directing Ms. Resconi to dispose of all mop water in the hazardous waste containers. Mr. Simmons prepared a memorandum dated May 2, 1995, to Mark Pettit, a DERM code enforcement officer, in which he reported in detail the inspection, the observations he made, and the conversations he had with Dryclean USA employees during his visit to the Kendale Lakes facility on that date. In accordance with Mr. Simmons' recommendation, a detailed inspection of the Kendale Lakes facility was ordered. On May 11, 1995, Heather Wright, an inspector with DERM's hazardous facilities section, visited the facility to perform this inspection. Ms. Resconi was not at the facility, but Ms. Wright met with Brad Clayton, the temporary manager at Kendale Lakes, and with Steve Lundy, Dryclean USA's district manager responsible for the Kendale Lakes facility. Ms. Wright made a detailed inspection of the facility on May 11, 1995, and found that the floor around the drycleaning machine was dry and that there was no evidence of leaks from the drycleaning machine. Mr. Lundy discussed with Ms. Wright the procedure for cleaning up spills of tetrachloroethylene or substances known to be contaminated with tetrachloroethylene, and he told her that spills were picked up with absorbent cloth, which was then put into the drycleaning machine to extract the tetrachloroethylene from the cloth. He also told her that any other materials known to be contaminated with tetrachloroethylene were disposed of in hazardous waste druMs. Ms. Wright questioned Mr. Lundy on the method of disposing of water in the mop bucket, which was located just inside the back door of the facility. He told her that it was thrown out the back door of the facility, but he also told her that spills were not cleaned up with the mop, which was used only to mop the floors of the facility. Ms. Wright collected a sample of the water in the mop bucket and submitted it to the DERM laboratory for testing. The laboratory analysis established that the sample contained 121,928 parts per billion of tetrachloroethylene, an amount close to saturation.3 Ms. Wright did not observe the manner in which the employees of the Kendale Lakes facility disposed of the water in the mop bucket. Ms. Wright prepared an Incident Report dated May 11, 1995, in which she reported in detail the inspection, the observations she made, and the conversations she had with Dryclean USA employees during her visit to the Kendale Lakes facility on that date. When Mr. Rodriguez learned that the sample of water taken from the mop bucket at the Kendale Lakes facility contained almost 122,000 parts per billion of tetrachloroethylene, he instituted a new policy regarding the handling of mop water at all Dryclean USA facilities. Pursuant to a memo dated June 8, 1995, the new procedure requires that two mop buckets be maintained in each Dryclean USA facility, one to be used exclusively for mopping in the front "store" portion of the facility and one to be used exclusively for mopping in the back of the facility where the drycleaning equipment is located. The bucket used for mopping the back of the facility must be red, and the mop used must have a red handle. The water in the bucket used to mop the front of the facility must be discarded into the toilet, and the water in the red bucket, as well as the mop heads, must be disposed of as hazardous waste. According to samples taken by U.S. Environmental Group in November 1996, the level of tetrachloroethylene in samples of groundwater taken from Monitoring Well Number 2, located just outside the back door of the Kendale Lakes facility, was 499 parts per billion, a very small amount but one which was significantly higher than the samples taken from other monitoring wells at the Kendale Lakes site. This indicates that there has been a discharge of tetrachloroethylene in the vicinity of the back door of the facility, but the contamination in this area is in the form of pockets of pure tetrachloroethylene in the soil under the asphalt in the back of the facility. This is not consistent with the discharge of tetrachloroethylene that is dissolved in water. From 1994, when it began working at the Kendale Lakes facility, until the present, U.S. Environmental Group has found no indication of additional or increased contamination from tetrachloroethylene at the Kendale Lakes facility. On April 1, 1996, Dryclean USA applied to the Department for a determination that its Kendale Lakes facility was eligible to participate in the Drycleaning Solvent Cleanup Program. As part of its review process, the Department requested that DERM provide answers to certain questions relating to the Kendale Lakes facility. One of the questions was whether DERM was aware of any "willful" discharge of contaminated materials at the Kendale Lakes site; DERM answered "Unknown." Also in response to the Department's inquiries, DERM provided the Department with materials that included the inspection reports submitted by Mr. Simmons and Ms. Wright in late April and early May 1995 and the laboratory analysis of the mop water sample taken by Ms. Wright on May 11, 1995. The Department relied on the information received from DERM in reviewing the application. In a letter dated August 2, 1996, the Department notified Dryclean USA that its application for the Kendale Lakes facility was denied because it had determined that Dryclean USA had willfully discharged drycleaning solvents "onto the soils or into the waters of the State." The sole basis for this conclusion was the information in Mr. Simmons' and Ms. Wright's reports that Ms. Resconi and Mr. Lundy stated during the inspections on May 2 and May 11, respectively, that the water in the mop bucket found beside the back door of the facility was routinely thrown out of the back door and on the laboratory results showing that the sample of water taken from the mop bucket on May 11, 1995, contained approximately 122,000 parts per billion of tetrachloroethylene. The parties have stipulated that, except for the issue of whether there has been a willful discharge of drycleaning solvent at Dryclean USA's Kendale Lakes facility subsequent to November 1, 1980, the application at issue in this proceeding satisfies all of the statutory criteria to establish Dryclean USA's eligibility to participate in the Drycleaning Solvent Cleanup Program for that facility. The evidence presented by the Department is not sufficient to support a finding that there were willful discharges of drycleaning solvent at the Kendale Lakes facility subsequent to November 19, 1980. The evidence does not establish that spills of tetrachloroethylene and substances contaminated with tetrachloroethylene were routinely cleaned up with a mop and the mop water discharged out the back door of the Kendale Lakes facility. Dryclean USA's employees received extensive training in the proper disposal of hazardous waste and the proper method for handing spills of tetrachloroethylene and substances contaminated with tetrachloroethylene, and its managers were given additional training that included information on the legal and environmental aspects of tetrachloroethylene contamination. There was no plausible reason suggested by the evidence for Ms. Resconi to flout the policies and procedures established by her employer. Furthermore, the evidence presented by the Department is simply too tenuous to establish, as the Department proposes, that Ms. Resconi admitted to Mr. Simmons that spills of tetrachloroethylene and substances contaminated with tetrachloroethylene were routinely cleaned up with a mop and the mop water discharged out the back door of the Kendale Lakes facility.4 At most, the evidence establishes that water used to mop the floor of the Kendale Lakes facility was most likely discharged out the back door until May 2, 1995, when Mr. Rodriguez directed Ms. Resconi to dispose of all mop water at the facility in the hazardous waste containers, and that, on May 11, 1995, the water in the mop bucket contained a significant amount of tetrachloroethylene. There is no evidence that Dryclean USA or its employees knew that the water in the mop bucket on May 11, 1995, contained tetrachloroethylene or that the water in the mop bucket on May 11, 1995, was discharged out the back door of the facility or that any mop water containing tetrachloroethylene was discharged out the back door of the facility. In fact, the uncontroverted evidence is that there has been no increase in the level of tetrachloroethylene contamination at the Kendale Lakes facility since at least 1994.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Environmental Protection issue a Final Order granting the Drycleaning Solvent Cleanup Program Application submitted by Dryclean USA of Florida, Inc., for its facility located at 14099 Southwest 88th Street, Miami, Florida. DONE AND ENTERED this 2nd day of January, 1998, in Tallahassee, Leon County, Florida. PATRICIA HART MALONO Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of January, 1998.
The Issue The issue is whether Respondent is guilty of discharging untreated septage at a site that Respondent was not permitted to use, in violation of Rule 10D-6.052(7)(b), Florida Administrative Code; and operating two septic pumping trucks, even though authorized to operate only one such vehicle, in violation of Rules 10D-6.052(2)(a) and 10D-6.052(1), Florida Administrative Code; and, if so, what penalty should be imposed.
Findings Of Fact Since 1989, Respondent has been a registered septic tank contractor. Petitioner annually issues Respondent a separate permit to pump, transport, and dispose of septage. Petitioner or its predecessor has disciplined Respondent on two occasions. On November 15, 1994, Respondent paid a $500 fine after the issuance of an administrative complaint for discharging improperly treated septage, and, on August 19, 1996, Petitioner issued a final order imposing a $500 fine and 90-day suspension against Respondent for repairing a septic tank system without a permit. Respondent’s attempts to explain away these violations were unpersuasive. At the time in question, Respondent’s permits allowed him to operate only one truck in transporting septage--a 1988 Ford--and to discharge septage only at one location--Hunter Land Application Site. Respondent’s permits also required him to stabilize septage only at one location--A-1 Septic Tank Service’s Lime Stabilization Facility. On August 15, 1997, Respondent operated or caused to be operated the permitted 1988 Ford truck and another unpermitted truck for the purpose of receiving and transporting septage that Respondent had pumped from septic tanks. Respondent and one of his employees drove the loaded trucks to J. R. Brooks & Sons Ranch, where they landspread the septage that they had been transporting. They dumped at this site about 8000 gallons of raw septage containing condoms, tampons, vegetable matter, and other items of the type normally found in unscreened septage pumped from septic tanks and grease traps. Petitioner had not approved the J. R. Brooks site for discharge of septage pumped from septic tanks. The Department of Environmental Protection (DEP) had designated the J. R. Brooks site for use by Resource Tech, which transported wastewater residuals from the Dade County Municipal Treatment Plant and discharged them at the J. R. Brooks site. The permit allowed Resource Tech to discharge wastewater residuals with only minimal levels of pathogens. DEP calculates the carrying capacity of sites such as the J. R. Brooks site based on the amount of material that they receive from permitted, disclosed discharges. After learning that the J. R. Brooks site had received unpermitted discharges, DEP determined that it must close the site and find a new one due to public-safety concerns. Respondent also failed to stabilize the septage with lime prior to discharging it on the J. R. Brooks site. The purpose of adding lime to septage is to kill pathogens. The J. R. Brooks site drains through ditches into nearby wetlands. From there, runoff drains into the Estero Bay. The untreated septage discharged by Respondent presents a greater threat to wildlife and public safety than do the wastewater residuals remaining after wastewater treatment that Residual Tech was authorized to discharge at the site. At the time of the hearing, Respondent was negotiating the sale of the business, but the buyers needed to operate under Respondent’s certificate until they could qualify to obtain one. However, Respondent admitted that he had someone else available to qualify the buyers’ operation for a certificate.
Recommendation It is RECOMMENDED that the Department of Health enter a final order revoking Respondent’s certificate as a septic tank contractor. DONE AND ENTERED this 9th day of September, 1998, in Tallahassee, Leon County, Florida. ROBERT E. MEALE 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 9th day of September, 1998. COPIES FURNISHED: Susan Mastin Scott Chief Legal Counsel Department of Health Post Office Box 9309 Fort Myers, Florida 33902-9309 John Charles Coleman Coleman & Coleman Post Office Box 2089 Fort Myers, Florida 33902 Angela T. Hall, Agency Clerk Department of Health Bin A02 2020 Capital Circle Southeast Tallahassee, Florida 32399-1703 Pete Peterson, General Counsel Department of Health Bin A02 2020 Capital Circle Southeast Tallahassee, Florida 32399-1703
Findings Of Fact Reimbursement Program The Florida Legislature created the reimbursement program to provide for rehabilitation of as many petroleum contamination sites as possible, as soon as possible. Section 376.3071(12)(a), Florida Statutes. The Legislature intended that those responsible persons who possessed adequate financial ability should conduct site rehabilitation and seek reimbursement in lieu of the state conducting the cleanup. Section 376.3071(12)(c), Florida Statutes (1993). When owners and operators of the site or their designees perform site remediation program tasks under any of the programs created by Chapter 376, Florida Statutes, those entities become entitled to reimbursement from the Inland Protection Trust Fund (IPTF) of their allowable costs at reasonable rates. Section 376.3071(12)(b), Florida Statutes. "Allowable" costs are those which are associated with work that is appropriate for cleanup tasks. Section 376.3071(12)(d), Florida Statutes, requires DEP to: Reimburse actual and reasonable costs for site rehabilitation; and Reimburse interest on the amount of reimbursable costs for applications filed after August 14, 1992, at a rate of 1 percent per month or the prime rate, which- ever is less. Interest shall be paid from the 61st day after an application is filed with the department until the application is paid, provided the department determines the application is sufficient; otherwise, interest shall be paid commencing on the date the application is made sufficient until the application is paid. . . . A site owner or operator may engage the services of firms to perform remediation activities on a site and may designate an entity to receive reimbursement for such work. Section 376.301(14), Florida Statutes. Chapter 17-773, Florida Administrative Code (as revised in April of 1993), contains DEP's rules which were in effect at the time Petitioners submitted the instant applications. This chapter is currently located in Chapter 62-773, Florida Administrative Code. Chapter 17-773, Florida Administrative Code establishes procedures and documentation required to receive reimbursement from the IPTF. Rule 17-773.100(4), Florida Administrative Code. Rule 17-773.100(5), Florida Administrative Code, provides in pertinent part: "review and approval of reimbursement applications shall be based upon the statutes, rules and written guidelines governing petroleum contamination site cleanup and reimbursement which were in effect at the time the work was performed or the records of activities and expenses were generated, as applicable. . . . In order to be reimbursable, an applicant must break charges in an application into applicable units and rates. Rule 17-773.100(5), Florida Administrative Code. DEP has a predominate rate schedule to determine whether an allowable cost is reasonable. DEP bases its predominate rates on a study of average rates that contractors charge for a particular task. Requests for reimbursement must apply to costs which are "integral" to site rehabilitation. Rule 17-773.100(2), Florida Administrative Code. "Integral" costs are those which are essential to completion of site rehabilitation. Rule 17-773.200(2)(11), Florida Administrative Code. After integral costs have been identified and incorporated on a units and rates basis in an invoice, the invoice may be marked up at two levels. These markups are subject to certain limitations established by DEP rule: There can be no more than two levels of markups or handling fees applied to contractor, subcontractor or vendor invoices (Rule 17-773.350(9), F.A.C.); There can be no markups or handling fees in excess of 15 percent for each level of allowable markup applied to contractor, subcontractor or vendor invoices (Rule 17-773.350(10), F.A.C.); and There can be no markups or handling fees applied to invoices between any two entities which have a financial, familial, or beneficial relationship with each other (Rule 17-773.350(11), F.A.C.). In order to be reimbursable, costs must have been actually "incurred." Rule 17-773.700, Florida Administrative Code. "Incurred" means that allowable costs have been paid. Rule 17-773.200(9), Florida Administrative Code. When the "person responsible for conducting site rehabilitation" (PRFCSR) has no financial interest in the site, DEP considers the following costs as incurred when the program task is complete: Reasonable rates, including profits associated with the work performed, claimed for the use of their own personnel or equip- ment with documentation pursuant to Rule 17-773.700(7), F.A.C.; and Allowable markups or handling fees applied to their paid contractor, subcontractor, or vendor invoices pursuant to Rule 17-773.350(9), (10), and (11), F.A.C. Rule 17-773.200(9), Florida Administrative Code. Other rules reference limitations on the ability of an entity to take a markup. Rule 17-773.600(2)(d), Florida Administrative Code, provides in pertinent part: . . . If the person responsible for conducting site rehabilitation manufactured the [capital expense item], or a markup is otherwise prohibited under Rule 17-773.350(9), (10) or (11), Florida Administrative Code, no markup of the equipment shall be allowed. Rule 17- 773.700(5), Florida Administrative Code, provides in pertinent part: Costs claimed in a reimbursement application for the employees, equipment or materials of the site owner, site operator or any entity which has a financial interest in the site or a familial or other beneficial relation- ship with the site owner or operator shall be considered to be in house and reimburse- ment shall be limited to actual costs only. No fee, markup, commission, percentage or other consideration shall be allowed. . . . Rule 17-773.700(7), Florida Administrative Code, provides in pertinent part as follows: Pursuant to Rule 17-773.200(9), Florida Administrative Code, reasonable rates, including profits, may be claimed for the personnel and equipment or other allowable expenses of the person responsible for conducting site rehabilitation as well as allowable markups on paid contractor subcon- tractor and vendor invoices and shall be considered incurred for the purpose of reimbursement provided: The person responsible for conducting site rehabilitation does not have a financial interest in the site pursuant to Rule 17-773.200(7), Florida Administrative Code, or a familial or other beneficial relationship with the site owner or operator; The activities performed were integral to the program task claimed pursuant to Rule 17-773.500, Florida Administrative Code; and Detailed invoices are provided by the person responsible for conducting site rehabilitation that include all subcon- tractor and vendor invoices . . . [which] must identify the person responsible for conducting site rehabilitation and clearly distinguish their costs from those for paid subcontractors or vendors. There are no other provisions in the applicable rules which pertain to markups. A contractor must pay all invoices generated by a subcontractor at 100 percent of their face value prior to submission of an application in order to qualify those invoices for reimbursement. When a contractor pays a subcontractor's invoices, the contractor paying those invoices normally may take one of the allowable levels of markup. Prior to submitting a reimbursement application, a funder or PRFCSR involved in the reimbursement chain must pay the contractor for its invoices and markup. Then, the funder may apply the second allowable markup and submit the reimbursement application for review by DEP and payment from the IPTF. DEP does not contest the second level of markup in these applications. DEP rules restrict reimbursement when parties within the usual "chain" of reimbursement (PRFCSR or funder, contractor and subcontractor) have financial, beneficial or familial relationships with each other or the site owner. The application form requires disclosure of such relationships through the Program Task and Site Identification Form. Rule 17-773.200(1), Florida Administrative Code, provides as follows: "Beneficial relationship (interest)" means a connection or association, excluding an arm's length contractual relationship, which benefits a person or company by yielding a profit, advantage or benefit, or entitlement thereto, exceeding five percent of the person's or company's annual gross income. Rule 17-773.200(6), Florida Administrative Code, provides in pertinent part: "Familial relationship (interest)" means a connection or association by family or relatives, in which a family member or a relative has a material interest. . . . Rule 17-773.200(7), Florida Administrative Code, provides as follows: "Financial relationship (interest)" means a connection or association through a material interest or sources of income which exceed five percent of annual gross income from a business entity. Banks, lending institutions, and other lenders that provide loans for site rehabilitation activities are not considered to have a financial interest in the site on that basis alone. However, as of the effective date of this rule, guarantors of loans to or co-makers of loans with persons signing as responsible party are considered to have a financial interest if the amount of the loan exceeds five percent of the net worth of either company. As used in this definition, sources of income shall not include any income derived through arm's- length contractual transactions. Rule 17-773.200(13), Florida Administrative Code, states as follows: "Material interest" means a direct or indirect interest or ownership of more than five percent of the total assets or capital stock of any business entity. The rules and written guidelines of DEP do not address activities, including financing arrangements, occurring outside of the usual chain of reimbursement, so long as an applicant does not include charges for such activities in an application. Heretofore, DEP has not deducted finance costs that an applicant does not include as a line item in a reimbursement application. Pursuant to Section 376.3071(l2)(m), Florida Statutes, DEP must perform financial audits "as necessary to ensure compliance with this rule and to certify site rehabilitation costs." Rule 17-773.300(1), Florida Administrative Code. DEP performs this audit function: (a) to establish that the PRFCSR incurred the cost; (b) to determine that adequate documentation supports the claimed costs as incurred; and (c) and to review the reasonableness and allowance of the costs. The audit staff interprets the term "incurred" to mean that the applicant paid the costs included in the reimbursement application. Pursuant to Rule 17-773.350(4)(e), Florida Administrative Code, "[i]nterest or carrying charges of any kind with the exception of those outlined in Rule 17-773.650(1), F.A.C." are not reimbursable. The exceptions to the payment of interest set forth in Rule 17-773.650(1), Florida Administrative Code, are not at issue here. An interest rate charge on short-term borrowed capital from an unrelated third-party source is a "cost of doing business." DEP's predominate rates are fully loaded. They include a variable for all direct and indirect business overhead costs such as rent, utilities and personnel costs. DEP includes the cost of short-term borrowed capital in the direct and indirect overhead components of DEP's fully-loaded personnel rates. Rule 17- 773.700(5)(a), Florida Administrative Code. However, DEP never intended for its predominate rate schedule to create an entitlement to reimbursement of claims which are not otherwise actual and reasonable costs of site rehabilitation. Petitioners PRFCSRs are entitled to make application for reimbursement of allowable markups and costs of site rehabilitation that they incur. In these consolidated cases, the site owners or operators designated either Petitioner ET or Petitioner SEI as PRFCSR. The PRFCSR is typically referred to as the "funder" in the reimbursement chain. Petitioner ET is a trust formed in 1993 and domiciled in Bermuda. It acts as a conduit for funds that finance activities associated with Florida's petroleum contamination site cleanup program. The named beneficiaries of the trust are those contractors and subcontractors entitled to payment of costs for activities integral to site rehabilitation and for allowable markups of such costs. The sole trustee of ET is Western Investors Fiduciary, Ltd. (WIFL). WIFL is also the owner and a beneficiary of ET. Any profit that ET derives from funding cleanup projects flows through WIFL to investors who provide funds to finance site rehabilitation. American Environmental Enterprises, Inc. (AEE discussed below) provided the investment funds for the reimbursement applications at issue here. WIFL is a limited liability corporation created and domiciled in Bermuda. The officers of WIFL are: William R. Robins, President; John G. Engler, Vice-President; and Peter Bougner, Secretary. The directors of WIFL are: William R. Robins, John G. Engler, Paul H. DeCoster, Alec R. Anderson and Nicholas Johnson. WIFL's directors are also its shareholders. Petitioner SEI is a corporation incorporated and operating under Florida law. Organized in 1994, SEI acts as a conduit for funds to finance activities associated with Florida's petroleum contamination site cleanup program. The officers and directors of SEI are: William R. Robins, President; John G. Engler, Executive Vice President; and Paul H. DeCoster, Secretary. William R. Robins is the sole shareholder of SEI. SEI was specifically created to meet the needs of American Factors Group, Inc.'s (AFG discussed below) Florida investors. Respondent DEP is the agency charged with the duty to administer the IPTF and Chapter 376, Florida Statutes. Financing Entities American Factors Group, Inc. (AFG) is a privately held corporation incorporated and operating under New Jersey law. AFG is not a party to this proceeding. AFG, acts as the servicing agent for contracts associated with factoring activities and other types of financing operations. AFG, through one of its divisions, Environmental Factors (EF), entered into financing contracts with entities in the reimbursement process: (a) Petitioners ET and SEI, funders; (b) Gator Environmental, Inc. (Gator), general contractor; and (c) Tower Environmental, Inc. (Tower), prime subcontractor. Through these agreements, EF or its assignee bought the rights of ET, SEI, Gator, and Tower to future reimbursement payments at a percentage of the face value of the relevant invoices. The officers of AFG are: William R. Robins, President; John G. Engler, Vice President; and Paul H. DeCoster, Secretary. Bleak House, Inc. (Texas) owns the stock of AFG. American Environmental Enterprises, Inc. (AEE) is incorporated and operating under Nevada law. AEE is not a party to this proceeding. AEE, as the assignee under the EF contracts, is a third-party provider of capital to various entities in the reimbursement process, including Petitioners. The officers of AEE are: William R. Robins, President; John G. Engler, Vice-President; and Paul H. DeCoster, Secretary. Bleak House, Inc., (Nevada) owns the stock of AEE. Bleak House, Inc., (Nevada) is incorporated and operating under Nevada law. Bleak House, Inc. (Texas) is incorporated and operating under Texas law. Officers of both corporations are William R. Robins, President; John G. Engler, Vice President; and Paul H. DeCoster, Secretary. Magazine Funding, Inc. owns the stock of both Bleak House corporations. Magazine Funding, Inc. is incorporated and operating under Nevada law. Officers of Magazine Funding, Inc. are William R. Robins, President; John G. Engler, Vice-President; and Paul H. DeCoster, Secretary. Family Food Garden, Inc. owns the stock of Magazine Funding, Inc. Family Food Garden, Inc. is incorporated and operating under Massachusetts law. Officers of Family Food Garden, Inc., are William R. Robins, President; and Paul H. DeCoster, Secretary. Six shareholders own the stock of Family Food Garden, Inc. None of these shareholders are related by familial ties to the officers or directors of the aforementioned companies or any relative thereof. Each of these companies -- ET, SEI, WIFL, AEE and AFG (including EF) share common officers and directors. Each of the companies maintain their own books and business records, file their own tax returns, and maintain records in accordance with the laws of the jurisdiction in which they were established. They operate pursuant to their respective bylaws or trust agreement. ET, WIFL, and SEI do not have common assets with AEE or AFG (including EF). ET, WIFL and SEI do not have a beneficial, financial, or familial relationship with AEE or AFG (including EF) as Rule 17-773.200, Florida Administrative Code, defines those terms. Despite the facial organizational and structural integrity of ET, WIFL, SEI, AEE and AFG, the officers and directors of AFG and/or AEE created Petitioners, in large part, for the benefit of AFG and/or AEE as a means to invest funds in Florida's petroleum contamination site cleanup program. The primary purpose of each funder is to maximize the profits of AFG and its investors. AFG has other investment vehicles (funders) which it uses at times depending on the needs of its investors. AFG waits until the last instance before deciding which entity it will designate as funder in any particular factoring scenario. AFG usually does not make that decision until the day AFG's designated funder issues a funder's authorization to the general contractor. At the hearing, Mr. Stephen Parrish, a vice president of AFG, testified as the party representative for ET and SEI. WIFL and SEI have no employees. EF or AFG responded to DEP's request for Petitioners to provide additional information about the financing scheme utilized here using stationary bearing EF's or AFG's letterhead. Nineteen of the letters written on ET's behalf refer to ET as an affiliate of AEE. At least five of the letters written on SEI's behalf refer to ET as the funder and AEE as ET's affiliate. The greater weight of the evidence indicates that AFG and/or AEE negotiated less than arms-length contractual agreements with ET, WIFL, and SEI. Petitioners admit that they are "affiliates" of AEE and AFG through contractual agreements. However, there are no written factoring contracts between Petitioners and AFG such as the ones that exist between AFG, Gator and Tower. The only documented evidence of agreements between Petitioners and AFG are transactional based bills of sale representing the sale to AEE of Petitioners' right to receive reimbursement from the IPTF. AFG created these bills of sale for bookkeeping purposes. AFG did not even go to the trouble of tailoring the form for the bills of sale for their stated purpose. For all practical purposes, Petitioners are under the management and control of AEE and AFG. Petitioners and AFG disclosed their affiliation in meetings with DEP staff and through correspondence and other documentation, including but not limited to: (a) letter to DEP dated July 13, 1994 from AFG's counsel; (b) Addendum to Certification Affidavit signed by a Certified Public Accountant in each application; (c) Funder's Authorization; (d) letters sent to DEP between August 14, 1995 and November 19, 1996. Factoring and the Factoring Transactions Factoring is the purchase and sale of an asset, such as an account receivable, at a discount. An account receivable reflects the costs that a business charges after rendering a service but before the entity responsible for payment pays for that service. When a contractor completes a rehabilitation task, the contractor's invoice is an account receivable until it receives payment. In these consolidated cases, AEE provided short-term operating capital to Gator and Tower at an interest rate equal to the discount percentage of the relevant invoice (account receivable). Gator and Tower did not sell their account receivables to AEE. Instead, AEE, as the assignee of EF, purchased a contractual right to receive Gator's and Tower's reimbursement payments. In exchange, AEE advanced Gator and Tower a discounted amount of their invoices. The discounted amount of an invoice represents a loan from AEE to Gator and Tower. The difference between the face amount of the invoice and the discounted amount of the invoice represents interest. A discount percentage and an interest rate are equivalent. The amount of the discount represents interest on the loan or advance provided by AEE. It is an interest expense to the contractor or subcontractor. The Factoring Agreements On or about April 25, 1994, EF and Tower entered into a Prime Subcontractor Factoring Agreement. On or about July 8, 1994, EF and Tower executed an addendum to the Prime Subcontractor Factoring Agreement. The addendum required Tower to sell to EF Tower's right to receive payments from Gator. In return, EF agreed to advance Tower a discounted amount equal to 97 percent of the face amount of Tower's invoices. Tower agreed to repay EF 100 percent of the face amount of the invoices upon receipt of payments from Gator. The discounted amount of each invoice represents a loan from AEE to Tower. A bill of sale evidenced the sale of Tower's right to receive payment on each application. On or about July 8, 1994, EF and Gator entered into a General Contractor Factoring Contract. On or about July 13, 1994, EF and Gator entered into an Addendum to General Contractor Factoring Agreement. This addendum required Gator to sell EF Gator's right to receive payments from ET or SEI. In return, EF agreed to advance Gator a discounted amount equal to 88 percent of the face amount of Gator's invoices. Gator agreed to repay EF 100 percent of the face amount of the invoices upon receipt of payments from the funder. The discounted amount of each invoice represents a loan from AEE to Gator. A bill of sale evidenced the sale of Gator's right to receive payment on each application. The financing of the pending reimbursement applications involved the following interrelated transactions though not necessarily in this order: AEE as the assignee of EF purchased the right of ET, SEI, Gator and Tower to receive reimbursement for their services at a discount. ET, SEI, Gator and Tower agreed to repay AEE in full. Tower prepared and submitted to Gator an invoice for services provided by Tower and its subcontractors. Tower also prepared and submitted to Gator a reimbursement application for the program task. AEE advanced Tower the agreed upon discount amount. Tower used these funds to pay its subcontractors and vendors. AEE advanced Gator the agreed upon discount amount. Gator used these funds to pay Tower. Tower repaid AEE in full. Gator prepared an invoice for services provided by Gator, Tower and Tower's subcon- tractors including a 15 percent markup and submitted it with the reimbursement application either to ET or SEI. AEE advanced ET or SEI the discounted amounts as agreed. ET or SEI paid Gator in the full amount of Gator's invoice plus markup. Gator repaid AEE in full. ET or SEI prepared an invoice for its services plus the services of Gator, Tower, and Tower's subcontractors and a 15 percent markup. ET or SEI submitted the reimbursement application to DEP. When ET or SEI receives reimbursement from the IPTF, they will remit the total payment to AEE. The on-site work on each project was complete or substantially complete prior to Gator's involvement. In regards to some applications, the relevant dates on the subcontract/purchase order, Gator invoice, and Tower invoice are the same. The amount of time between AEE's payment of the advances and Gator's and Tower's subsequent remittance of 100 percent of the face amount of their invoices to AEE varied from a few days to a few weeks. The Agency Statement--Factoring Petitioners submitted the subject applications to DEP between July 18, 1994 and February 17, 1995. The financing scheme utilized in these applications was unique. Prior to the receipt of these applications, DEP never had reviewed reimbursement applications using the type of factoring scheme at issue here. In fact, the instant cases present a scenario never contemplated by DEP when it promulgated its rules and written policies. In the instant applications, the "chain of reimbursement" included: ET and SEI as funders or PRFCSRs, Gator as the named general contractor, Tower as prime subcontractor, and numerous subcontractors and vendors. As stated above, DEP was also aware that AFG and AEE (including EF) were "affiliated" with ET and SEI and would ultimately receive all reimbursement payments from the IPTF. 56 When Petitioners submitted the subject applications, no rule or written policy disallowed reimbursement for the face amount of contractors' and subcontractors' invoices when they sold their right to payments, i.e. the receivables, at a discount. When Petitioners submitted the subject applications, DEP had rules that restricted the ability of an entity to apply markups on invoices when a familial, financial or beneficial affiliation existed between a contractor, subcontractor, PRFCSR and the site or site owner, or when such relationships existed amongst those entities in the chain of reimbursement. However, there were no rules or written guidelines restricting reimbursement, based upon financial transactions occurring outside of the chain of reimbursement, if the applicant did not pass the costs of such transactions to DEP in an reimbursement application. In that regard, DEP usually dealt only with what was apparent in an application. If an application had a line-item claim for interest, DEP would not pay that claim under the rule limiting the payment of interest. Otherwise, DEP generally did not deal with costs, including interest, for which the applicant did not seek reimbursement. The applications in the subject cases did not contain line-item claims for interest. However, the difference between the face value of the invoices and the amount for which Gator and Tower sold their right to receive reimbursement for those invoices clearly represents interest. Tower's invoices appear to represent work that was integral to site remediation which was broken down into appropriate Eunits and rates. There is no evidence that the prime subcontractor, subcontractors and vendors intentionally inflated their invoices to cover the cost of financing. However, they did agree to accept a lesser amount then the face amount of their invoices for their services prior to the filing of the applications. In September and October of 1993, Paul DeCoster wrote letters to DEP describing a proposed financing scheme in which AFG would purchase the account receivables of contractors engaged in site rehabilitation. Mr. DeCoster wrote a follow-up letter dated October 4, 1993. In this letter, Mr. DeCoster proposed that AFG would charge the contractor a finder's fee which would be in addition to the 15 percent financing "markup" taken by the investor providing the financing. This proposal referenced a funder, FEC, whose parent was AFG. The transactions between the entities in the instant applications did not involve a finder's fee or a funder identified as FEC. In October of 1993, Will Robins met with DEP staff to discuss the manner in which the reimbursement program would apply to a proposed financing scheme. In this proposal, AFG would charge contractors an application/initiation fee and/or a commitment fee. The transactions between the entities in the instant applications did not involve an application/initiation fee and/or a commitment fee. After that meeting, counsel for AFG sent DEP a letter dated November 4, 1993. The letter acknowledges that the existing rules did not "specifically address the types of situations that arise when providing capital for cleanup activities through funding groups such as AFG." The letter identifies ET as the proposed funder through which AFG would finance cleanups. AFG would receive the ultimate reimbursement payment from the IPTF. At that time DEP was concerned that the proposed application/initiation fee was a "kickback" which DEP should deducted from the funder's markup. In January of 1994, counsel for AFG wrote a letter to DEP describing a financing scheme which differs in some respects from the financing scheme at issue here. This letter states that AFG intended to purchase receivables of the funder and the general contractor at a discount. Under this plan, the general contractor and the funder would claim the two markups. The subcontractors would pay AFG a finder's fee. The letter reveals that AFG, its affiliates, and investors would recover the cash equivalent of both levels of markups plus a fee from subcontractors for funding the high costs or risky projects. The transactions between the entities in the instant applications did not involve a finder's fee. On July 13, 1994, counsel for AFG wrote DEP to explain some modifications in the details to the proposed plan for the purchase and sale of receivables at a discount. This letter informed DEP that AFG would have a financial affiliation with the funder (ET) which would exist outside the chain of reimbursement and which would have no effect on either the markups or the overall reimbursement amount reflected in any application. All contracts within the chain of reimbursement (between ET, SEI, Gator, Tower, and its subcontractors) would be negotiated in arms-length transactions. The letter states: In this plan the subcontractors will perform their work on the site and will prepare their invoices in a manner consistent with any publicly or privately financed cleanup. Those invoices will be complied and forwarded to the general contractor for its review and the general contractor will add on the markup allowed by rule to the subcontractor's bills. The reimbursement application will then be forwarded to the funder who will ensure that all bills have been paid and who will be identified as the "person responsible for conducting site rehabilitation" on the reimbursement application. The funder will take the second markup allowed by rule, and will submit the reimbursement application to the Department of Environmental Protection for processing. Reimbursement will ultimately be paid by the Department to the funder in accordance with the reimbursement application. At no step in this process will the Department relinquish any authority to review and approve either the scope and nature of the clean-up or the rates charged by the contractors and subcontractors. Commencing on August 31, 1994, DEP began to develop a policy regarding the use of factoring as a financing mechanism in the reimbursement program. DEP personnel exchanged numerous documents regarding the subject of factoring. In one of those memoranda dated September 2, 1994, Charles Williams, DEP's Reimbursement Administrator, indicated that "we absolutely need to have a Big Meeting to decide what to do once and for all." In November 1994, DEP provided AFG's counsel with an informal opinion of how DEP would handle a factored application as described by Will Robins of AFG in an earlier meeting with DEP staff. The statement was that the difference between the amount that a contractor accepted in payment for his services, which was a discounted amount after factoring, . . . and the face value of the invoice which was claimed and marked up in the application was determined to be a carrying charge or interest, which is specifically disallowed for reimbursement in the reimbursement rule. American Factors Group. Inc. and the Environmental Trust v. Department of Environmental Protection, DOAH Case No. 95-0343RU, Final Order issued July 24, 1995. DEP advised AFG's counsel that it would deal with factored applications involving other entities on a case by case basis. On December 20, 1994, John Ruddell, DEP's Director of the Division of Waste Management, sought permission from DEP's Policy Coordinating Committee to promulgate a rule amendment to Chapter 62-773, Florida Administrative Code (formally Chapter 17-773). A draft rule accompanied the request. Mr. Ruddell developed the draft rule in compliance with Chapter 94-311, Section 6, Laws of Florida, which required DEP to revise its reimbursement rule. The draft rule provided that nothing in this Chapter shall be construed to authorize reimbursement for the face amount of any bill or invoice representing incurred costs when the receivable has been sold at a discount. In all such cases, reimbursement shall be limited to the actual discounted amount accepted by the provider of the goods or services. . . . The draft rule had the effect of prohibiting factoring as a mechanism for financing site rehabilitation work. The draft rule did not single out any other financing mechanism. DEP did not promulgate that draft rule. DEP requested that Petitioners furnish additional information regarding the instant applications. Between March 1, 1995 and November 17, 1995, Petitioners responded to DEP's requests with letters bearing AFG's or EF's letterhead. The letters state that prior to filling the applications, ET (and in some cases SEI) paid Gator for the face amount of the invoices plus Gator's markup. Gator then paid the subcontractors for the face amount of their invoices. Prior to these payments, AEE, an affiliate of ET, purchased the right to receive the amount due to Gator from ET or SEI and the right to receive the amount due to subcontractors from Gator. In each case, AEE bought the right to receive at a discount. According to the financing scheme, ET or SEI received sufficient funds from AEE to make the payments to Gator. ET, in turn, was obligated to pay AEE following its receipt of the funds claimed in the reimbursement application. On or about April 21, 1995, Bruce French, Environmental Manager in DEP's Bureau of Waste Cleanup, developed a memorandum discussing the proper handling of factored and/or discounted reimbursement applications. Mr. French initially sent the memorandum to Charles Williams, DEP's Reimbursement Administrator in DEP's Bureau of Waste Cleanup. The memorandum states that: invoices from subcontractors, vendors, suppliers and/or the general contractor which were paid a factored (e.g., discounted) amount by a third party capital participant (e.g., funder) represents the actual amount incurred by that entity and subsequently by the general contractor. DEP subsequently disseminated the memorandum to all application reviewers to acquaint them with DEP's policy on invoices or applications involving factoring as the financing mechanism. DEP did not direct the policy on factoring towards any individual company. DEP intended it to apply to "any combination of a general contractor, management company, funder and responsible party" in any situation in which a third party capital provider paid those program participants or suppliers a factored (discounted) amount of their invoices. The policy memorandum directed DEP reviewers to deduct costs from an application in an amount equal to the difference in the face value of an invoice and the amount paid for the right to receive payment under that invoice. The language of the policy set forth in the April 21, 1995 memorandum was broad and did not condition DEP's position on factoring on any affiliation between any parties. Between August 14, 1995 and February 2, 1996, DEP took action on the 45 applications at issue here. As reflected in those notices, DEP denied reimbursement of costs claimed in those applications because of the factoring of the supporting invoices and because "the difference between the face amount of the supporting invoices and the amount factored represents interests or carrying charges which are specifically excluded from reimbursement pursuant to Rule 62- 773.350(4), F.A.C." DEP deducted from the cost of each application an amount equal to the amount of the discount on each relevant invoice. When DEP issued the denial letters, it had not adopted the policy against factoring by the rulemaking procedure required in Section 120.54, Florida Statutes. The notices reflected a basis of denial of costs that was consistent with DEP's policy as reflected in the December 20, 1994 Draft Rule and the April 21, 1995 memorandum. This non-rule policy, which generally applied to all factoring schemes was not apparent from the rules in effect at that time. The Agency Statement--Markup/Value Added Policy Funders and contractors are entitled to take a markup of paid contractor and subcontractor invoices for allowable costs at reasonable rates. The invoices must represent actual and reasonable costs which are integral to site remediation. Contractors usually are entitled to a first-tier 15 percent markup for supervising and/or coordinating on-site remediation, for investing capital while awaiting reimbursement by paying subcontractors' invoices, and for assuming liability for the performance of the subcontractors. Funders normally are entitled to a second-tier 15 percent markup as an incentive to provide funds to finance the work. Markups are expressly subject to limitations set forth in Section 17- 773.350(9), (10) and (11), Florida Administrative Code. There are no other specific or implied limitations on markups in the rules or written guidelines. Requiring each entity that receives a markup in the reimbursement chain to pay contractor, subcontractor, and vendor invoices helps ensure that each level in the reimbursement chain pays the entity at the next lowest level in full. In these cases, each level in the reimbursement application chain "technically" paid the entity at the next lowest level. DEP policy in effect at the time Petitioners submitted the instant applications for reimbursement was to allow markups of paid invoices at two levels. However, DEP was not aware of situations where general contractors claimed markups for work that was complete before they ever became involved in the projects. With regard to all of the pending reimbursement applications, Gator applied a 15 percent markup to all of Tower's invoices including the invoices of Tower's subcontractors and vendors. With regard to a minimum of 30 of the 45 sites, Gator clearly did not supervise, manage or direct any of the on-site remediation activities. In fact, Gator did not become involved until after Tower had undertaken and completed these tasks. In at least 30 of the instant cases, Tower was acting as the general contractor when all of the on-site remediation took place. However, Tower could not apply a 15 percent markup to the invoices for its own services. Gator made it possible for Petitioners to claim the markup on Tower's invoices. As to the 15 sites at which Gator allegedly had some type of involvement with on-site remediation activities, the record contains no evidence regarding the specific activities or the level of Gator's involvement on any particular project. Gator performed some type of minimal due diligence review of Tower's site work. Gator allegedly reviewed Tower's technical and administrative files, cross-referenced technical and administrative files with the applications which Tower prepared, made visits to some job sites, and prepared a deficiency letter to determine the appropriateness of the scope of Tower's work. However, all of these functions were repetitious of the work performed by Tower and the certified public accountant attesting to the Certification Affidavit. Tower was a qualified engineering consulting firm that employed its own engineers and geologists. Gator's employee that reviewed the technical information in Tower's files was not a Florida professional engineer. He was not qualified as a certified public accountant to determine whether a charge was within DEP's reasonable rates. The Gator employee was a Florida professional geologist but he did not sign and seal the deficiency letter as such. There is no reference in DEP's rules or written policies to a deficiency letter. AFG required Gator to prepare the deficiency letter within two days of the date on which EF provided Gator with the opportunity to review a completed task. This two-day turn around time allegedly afforded efficiency of payment. The deficiency letters were limited to the question of whether the scope of Tower's services were reimbursable. Gator did not begin its review of an reimbursement application until after Gator received an invoice from Tower. The relevant subcontract/purchase order issued by Gator to Tower, the Tower invoice and the Gator invoice often were prepared on the same day. Gator "technically" paid the invoices at the next lowest level with money that AEE advanced. When Gator received payments from ET or SEI, it immediately repaid AEE before ET or SEI submitted the applications to DEP or soon thereafter. Pursuant to the addenda to the factoring contracts, Tower, not Gator, contributed to a reserve trust account which AEE will use to cover any reimbursement shortfalls. Gator allegedly indemnified the funder and guaranteed its own work but did not assume a risk of loss on Tower's work. On most if not all of the applications, Gator performed no meaningful management or supervisory functions. Gator's primary purpose in these consolidated cases was not to afford AFG a level of comfort as to the appropriate scope of the individual program tasks but to ensure that third-party investors maximized their profits. On September 1, 1994, Restoration Assistance, Inc., an entity under contract with DEP to review reimbursement applications, issued a memorandum to its reviewers directing them to complete their review and do a "total denial" on "Gator Environmental packages." The memorandum advised the reviewers that "Bruce" was drafting canned language to use in DEP's denial statement. On or about April 21, 1995, DEP presented its reviewers with a memorandum setting forth an initial overview of a "value added" policy for markups taken by a "management company" involved in site remediation activities. The memorandum indicated that DEP would allow reimbursement of claims for actual project management work and value-added services. The memorandum further provided that DEP would allow markups to a management company which only provided cash-flow services for a majority of the program task period even if the management company performed no other service. However, DEP would deny a markup if the management company provided such services during a "one month time period." DEP intended for the April 21, 1995 memorandum to acquaint DEP reviewers with the emerging DEP policy on markups. DEP's rules and written guidelines do not address the distinction made in the April 21, 1995 memorandum regarding the timing during which a management company could provide cash flow services and still be entitled to a markup. On October 20, 1995, Charles Williams issued a DEP policy memorandum for reviewers to use in reviewing reimbursement applications. Through that memorandum, DEP finalized and implemented the "value added" policy. The memorandum states that if the "GC" [general contractor] was involved with the management of the project during the course of the actual work by subcontractors, [DEP] rules do not preclude them from applying a markup. However, if the "GC" came along after the work was completed by other contractors and their involvement was more of a due diligence exercise to faciltiate (sic) a funding arrangement by a third party, then the "GC" markup would not be justified, though a markup by the actual funder listed as the PRFCSR could be allowed." Prior to the establishment of the "value added" policy on October 20, 1995, DEP made no inquiry as to whether a contractor provided value added services which were not reflected in an application in order to be entitled to a markup. DEP applied the "value added" policy to all pending applications (including the ones at issue here) resulting in a deduction of Gator's markup in all of the subject cases. The Department of Banking and Finance reviewed and issued a report (Comptroller's Report) on the Petroleum Contamination Site Cleanup Reimbursement Program on November 29, 1994. This report addressed the issue of markups in the reimbursement program. The Comptroller's Report recognized that DEP found the multiple markup structure to be beneficial in that it "attracts the involvement of companies whose role in cleanup projects is limited to providing funds to finance the work [and] attracts investors who provide funds which might not otherwise be available--thus facilitating cleanup of contaminated sites." The report acknowledges that a prime contractor "might have only limited direct involvement in the cleanup, having engaged subcontractors for most or all of the actual work." The Comptroller's Report did not address whether a contractor would be entitled to a markup if it became involved after all site work was complete. The Petroleum Efficiency Task Force's (PETF) final report concerning financing for reimbursement contractors issued on August 17, 1994. This report discussed DEP's policy of allowing two markups on paid invoices. The report recognized that "funders must be able to rely on the skills and knowledge of contractors to minimize reimbursement shortfalls." The PETF recommended for future consideration that "the Department should provide in rulemaking that contractors who take the first-tier 15 percent markup on subcontracted work must adequately supervise the work." When the PETF issued this final report, there was no existing rule that established any level of on site supervision or any other specific criteria for applying one of the two allowable levels of markup, other than paying invoices for integral site rehabilitation work. DEP's rules and written guidelines did not substantively change with regard to the "value added" policy from the April 22, 1993 revision of Chapter 17-773, Florida Administrative Code, to the October 20, 1995 memorandum which established a non-rule limitation on the ability of an entity to apply a markup to paid invoices. The "value added" policy is not reflected in any rule or written guideline, and would not be made available to a participant in the reimbursement program who requested program information. The "value added" agency statement is a non-rule policy which has the effect of a rule. DEP intends to apply the policy in all cases where a contractor's service adds no value to a project. DEP did not anticipate the need for such a rule when it promulgated the current rules. The Agency Statement Standard During the 1994 Legislative Session, the Florida Legislature directed that "no later than January 1, 1995, DEP shall review and revise rules related to the pollutant storage tanks programs . . . ." Chapter 94-311, Section 6, Laws of Florida. DEP understood that legislative instruction to include rule revisions related to the reimbursement program. On April 7, 1994, the Office of Statewide Prosecution issued a Statewide Grand Jury Report. The final report concerning financing of reimbursement contractors was prepared for the Florida Petroleum Efficiency Task Force on August 17, 1994. The Office of Controller issued its report on the Petroleum Contamination Site Cleanup Reimbursement Program on November 29, 1994. All of these reports offered suggestions for changes to the reimbursement rule. DEP first learned about factoring from presentations by Paul DeCoster and Will Robins in 1993. After these meetings, Petitioner proposed several factoring plans as proposed schemes to finance petroleum contamination site cleanup projects. Petitioners did not finalize the exact financing scheme they intended to use until July of 1994. Petitioners filed the first applications on July 18, 1994. By that time, DEP was aware that the factoring company was affiliated with the funders. DEP was also aware that the factoring company would receive the difference between the face amount of an invoice and the discount amount of that invoice. However, DEP was not aware of the exact nature of the relationships between AFG, AEE, EF, ET, WIFL, SEI, Gator and Tower. DEP was unable to evaluate all aspects of Petitioners' factoring plan without supplemental information about the details of the purchase and sale of receivables as they related to each application. DEP requested additional information from the applicants to determine if the costs were actually incurred. As a result of the information that DEP received, it reviewed all transactions to determine whether the costs claimed in the applications were actual and reasonable. On December 20, 1994, John Ruddell, Director of DEP's Division of Waste Management, sought permission from DEP's Policy Coordinating Committee to promulgate a rule amendment to Chapter 62-773, Florida Administrative Code (formerly Chapter 17-773, Florida Administrative Code). A draft rule accompanied the request. DEP intended the draft rule to comply with the legislative mandate contained in Chapter 94-311, Section 6, Laws of Florida. By that time, Petitioners had filed 41 of the subject applications. The 1994 draft rule provided that if a program participant sold a receivable at a discount, reimbursement would be limited to the actual discounted amount accepted by the provider of the goods or services rendered. The draft rule eliminated markups of contractor and subcontractor invoices. The December 20, 1994 memorandum to DEP's Policy Coordinating Committee did not indicate any deficiency in the existing delegated legislative authority that would prevent DEP from implementing the changes to the draft rule. DEP policy coordinating committee declined to approve the initiation of rulemaking procedures. Instead, it directed DEP staff to draft a bill for the 1995 legislative session. DEP based this decision on a determination that it would take too long to correct the numerous problems through the rulemaking process. The 1995 Legislative Session made several changes to the reimbursement program, particularly as it related to the direction of future site remediation activities. Chapter 95-2, Laws of Florida, passed the 1995 Legislative Session and changed the program from reimbursement of completed work to requiring pre-approval of work before it commenced. The 1995 Legislative Session did not make any relevant amendment to the reimbursement payment procedures in Section 376.3071(12), Florida Statutes. During the period between adjournment of the 1995 Legislative Session and February 2, 1996, DEP took action on each of the 45 applications that are the subject of this proceeding. Meanwhile, DEP focused its attention on making the necessary changes to switch from a reimbursement program to the new pre- approval program. It is not unreasonable to believe that such a significant change in a large program would take an agency some time to educate itself and the program's participants, prepare documentation and forms, and take steps to begin implementation. On March 22, 1996, approximately six and one-half months (198 days) after the petition for administrative hearing in Case No. 95-4606, and almost 21 months after the effective date of Chapter 94-311, Laws of Florida, DEP published its notice of rule development in the Florida Administrative Weekly. DEP filed the notice of rule development specifically "in response to litigation pending before the Division of Administrative Hearings" in the 45 cases that are the subject of this proceeding. In these consolidated cases, DEP did not have sufficient time prior to March 22, 1996 to acquire the knowledge and experience reasonably necessary to address, through the rulemaking process, the policy statements relative to factoring and markups based on value added services. Certainly, related matters were not sufficiently resolved to enable DEP to initiate rulemaking to address the policies set forth in the March 21, 1995 and October 20, 1995 memoranda until the spring of 1996. DEP is currently using the rulemaking procedure expeditiously and in good faith to adopt rules which address these non-rule policies. Additionally, the record indicates that it was not possible for the agency to initiate rulemaking in time to give Petitioners advance notice of the new policies. Petitioners filed the last applications in February of 1995 before DEP had time to fully evaluate the factoring plan. The time it took DEP to develop the detail or precision in the establishment of the policies set forth in the March 21, 1995 and October 20, 1995 memoranda was reasonable under the circumstances.
Findings Of Fact The Department of Transportation, pursuant to its decision to procure certain sewer line cleaning equipment, issued an Invitation to Bid to potential vendors of such equipment. The specifications in that Invitation to Bid which are at issue in this proceeding concern the specified ability of the machine being proposed to vacuum gutters while being driven or, that is, in motion. The other specification at issue was that the machine had to be a standard production model with five of such machines in service for one year prior to May 1988. The sewer line cleaner specified had to have a nine cubic yard capacity. The bids were received, including that of Vac-Con, Inc. and Jet Vac Sanitary Service. The bid results were posted on June 3, 1988, noticing the Department's intent to award the contract for the nine cubic yard sewer line cleaner to Vac- Con, Inc. Jet Vac Sanitary Service timely filed a formal protest of that intended bid award on June 17, 1988. The Petitioner's formal protest was transmitted to the Division of Administrative Hearings and duly came on for hearing. The Petitioner is contending that the Vac-Con model V290 storm sewer line cleaner does not meet the specifications in the Invitation to Bid because it will not vacuum gutters while in motion in the configuration set forth in Vac-Con's published specifications for its standard models. It asserts, in conjunction with this argument, that the alternative configuration proposed by Vac-Con would in effect render this a nonstandard production model of which Vac- Con has not had five in service prior to May 1988, which would represent a departure from the bid specifications and thus result in a non-responsive bid. The Respondent, however, contends that the alternative configuration proposed by Vac-Con is merely an options package to an existing standard production model machine and thus is in conformance with the specification. The Respondent has been advised by Vac-Con that the V290 machine will perform as specified and that at least five machines have been so configured and have been in service for the required one year or greater period. It is stipulated that Jet Vac Sanitary Service was the next lowest bidder after Vac-Con and has standing to protest the Intent to Award. Jet Vac was a responsive bidder. It is also stipulated that the configuration of the model V290 depicted in Vac-Con's promotional material itself will not meet the specifications set forth in Respondent's Invitation to Bid. The dispute is whether the Vac-Con machine, as optionally modified, as proposed by Vac-Con, meets the specification concerning the machine being a standard production model. In response to the Invitation to Bid, Vac-Con, Inc. submitted a bid for its Vac-Con model V290. It accompanied that bid with a written statement of the model specifications which coincided with the specifications required by the Invitation to Bid. It specified, that is, that it would comply with the requirement that the vehicle be able to vacuum gutters while being driven in motion. Jet Vac in turn submitted a bid which was responsive, but it was not the lowest bid. Vac-Con, Inc., in other bids submitted in the past year as well as in its advertising literature, describes the V290 model of sewer line cleaner as one in which the vacuum compressor is driven by the truck engine, that is the engine which provides the motive power to the vehicle. In order to operate the vacuum compressor as described in that literature, the rear axle of the truck has to be disengaged, with the result that the unit cannot vacuum and drive at the same time. This configuration of the V290 model which has the vacuum being operated by the truck engine or chassis engine, is the normal type of unit offered by Vac-Con in its vehicle demonstrations and literature, as recently as one week prior to trial. In order for the V290 to comply with the bid specifications at issue, it must be reconfigured so that the vacuum compressor is run by an auxiliary engine and not the motive power engine. The power available to operate the vacuum compressors which vacuum trash from gutters and so forth, would be reduced from the chassis engine which, in the normal configuration of that model, operates the vacuum compressors. The reconfiguration whereby the vacuum compressors would be run off the auxiliary engine, and not the motive engine, would require a reversal of the V-belt drives used by the normal unit. This alternate configuration would be obvious to the casual observer. The intent of the term "standard production model" in the specifications at issue is to ensure that a machine purchased will have ready availability of manufacturer's replacement parts out of stock. This serves to prevent the purchaser from having to do development work on new models which are not in standard production runs and do not have inventories of spare parts in the manufacturer's stock as yet. Because the alternate configuration of the unit, whereby it would vacuum while moving, running its vacuum equipment off of its auxiliary engine, requires new engineering and reevaluation of the power of the V290's auxiliary motor, the specification language requiring a "standard production model" and requiring that five such units be operational in the field, requires in this instance that five units in the alternate configuration at issue be found to have been in satisfactory field service for one year. The written description submitted by Vac-Con, Inc. in response to the bidding documents, describes a machine which complies with the specification requiring the ability of the machine to vacuum while it is in motion. That description was specially prepared for purposes of this bid. Indeed it is not a machine represented, at the time of the bid, in the company's advertising literature, catalog data or other published brochures and like sources of information in order to verify that indeed Vac-Con did have five units in the alternative configuration in satisfactory service. The Department's representative, Mr. Burt, telephoned individuals whose names had been supplied him by Vac-Con as being persons who could verify that the alternative, which could vacuum in motion with the vacuum blower run off the auxiliary engine, was indeed in service. Using these names supplied him by Vac-Con and names of persons some of those people in turn gave him, who had such altered machines operating in satisfactory service, Mr. Burt telephoned each of the individuals whose names had thus been furnished by Vac-Con and its customers. He thus confirmed that there were indeed at least five units in service in the field, for at least one year, which had the ability to vacuum gutters while in motion, with the vacuum equipment being operated by the auxiliary engine on the machine. The Department has a policy of relying upon the representations of its suppliers. It does not inspect each piece of equipment before it writes a purchase order after awarding a bid. It instead reserves the right to reject any piece of equipment that does not meet specifications, after purchase. The Department does not wish to get into an adversary relationship with its suppliers and, in turn, vendors typically do not want an adversary or unfavorable relationship with the Department and do not want future disqualifications from bidding based upon any lack of integrity or misrepresentations in responding to bid specifications. Accordingly, the representations made on the bidding document have historically been quite accurate and have a high degree of probability of reliability. Hence, the Department has not, in the exercise of its discretion, followed a policy of physically inspecting each piece of equipment and independently verifying its existence or capabilities. It rather has effectively, in the past, relied upon the vendor's representations regarding the capacities or capabilities of equipment. In fact, the Department has neither the staff nor the time to make any further pre-award investigations, especially due to the nationwide market and indeed, to some extent, international market, in which it seeks to procure equipment of all sorts. In any event, being satisfied that the equipment would perform as represented and verifying that at least five such configured machines were in active field service for a year or more, the Department concluded that, in the exercise of its discretion, that the specifications had been adequately responded to and that the award should be made to Vac-Con as lowest, most responsive bidder. Insufficient proof to the contrary was offered at the hearing.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore RECOMMENDED that a Final Order be entered awarding the contract for Florida DOT Bid Number MY3188B5 to Vac-Con, Inc. DONE and ENTERED this 8th day of December, 1988, in Tallahassee, Florida. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of December, 1988. COPIES FURNISHED: Ray Heath William B. Singleton Jet Vac Sanitary Services Post Office Box 186 New Smyrna Beach, Florida 32070 Bruce A. Campbell, squire Senior Litigation Attorney Office of General Counsel Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0450 Kaye N. Henderson, P.E., Secretary ATTN: Eleanor F. Turner, M.S. 58 Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0450
The Issue Whether Alachua County Environmental Protection Department discriminated against Tilak B. Shrestha based upon his race or national origin, in violation of Title VII of the Federal Civil Rights Act of 1964 and the Florida Civil Rights Act of 1992, by releasing Mr. Shrestha from his temporary assignment through Temp Force with the Alachua County Environmental Protection Department and by not hiring Mr. Shrestha for the position of Senior Environmental Specialist within the Alachua County Environmental Protection Department.
Findings Of Fact The State of Florida funds the Petroleum Cleanup Program (Petroleum Program) which is focused on removing petroleum contaminants from various sites within the State of Florida. The Department of Environmental Protection (DEP) administers the Petroleum Program, also known as the Underground Storage Cleanup Program. In 12 counties, including Alachua, Florida contracts with the county to manage the Petroleum Program. The Alachua County Environmental Protection Department (Alachua DEP) manages the Petroleum Cleanup sites in Alachua County. Mr. Chris Bird has been the director of the Petroleum Program since 1993. He has worked with Alachua County since 1986. In the 1994-1995 fiscal year, the Florida Legislature was facing a deficit; therefore, the Legislature significantly reduced the funding for the Petroleum Program. As a result, DEP froze the Petroleum Program, and dropped several active sites. The lack of funding resulted in downsizing at both the county and state levels at the beginning of 1995. At the beginning of 1995, the Alachua DEP had three funded positions in the Petroleum Program. Mr. Alex Vieira occupied the position of full-time Professional Engineer. The Alachua DEP also had funding for an administrative position and a full-time Environmental Engineer/Geologist. The Environmental Engineer/Geologist position was vacant at the beginning of 1995. The Alachua DEP originally advertised for the position. However, when the State reduced funding for the Petroleum Program, the Alachua DEP decided not to fill the position with a permanent employee and ultimately froze this permanent position. In order for the Petroleum Program to continue at a minimum level of operation, the Alachua DEP hired temporary employees through Temp Force, a temporary employment agency. Temp Force served as an independent contractor for the Alachua DEP. Temp Force provided Mr. Tilak Shrestha and Mr. Mike Shuler to the Alachua DEP Petroleum Cleanup Program. Mr. Shuler began working at the Alachua DEP through Temp Force two months prior to Mr. Shrestha's Temp Force assignment to the Petroleum Program. At the time of the assignment through Temp Force, Shrestha was not credentialed as a Ph.D. Mr. Shrestha and Mr. Shuler were employees of Temp Force, received their paychecks from Temp Force and acquired no benefits from Alachua County. Mr. Shrestha worked as a Temp Force employee for six months at Alachua DEP and was assigned to various projects at the Alachua DEP. As supervisor for the Petroleum Program, Mr. Vieira assigned projects to both Mr. Shrestha and Mr. Shuler. Mr. Shrestha described his working conditions during his assignment through Temp Force with the Alachua DEP as "good, no complaints," and "good on average." In 1995, the Florida legislature ultimately reduced funding for the Petroleum Program from $1.2 million to approximately $250,000. When the Alachua DEP received notice of these funding cuts, Mr. Bird advised Mr. Vieira that he needed to release one of the Temp Force employees from his assignment with the Alachua DEP. Mr. Vieira retained Mr. Shuler and informed Mr. Shrestha that he would no longer be working on the Petroleum Cleanup assignment through Temp Force. Mr. Shrestha's assignment through Temp Force with the Alachua DEP was terminated on August 10, 1995. During Fall 1995, the legislature substantially changed the law and administration pertaining to the Petroleum Program, both at the county and state levels. In October 1995, Ms. Pegeen Hanrahan became the Petroleum Program supervisor following Mr. Vieira's resignation. Ms. Hanrahan earned a Bachelor's degree in Environmental Engineering and Sociology and a Master's degree in Environmental Engineering. She is a registered Professional Engineer and a certified Hazardous Materials Manager. She began working for Alachua County in 1992 as an Environmental Engineer and later served for three years as Hazardous Materials Program Supervisor for Alachua County. When Ms. Hanrahan became supervisor of the Petroleum Program in Fall 1995, the Petroleum Program had essentially entered a "stand-by" mode. The Alachua DEP declined to send any additional work to its sub-contractors. Therefore, the technical duties involved in the Petroleum Program were reduced and the administrative duties became more important. During the Fall of 1995, there were no permanent employees on staff. Mr. Shuler remained as the only temporary employee in the Petroleum Program and according to Ms. Hanrahan was doing a "perfectly adequate job." Based on the new and reduced Petroleum Program budget for the 1995-1996 fiscal year, the Alachua DEP acted in October 1995 to establish the position of Senior Environmental Specialist in lieu of the Environmental Engineer/Geologist position. The position was advertised in December 1995. The main role of the Senior Environmental Specialist was to assist the Professional Engineer in the area of the administration involved in the Petroleum Program. The duties included filing reports, tracking sites, and submitting task orders and invoices to the office in Tallahassee. Due to the increasing changes in the Petroleum Program, the Alachua DEP required a Senior Environmental Specialist who understood the Petroleum Program's administrative tasks, as well as the State policies pertaining to the Petroleum Program. The Senior Environmental Specialist candidate was required to have a technical background in fields including, but not limited to, engineering, biology or geology. The Professional Engineer, not the Specialist, was assigned the technical review of the Petroleum Program. An applicant's understanding of the technical and administrative duties was necessary. In 1995, the Alachua DEP advertised the position of Senior Environmental Specialist, which included printing an advertisement in the local newspaper, per the County regulations. The Alachua DEP described the administrative tasks of Senior Environmental Specialist to include: preparing reports; making recommendations; receiving and investigating complaints; conducting performance evaluations; counseling, hiring and terminating employees. The Alachua DEP described the knowledge, skills, and abilities of the Senior Environmental Specialist to include: thorough knowledge of the technical methods and procedures involved in the administration of environmental regulations, programs, and policies; knowledge of local, state, and federal rules, regulations, and ordinances related to environmental protection; ability to create concise, clear, and succinct technical reports; and ability to research technical problems, formulate recommendations, and compile related reports. The Alachua DEP described the minimum qualifications for the position of Senior Environmental Specialist as: Bachelor's degree in environmental or natural science, civil or environmental engineering, geology, or hydrology, or related field, and two years' professional level environmental-related experience; or any equivalent combination of related training and experience. The County received 14 applications for the position as Senior Environmental Specialist from applicants, which included Mr. Shrestha and Mr. Shuler. Ms. Hanrahan was supervisor of the Petroleum Program in January 1996 and responsible for the hiring of the Senior Environmental Specialist. She received an Application Referral Document from personnel, stating that each of the applicants met the County's minimum requirements for the position of Senior Environmental Specialist. Upon receipt of the re?sume's and applications, Ms. Hanrahan initially screened the applicants for those who had petroleum-related experience. She narrowed the applicants to four individuals, who included Mr. Shrestha, Mr. Shuler, and two others. On January 22, 1996, Ms. Hanrahan conducted a telephone interview of each of the four applicants who passed the initial screening. The telephone interview was customary hiring practice within the Alachua DEP. During the telephone interview, Ms. Hanrahan asked each applicant the same series of ten questions, designed to test the applicant's level of knowledge regarding technical and administrative aspects of the position of Senior Environmental Specialist. Mr. Shrestha answered five out of a possible eleven answers correctly. This was the second highest score out of the four applicants. Shuler achieved the highest score, answering eight-and-one-half out of eleven answers correctly. Three interview questions specifically addressed administrative issues. Question six asked, "What does RBCA stand for?" Question seven stated, "This year the Florida Petroleum Cleanup Program has adopted a new mechanism for review and approval of work on petroleum contaminated sites. Can you tell me what that program is called?" Question nine stated, "Give two examples of policy decisions under RBCA." Mr. Shrestha failed to answer question six, seven or nine correctly. Mr. Shrestha's failure to correctly answer each of the administrative questions indicated to Ms. Hanrahan that he was unaware of the changes within the Petroleum Program. Another purpose of the telephone interview was to assess the applicants under pressure. Ms. Hanrahan also sought to evaluate how the applicants responded to her authority. During the telephone interview, Mr. Shrestha challenged Ms. Hanrahan regarding the relevance of the questions to the position of Senior Environmental Specialist and she noted his argumentative attitude during the interview. He conceded at the hearing that he did ask her about the relevancy of the questions. Based upon his argumentative tone, Ms. Hanrahan questioned Mr. Shrestha about his ability to accept her supervisory decisions. She decided not to hire Mr. Shrestha for the position of Senior Environmental Specialist based on his limited knowledge of the administration of the Petroleum Program, a factor essential to the position of Senior Environmental Specialist, and his inability to accept her authority as supervisor. Ms. Hanrahan was also aware of critical statements that Mr. Shrestha allegedly had made to female co-workers during his assignment through Temp Force at the Alachua DEP. Ms. Robin Hallbourg is currently employed as Senior Environmental Specialist with the Alachua DEP. Ms. Hallbourg has been with the Alachua County DEP for 15 years. Ms. Hallbourg worked with Mr. Shrestha at the Alachua DEP during Mr. Shrestha's assignment through Temp Force. Ms. Hallbourg testified that Mr. Shrestha told her that "she should be home with her child" and that she "should allow a man to have her job." After this conversation, Ms. Hallbourg discussed his statements with others in the Alachua DEP, including Ms. Hanrahan. Ms. Hanrahan recalled the discussion with her. Ms. Hanrahan hired Mr. Shuler for the position of Senior Environmental Specialist because he proved himself to be the most qualified candidate during the interview process. Ms. Hanrahan kept an interview log on which she noted Mr. Shuler's strong qualifications for the position of Senior Environmental Specialist. She noted his "excellent experience in the Petroleum Cleanup Program and his significant applicable training and experience in program administration." Ms. Hanrahan also noted that his "application and interview showed strong computer skills." Mr. Shuler's Bachelor's degree in Microbiology met the education requirements for the position of Senior Environmental Specialist. Moreover, at the time of Shuler's application, there had been a growing emphasis placed on bi-remediation, which is currently a regularly used process. Given Ms. Hanrahan's education, training,and experience as a Professional Engineer, she determined that a Bachelor's degree in Microbiology was an appropriate background for the position. In addition, Mr. Shuler had the technical knowledge of processes, performance of groundwater sampling, and drilling, as well as other relevant technical knowledge pertaining to the position of Senior Environmental Specialist. Additionally, due to his continued assignment in the Alachua DEP, he was aware of the new administrative duties required of a Senior Environmental Specialist. Ms. Hanrahan had personally observed Mr. Shuler from October 1995 until January 1996, and was extremely satisfied with his performance. As part of the usual hiring process, Ms. Hanrahan submitted her interview log, personnel action form, and applications to the personnel department to support her hiring decision. Mr. Bird approved the hiring decision in his capacity as director, and the personnel department, budget department, and Equal Employment Office then approved the decision. Since his hire, Mr. Shuler has been commended by the Alachua DEP and his supervisors. Ms. Hanrahan informed Mr. Shrestha that he had not been hired for the position during a telephone conversation on January 23, 1996. She did not base her decision to hire Mr. Shuler over Mr. Shrestha on the basis of race or national origin. Ms. Hanrahan is fully aware of Alachua County's Equal Employment Opportunity policy through her position as advisor on the Equal Opportunity Advisory Committee. There is no evidence of any discriminatory hiring decision. In fact, on the same day that Ms. Hanrahan hired Mr. Shuler for the position of Senior Environmental Specialist, she also hired Mr. Gus Olmos for the position of Environmental Engineering Supervisor. Mr. Olmos is from Panama and is Hispanic. Moreover, Dr. Prasad Kuchibhotla is a Professional Engineer with a Bachelor's, Master's and Ph.D. in Chemical Engineering. He is from India and is Asian. Alachua County hired Dr. Kuchibhotla in 1997 and is the current Petroleum Cleanup Program Manager for Alachua DEP. Dr. Kuchibhotla currently has a Senior Environmental Specialist working for him within the Petroleum Program. As was the case in December 1995, the current Specialist's primary duty is to assist him with the detailed administrative tasks involved with the Petroleum Program. On January 27, 1997, Mr. Shrestha filed a formal Charge of Discrimination. The charge was date stamped as received by the Florida Commission on Human Relations on January 30, 1997. Mr. Shrestha is currently employed with Bell South in Atlanta, Georgia. He earns $47,000 per year and receives health benefits.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations enter a final order finding that Petitioner, Tilak B. Shrestha is not entitled to any relief relating to his charge of discrimination under Title VII of the Federal Civil Rights Act of 1964 and the Florida Civil Rights Act of 1992. DONE AND ENTERED this 2nd day of August, 2000, in Tallahassee, Leon County, Florida. WILLIAM R. PFEIFFER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 2nd day of August, 2000. COPIES FURNISHED: Tilak B. Shrestha 3579-C Meadowglen Village Lane Doraville, Georgia 30340 Robert M. Ott, Esquire County Litigation Attorney Post Office Box 2877 Gainesville, Florida 32602 Sharon Moultry, Clerk Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32303-4149 Dana A. Baird, General Counsel Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32303-4149
Findings Of Fact Petitioner, Department of Health and Rehabilitative Services, is the state agency charged with regulating waste water treatment facilities and any sanitary nuisance which may emanate as a result of such operations pursuant to Chapters 381 and 386, Florida Statutes. Respondent, Larry G. Delucenay d/b/a Madhatter Utilities, Inc., owns and operates the Foxwood Waste Water Treatment Plant which is permitted and certified by the Department of Environmental Regulation. Respondent, in operating the Foxwood system, discharges its treated effluent water by means of two percolation ponds and a drip field located adjacent to the Cypress Cove Subdivision in Pasco County, Florida. Respondent owns and controls percolation ponds which are located adjacent to the Cypress Cove Subdivision and pumps human waste from a sewage treatment plant to percolation ponds in the Cypress Cove Subdivision. Respondent's percolation ponds are located approximately 50 ft. west of several residences and the ponds are accessible to the public. The ponds are elevated from 3 ft. to 5 ft. above the adjacent residential lots in the subdivision. However, there is a sand berm approximately 8 ft. high with a 12 yd. base which serves as a barrier between the percolation ponds and the Cypress Cove residences. On August 5, 1991, environmental health specialist Burke observed liquid flowing through the sand berm. He also observed erosion patterns in the sand on the berm which indicated liquid was flowing through it. Mr. Burke, while in the company of two other employees of Petitioner, observed liquid flowing from the percolation ponds onto Lake Floyd Drive to the south of the ponds. An improperly designed nearby lake exacerbated the flooding into Lake Floyd Drive. Respondent's waste water treatment system is designed according to the manufacturer's specifications. Pasco County allowed a number of developments to be built in the area without an adequate drainage system which adversely impacts Respondent's system to the point whereby untreated drainage outfall is draining into the southeast areas in Cypress Cove. Specifically, Respondent's pond #4 is designed to handle a water level up to 67.33 ft. During the investigation of the case, the water level in that pond was approximately 3 1/2 ft. higher than the designed capacity and was therefore causing overflow into the southeast areas of the development. (Respondent's Exhibits A, B and C.) Noteworthy also was the fact that a developer failed to complete a connection which has impacted Respondent's percolation pond and has forced the water to rise approximately 9 ft. higher than the designed capacity which has resulted in an overflow approximately 3 ft. to 4 ft. into the neighboring subdivision. As a result of the overflow, waste water spills over the percolation ponds and prevents the water from draining through the berms as designed. Petitioner's consulting engineer, Robert William Griffiths, credibly testified that a number of agencies having oversight responsibility such as Pasco County, the Southwest Florida Water Management District and the Department of Environmental Regulation, mandated that the drainage system be completed prior to the entire build-up of Cypress Cove. Despite the mandate, the drainage system was not completed and the County allowed the development to continue. Respondent is properly treating and chlorinating sewage in its plant which complies with Petitioner's requirements for the treatment of sewage in systems designed such as Respondent's. Respondent properly treats sewage flowing through its ponds and its berms are properly maintained. As early as October 1989, Respondent consulted and retained an engineer, Gerald E. Towson, who was commissioned to investigate the specifics of designing a waste water treatment plant based on concerns raised by the Department of Environmental Regulation (DER). As a result of that charge, Towson investigated the area and observed flooding and the stormwater runoff in the Cypress Cove neighborhood and attempted to find a solution to alleviate the problem. Consultant Towson also investigated Respondent's treatment plant to determine if the system was functioning as designed. Based on his observation and inspection of the treatment facility, the facility was operating as it was designed and properly filters and treats the effluent. However, based on Respondent's inability to control the stormwater runoff in the neighborhood created by the excess buildup, Towson concluded that there was no workable solution to the problem. As a result of Towson's inability to find a workable solution to handle the concerns raised by DER, Respondent suggested that Towson locate another wastewater treatment site which he found in a surrounding area. Respondent negotiated a lease arrangement with the landowner and initiated the permit process with DER. After the completion of numerous documents and engineering studies required by the Department of Environmental Regulation, Respondent was able to get the leased site permitted by DER as a slow drip irrigation system during March 1991. However, while construction of the system was scheduled to start during March 1991, as a result of vigorous protests from area neighbors, construction was delayed. Respondent thereafter investigated several sites but was unable to fine a suitable area near Cypress Cove. Towson completed a lengthy and cumbersome process in getting Respondent's construction application processed by DER. Initially the application was filed and following a DER review, a Notice of Intent to Issue was given. Hillsborough County thereafter reviewed the project and following their review, Hillsborough County issued its Notice of Intent to Grant and public notice was given. Based on Respondent's inability to comply with the neighbor's concerns regarding setback problems, DER withdrew its permit during May of 1991. Thereafter, Petitioner became involved in connecting with the Pasco County Public System. That connection was ultimately made and the County gave its approval following a delay based on a review occasioned by an employee who had been on vacation. Upon getting the approval, Petitioner ordered the equipment from a supplier which included installation of a magnetic meter and the necessary hookups into the Pasco County System. A "phased in" connection has been completed and the stormwater runoff problem has been abated. When the problems raised by DER and ultimately Petitioner was first brought to Respondent's attention, Pasco County did not have the capacity to handle the hookups required by Respondent's system. Respondent, has been involved in the installation of waste water treatment plants since 1967. Respondent is qualified as a Class "A" Licensee Waste Water Operator. He has been accepted as an expert in numerous administrative hearings. Respondent purchased the Foxwood System during 1982. Respondent utilized a 13 acre tract near Lake Floyd Drive. The system was licensed and designed with a flow capacity of 300,000 plus gallons per day. During the time when the Administrative Complaint was issued, the flow capacity was 220,000 gallons per day. The storm water system which was to have been completed by developers in the area was not connected to the public system and the County granted numerous other permits to daycare centers and several parking lots were constructed for other newly constructed commercial buildings in the area. As a result of the excess runoff created by the development in the area, Respondent's system was impacted and the water level was raised in the percolation ponds to the point whereby an overflow resulted. Petitioner adduced no evidence which showed that any physical or emotional harm resulted from the runoff. At all times while the concerns were being raised by Petitioner and other oversite agencies, the effluents in Respondent's systems were properly treated. Respondent vigorously attempted to abate the runoff created by the excess buildup in the area despite the fact that the problem was raised by Pasco County and over which Respondent had no control. Throughout the process of attempting to find alternate solutions and ultimately getting permitting approval to start construction of an alternative waste water treatment system, Respondent operated in good faith. When no alternate site became available, Respondent initially made application to connect with Pasco County System and that connection has now been made.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that: Petitioner enter a Final Order dismissing the Administrative Complaint herein in its entirety. DONE and ENTERED this 29 day of April, 1992, 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 29 day of April, 1992. COPIES FURNISHED: THOMAS W CAUFMAN ESQ HRS DISTRICT V LEGAL OFFICE 11351 ULMERTON RD - STE 407 LARGO FL 34648 RANDALL C GRANTHAM ESQ COTTERILL GONZALEZ & GRANTHAM 1519 N MABRY - STE 100 LUTZ FL 33549 RICHARD S POWER AGENCY CLERK DEPT OF HEALTH AND REHABILITATIVE SERVICES 1323 WINEWOOD BLVD TALLAHASSEE FL 32399 0700 JOHN SLYE ESQ/GENERAL COUNSEL DEPT OF HEALTH AND REHABILITATIVE SERVICES 1323 WINEWOOD BLVD TALLAHASSEE FL 32399 0700
The Issue The issue for determination is whether Angie's Quality Cleaners, d/b/a Tony's Cleaners, DEP Facility No. 139500552 is eligible for state-administered cleanup under the Drycleaning Solvent Cleanup Program pursuant to Section 376.3078, Florida Statutes.
Findings Of Fact Angie's Quality Cleaners, d/b/a Tony's Cleaners, DEP Facility No. 139500552 (Respondent Cleaners) operates as a drycleaning facility at 1197 West 35th Street, Hialeah, Florida. Colombina Holding Company, N.V., Inc. (Intervenor) is the owner of the real property located at 1197 West 35th Street, Hialeah, Florida. Respondent Cleaners made application with the Florida Department of Environmental Protection (Respondent DEP) for state-administered cleanup under the Drycleaning Solvent Contamination Cleanup Program (Drycleaning Cleanup Program). By letter dated October 25, 1996, Respondent DEP notified Respondent Cleaners, among other things, that its application was approved and that it was eligible to participate in the Drycleaning Cleanup Program. Prior to Respondent Cleaner's approval to participate in the Drycleaning Cleanup Program, Metropolitan Dade County (Petitioner) issued to Respondent Cleaners a Notice of Violation and Orders for Corrective Action (NOV) for contamination at the drycleaning facility. The NOV required Respondent Cleaners to assess and remediate the contamination and to pump out and clean a soakage pit. Having received the NOV, Respondent Cleaners obtained the services of an environmental consultant to assess the contamination on the site and to propose a plan of remediation. Respondent Cleaners maintained contact with Petitioner and advised Petitioner of the progress. Petitioner required Respondent Cleaners to submit a Contamination Assessment Report (CAR) and IW Process Change Plans for the facility. Respondent Cleaners complied with the requirement. By letter dated November 21, 1996, counsel for Respondent Cleaners made inquiry to Respondent DEP as to whether pump out or cleaning of contamination in a soakage pit was included within the Drycleaning Cleanup Program. On November 20, 1996, Petitioner's Department of Environmental Resources Management (DERM) conducted a routine inspection and a receptor survey of Respondent Cleaners. No violations were observed by the inspector. Respondent Cleaners has not remediated the contamination at the facility site.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Environmental Protection enter a final order finding Angie's Quality Cleaners, d/b/a Tony's Cleaners, DEP Facility No. 139500552 eligible to participate in the Drycleaning Solvent Contamination Cleanup Program. DONE AND ENTERED this 21st day of April, 1998, in Tallahassee, Leon County, Florida. ERROL H. POWELL 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 21st day of April, 1998.
The Issue The issues in this case are whether Respondent, L.B. King, Jr., violated certain rules relating to petroleum contamination site cleanup criteria promulgated by Petitioner, Department of Environmental Protection (Department), whether he should be required to pay an administrative fine and investigative costs and expenses incurred by the Department, and whether he should take corrective action, as described in the Department's Notice of Violation, Orders for Corrective Action, and Administrative Penalty Assessment (Notice of Violation) issued on June 15, 2007.
Findings Of Fact Based upon the record presented by the parties, and those allegations in the Notice of Violation which are undisputed, the following findings of fact are determined: Respondent is the owner and operator of non-residential property (doing business as King Oil and Tire) located at 16776 Southeast U.S. Highway 19 (at Main Street and Ward Street) in Cross City, Florida. He has owned the property since June 30, 1982. Since July 1978, eight regulated petroleum storage tanks were situated on the property. See Fla. Admin. Code R. 62- 761.200(20), (45), (53), and (65). The Department has assigned facility identification number 15/8839661 to the site. During the intervening time period since Respondent assumed ownership, six of the tanks and their associated piping have been closed or removed, including tank 4 in August 1997 and tanks 5 and 6 in March 2004. Tank 4 was a 1,000 gallon diesel underground storage tank system (UST) originally installed in July 1982, tank 5 was a kerosene UST installed in July 1978, while tank 6 was a waste oil UST installed in July 1978. Only tanks 7 and 8 still remain in service. After tank 4 and the associated piping were closed in August 1997, Respondent conducted a closure assessment in the area of tank 4 and performed soil and groundwater analytical sampling in the area of its former piping run. He then filed a Tank Closure Assessment Report (TCAR) with the Department on August 19, 2003. The TCAR revealed groundwater contaminants above the Department's Cleanup Target Levels (CTLs) for Methylnapthalene in two respects and for Naphthalene. See Fla. Admin. Code R. 62-777.170(1)(a), Table I. Because of the presence of contamination on the site, on September 3, 2003, the Department sent Respondent a letter requesting that he submit a Discharge Report Form (DRF) and initiate a site assessment, as required by Florida Administrative Code Rule 62-770.600, and that he file a completed site assessment report by July 10, 2004.3 Subsection (1) of that rule requires that "[w]ithin 30 days of discovery of contamination, the responsible party shall initiate a site assessment." On September 29, 2003, the Department received the requested DRF. During a tank closure inspection of tanks 5 and 6 performed on March 4, 2004, the Levy County Health Department, acting on behalf of the Department, discovered stained soils in the fill area of tank 6. On May 18, 2004, the Department received a TCAR dated May 7, 2004, for the closure of tanks 5 and 6. The TCAR documented the results of laboratory analytical tests on groundwater samples, which revealed groundwater contaminants above the Department's CTLs for Methylnapthalene in two respects. On May 24, 2004, the Department received from Respondent a copy of a DRF (dated March 9, 2004, as amended on April 9, 2004) for the contamination related to tanks 5 and 6. The DRF was the last report filed by Respondent concerning tanks 5 and 6. On the same date, the Department sent Respondent a letter requesting that he initiate site assessment activities for the discharge related to tanks 5 and 6, as required by Florida Administrative Code Rule 62-770.600(1). On July 14, 2004, the Department sent Respondent another letter requesting (a) completion of a site assessment and (b) the submission of a Site Assessment Report (SAR) for the discharge from tank 4 (SAR-97), which complied with the requirements of Florida Administrative Code Rule 62-770.600(8). (The SAR-97 was originally due on July 10, 2004, but had not yet been filed.) In order to be deemed complete, a SAR must contain all of the information detailed in subsection (8). Also, the letter requested that a SAR for the 2004 discharge (SAR-04) be completed no later than August 1, 2004, as required by Florida Administrative Code Rule 62-770.600(7). That subsection requires in relevant part that "[w]ithin 270 days of discovery of contamination, the responsible party shall submit to the Department or to the FDEP local program for review two copies of a [SAR] " On July 15, 2004, or the day after the above letter was mailed, the Department received a copy of the SAR-97 from Respondent. The report was then referred to the Department's Petroleum Cleanup Section for its review. By letter dated August 27, 2004, the Department advised Respondent that SAR-97 was under review. The letter also changed the due date for the SAR-04 from August 1, 2004, to November 9, 2004. On September 15, 2004, the Department received correspondence from Respondent requesting an extension of time in which to submit his SAR-04. On December 10, 2004, the Department approved the request and authorized Respondent to file a SAR-04 no later than March 1, 2005. On April 12, 2005, Respondent filed with the Department a Site Assessment Report Addendum (SARA) for the 1997 discharge (SARA-97). The report was dated March 1, 2005. On May 25, 2005, the Department sent Respondent a letter requesting that he file two copies of a supplement to the SARA-97 no later than July 5, 2005, to address certain deficiencies noted in that report, as required by Florida Administrative Code Rule 62-770-600(11). That subsection provides that "[i]f the [SAR] is incomplete in any respect, or is insufficient to satisfy the objectives of subsection 62- 770.600(3), F.A.C., the Department or the FDEP local program shall inform the responsible party pursuant to paragraph 62- 770.600(9)(b), F.A.C., and the responsible party shall submit to the Department or to the FDEP local program for review two copies of a [SARA] that addresses the deficiencies within 60 days after receipt of the notice." The same letter also requested that a disposal manifest be provided for the tank and piping closures. On July 11, 2005, the Department received a second SARA-97 from Respondent's consultant. On July 14, 2005, it also received the disposal manifest documentation for the closure of tank 4 and its piping. These were the last reports filed by Respondent. On October 4, 2005, the Department sent Respondent a letter requesting that he provide two copies of a third SARA for the 1997 discharge to address deficiencies noted by the Department in the second SARA. The letter indicated that the third SARA was to be filed no later than November 23, 2005. The Department also requested that he provide a completed financial affidavit to justify Respondent's claim that he was financially unable to complete the remaining required cleanup corrective actions at his property. On November 29, 2005, Respondent requested an extension of time to complete the third SARA-97. (The reason for the requested extension was that Respondent's insurance carrier would not give authorization for the work.) On January 12, 2006, the Department advised Respondent by letter that his request had been denied and that he must submit either the third SARA or a financial affidavit, as previously requested, no later than February 15, 2006. In its response, the Department indicated that it did not "consider generic delays by contractors or insurance carriers as good cause for an extension." To date, neither filing has been made. By failing to file the requested third SARA for the 1997 discharge, Respondent has contravened the requirements of Florida Administrative Code Rules 62-770.600(11) and 62- 770.800(3), which require that within 60 days after notice, a responsible party submit a SARA to address deficiencies noted in a SAR. Respondent's conduct also implicates Florida Administrative Code Rule 62-770.800(5), which makes it a violation of two Florida Statutes for a responsible party to not submit requested information within the time frame specified. Since March 1, 2005, which was the due date on which a report was to be filed, Respondent has failed to submit an approved SAR for the 2004 discharge, as required by Florida Administrative Code Rule 62-770.600(7), which in turn contravenes Florida Administrative Code Rule 62-770.800(3) and (5). To date, Respondent has failed to complete site assessment activities for both the 1997 and 2004 discharges, as required by Florida Administrative Code Rule 62-770.600(10). That provision states that "[s]ite assessment activities shall not be deemed complete until such time as a [SAR] is approved." To date, Respondent has failed to timely and completely assess and remediate the contamination at his property, as required by Florida Administrative Code Rule Chapter 62-770. That chapter contains the criteria which apply to the cleanup of a site contaminated with petroleum products. During the course of its investigation of this matter, the Department has incurred expenses "in the amount of not less than $500.00." As mitigating evidence, Respondent offered into evidence Respondent's Exhibits 2-15, the majority of which pertain to his insurance policy and the pending litigation with his carrier, Mid-Continent Casualty Company (MCC), or the priority score funding process, which is the process by which contaminated properties are scored or rated for purposes of determining eligibility to receive state cleanup funds when the responsible party is financially unable to do so. Although evidence regarding the insurance policy and pending litigation was deemed to be immaterial to the issues of establishing Respondent's liability for the violations and responsibility for undertaking the corrective actions necessary to satisfy the violations, the undersigned ruled that it could be used by Respondent as mitigating evidence, if relevant, for the purpose of seeking to reduce the administrative penalty. Respondent's Exhibits 8, 9, and 11 indicate that after he reported the 2003 discharge to MCC, in 2003 the carrier denied coverage for that discharge (on the ground "any 'confirmed release' must commence after the retroactive date of the policy (4/3/98)"). However, MCC initially accepted coverage for the 2004 discharge and authorized Respondent's environmental consultants to conduct a site assessment. The documents further show that in December 2005, or before the 2004 site assessment had been completed and a SAR prepared, MCC reversed its position and denied coverage for the 2004 discharge on the ground there was no "Confirmed Release," as defined by the policy. Respondent then filed his lawsuit seeking a determination that the carrier was responsible for cleanup costs. Respondent asserts that he has expended more than $50,000.00 in pursuing the lawsuit, which is much more than the administrative penalty being assessed by the Department. Respondent points out that prior to the time MCC reversed its position as to coverage for the 2004 discharge in December 2005, he had filed a DFR, TCAR, disposal manifest, SAR- 97, and two SARAs for the 1997 discharge, and a TCAR and DFR for the 2004 discharge, all of which indicate a good faith effort on his part to comply with the assessment requirements. As noted above, the final reports prepared by Respondent's consultant were a second SARA-97 and a disposal manifest for the 1997 discharge, which were filed with the Department in July 2005, and a TCAR and DRF for the 2004 discharge filed in May 2004. Respondent's Exhibit 10A recites language in Coverage B of the insurance policy, which provides in part that MCC "will pay Clean-up Costs by an Insured for environmental damage that an Insured is legally obligated to pay . . . ." Respondent argues that if he acknowledges by affidavit or other proof that he does not have the ability to pay for cleanup costs, he fears that under the above language, MCC would not be "legally obligated to pay." This is because Section 376.3071(7)(c), Florida Statutes, provides that when a responsible party does not have the ability to pay for all of the cleanup costs, the Department "may" enter into an agreement with the responsible party to undertake all or part of the site rehabilitation after "taking into consideration the party's net worth and the economic impact on the party." Respondent contends that if he files an affidavit under this statute, MCC would then be relieved of any responsibility under the policy, and his rights in the lawsuit would be jeopardized. Respondent further points out that several other provisions in the insurance policy prohibit him from completing the assessment until the litigation is concluded. For example, one provision (Section II.B) provides that "No Clean-up Costs, charges, and expenses shall be incurred without the Company's consent," while another (Section II.C) provides that "An Insured shall not admit or assume any liabilities or settle any Claim(s) without the Company's consent." Respondent asserts that these provisions prevent his consultant from conducting any further work on the site without MCC's consent, and if he does so, he will lose the right to reimbursement under the policy. Finally, Exhibits 3 through 6 show that Respondent's property has been assigned a site ranking score of ten points, and that the Department is currently funding sites that are eligible for state restoration funding only if they have scores of 37 points and higher. Thus, Respondent argues that a delay in remediation of the site is not unreasonable. Except for the two discharges at issue in this case, there is no evidence that Respondent has a history of non- compliance or that he gained any direct economic benefit by virtue of the discharges. Although no reports have been filed since July 2005, through counsel, Respondent has kept the Department abreast of his efforts to establish liability on the part of MCC so that the site assessments can resume.
