Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made. Chandler sought exemption from permitting requirement from the Department to perform certain dredging in two artificial dead-end canals located in Placida Point Subdivision (formerly Porto-Fino Subdivision), Charlotte County, Florida. The Department has denied the exemption on the basis that "the proposed work indicates that it is not for maintenance purposes, and therefore, it does not fit the maintenance exemption". The dredging proposed by Chandler would remove the existing earthen plugs between Coral Creek (an adjacent creek) and the two canals. Coral Creek is a natural body of water and is waters of the State. The two canals were excavated (constructed) during the latter part of 1969 and early 1970 (before April 1970). Although no original design specifications were offered into evidence, there is sufficient competent evidence to show that at the time the canals were constructed earthen plugs were left between the canals and Coral Creek which restricted the water exchange between the canals and Coral Creek. The exchange of water apparently occurred at mean high water, and navigation, if any, was restricted to small boats. Porto-Fino Realty Co., Inc., (Porto-Fino) developed the Porto-Fino Subdivision in 1971, and in early 1971 applied to the Board of Trustees of the Internal Improvement Trust Fund (Board) for a dredge permit to connect the certain existing canals, which included the canals in question, to Coral Creek. As part of the application review, a site inspection was made, and it was found that the earthen plugs left between Coral Creek and the canals when they were constructed allowed water to ebb and flow during periods of high tide. As a result of this site inspection, it was recommended that before any further consideration be given the permit application, that the applicant be advised that the canals had to be adequately diked. The record is not clear on whether this permit was granted, but apparently it was not because this subject was raised again in 1974 with Lou Fusz Motor Company, the present owner of Porto-Fino Subdivision, by the Board and the Department of Army, Corps of Engineers (Corps). Apparently, it was determined by the Board, and possibly by the Corps, that the plugs had washed out and needed to be repaired. In 1975, at the request of the Board, the earthen plugs were repaired and culverts placed in the plugs to allow flushing of the canals. The earthen plugs are presently in existence in the mouth of the canals, and are colonized by mangroves, Brazilian pepper and Australian pine. The mangroves are mature trees 10-15 feet in height, and approximately 10-15 years old. The plugs do not show any signs of any recent dredging in or around the mouths of the canals. The plugs form a barrier to navigation between the canals and Coral Creek. The canals have not been used for navigational access to Coral Creek since they were repaired in 1975. The canals have not been previously dredged to maintain navigational access for boat traffic to Coral Creek, and are not presently used for navigational access to Coral Creek. There is sufficient competent substantial evidence to establish facts to show that the earthen plugs, as they presently exist, are man-made barriers that separated the two canals from Coral Creek. There is insufficient evidence to show that the repair of the earthen plugs in 1975 by the developer was illegal. The repair of the earthen plugs in 1975 by the developer was necessary because the original plugs had not been properly constructed or had washed out over the period of years. Coral Creek and the canals in question are surface waters of the state as defined in Rule 17-312.030(2), Florida Administrative Code. Canals which are used for navigation have to be periodically dredged to maintain navigational access. There is sufficient competent substantial evidence to establish facts to show that the dredging proposed by Chandler would not be "maintenance dredging" as contemplated by Rule 17-312.050(1)(e), Florida Administrative Code.
Findings Of Fact This cause comes on for consideration based on the Petitioners' challenge to the Respondent's State of Florida, Department of Environmental Regulation's stated intent to issue a permit to the applicant, Atlantic Bancorporation under the authority of Chapters 253 and 403, F.S., and Public Law 92-500. The Respondent Atlantic Bancorporation filed an application for a permit with the Respondent State of Florida, Department of Environmental Regulation. There were four items found in the application, being: The construction of a 256 foot long by 5 foot wide dock, together with a 30 foot long by 14 foot wide boat ramp. Six storm sewers using 15" pipe with headwalls. An access road to the boat ramp of 425 feet in length, constructed of limerock. Crossing of a stream with sanitary sewer. The details of the written application may be found in the Respondent, Atlantic Bancorporation's Exhibit #1, admitted into evidence. The only aspects of the permit application which the Petitioners are challenging pertain to the proposed dock, boat ramp and access road to those facilities. On May 3, 1977, Mr. C. E. Barber, an inspector with the Department of Environmental Regulation met with Daniel Thatcher, the President of General Shelter Corporation, which corporation was the agent of Atlantic Bancorporation on that date. (Subsequent to the time of the application General Shelter Corporation has become the owner of the land and Atlantic Bancorporation is the first mortgagee on the land.) The meeting on May 3, 1977 took place at the site of the proposed boat dock, boat ramp and access road. The meeting was for purposes of pre-application inspection, as a preliminary step toward filing the application for permit. During the course of this meeting, Mr. Barber looked around the general area and talked to Thatcher about the underlying scope of the project and the items which would be considered in the permit process. This conversation and inspection took place over a period of 45 minutes. Subsequent to this meeting and conversation, the application for permit was filed on May 9, 1977 over the signature of Daniel Thatcher. Inspector Barber determined that the nature of the project was such that a short form investigation could be utilized in keeping with the requirements of Chapter 403, F.S. He returned to the area of the project on June 7, 1977 and spent two hours inspecting the area. He went to his office and wrote a report on the question of granting the permit. This report is entitled Permit Application Appraisal and may be found as Respondent's Department of Environmental Regulation's Exhibit #1, admitted into evidence. His recommendation was that the permit be granted upon condition that silt screens be used in the course of the construction phase of the project to combat turbidity in the literal zone, an area of the creek In which the dock and boat ramp are being placed. Mr. Barber's supervisor David Scott, who was an Environmental Specialist III, at the time of the application, approved the recommendation that the permit be granted. This approval of Mr. Barber's position was upon condition that the silt screens be employed in the construction phase. Additionally, the State of Florida, Department of Natural Resources and local water management district were made aware of the pending application of the Respondent Atlantic Bancorporation. Neither of these agencies offered any comment or disagreement to the intention to grant the permit. The Petitioners were notified of the position of the State of Florida, Department of Environmental Regulation's intention to issue the permit requested by Atlantic Bancorporation, in the form of letters addressed to the Petitioners. Copies of those letters may be found as Respondent, Department of Environmental Regulation's Composite Exhibit #2, admitted into evidence. The substance of these letters is the same in that the letters state that the Department of Environmental Regulation has been given reasonable assurances by the applicant that the short term and long term effects of the proposed activity will not result in violation of water quality criteria, standards, requirements and provisions of Chapter 17-3, Florida Administrative Code. Nor, will the proposed activity interfere with the conservation of fish, marine and wildlife or other natural resources to such an extent as to be contrary to the public interest. Finally, the letter also states that the proposed project will not create a navigational hazard, or serious impediment to navigation, or substantially alter or impede the natural flow of waters, so as to be contrary to the public interest. In trying to establish a position contrary to that of the Respondent, State of Florida, Department of Environmental Regulation, Petitioners offered the testimony of one of the Petitioners Thomas T. Elmore, Jr. and a Mr. Lamar Veal. The substance of their testimony indicated that there was a large number and variety of fish, marine and wildlife to include: osprey, hawks, blue and white herring, water turkey, ducks, coots, cranes, geese, egrets, woodpeckers, and various other small birds. The type of fish spoken of were bass and sunfish. They also indicated that alligators, manatee, and shrimp may be found in the vicinity of the project. Specific reference was made to one manatee that had been observed in the area which appeared to have been scarred by propellers of boats. Reference was also made to an alligator that had been killed, apparently by propellers of boats. Considering the damage done to the manatee, it is unclear where the damage occurred, because the area in question, which is known as Doctors Lake is a tributary to the St. Johns River, a body of water of considerable dimension. On the other hand Doctors Lake is one to one and a half miles wide and five miles long. These same witness, to wit: Elmore and Veal, testified about grass beds at various places in the area of Doctors Lake. Photographs offered as exhibits by the Petitioners demonstration that some of these grasses were found in the vicinity of the location for the boat ramp and dock, but there was no testimony that these grasses would be unduly disturbed. Testimony by Mr. Veal indicated that Doctors Lake does not "flush" very readily. Their testimony established that there are a number of homes located on Doctors Lake and that there is some motor boat activity and that oil and gas spills from boats occur in the lake. Finally, the testimony established that the power boats that pass by have some effect, which measurement was not known, on the erosion of the shore, particularly in the areas that lack grass vegetation. The area where the permit is requested is not one lacking in grass vegetation at the shoreline. After examining the sum and substance of the testimony offered in behalf of the Petitioners, they have failed to establish that the granting of the permit and subsequent construction under the permit, violates water quality criteria, standards, requirements and provisions of Chapter 17-3, Florida Administrative Code. Nor, have they established that the proposed activity will interfere with the conservation of fish, marine and wildlife or other natural resources, to such an extent as to be contrary to the public interest. Moreover, the Petitioners have failed to show that the proposed project will create a navigational hazard, or a serious impediment to navigation, or substantially alter, or impede the natural flow of navigable waters so as to be contrary to the public interest. Therefore, the Petitioners have failed to show any reason why the permit as applied for should not be granted by the Respondent, State of Florida, Department of Environmental Regulation.
Recommendation It is recommended that the permit application filed by Atlantic Bancorporation, which is the subject of this case, be granted by the State of Florida, Department of Environmental Regulation. DONE AND ENTERED this 25th day of October, 1977, in Tallahassee, Florida. CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Edward C. Coker, III, Esquire 1212 Atlantic Bank Building Jacksonville, Florida 32202 Allen Scott, II, Esquire 220 East Forsyth Street Jacksonville, Florida 32202 Sheri W. Smallwood, Esquire Assistant General Counsel Department of Environmental Regulation 2562 Executive Center Circle, East Montgomery Building Tallahassee, Florida 32301
The Issue Whether the challenged agency statement is a rule as defined under Section 120.52(16), Florida Statutes. If the agency statement is a rule, whether Respondent has violated Section 120.535(1), Florida Statutes, by failing to adopt the alleged agency statement as a rule. If the agency statement is a rule, whether it is an invalid exercise of delegated legislative authority.
Findings Of Fact Respondent, Department of Environmental Protection (DEP), is the administrative agency of the State of Florida which administers the relevant portions of Chapter 376, Florida Statutes, and the rules pertaining thereto with regard to the reimbursement of actual and reasonable costs of cleanup of petroleum sites. Petitioner, American Factors Group, Inc. (AFG), is engaged in the business of financing storage tank clean-ups eligible for reimbursement pursuant to Section 376.3071(12), Florida Statutes. Petitioner, The Environmental Trust (TET), is affiliated with AFG. Certain principals of AFG are also trustees of TET. TET acts as the funder of the contractors and subcontractors performing rehabilitation activities at petroleum sites. Environmental Factors, a division of AFG, negotiates and enters into the financing contracts with the contractors and subcontractors. American Environmental Enterprises, which is affiliated with AFG, handles the financial transactions relative to the contracts in which Environmental Factors enters as a division of AFG. In other words, American Environmental implements the contracts on behalf of AFG. Under the reimbursement program, the invoices are submitted to DEP after the program task is completed or not more than once every six months for remedial actions. DEP will reimburse the applicant for the actual and reasonable costs incurred for site rehabilitation. The application is reviewed by DEP within sixty days of receipt. If additional information is needed, DEP will advise the applicant. DEP is required to deny or approve the application for reimbursement within ninety days of the date the additional information is submitted or at the end of the sixty-day review period if no additional information is requested. Because of backlogs in the past, DEP has taken longer than the statutory time frames to make a payment for reimbursement. In the financial arrangements between a contractor and AFG, the contractor is required to submit invoices to AFG upon the completion of the contractor's services. AFG advances the contractor a discounted amount based upon a percentage of the face value of the invoice. The contractor is also required to contribute a certain percentage of the invoice amount to a reserve trust account. The turn around time between AFG's receipt of the contractor's invoice and the advance of the discounted amount to the contractor is typically five to ten days. This financial arrangement between AFG and the contractors is known as factoring. Factoring is generally construed as the purchase of an asset, which may include an account receivable, from another person at a discount. An account receivable reflects the costs that a company charges for its service after that service has been rendered but has not been paid by the entity responsible for payment. Thus, when a contractor completes his rehabilitation task, the amount of his invoice that would be submitted to DEP for reimbursement is an account receivable. In determining how much the invoice is to be discounted, AFG will take into consideration the time value of the funds. In other words, AFG uses how long will it take for AFG to receive the invoice amount from DEP as a component in determining the percentage of discount. In the instant case, AFG is not actually buying the account receivable, but is buying the right to receive the payment for the account receivable when it is paid. AFG has recourse against the contractor through an indemnity and such recourse is secured by the contractor's contribution to a reserve trust account. AFG has been using this type of financing in Florida in the context of clean ups of petroleum sites since 1993. By letter dated September 10, 1993, Paul DeCosta, an attorney representing AFG, requested Lisa Duchene of the DEP to advise him how certain activities contemplated by AFG in financing expenses for reimbursable environmental cleanups would be treated by DEP pursuant to Section 376.3071, Florida Statutes. By letter dated November 4, 1993, E. Gary Early, counsel for AFG, advised Bill Sittig of DEP of his understanding of a discussion between Mr. Sittig and representatives of AFG on October 21, 1993. The discussion concerned DEP's position on certain aspects of the financing arrangements that AFG contemplated using for the environmental cleanups. On January 18, 1994, Mr. Early wrote to Lisa Duchene, outlining AFG's plan for providing capital for site rehabilitation, and requesting that she advise him if there were any obvious problems with the proposed financing structure. Rule 62-773.350(4)(e), Florida Administrative Code prohibits the reimbursement of costs associated with interest or carrying charges of any kind with the exception of those outlined in Rule 62-773.650(1), Florida Administrative Code. In November, 1994, Mr. Early, Ms. Duchene, and Charles Williams, Environmental Administrator for DEP's Bureau of Waste Cleanup, had a telephone conversation concerning factored invoices. Mr. Early was advised the following by DEP staff: That the difference between the amount that a contractor accepted in payment for his services, which was a discounted amount after factoring, the difference between that 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. This position had been formulated at meeting of DEP representatives prior to the telephone call. The statement was limited to the scenario that Will Robbins of AFG had outlined in an earlier meeting with DEP staff. The statement of DEP was an informal opinion of how DEP would propose to deal with an application involving AFG and the scenario described if such an application should be submitted to DEP. In determining whether DEP would also treat the discounted amount as a carrying charge in other transactions of other entities involving factoring, DEP would have to deal with it on a case by case basis. By memorandum dated April 21, 1995, Bruce French, an Environmental Manager with DEP, set forth DEP's policy regarding factored and/or discounted reimbursement applications. The memorandum was issued to provide guidance to DEP reviewers when considering applications that involve factoring and reimbursement fees. The memorandum provided: Regarding reimbursement applications where the program task organization structure of the applicants may involve any combination of a general contractor, management company, funder and responsible party and any other parties with claims in applications from these entities, only incurred costs of the general contractor and subcontractors including allowable markups are to be considered for reimbursement. Specifically, 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. Additionally, the memorandum gave an example of factoring involving the payment of factoring fees, and explained what amounts would be allowed in the scenario. The factoring scenario described in the memorandum was not the same scenario that AFG representatives described to DEP. Petitioners have not challenged the validity of the April 25, 1995, memorandum as a rule.
Findings Of Fact The Parties Gleason Brothers and Company (Gleason), as stipulated, is a small business party within the meaning of Section 57.111, Florida Statutes. Gleason owns real property in Brevard County, Florida, specifically described as Sections 28 and 33, Township 27 South, Range 36 East. The Department of Environmental Protection (DEP) is a state agency with jurisdiction to issue wetland resource permits and management and storage of surface water (MSSW) permits pursuant to Chapters 373 and 403, Florida Statutes. The Permit Proceeding On June 18, 1993, the Brevard County Solid Waste Management Department (Brevard County) applied to DEP for wet land resource and MSSW permits required for the county's landfill expansion and new construction. Part of the landfill project consisted in a proposal for off-site mitigation which was required to offset wetland impacts by the landfill expansion. The off-site mitigation property is several miles from the landfill site and is described as west of Interstate 95, north of State Road 500, Sections 27 and 34 Township 27 South, Range 36 East. The off-site mitigation property lies adjacent to, and east of, the subject Gleason property. Both Gleason's and the off-site mitigation property are east of the St. John's River, with Gleason's property lying between the river and the off-site mitigation property. In its 1993 application, Brevard County proposed to restore the historic natural grade of the mitigation property by removing certain dikes or berms and by filling some ditches, which berms and ditches were created many years ago by the former owners, the Platts, to improve the property for agricultural use. Some of those ditches and berms run along the property line between the Gleason and mitigation property. In August and September 1993, Brevard County requested Gleason's permission to enter its land to install two piezometers as part of a scope of work to monitor impacts of the proposed off-site mitigation project. The county provided a copy of the scope of work and a map to Gleason's attorney, Robert Riggio. On October 21, 1993, Riggio responded, by letter to Richard Rabon, Director, Brevard County Solid Waste Management Department, that Gleason would not allow permission to enter its land for hydrological monitoring. Furthermore, Riggio stated, Gleason was concerned about the effects of potential flooding and an artificial increase in the area's water table which could "upset the value and continued usability of its land". On November 15, 1993, Riggio wrote to DEP staff person, Ann Wonnacott (now, Ann Ertman) requesting notice of intended agency action on the county's landfill permits, and expressing Gleason's concern that the proposed project, including filling of ditches and removing berms, would artificially raise water levels, flood and devalue Gleason property. On February 11, 1994, Riggio sent DEP a map of Gleason's property and a legal description. On November 18, 1994, Riggio again wrote to Ann Wonnacott and objected to the landfill project on Gleason's behalf. Again, Riggio stated that the off- site mitigation plan included filling ditches which provided a flow of water in which Gleason asserted "legally recognizable rights". In the meantime, in response to Gleason's concerns, in November 1993, DEP asked Brevard County to provide reasonable assurance that the off-site mitigation project would not flood surrounding property. Brevard County's licensed professional engineers then undertook a groundwater modeling analysis and gathered information and performed testing for a stormwater modeling analysis. In reports provided in April 1994 the engineers concluded that the project would not increase flooding on Gleason's land. DEP's expert in surface water management reviewed the engineering reports, data and reports on the area from the St. Johns River Water Management District, USGS quadrangle maps and aerial photographs, and he agreed that the project would not increase flooding on Gleason's land. DEP staff review of the Brevard County applications revealed that the applications met relevant rule and statutory criteria, and on February 7, 1995 DEP issued its Notice of Intent (NOI) to issue a wetland resource permit for the onsite and off-site parts of the project, and an MSSW permit for the onsite part of the project only. The draft permit provided that no work could commence prior to issuance of the MSSW permit for the off-site mitigation work. DEP staff considered the off-site mitigation MSSW permit the "linchpin" of the entire project: without it, no work on any part of the project could commence. Gleason, though its attorney, Robert Riggio, timely filed a Section 120.57(1), Florida Statutes petition for formal administrative hearing challenging DEP's intent to issue permits to Brevard County. The petition was forwarded to the Division of Administrative Hearings. Gleason's petition raised several material issues: that the removal of the berms and filling of the ditches (called "drainage canals" by Gleason) would alter the "natural and historic hydroperiod" of Gleason's property, increasing water levels and enhancing the growth of weeds and other noxious vegetation; that it appeared that some of the ditches to be filled were actually within the boundaries of Gleason's property; and that DEP failed to adequately assess the effect of the proposed permitted action on the property of others. Discovery commenced and Gleason continued to object to Brevard County's requests to enter Gleason's land for inspections and testing. From Brevard County's perspective, the main function of filling in the ditches was to obtain additional mitigation credits for the area of the ditches. Relying on its engineers, the county did not consider that the ditches performed a significant hydrological function. At some point in time after Gleason's petition was filed, Brevard County agreed to not fill the ditches and submitted a modified application to DEP. In July 1995, Brevard County submitted to DEP its application for the MSSW permit for the off-site mitigation project (the "linchpin" permit). The application included removing the berms but did not propose filling in the ditches. In August 1995, DEP issued notices of intent to grant the revised permit and the off-site mitigation MSSW permit. Gleason, Brevard County and DEP signed a joint stipulation and motion to relinquish jurisdiction in the Division of Administrative Hearings case on December 21, 1995, The motion was granted, and Division of Administrative Hearing's files were closed. On January 3, 1996 DEP entered its final order and issued the permits, as revised. "Prevailing Party" From the time when it was first informed of the project, Gleason's primary concern was the county's proposal to fill the ditches. Whether this concern was misguided or whether it was legitimate, it was not until the petition was filed, and some time thereafter, that the county changed its application. Gleason's February 22, 1995 petition specifically requested the alternative relief of an order modifying the subject permits by leaving the "drainage canals" intact. When it obtained its relief by settlement prior to an evidentiary hearing, Gleason became a "prevailing party". A Reasonable Basis in Law and Fact Ann Wonnacott Ertman reviewed Brevard County's permit application, including the off-site mitigation project and she visited the mitigation site. By walking along the ditch between the site and the Gleason property she was able to view both properties, although obviously not the entire two sections owned by Gleason. The Gleason property viewed by Ms. Ertman was flat, and predominately dominated by wetland vegetation. She saw some cattle grazing, but no other uses or improvements to the property. As understood by Ms. Ertman, the purpose of the off-site mitigation project was to reestablish the hydrology which existed prior to the Platts' construction of the berms and ditches. Those berms prevented some flood waters from the St. Johns River and Lake Washington from flowing onto the Platt property. Removal of the ditches and berms would therefore allow the flood waters collecting on Gleason's property to sheet flow into the mitigation site. Both the Platt property and Gleason property are considered to be within the mean annual and ten-year floodplain of the St. Johns River. As viewed by DEP and Brevard County, the off-site mitigation project would reduce, not increase water, on the Gleason property. On the other hand, Gleason and its consultant conjectured that stormwater runoff flowing from the slightly higher elevations on the Platt property would flow unimpeded onto the lower Gleason property if the ditches were removed. This conjecture was based on an assumption that the ditches served a significant hydrological function by draining water off the property and transporting it away somewhere. When Gleason, through its attorney, made its concerns known to DEP, Brevard County was required to respond and its consultants were required to perform further studies and tests. Based on their studies and tests and computer modeling, Brevard County's consultants concluded that removing the ditches would not increase, but would rather slightly decrease, the amount of impervious surface area at the mitigation site and there would be a slight decrease in the volume of stormwater runoff flowing from that land to Gleason's land. Brevard County's consultants also determined that, notwithstanding the size of the ditches, the soil types in the area acted as a barrier to the water and the ditch could not exert a significant drawdown effect. All of the information available to the DEP staff who reviewed the application competently supported the conclusion that filling the ditches would have no negative effect on Gleason's adjacent property. This information included observations from staff site visits, detailed information from Brevard County's consultants, U.S.G.S. quadrangle maps, aerial photographs, and uniquely relevant documents published by the St. Johns River Water Management District. This information properly outweighed the unsupported conjectures expressed by Gleason and its consultant, and after finding the application otherwise met the statutory and regulatory criteria, DEP had a reasonable basis to issue its intent to grant the permit. DEP was never apprised of Gleason's claim that some part of the ditches were on its property until Gleason's petition was filed in response to the notice of intent to issue the permit. In its initial application Brevard County represented to DEP that it was the record owner of the land where the project was proposed. DEP does not require a detailed land survey with the application, as that is an expense that would be unnecessary if the project were ultimately disapproved. Instead, the survey is a condition of the permit; that is, it must be accomplished prior to commencement of an approved project. DEP does not authorize trespass on property not belonging to an applicant. Nor did Brevard County intentionally include Gleason-owned ditches in its project. There was no incentive for it to do so, as no mitigation credit would be allowed for such extraterritorial works. Nominal Party or Special Circumstances As the agency responsible for reviewing and acting on the applications at issue, DEP was more than a "nominal party" in this proceeding. However, in this instance, it was in the peculiar position of not being entirely in control of the outcome of the proceeding. The applicant, and not DEP, determined the project for which the permit was sought. Brevard County, and not DEP, initially chose to fill ditches, and Brevard County chose to delete that work from its amended application and from the "linchpin" application, the off-site mitigation MSSW permit. In either case, with and without the ditch filling work, DEP determined the applications met relevant criteria and merited approval. Reasonable Fees As stipulated, the fees and costs of $13,193.50 incurred by the Gleasons in the underlying action are reasonable.
The Issue The issues in this case are: 1) whether the Petitioner, Southport Ranch, LLC (Petitioner), is a substantially affected person with standing to challenge the Respondent, South Florida Water Management District’s (District) intent to issue Environmental Resource Permit (Mitigation Banking) Number 49-00007-M to the Respondents, D.R. Horton, Inc., and Osceola County (Applicants); and 2) the number of potential mitigation bank credits that the District should award to the Applicants.
Findings Of Fact The Parties The District is a government entity created pursuant to chapter 25270 of the 1949 Laws of Florida, and operates as a multi-purpose water management district. The District has the authority and duty to exercise regulatory jurisdiction over the Twin Oaks Mitigation Bank (the Project) under the provisions of part IV, chapter 373, Florida Statutes, and Titles 40E and 62 of the Florida Administrative Code. The Respondent, D.R. Horton, Inc. (D.R. Horton), is a Florida corporation and the owner of two of three parcels that comprise the Project. D.R. Horton is the largest homebuilder in the Unites States with a large full-time staff in Florida and around the country. The Respondent, Osceola County, is a political subdivision of the State of Florida and the owner of one of three parcels that comprise the Project. The Petitioner, Southport Ranch, LLC, is a Florida limited liability corporation that owns 7,000 acres of real property located within the Lake Tohopekaliga (Lake Toho), Lake Gentry, and Reedy Creek drainage basins in Osceola County. Petitioner’s Substantial Interests The real property owned and managed by the Petitioner is called Southport Ranch (Ranch). The Ranch straddles three drainage basins, which are sub-basins within the Kissimmee River Basin. A small portion of the Ranch touches Lake Toho and the eastern boundary of the Ranch extends to the centerline of the C-35 Canal. Water flows south from Lake Toho through the C-35 Canal and into Ranch property through culverts. Extensive wetland resources are located throughout the Ranch, including forested, freshwater, and herbaceous wetlands. The Ranch is populated by a wide array of aquatic and wetland dependent animal species, including several species that are listed as threatened or endangered by the state or federal government. The Petitioner is owned by a series of trusts established by George Andrew Kelley (Kelley) who passed away in 2014. Kelley was a fourth-generation cattle rancher. Gary Lee manages the Ranch operations and is also the trustee of the George Andrew Kelley Family Trust. Mr. Lee testified that the Petitioner’s primary management objective, consistent with the direction of Kelley prior to his death, is preservation and conservation. This includes preserving and protecting existing wetland habitat on the Ranch. Historically, the primary land use on the Ranch was cattle ranching and that activity continues on a portion of the Ranch property. The other land use is the Southport Ranch Mitigation Bank (SRMB), a wetland mitigation bank permitted by the District in 2010. The SRMB is operated by a separate company in partnership with the Petitioner, and they are co- permittees on the mitigation bank permit. Mr. Lee testified to certain concerns with the Project and the number of proposed mitigation credits. Mainly that, if the Project does not achieve success as a mitigation bank, it could be detrimental to existing wetlands, such as those on the Ranch, which support aquatic and avian species. In addition, there could be adverse regional impact in the form of a net loss of wetlands. Mr. Lee considers the Ranch to be a “very[,] very[,] very unique piece of property” and “we’re trying to save it.” The Petitioner’s expert, Carl Salafrio, testified that utilization of a mitigation credit or credits that do not completely offset the loss of wetland function caused by a permitted wetland impact within the Kissimmee River watershed or the three sub-basins in which the Ranch property is located, would adversely impact aquatic and wetland species present on the Ranch. The Project and Vicinity The Applicants propose to construct and operate the Project along the northeast side of Lake Toho in Osceola County. The Project consists of three mitigation areas (MA) with a total of 747.91 acres. MA1 is the northern parcel and comprises 202.94 acres that are currently drained by an off-site pump that pushes water to the west into Lake Toho. MA1 is bounded on the north by the Partin Canal, to the west by Kings Highway, and to the east by Neptune Road. D.R. Horton owns MA1. An existing conservation easement (CE) encompasses 45.26 acres of MA1. The CE is associated with the prior issuance of an Environmental Resource Permit (ERP) for Phase 1A of a residential development known as the Toho Preserve (now known as Kindred). MA2 is south of MA1 and the southwestern region of MA2 abuts the northeastern shore of Lake Toho. MA2 is bounded to the east by Macy Island Road. MA2 comprises 283.82 acres that are currently drained to the south by a pump into Lake Toho. MA2 is owned by D.R. Horton. MA3 is east of MA2 and comprises 261.15 acres that drain through a culvert under Macy Island Road into MA2 and south into Lake Toho. MA3 is owned by Osceola County and the County will be the sole user of the mitigation credits generated by MA3. MA3 is bounded on the east by the C-31 canal and to the south by a park owned by Osceola County. The service area for the mitigation bank consists of the Lake Toho, Reedy Creek, Lake Gentry, Lake Hart, Shingle Creek, Boggy Creek, Lake Hatchineha, and Lake Kissimmee drainage basins within the jurisdiction of the District. The service area also includes portions of the Southern St. Johns River basin, which is within the jurisdictional boundary of the Southwest Florida Water Management District, and additional areas within the boundaries of the St. Johns River Water Management District. The Project site was historically littoral areas of Lake Toho that were separated from the Lake by drainage modifications, such as those made in the 1950s by the Central and South Florida Flood Control Project. The drainage modifications included features, such as the C-31 Canal, the Partin Canal, dikes, ditches, pumps, culverts and roads. In particular, the large agricultural pumps at MA1 and MA2 drain the mitigation areas and pushes water into Lake Toho to maintain the acreages as pasture for cattle grazing. The Applicants propose to construct the Project through a combination of wetland restoration, wetland and upland enhancement, conservation easements, and implementation of hydrologic improvements. The Project will increase hydroperiods in targeted wetlands to mimic the historic hydrologic regime and restore natural sheet flow patterns that existed prior to the drainage modifications. Rainfall and runoff from adjacent developments will serve to hydrate the three mitigation areas. Successful restoration of the natural hydroperiods will promote the growth and maintenance of desired wetland vegetation communities in the mitigation bank. D.R. Horton will manage and operate the Project until it meets the success criteria documented in the permit. Once the Project achieves success, Osceola County will operate and maintain the Project in perpetuity. Osceola County has implemented an Environmental Land Conservation program (SAVE Ordinance) designed to acquire and manage, in perpetuity, conservation lands. Proposed Enhancement and Restoration The Project would restore the upland and wetland habitats historically a part of, and hydrologically connected to, Lake Toho. The mitigation activities will consist of various methods for the targeted community types. These include hydrologic enhancement and restoration, regrading wetland areas and ditches to match natural grades, prescriptive burning, elimination of nuisance and exotic plant species, and vegetation enhancement and restoration. The Project would eliminate incompatible land uses within the mitigation areas, such as cattle grazing, hay production, and sod farming. The Project would reestablish wetland community structures and functions similar to the natural, historic wetland communities within the mitigation service area. The target community types and required hydrologic enhancement were also identified by the Applicants’ expert, John Lesman. Mr. Lesman testified that he consulted resources, such as Ecosystems of Florida and the Florida Natural Areas Inventory. For example, portions of the upland pasture areas would be restored to slough marsh and wet prairie communities by increasing the elevation and duration of seasonal high water levels. Planting is proposed in upland enhancement areas because of a lack of viable seed source for natural recruitment of native upland species. For the wetland enhancement and restoration areas, existing wetland vegetation is a viable seed source to facilitate natural recruitment. Mr. Lesman testified that natural recruitment is a generally-accepted means to establish wetland plant species. The Petitioner’s expert, Beverly Birkitt, questioned whether more plantings should be required. However, if natural recruitment is not successful, the Applicants would conduct supplemental plantings in order to meet vegetation success criteria. The Project would utilize herbicidal and mechanical control of nuisance and exotic vegetation consistent with the Nuisance and Exotic Vegetation Control Plan. Prescribed burns are also used to control exotic and nuisance species in pyrogenic communities within mitigation banks. Ms. Birkitt opined that prescribed burns should not occur adjacent to existing and proposed residential development. However, prescribed burns are a common activity carried out by licensed professionals using methods established and approved by the Florida Forest Service. The Prescribed Burning Management Plan requires safeguards when there is a wildland-urban interface. Safeguards include permanent fire lines, educational outreach to adjacent residential communities, and local partnerships with local fire rescue agencies, the Florida Forest Service, and Osceola County staff. The Project’s mitigation activities would restore habitats for listed species, aquatic-dependent and wetland- dependent species, and a variety of other wildlife. Lake Toho and surrounding areas serve as a primary foraging and nesting refuge for the everglades snail kite. It is also habitat for various endangered and threatened species, such as the whooping crane, limpkin, snowy egret, white ibis, little blue heron, tricolored heron, and bald eagle. The Applicants modified the application to include a 25-foot buffer along specified portions of the perimeter areas of MA1, MA2 and MA3. Those specified portions have adjacent development or the potential for adjacent development, which is a risk for all mitigation banks. The Applicants also removed the acreage within the 25-foot buffer areas from consideration to generate mitigation credits. However, that acreage would still be enhanced or restored as part of the Project’s mitigation activities. A 25-foot buffer is not proposed for those areas that have existing physical buffers or legal restrictions that preclude future development. Proposed Hydrologic Improvements The Project encompasses numerous activities designed to restore hydrologic conditions at the mitigation areas including removal of certain drainage features and structures. Surface water from MA1 will flow through a broad crested weir, a series of pipes and a drop inlet with operable boards to the Partin Canal, which is directly connected to Lake Toho. The existing culvert under Kings Highway that currently allows MA1 to drain to the off-site pump would be plugged with concrete to allow hydroperiod restoration. The pump at the south end of MA2 that currently drains MA2 and MA3 would be removed and replaced with a broad crested weir, a series of pipes and a drop inlet with operable boards that will outfall to Lake Toho. The boards are light-weight aluminum and are easily installed or removed by a single individual. The weir structure would detain water in MA2 and MA3 causing re-hydration of these historic wetland systems. The installations of the control structures within MA1 and MA2 would reestablish the hydrologic connections between Lake Toho and MA1, MA2 and MA3. To properly assess and implement the hydrologic improvements, the Applicants developed a hydrologic model. The primary factors considered in order to model the proposed condition annual hydrograph were annual rainfall and evaporation from the water body areas. Sixteen years of average annual data for both rainfall and evaporation were obtained from the University of Florida – Institute of Food and Animal Sciences Department, Lake Alfred Experiment Station. The rainfall data was averaged to develop average daily rainfall totals for a hypothetical year. This rainfall data was entered into the Advanced ICPR model for generation of annual runoff hydrographs entering each of the on-site wetlands. Advanced ICPR is an industry standard model for stormwater management systems in large basins, routinely accepted by the District for permit applications. The water levels of Lake Toho are managed on a lake regulation schedule operated by the District. Lake Toho water levels influence hydrology in and around the Project site. The water levels of Lake Toho were factored into the Applicants’ hydrologic model. The Applicants used a 10-year average of water levels within Lake Toho. Surface water elevation data for Lake Toho was obtained from data provided by the District for the years 2001 through 2011. For the purpose of modeling the average annual conditions, the annual data was averaged with the 2004 data being excluded. The Petitioner’s expert engineer, Stuart Cullen, opined that the Lake Toho regulation schedule should have been considered instead of actual water levels. However, the evidence showed that the water levels frequently varied from the regulation schedule. Thus, the use of actual water levels within Lake Toho for modeling purposes yielded more accurate results. The Applicants’ model demonstrated post-development results using data for the existing conditions of the Project site. Mr. Cullen opined that the existing conditions used for this permit application should have been the “pumps off” scenario provided in the Conceptual ERP for the Kindred project because the District referenced the Kindred Conceptual ERP in the permit documents for this Project. However, Mr. Boyd, who was the engineer for the Kindred Conceptual ERP, testified that it included a pumps-off scenario only to show that even if the pumps failed, the Kindred development would not flood. This is a “worst case scenario” demonstration and is different than existing conditions, which are the conditions as they exist on the site today, not how they are permitted to exist in the future. Mr. Boyd explained that he listed the “pumps on” scenario as the existing condition because the off-site pump, which is not controlled by the Applicants, currently runs as needed to keep the property drained and completely dry. When the Applicants block the culvert connected to the off-site pump as part of the Project’s proposed activities, the pump will no longer affect the property. This is the “pumps off” scenario, which in this instance, only occurs post-development. Hydrologic modeling data and results demonstrated that water levels within the Project would mimic a traditional wet season/dry season fluctuation as opposed to the inverse hydroperiod of Lake Toho. The operable water control structures would be modified on a seasonal basis. In the dry season, the boards would be removed to lower the water levels, mimicking natural dry season water levels. Conversely, the boards would be in place during the wet season to raise the water levels in the wetlands, thereby creating natural wet season water levels. The model demonstrates that the system design would immediately provide the hydrologic enhancement necessary to meet the Applicants’ ecological goals. Uniform Mitigation Assessment Method The Uniform Mitigation Assessment Method (UMAM) provides a standardized wetland assessment methodology that may be applied across community types. UMAM is used to calculate the credits that may be awarded to a mitigation bank. UMAM involves a two-part analysis. Part I is a qualitative characterization of the property by assessment areas. An assessment area is all or part of a mitigation site that is sufficiently homogeneous in character or mitigation benefits to be assessed as a single unit. See Fla. Admin. Code R. 62-345.200(1). Part II utilizes the scoring criteria established under the rules to evaluate each assessment area’s “current” condition (prior to the mitigation) to its “with mitigation” condition. The resulting difference represents the improvement of ecological value or the ecological lift, referred to in the rule as the “delta.” See Fla. Admin. Code R. 62- 345.500. Ms. Birkitt agreed with almost all the Applicants’ “current” condition scores and also with all of the Applicants’ “with mitigation” condition scores related to upland enhancement. Ms. Birkitt focused on the “with mitigation” scores for wetland enhancement and wetland restoration. Ms. Birkitt testified that the ecological lift reflected by the UMAM numbers for the three wetland function indicators could not be achieved. The major reason given by Ms. Birkitt was the Applicants’ inability to achieve the necessary wet season water levels in the mitigation areas. Other reasons included the potential for development adjacent to the mitigation areas, the limited benefit attributed to prescribed burns, and the lack of planting in certain assessment areas. Part II scoring under the UMAM rule has three categories of indicators of wetland function: location and landscape support, water environment, and community structure. For location and landscape support, the value of functions provided by mitigation assessment areas are influenced by the landscape position of the assessment area, its relationship with adjacent and regional surrounding areas, including interconnectivity that benefits wildlife. For water environment, the quantity of water in an assessment area, including the timing, frequency, depth and duration of the inundation or saturation, and flow characteristics are considered. Hydrologic requirements and hydrologic alterations are evaluated to determine the effect of these conditions on the functions performed by the assessment area. For community structure, each mitigation assessment area is evaluated with regard to its characteristic community structure, including vegetation and habitat. By way of example, a score of 10 means the mitigation assessment area, based on reasonable scientific judgment, is capable of reaching 100 percent of beneficial ecological functions. A score of 5 means, that the assessment area is limited in its ability to perform beneficial ecological functions to 50 percent of the optimal value. See Fla. Admin. Code R. 62-345.500. The Petitioner’s experts identified the main hydrologic issue as the Applicants’ inability to achieve the necessary wet season water levels in the mitigation areas. As discussed above, the Applicants demonstrated that the system design supports the hydrologic environment necessary to provide functional gains consistent with the UMAM scoring. The potential for development would not decrease the value of functions gained by the enhancement and restoration activities. The 25-foot buffer around the mitigation areas adds an additional layer of protection and any future developments must address potential impacts to the Project before obtaining a construction permit. The important role of prescribed burns in mitigation banks is addressed above. Any necessary supplemental plantings would be carried out by the Applicants in accordance with the vegetation success criteria. Ms. Birkitt also testified that the Applicants’ “with mitigation” condition score for approximately 45 acres in MA1 is not appropriate due to the existing conservation easement and its requirements. As explained below, the Applicants took this into account in the “current” condition score (i.e. “without mitigation). In addition, the Project will provide hydrologic enhancement that is not currently provided through the conservation easement. The Project’s success criteria require a lower percentage of nuisance and exotic vegetation, which increases plant cover of appropriate and desirable species. Also, the Applicants will provide prescribed fire and wildlife management for all communities. Time Lag and Risk The time lag associated with mitigation is the period of time between when the functions are lost at an impact site and when the site has achieved the outcome scored in Part II of UMAM. See Fla. Admin. Code R. 62-345.600. There is no time lag if the mitigation fully offsets the anticipated impacts prior to or at the time of the impacts. A score of one is appropriate for activity-based releases that will occur in less than one year. Ms. Birkitt testified that the Applicants should have applied a time lag score greater than one to the initial and activity-based releases because these activities do not provide a functional gain and, therefore, the credits released will not actually offset any impacts. However, the applicable rule applies a time lag score of one (T-factor of 1) to activities that reach success within one year. The evidence shows that the initial and activity-based releases will occur in less than one year. Any amount of risk above de minimus reduces the ecological value of the mitigation assessment area. A score of one would most often be applied to mitigation conducted in an ecologically viable landscape and deemed successful or clearly trending towards success prior to impacts. Ms. Birkitt admitted that placing the Project site under a conservation easement and installing the hydrologic improvements should benefit the Project’s hydrology, but opined that no benefit would actually occur. As discussed above, the hydrologic improvements are designed to provide an instantaneous and clear trend towards success. Mitigation Credits The Mitigation Bank Permit proposes to authorize 388.13 wetland mitigation credits. D.R. Horton would receive 99.56 credits for MA1 and 150.92 credits for MA2. Osceola County would receive 137.65 credits for MA3. The Applicants evaluated the quality of the wetlands by performing the functional assessment of the Project site in the “current” condition and then the functional assessment of the Project site in the “with mitigation” condition. This evaluation method yielded the quality of the restoration and enhancement. The Applicants further evaluated the resulting quality against the total acreage for the Project. In total, the Applicants propose restoring 183.18 acres of wetlands and enhancing 542.52 acres of wetlands and associated uplands. It is “exceptional” and “unique” to have so much wetland restoration in a mitigation bank project. The Applicants recognized that the District previously issued a permit requiring a conservation easement on approximately 45 acres in MA1. The proposed success criteria from that preservation were taken into account in the “current” condition score for that assessment area. Osceola County acquired MA3 with funds through the land conservation program established by its SAVE Ordinance. The SAVE Ordinance places minor limits on the area. According to Osceola County’s Parks and Public Lands Director, Robert Mindick, the County’s management plans and the County’s SAVE Ordinance do not create the same land restrictions as a conversation easement. Nonetheless, the Applicants effectively treated the SAVE Ordinance as a conservation easement when assessing the UMAM scores for MA3. This was a more conservative approach. Credit Releases The Project would receive a 20 percent credit release upon recordation of conservation easements and providing the financial assurances required by the Permit. This initial release is a generally accepted practice, is considered a reasonable approach and would occur in less than one year. The Project would receive a 15 percent credit release based on successful construction and implementation of the hydrologic improvements. This activity-based release is generally accepted, is considered a reasonable approach, and would occur in less than one year. The remainder of the mitigation credits would only be released upon the Project attaining full success. The Project is structured so that 65 percent of its credits cannot be released until attaining full success. This structure is atypical, but puts the burden on the Applicants to perform in order to realize 65 percent of its credits. The Credit Release Schedule is reasonable and consistent with applicable rule criteria. Mitigation credits generated by MA3 may only be used by Osceola County in conformance with the limitations imposed by section 373.414, Florida Statutes. The ledger for mitigation credits will differentiate between MA1 and MA2 and MA3. Attorney’s Fees The Petitioner did not participate in this proceeding for an improper purpose as defined in section 120.595(1), Florida Statutes. As found in paragraphs 6 and 8 above, the Petitioner’s concerns were not purely economic as alleged by D.R. Horton. The Petitioner’s pleadings, starting with its Petition and Amended Petition, were not interposed for an improper purpose as defined in section 120.569(2)(e). Mere co-ownership of SRMB by the Petitioner does not overcome the findings in paragraphs 6, 8 and 9 above, and does not prove an improper or frivolous purpose. The preponderance of the evidence showed that the Petition and Amended Petition were filed to advance legitimate environmental concerns. The Petitioner’s Amended Petition was not interposed for a frivolous purpose as defined in section 57.105, Florida Statutes. Mere co-ownership of SRMB by the Petitioner does not overcome the findings in paragraphs 4 through 9 above and does not prove that the pleading was frivolous. The preponderance of the evidence showed that the Petition and Amended Petition were filed to advance legitimate environmental concerns. Ultimate Findings The Applicants presented a prima facie case demonstrating compliance with all applicable permitting criteria for the Mitigation Banking Permit. The Petitioner did not prove its case in opposition by a preponderance of the competent substantial evidence. However, the Petitioner did not participate in this proceeding for an improper or frivolous purpose.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is: RECOMMENDED that the South Florida Water Management District enter a final order approving the issuance of Mitigation Bank Permit Number 49-00007-M, as modified, subject to the conditions set forth in the Staff Report; and ORDERED that D.R. Horton’s request for reasonable attorney’s fees and costs under sections 57.105, 120.595, and 120.569, Florida Statutes, is denied. DONE AND ENTERED this 10th day of May, 2018, in Tallahassee, Leon County, Florida. S FRANCINE M. FFOLKES Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 10th day of May, 2018. COPIES FURNISHED: Susan Roeder Martin, Esquire South Florida Water Management District Mail Stop Code 1410 3301 Gun Club Road West Palm Beach, Florida 33406 (eServed) Wayne E. Flowers, Esquire Lewis, Longman & Walker, P.A. Suite 150 245 Riverside Avenue Jacksonville, Florida 32256 (eServed) Frank M. Townsend, Esquire Osceola County Attorney's Office Suite 4700 1 Courthouse Square Kissimmee, Florida 34741 (eServed) Shannon Marie Charles, Esquire Osceola County Attorney's Office 1 Courthouse Square Kissimmee, Florida 34741 (eServed) Julia G. Lomonico, Esquire South Florida Water Management District 3301 Gun Club Road West Palm Beach, Florida 33406 (eServed) Maricruz R. Fincher, Esquire South Florida Water Management District Mail Stop Code 1410 3301 Gun Club Road West Palm Beach, Florida 33406 (eServed) Bridgette Nicole Thornton, Esquire South Florida Water Management District 3301 Gun Club Road West Palm Beach, Florida 33406 (eServed) John W. Bizanes, Esquire Nason, Yeager, Gerson, White & Lioce, P.A. Suite 210 750 Park of Commerce Boulevard Boca Raton, Florida 33487 (eServed) John J. Fumero, Esquire Nason Yeager Gerson White & Lioce, P.A. 750 Park of Commerce Boulevard, Suite 210 Boca Raton, Florida 33487 (eServed) Thomas F. Mullin, Esquire Nason Yeager Gerson White & Lioce, P.A. Suite 210 750 Park of Commerce Boulevard Boca Raton, Florida 33487 (eServed) Ernest Marks, Executive Director South Florida Water Management District 3301 Gun Club Road West Palm Beach, Florida 33406-3007 (eServed) Brian Accardo, General Counsel South Florida Water Management District 3301 Gun Club Road West Palm Beach, Florida 33406-3007 (eServed)
The Issue Whether Respondent Richardson’s application for a wetlands resource permit to construct a private road and bridge through wetlands should be denied for failing to provide mitigation to offset the impacts to existing wetlands. Whether Respondent Richardson had provided the Department with reasonable assurance that he or she owns or has sufficient authorization to use certain land in mitigation to offset the wetland impacts.
Findings Of Fact In January of 1990, John Richardson applied to the Department for a wetland resource (dredge and fill) permit under Section 403.918, Florida Statutes to construct a private road and bridge through wetlands. The proposed project would impact 0.032 acres of wetland. The proposed project is not located in an Outstanding Florida Water (OFW). The proposed project would adversely affect the following: the conservation of fish and wildlife; the fishing, recreational values, and marine productivity in the vicinity of the proposed project; and the current condition and relative value of functions being performed by the wetlands impacted by the project. The proposed project would be permanent in nature. The proposed project would not meet the criteria of Section 403.918(2)(a) Florida Statutes, without mitigation adequate to offset the impacts to wetlands. To provide adequate mitigation for the proposed project, Respondent John Richardson proposed to create and preserve 0.029 acres of new wetlands and preserve 4.35 acres of existing wetlands. The preservation would consist of granting to the Department a perpetual conservation easement over the mitigation wetlands. Respondent John Richardson represented to the Department that he was the record owner or had permission to use the land that he offered for mitigation. The Department reasonably relied on that representation. The mitigation proposed by Respondent John Richardson would be adequate to offset the impacts to wetlands resulting from the proposed project. On March 4, 1992, the Department issued to John Richardson a wetlands resource permit for the proposed project. The Department was not aware, before it issued this permit, that John Richardson might not own or have permission to use the mitigation land. The Department was substantially justified in issuing the permit to John Richardson on March 4, 1992. Specific conditions 28-31 of that permit required Respondent John Richardson to grant the Department a conservation easement over the mitigation land within thirty days after issuance of the permit. Respondent John Richardson failed to grant the Department the required conservation easement, and failed to publish notice of the Department’s action. On July 22, 1996, Petitioners filed a timely petition with the Department challenging the Department’s issuance of the March 4, 1992, permit to Respondent John Richardson. On September 11, 1996, Janet Richardson filed an application with the Department for transfer of the March 4, 1992, permit to her following the dissolution of marriage with John Richardson. By letter dated October 11, 1996, the Department requested Janet Richardson to provide additional documentation to show that she either owns the mitigation land or has permission to use that land. Janet Richardson was required to provide a legal survey drawing depicting the mitigation land, property records showing ownership of that land, and a notarized statement from the land owner authorizing her to use that land. The Department specifically advised Janet Richardson that it could not approve the proposed project if she failed to submit this requested documentation to the Department prior to the final hearing. Janet Richardson failed to provide the requested documentation by the date of the final hearing in this matter, or subsequently. As of November 6, 1996, no work had begun on the proposed project. At the hearing, the Department adequately explained its change in position from deciding to issue the permit (on March 4, 1992) and proposing denial of the permit (on November 6, 1996). The Department relies on an applicant’s representations regarding ownership of or right to use land unless a problem is brought to the Department’s attention. In this case, the Department was not aware that there was a problem with the applicant’s right to use the mitigation land until the petition was filed with the Department on July 22, 1996. Janet Richardson failed to provide proof that she either owns or is authorized to use the land to mitigate the impacts to wetlands from the proposed project. Without such proof, Janet Richardson failed to prove that she could mitigate those same impacts from the proposed project.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Environmental Protection enter a Final Order denying Respondent Richardson’s request for a wetlands resource permit for the proposed project.ONE AND ORDERED this 17th day of December, 1996, in Tallahassee, Florida. DANIEL M. KILBRIDE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 17th day of December, 1996. COPIES FURNISHED: Richard Stauffer Post Office Box 97 Aripeka, Florida 34679-097 Cy Plata Post Office Box 64 Aripeka, Florida 34679 Steven McCallum Post Office Box 484 Aripeka, Florida 34679 Leslie Neumann Post Office Box 738 Aripeka, Florida 34679 John Richardson 700 West Broad Street Brooksville, Florida 34607 Janet Richardson 1603 Osowaw Boulevard Springhill, Florida 34607 Thomas I. Mayton, Jr., Esquire Department of Environmental Protection 3900 Commonwealth Boulevard, Mail Station 35 Tallahassee, Florida 32399-3000 Perry Odom, Esquire Department of Environmental Protection 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 Virgina B. Wetherell, Secretary Department of Environmental Protection 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000
The Issue The issue to be determined in this case is whether Respondent Oculina Bank is entitled to a Consolidated Environmental Resource Permit and Sovereign Submerged Lands Authorization to construct three single-family homes, an access drive, surface water management system, and three single-family docks in Indian River County.
Findings Of Fact Parties Petitioner Pelican Island Audubon Society has more than 25 members residing in Indian River County, was in existence for more than a year before Oculina Bank filed its application for the Permit, and was formed for the purpose of protecting the environment, fish, and wildlife resources. Petitioners Carolyn Stutt and Garrett Bewkes live approximately one mile north of the proposed project site, on John's Island, which is on the opposite side of the Indian River Lagoon from the proposed project site. Petitioner Carolyn Stutt uses the Lagoon for boating, nature observation, nature photography, and sketching. Petitioner Garrett Bewkes uses the Lagoon for boating and fishing. Petitioners Orin Smith and Stephanie Smith did not testify at the final hearing nor present other evidence to show they have substantial interests that could be affected by the proposed project. Respondents did not stipulate to any facts that would establish the Smiths’ substantial interests. Respondent Oculina Bank has an undivided ownership interest in the project site and is the applicant for the Permit that is the subject of this proceeding. DEP is the state agency responsible for regulating construction activities in waters of the State. DEP also has authority to process applications for authorization from the Board of Trustees of the Internal Improvement Trust Fund ("Board of Trustees") to use sovereignty submerged lands for structures and activities that will preempt their use by the general public. The Project Site The project site is 15.47 acres and located along 45th Street/Gifford Dock Road in Vero Beach. It is on the western shoreline of the Indian River Lagoon. The Lagoon in this area is part of the Indian River- Malabar to Vero Beach Aquatic Preserve. It is an Outstanding Florida Water. The Lagoon is an estuary, but it is almost non-tidal in this area. There is a seasonal rise in sea level that occurs from August to November and it is during this season that waters of the Lagoon flood into adjacent wetlands. The wetlands may be inundated at other times as a result of large storms. The wetlands along the western shore of the Lagoon play a role in regional tarpon and snook fisheries. Wetlands provide essential refuges for early-stage tarpon and snook. When the wetlands are inundated, larval tarpon and snook can move into the wetlands and seek out shallow areas to avoid predation by larger fish. The project site is dominated by salt marsh wetlands. In order to control salt marsh mosquitoes, the site was impounded by the Indian River Mosquito Control District sometime in the 1950s by excavating ditches and building earthen berms or dikes along the boundaries of the site. The mean high water line of the Lagoon in this area is 0.78 feet. The berms were constructed to an elevation of about five feet, but there are now lower elevations in some places. The wetlands on the site are isolated for much of the year because the waters of the Lagoon cannot enter the wetlands unless the waters rise above the lowest berm elevations. This connection only occurs in unusually high water conditions. The impoundment berms have decreased the frequency and duration of the project site’s inundation by waters from the Lagoon. There are almost 14 acres of wetlands impounded by the berms. The impounded wetlands are dominated by salt grass. There are also mangroves, mostly white mangroves, along the side slopes of the berms. Most of the upland areas are dominated by Brazilian pepper trees and Australian pine trees, which are non- native, invasive vegetation. Within the wetlands are three ponds. Before the project site was impounded for mosquito control, it had "high marsh" vegetation such as saltwort and glasswort, as well as black and red mangroves. The impoundment resulted in the reduction of these species. There is now reduced nutrient export from the impounded wetlands to the Lagoon. The project site still provides nesting, denning, and foraging habitat for birds and other wildlife. However, the environmental health and productivity of the wetlands on the site have been reduced by the impoundment berms. The adverse effects of impounding wetlands for mosquito control are widely understood by environmental scientists. Therefore, reconnecting impounded wetlands along the Indian River Lagoon has been a local and state governmental objective. North and south of the project site are salt marsh wetlands that have been restored. To the north is a portion of the mitigation area for a development called Grand Harbor. To the south is the CGW Mitigation Bank. Both adjacent wetland areas were restored by reconnecting them to the Lagoon and removing exotic vegetation. The restored wetlands to the north and south now contain a dominance of saltwort and glasswort. They also have more black and red mangroves. These environmental improvements, as well as an increase in species diversity, are typical for former mosquito control impoundments that have been restored. In the offshore area where the three proposed docks would be constructed, there are scattered seagrasses which are found as close as 25 feet offshore and far as 100 feet offshore. They include Manatee grass, Cuban shoal grass, and Johnson’s seagrass. The Proposed Project The proposed home sites are on separate, recorded lots ranging in size from 4.5 acres to 6.5 acres. The home sites would have 6,000 square feet of "footprint." The houses would be constructed on stilts. There would be a single access driveway to the home sites, ending in a cul-de-sac. The displacement of wetlands that would have been required for the side slopes of the access drive and cul-de-sac was reduced by proposing a vertical retaining wall on the western or interior side of the drive. Each home site has a dry retention pond to store and treat stormwater runoff. The ability of these retention ponds to protect water quality is not disputed by Petitioners. The home sites and access drive would be constructed on the frontal berm that runs parallel to the shoreline. However, these project elements would require a broader and higher base than the existing berm. The total developed area would be about three acres, 1.85 acres of which is now mangrove swamp and salt marsh and 0.87 acres is ditches. One of the onsite ponds would be eliminated by the construction. The houses would be connected to public water and sewer lines. Oculina Bank would grant a perpetual conservation easement over 11.69 acres of onsite salt marsh wetlands. It would remove Brazilian Pepper trees, a non-native plant, from the site. Petitioners' original objection to the proposed project and their decision to file a petition for hearing appears to have been caused by Oculina Bank's proposal to build docks over 500 feet in length. The dock lengths in the final revision to the project vary in length from 212 to 286 feet. The docks do not extend out more than 20 percent of the width of the waterbody. The docks do not extend into the publicly maintained navigation channel of the Lagoon. Because the docks meet the length limit specified in Florida Administrative Code Chapter 18-21, they are presumed not to create a navigation hazard. To reduce shading of sea grasses, the decking material for the docks would be grated to allow sunlight to pass through the decking. There are no seagrasses at the waterward end of the docks where the terminal platforms would be located and where boats would usually be moored. The dock pilings will be wrapped with an impervious membrane to prevent the treatment chemicals from leaching into the water. In Oculina I, the Administrative Law Judge determined that the condition for vessels moored at the proposed docks should be stated as a maximum permissible draft. The Permit imposes a maximum draft for boats using the docks. Fish Survey Oculina Bank conducted a fish sampling survey in 2014 to obtain additional information about the presence of tarpon, snook, rivulus, and other fish on the project site. Twenty-three sampling stations were established and sampled from January 16, 2014 to February 16, 2014. The survey was conducted during a period of seasonal high water in order to catalog the highest number of fish that might migrate in and out of the site during high water. Oculina Bank collected five species of fish that are typically found in impounded areas. No tarpon or snook were found. Oculina Bank did not find Florida Gar or Least Killifish during the fish survey, but Dr. Taylor observed these two species on his site inspection in 2015. He also saw three to five juvenile tarpon. No testimony about snook was presented at the final hearing nor was this fish mentioned in Petitioners’ Proposed Recommended Order. Mangrove Rivulus Rivulus marmoratus, or mangrove rivulus, is designated a species of special concern by the FWC. See Fla. Admin. Code R. 68A-27.005(2)(b). Species of special concern are those species for which there are concerns regarding status and threats, but for which insufficient information is available to list the species as endangered or threatened. Some research indicates rivulus are more common than originally believed. Certain populations of rivulus in Florida are healthy and thriving. A team of scientists who participated in a biological status review of the rivulus for the FWC recommended that the rivulus be delisted. The team included Dr. Taylor and Dr. Wilcox. In Oculina I, Dr. Gilmore did not find any rivulus on the project site, but he expressed the opinion that the site had rivulus habitat and they were probably on the site. In his more recent visits to the project site in conjunction with the current proceeding, Dr. Gilmore did not observe any rivulus. Oculina Bank did not find any rivulus during its fish survey. Dr. Taylor sampled for rivulus on the site on five different days in 2015 and found five rivulus in a ditch outside (waterward) of the impoundment berm. Dr. Taylor sampled “extensively” for rivulus in the interior of the project site, but found none there. Still, he believes there are probably some in the interior. The area where the rivulus were found outside the impoundment berm would not be changed by the proposed project. However, Oculina Bank’s proposal to scrape down the impoundment berm would eliminate many crab burrows, which are habitat for the rivulus. Dr. Taylor and Dr. Wilcox agreed that rivulus are more likely to be found in areas that are tidally connected. The preponderance of the evidence does not support Petitioners’ claim that the proposed project would, on balance, adversely affect the mangrove rivulus. However, the recommended permit modifications should benefit the species. Tarpon In Oculina I, Dr. Gilmore testified that the project site was “one of the critical habitats maintaining regional tarpon fisheries.” However, he only observed one “post larval” tarpon in 2012 and none in 2014. Dr. Gilmore stated that a small mesh seine is the best method to sample for these nursery phase tarpon, but he never used such a seine to sample for them on the project site, nor did anyone else. Extensive evidence regarding on-site investigations and literature related to tarpon was presented at the final hearing. Sometimes the testimony failed to distinguish between early stage (larval) tarpon and later stage (juvenile) tarpon, whose habitat needs are not the same. The nursery and refuge functions of the wetlands on the project site relate primarily to larval tarpon, not juvenile tarpon. The shallow ponds on the project site are an important habitat type that can be used by larval tarpon when related hydrologic conditions are compatible. The preponderance of the evidence does not support the characterization of the wetlands on the project site as “critical habitat” for tarpon in the region. The current hydrologic conditions diminish the value of the nursery and refuge functions provided by the wetlands. Improving the connection between the wetlands and the Lagoon can enhance the tarpon nursery function if the improved connection is made without giving predators of larval tarpon access to the interior ponds. Dr. Gilmore stated, “you don’t have to take down the entire dike, you can create low spots.” By low spots, he means areas like the one that currently exists in the southern impoundment berm that is at about elevation 2.0 feet. The preponderance of the evidence shows the proposed project would not adversely affect the nursery function of the wetlands for tarpon if the recommended modifications are made to the Permit to improve the connection to the Lagoon while keeping the interior ponds isolated from the Lagoon for most of the year. Mitigation DEP conducted a Uniform Mitigation Assessment Methodology (“UMAM”) analysis for the proposed project that assumed direct impacts to 2.72 acres of mangrove swamp. It did not account for secondary impacts that could be caused by the proposed project. DEP’s UMAM analysis determined there would be a functional loss of 1.269 units. It further determined that these losses would be offset by the creation of 0.88 acres of salt marsh and the enhancement of 10.81 acres of mangrove swamp, resulting in a net functional gain of 2.342 units. DEP concluded that, if functional losses caused by secondary impacts were included, there would be a functional loss of 2.350 units, which still results in a net gain of 3.056 units. Because DEP determined there would be a net gain in functional value, it did not require Oculina Bank to provide additional on-site mitigation or to purchase mitigation credits from an off-site mitigation bank. The UMAM analysis performed by DEP did not adequately account for the lost tarpon nursery function and the proposed mitigation could further diminish the nursery function. The purchase of mitigation bank credits would not offset the lost nursery function because the mitigation bank was not shown to provide a nursery function.
Recommendation Based upon the foregoing Findings of Fact and Conclusion of Law, it is RECOMMENDED that the Department of Environmental Protection issue Permit No. 31-0294393-003-EI, with the following modifications: The impoundment berm will not be scraped down to mean sea level, but, instead, two new low spots will be created in the impoundment berm at an elevation of approximately 2.0 feet. A new isolated pond will be created to replace the one that will be eliminated by the construction, similar in size to the one that will be eliminated. Internal ditches and other channels will be filled as needed to eliminate predator access to the ponds. If these modifications are not made, it is recommended that the Permit be denied. DONE AND ENTERED this 1st day of June, 2016, in Tallahassee, Leon County, Florida. S BRAM D. E. CANTER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 1st day of June, 2016. COPIES FURNISHED: Marcy I. LaHart, Esquire Marcy I. LaHart, P.A. 4804 Southwest 45th Street Gainesville, Florida 32608-4922 (eServed) Glenn Wallace Rininger, Esquire Department of Environmental Protection Douglas Building, Mail Stop 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399 (eServed) Nicholas M. Gieseler, Esquire Steven Gieseler, Esquire Gieseler and Gieseler, P.A. 789 South Federal Highway, Suite 301 Stuart, Florida 34994 (eServed) Jonathan P. Steverson, Secretary Department of Environmental Protection Douglas Building, Mail Stop 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399 (eServed) Craig Varn, General Counsel Department of Environmental Protection Douglas Building, Mail Stop 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399 (eServed) Lea Crandall, Agency Clerk Department of Environmental Protection Douglas Building, Mail Stop 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399 (eServed)
The Issue The issue in this case is whether Petitioner proved that Respondent violated chapter 440, Florida Statutes (2014),1/ by failing to secure the payment of workers' compensation coverage as alleged in the Stop-Work Order and Amended Order of Penalty Assessment.
Findings Of Fact The undersigned makes the following findings of material and relevant facts: The Parties Petitioner is the state agency responsible for enforcing the requirement in chapter 440 that employers in the state of Florida secure the payment of workers' compensation insurance benefits covering their employees. Perez Concrete is a subcontractor/corporation registered to do business in Florida. Its principal business address is 6632 Willow Street, Mount Dora, Florida. Intervenor, KC Curb, is a contractor/corporation registered to do business in Florida. Its principal business address is 4975 Patch Road, Orlando, Florida. A representative of the FFVA Mutual Insurance Company (FFVA) testified. FFVA is a mutual insurance company in Florida which provides, among other things, workers' compensation insurance coverage. The witness was an underwriting supervisor. In general, workers' compensation policies go through a yearly review and renewal process handled by the underwriter. KC Curb had been a client of FFVA since 2006. Perez Concrete has never been a client of FFVA, and Perez Concrete is not a named insured on the workers' compensation insurance policy held by KC Curb from 2013 through 2015. There have been occasions when KC Curb picks up employees of subcontractors and includes them in its self-audits. Under those circumstances, KC Curb pays the premium for those particular subcontractor employees. If KC Curb pays a premium that includes the payroll for a subcontractor's employee, his or her workers' compensation benefits are covered by the KC Curb workers' compensation policy. FFVA performs an audit each year on all of the workers' compensation policies it writes. The final audit is performed, in part, to determine the final premium due on the account for that year. During a final audit, FFVA reviews any payroll paid to subcontractors. If those subcontractors did not have a certificate of insurance, then FFVA would include the payroll paid to that subcontractor to calculate the final premium due from the general contractor. If FFVA identified that there were certain subcontractor employees during the audit that worked for Perez Concrete, who were doing work on the subcontract with KC Curb, the premium would be calculated based upon those additional Perez Concrete employees. As a result, those Perez Concrete employees would be covered under the KC Curb workers' compensation insurance policy and entitled to benefits if injured on the job. KC Curb's final premium would be based on the final yearly audit including any subcontractor employees of Perez Concrete. The subcontractor employees would be covered for any injuries on the job that might have occurred during the year audited. The premium ultimately charged to the general contractor is based solely on the payroll, and not on named employees. KC Curb also does a monthly self-audit which only includes its payroll. The company makes a monthly premium payment based on what is shown in its monthly audit. If KC Curb picks up or includes an employee of a subcontractor on its monthly self-audit and reports pay going to that person, then that subcontractor employee is covered for workers' compensation benefits. When end-of-the-year audits are performed, the reports provided by KC Curb contains names of its own employees or a description of employees. This report would list the employees of KC Curb, but it would not list the employees of any subcontractors, only the amount of payroll for those subcontractors. The owner of Perez Concrete is Agustin Osorio, who testified. Perez Concrete builds concrete sidewalks, driveways, curbs, and inlets. It also does the framing and finishes the concrete. Perez Concrete had a workers' compensation insurance policy providing benefit to its employees in place from August 2013 through April 2015, with Madison Insurance Company. See, generally, Resp. Exhs. B-D. Perez Concrete's policy was canceled for late payments on April 10, 2015. Apparently, Perez Concrete was late with two payments, and the Madison Insurance Company canceled Perez Concrete's workers' compensation policy. Perez Concrete had two employees, in addition to Osorio, in July 2015, when it was first visited by Petitioner's compliance investigator, Stephanie Scarton. Scarton stopped by while the employees were performing a small sidewalk finished job in Rockledge, Florida, for KC Curb. During this first meeting, Osorio told Scarton that the KC Curb's workers' compensation policy "was covering me." Osorio testified that she responded "everything was all right." Upon questioning by the undersigned, Osorio clarified that the first visit of the investigator was in the middle of July 2015 at a work location in Rockledge, Florida. After discussing his operations and telling the investigator about the KC Curb policy coverage, she left. Osorio testified that Scarton called KC Curb that same day to confirm his comments, and then she told him that everything was "all right." Osorio testified that the same investigator visited again on August 19, 2015. That day, she gave him the Stop-Work Order. Osorio testified that it was during the August 19, 2015, visit that she changed her previous response and said that Perez Concrete was not covered under the KC Curb policy. As the owner, Osorio had a valid exemption for himself from workers' compensation coverage from January 2014 through January 2016. Resp. Exh. E. Osorio had a conversation with "Robin" from KC Curb (date not specified). When he asked her whether Perez Concrete was covered, she told him that his company would be covered under KC Curb's workers' compensation policy. Osorio testified that Perez Concrete pays KC Curb seven percent of the weekly revenue derived from working for KC Curb, in order to be included on KC Curbs workers' compensation policy. Perez Concrete pays an additional one percent to KC Curb to be included on its general liability insurance policy. Perez Concrete had bought its own workers' compensation policy in 2013 and in 2014. Resp. Exhs. B-D. When Perez Concrete's policy was canceled by Madison Insurance Company on April 10, 2015, Osorio contacted KC Curb about the insurance. Osorio understood that by doing so, he had secured the payment of workers' compensation insurance coverage for his employees. When Osorio contacted the KC Curb representatives, he told them that he wanted to continue working with them and asked them about the insurance coverage. Petitioner's compliance investigator, Scarton, testified. She has held that position since approximately April 2013. She conducts random site visits to verify that companies have workers' compensation coverage. She conducts approximately 80 compliance investigations per month. On July 6, 2015, she conducted a random visit at a construction site where concrete work was being performed by Perez Concrete. She spoke with Osorio who told her that he did not have workers' compensation insurance coverage, but that he was covered through another company. In checking her CCAS automated data system, she confirmed that Perez Concrete did not carry its own workers' compensation policy.2/ After speaking with Osorio and getting his explanation, she contacted KC Curb and spoke with Robin Sempier. She was informed that KC Curb paid the workers' compensation coverage for Perez Concrete. Sempier told the investigator that KC Curb was allowed to proceed in that fashion with its subcontractors under an arrangement from a previous compliance case handled by Petitioner.3/ After speaking with Sempier about Perez Concrete's situation, Scarton contacted her supervisor, Robert Serrone. He directed her to refer the case involving Perez Concrete to Petitioner's fraud unit and to let them handle the investigation. Scarton's next involvement was in August 2015, when she was contacted by her supervisor and directed to issue a stop-work order to Perez Concrete. She obtained the Stop-Work Order, and served it on Perez Concrete on August 19, 2015. Petitioner also served Perez Concrete with a business records request. Perez Concrete did not comply with the request, nor did it submit any business records to Petitioner. Upon inquiry by the undersigned, the parties stipulated on the record that the appropriate amount of the penalty would be $11,902.20, should a violation be proven. The investigator asked the KC Curb representative to send her documentation confirming that KC Curb pays the workers' compensation coverage for Perez Concrete. The investigator opined on cross-examination that the employees of Perez Concrete were not covered by KC Curb. Scarton concluded that "in accordance with the investigations that we conduct, Perez Concrete would need to carry the coverage." Tr., p. 139, line 7. She later stated that on July 6, 2015, she could not confirm insurance coverage "one way or another." Tr., p. 140, lines 6 and 13. Professor Joseph W. Little of Gainesville, Florida, was called to testify as an expert on behalf of Perez Concrete and KC Curb. He is currently employed as an adjunct faculty member at the University of Florida, College of Law. He is also Professor of Law Emeritus at the University of Florida, College of Law. He had been employed as a professor at the University of Florida, College of Law, since 1967, teaching workers' compensation law. Little is unquestionably an expert in the field of Workers' Compensation Law. Little also authored the legal hornbook entitled "Workers' Compensation," a publication of the West Publishing Company. Little reviewed the facts of the case by reviewing the documentation provided by counsel who retained him. This included the Stop-Work Order, the petition, an amended petition, motions, and orders issued in the case. He also studied the applicable statutes and administrative rules of Petitioner as well as decisional law that he felt was relevant.4/ Little testified, and the undersigned considered, that he was not aware of any decisional law in the state of Florida interpreting the word "secure" to mean "buy" or "must buy," so long as there was an agreement between the subcontractor and the prime contractor that one or the other would purchase the insurance. Tr., p. 180, line 4. Little testified that the concept of the "statutory employer" found in chapter 440 has remained in place and steady throughout the history of the statute. He pointed out other relevant statutes in chapter 440 that needed to be read in pari materia with one another. An insurance agent from Bouchard Insurance, John Manis, also testified. Bouchard Insurance is a commercial insurance agency which sells workers' compensation insurance. Bouchard Insurance represents FFVA and sells workers' compensation insurance as an agent for that company. Manis had worked on the KC Curb account since 2005. He is familiar with how KC Curb and FFVA conduct their workers' compensation business together, including the payment of premiums. When a workers' compensation policy is written, the business will give its payrolls to the agent who determines the class codes that are applied and used in the policy. At the end of each year, an audit is conducted on those payrolls to determine whether or not the business owes money to FFVA, or if a refund from FFVA is in order. Some companies, like KC Curb, do a monthly audit--during which they input their payroll and are told what premium is due for the month. When a subcontractor of KC Curb declines or fails to obtain its own insurance policy, the subcontractor's employee becomes "like an employee of KC Curb," and FFVA will charge KC Curb for those employees, as if they were its own. The names of actual subcontractor employees are provided at audit time, not during the year. Apparently, this is a common practice in the industry. The office manager for KC Curb is Sempier. She testified that KC Curb is a concrete curb construction company that has been in business for 22 years in the Orlando area. It performs concrete construction services using a combination of in- house crews and subcontractors. One of Sempier's duties is to monitor subcontractor compliance with the Workers' Compensation Laws. She characterized KC Curb as being "very on top of that." Subcontractors are required to provide KC Curb with certificates of insurance before they start any work. Subcontractors are required to produce a certificate of workers' compensation insurance, or they go under the KC Curb policy as an uninsured subcontractor. Although KC Curb requires subcontractors to get their own insurance because this is much less expensive, some of them cannot or do not secure their own, so KC Curb secures it. The subcontractor is back-charged for this coverage. In monthly workers' compensation self-audits, Sempier includes a sheet that shows payroll for KC Curb's uninsured contractors and its own employees. Those numbers are combined together along with other clerical classes and the insurance premium payment is calculated. Tr., p. 221, line 3. Although not required by the FFVA, KC Curb includes payroll numbers for its uninsured subcontractors in each monthly self-audit. Tr., p. 221, line 11. Respondent's Exhibit J, entitled "Self-Reported Payroll," was explained by the witness. The document, prepared and issued by KC Curb for 2015, includes an entry reflecting the total payroll paid each month for KC Curb. This included both KC Curb's own W-2 employees and employees of subcontractors. Tr., p. 227, line 19. The second page of Respondent's Exhibit J (with information regarding other subcontractors redacted) shows that the payroll for employees of Perez Concrete was included beginning April 2, 2015. Tr., p. 224, line 16. Respondent's Exhibit J indicates, bottom right, the number of employees that were picked up from Perez Concrete.5/ Monthly premiums are paid by KC Curb instantaneously "on-line" and are based on the total payroll numbers listed in Respondent's Exhibit J, beginning with page 2. The payment comes directly out a KC Curb's checking account. Sempier testified that once payment was made, all employees included in the payroll amounts are covered by KC Curb's workers' compensation policy, including the Perez Concrete employee number listed. Tr., p. 224, line 23, and p. 253, line 14. See Resp. Ex. J, p. 2, bottom right. Work orders are received from the subcontractors for KC Curb. Those work orders are supposed to list the names of the subcontractor's employees. In this manner, KC Curb is able to determine how many employees are going to be covered by insurance for a particular subcontractor. When KC Curb was informed that the policy of insurance for Perez Concrete had been canceled, KC Curb called Perez Concrete's insurance agent to get the exact date of cancellation. When Perez Concrete's workers' compensation insurance cancellation was confirmed, KC Curb notified Perez Concrete in writing that it needed to promptly provide new certificates of insurance. See Resp. Exh. H. Perez Concrete was likewise notified in writing of KC Curb's requirements for "KC Curb to provide Workers' Compensation Insurance for your Company." See Resp. Exh. I. Osorio testified that Perez Concrete chose to have KC Curb secure the insurance for Perez Concrete after April 10, 2015, and he signed Respondent's Exhibit I agreeing to follow the guidelines for workers' compensation insurance. Thereafter, KC Curb began to pick up and include Perez Concrete's employees on its monthly self-audits. Likewise, it started to pay a premium amount for insurance which included payroll related to Perez Concrete's employees. Sempier was contacted by Petitioner's investigator, Scarton. When she informed the investigator that KC Curb was compliant with the law and was following a procedure previously permitted, the investigator called back that same day and asked for her to get something from her agent verifying that Perez Concrete was covered. Sempier testified that she promptly obtained a letter from KC Curb's insurance confirming coverage for Perez Concrete and thought she attached it with her email back to the investigator. Tr., p. 256, line 18. She subsequently learned that she attached the wrong document to the email, and the investigator did not receive the confirmation letter.6/ The evidence indicated that in the year 2015, KC Curb provided workers' compensation insurance coverage as a "statutory employer" for the employees of approximately seven of its subcontractors.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner, Department of Financial Services, Division of Workers' Compensation, issue a final order withdrawing or dismissing the proposed penalty and finding that Respondent was in compliance with the statute during the relevant period of time. DONE AND ENTERED this 5th day of April, 2016, in Tallahassee, Leon County, Florida. S ROBERT L. KILBRIDE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 5th day of April, 2016.
Findings Of Fact Stipulated Facts Deemed Relevant to Be Found Petitioner is the state land planning agency with the duty and responsibility to enforce and administer Chapter 380, Florida Statutes. The Killearn Lakes project is a planned residential community located north of Tallahassee near Bradfordville in Leon County, Florida. A portion of the Killearn Lakes Project, consisting of Units 1, 2, 3, 4 and 5 (phase I) is vested from Development of Regional Impact (DRI) review pursuant to Section 380.06(20), Florida Statutes. Petitioner recognized the vested rights for said portion of Killearn Lakes in BLIVR-274-037. The vested portion of Killearn Lakes has never undergone DRI review and is not a subject of this administrative proceeding. The remainder of the Killearn Lakes project, consisting of Units 5 (phases II and III), 6 and 7, is not vested from DRI review. Killearn was the sole owner of the non-vested portion of Killearn Lakes during the original DRI review, and is presently the owner and developer of most of the undeveloped portion of the Killearn Lakes DRI. The county is the local government with the jurisdiction to issue DRI development orders, and is the local government with the primary responsibility for administering DRI development orders for the land covered by the Killearn Lakes DRI development order. On November 14, 1974, Killearn filed a DRI application for development approval (ADA) for the non-vested portion of Killearn Lakes. In March of 1976, the Northwest Florida Planning and Advisory Council, District II, issued its Development of Regional Impact Evaluation for Killearn Lakes, Inc. On March 23, 1976, the county held a public hearing pursuant to Section 380.06(7), Florida Statutes (1975), on the Killearn Lakes ADA. The county commission issued a Development of Regional Impact Development Order approving the Killearn Lakes DRI and rejecting the conditions recommended by the Northwest Florida Planning and Advisory Council. No notice of the adoption of the Killearn Lakes DRI development order was, or has ever been, recorded in the Public Records of Leon County. At the time of the adoption of the Killearn Lakes DRI development order, Chapter 380, Florida Statutes, did not require the developer to record a notice of adoption, as is presently required by Section 380.06(15)(f), Florida Statutes (Supp. 1990), which first became effective in 1980. The county has issued every final local permit for the development that has occurred in the Killearn Lakes DRI. The county has not adopted a document entitled "Amendment to the Killearn Lakes DRI Development Order," and no such amendment to the Killearn Lakes DRI Development Order has been rendered to the Petitioner. Development within the Killearn Lakes DRI has not been completed. Central sewer has not been constructed throughout the developed portion of Killearn Lakes DRI. Other Facts Issuance of the Development Order Preliminary to action taken by the county commission which approved the subject development, the Tallahassee-Leon County Planning Commission met on March 18, 1976. It considered the recommendations of the Northwest Florida Regional Planning and Advisory Council related to the project. The recommendations of the Council were: Approval of the project on a phase by phases [sic] basis with necessary permits being granted after review and evaluation of the completed and proposed phases of development; Close monitoring of the drainage methods throughout each phase of development by the Leon County Engineering Department through on-site inspection; Developer is required to obtain a report from the Florida Games and Fresh Water Fish Commission for submission to the Leon County Commission concerning the evaluation of a lake drawdown project before a permit is granted; Developer must provide more information to the Leon County Commission regarding dredge and fill operation prior to the issuing of a permit for each phase of construction; Before the Leon County Commission issues a permit for each phase of development, a review of the upgrading of the Thoamsville [sic] Highway is required from the Florida Department of Transportation; Developer is required to comply with the following two conditions before a permit can be granted: Place hydrants so that all dwellings are within 1000 feet, and commercial property is within 500 feet. Increase water pressure and supply. A phase by phase review of projected growth of the Killearn Lakes Project and a brief impact analysis of Environmental and Natural Resources, Economy, Public Facilities, Public Transportation Facilities, and Housing in the immediate community and region is required before a permit can be issued to continue the Killearn Lakes project on a phase by phase basis. The successful review and evaluation of the above mentioned modifications prior to issuing each phase construction permit is recommended. The local planning group recommended approval of a development order without acceptance of the conditions suggested by the Northwest Florida Regional Planning Council. As mentioned before in Footnote 1, the county rejected all recommendations by that planning and advisory group. According to the minutes of the March 23, 1976 meeting: Mr. Simpson reported that the Planning Commission had recommended granting the development permit of Killearn Lakes without the application of the recommendations of the Northwest Florida Planning & Advisory Council, Inc. Commissioner Vause moved that the report from the Northwest Florida Planning & Advisory Council, Inc. dated March of 1976, be reflected in the minutes as being received and filed and that the Board follow the recommendation of the Planning Commission, Commissioner Marchant seconded the motion. Following very much discussion, Commission Vause amended his motion to adopt the following resolution and to issue a development order as recommended by the Planning Commission, Commissioner Marchant agreed to the amendment and the vote of the Board was unanimous in favor thereof. The Tallahassee-Leon County Planning Commission in its action of March 18, 1976 had not suggested any substantive changes to the ADA. The County Commission did not vote to modify the ADA by changes to the language in the ADA through additions or deletions to the text of the ADA or requirements set forth in the development order or attachments to the development order. Having rejected the recommendations set out by the Northwest Florida Regional Planning and Advisory Council, and offering no other conditions to control the development order other than those contemplated by statutes or rules pertaining to the issuance of the development order, the terms of the development order became those found within the ADA. Deadline for Development Among the topics discussed in the ADA is the date for completing the project. The ADA identifies the project completion date as 1985. This information is provided in accordance with the questionnaire which the consultant to Killearn answered in preparing the ADA. Having examined the Draft Operating Manual for Developments of Regional Impact which had been prepared by the Division of State Planning, the predecessor agency to the Petitioner, it is inferred that the application format/questionnaire recommended by the Division of State Planning was followed in preparing the ADA. The questionnaire contemplates in a number of instances establishment of a concluding date for the project. The evidence presented at hearing did not show that the county made a conscious decision to require submission of the application in the format set forth in the draft operating manual by the Division of State Planning, rather it acquiesced in that protocol on this occasion. There is no evidence that the Division of State Planning had communicated with the county concerning the use of this questionnaire for preparing an ADA, especially as it might pertain to the policy reasons for setting forth a deadline for project completion. Excepting the questionnaire, the Draft Operating Manual for Developments of Regional Impact prepared by the Division of State Planning was not shown to have been made available to the county or the applicant prior to the submission of the application. In particular, the applicant and county were unfamiliar with Section 2.05c. in its statement that all local development orders issued in response to an ADA should include provisions pertaining to the period of effectiveness of the development order and Section 2.07a.(2) pertaining to expiration of the period of effectiveness of the development order as a factor that may require retriggering of the DRI process. By implication, the county was not carrying forward the policy ideas expressed by the Division of State Planning where it urges local government, in the interest of sound planning principles to include a provision in the development order pertaining to the period of effectiveness of that development order and the statement that at the expiration of that period of effectiveness the development order may require a retriggering of the DRI review process. In the abstract, the questions that were answered in the ADA in response to the format contemplated by the Division of State Planning dealing with a concluding date for the project can be seen as associated with the concept of establishing an expiration date for the development order. The answers do not equate to setting out the expiration date as an incorporated requirement countenanced by this development order. Neither does the development order nor the incorporated ADA remind the developer or its successors in interest that there is a deadline for concluding the project beyond which the development order is no longer effective and the possible requirement for retriggering review of the DRI. Under the circumstances, absent some requirement of law not arising from the development order per se, the statements found within the ADA concerning the projects's concluding date are nothing more than an internal planning device for the benefit of the developer and its successors in interests. As an estimate by the applicant it does not express the perception of local government in issuing the development order and is unenforceable. Statutes and rules in effect at the time that the development order was issued, and it is those statutes and rules which control for reasons discussed in the conclusions of law, did not mandate the establishment of deadlines for completing the project, establishment of a period of effectiveness for the development order or a statement setting out the ramifications for not complying with the deadlines for buildout on the possible consequences of operating beyond the period of effectiveness of a development order. More generally stated Chapter 380, Florida Statutes and the rules of the Division of State Planning in existence when the project was considered did not readily explain the application process. It is not accepted that the county in view of the dialogue which took place between various commissioners and representatives of Killearn on March 23, 1976, took official action to extend the deadline set out in the ADA, but the resulting de facto extension of the buildout deadline beyond the effective date set forth in the ADA is irrelevant. The discussion among the commissioners and with representatives of the developer concerning the project completion was inconclusive, because from a parliamentary viewpoint, the county did not act to restate the ADA and by such restatement set forth a project deadline. The county never precluded further development in the DRI area after 1985 absent further DRI review. It did not have to. No deadline was required by law. No legally binding deadline has been imposed. Therefore development may proceed into the future. Sewer Service At The Inception Another item in dispute concerns the need to provide sewer service in the project area and at what point in time. The development order unequivocally requires a sewage treatment system so that units as they are built are connected to that system contemporaneous with their development. The development order does not allow alternative use of septic tanks until a central sewer system becomes available, if it ever does. The introductory portion of the ADA under the report summary speaks of sewer being provided by Talquin Electric Cooperative, Inc. Under the environmental assessments portion of the ADA associated with water quality, Paragraph 19.b.(3)(a), which speaks to possible discharges into ground water of liquid waste states: All units will be connected to a central plant as they are developed. This plant will remove 90 percent of the bio-chemical oxygen demand (B.O.D.) and of suspended solids (Chapter 403, Florida Statutes) and discharge to a land via a land disposal system; no surface discharge, (Figure 19-10). The economic assessments, Paragraph 25, discusses sanitary sewers at pages 59 and 61, as follows: a. Cite amount of sewage expected to be generated by the proposed development and source of treatment facility. Amount generated (added to .04 of Phase I): About 1.4 million gallons per day (mgd) in DRI area. Treatment will be accomplished by Talquin Electric Cooperative for Phases I into IV. The collection system will utilize lift stations (Figure 25-1). Will the design of the sewage system insure that all areas of the development have adequate facilities at all stages of the development? Specify. The Sewage Treatment Plant (STP) and collection system construction will be phased (Table 2) to accommodate this flow as follows: Now ready to start - .040 mgd S.T.P. (Phase (not in DRI area) 1, Unit 5) Until January 1975 - .450 mgd S.T.P. (Phase II, Units 5 & 6) Until mid-1976 - .900 mgd S.T.P. (Phase III, Unit 5+ apt./Condo. & Comm.) 1978 to mid-1982 - 1.800 mgd S.T.P. (Phase IV) or convert .900 mgd S.T.P. to a lift station and pump to City of Tallahassee Talquin Electric Cooperative has a construction permit from the Department of Pollution Control, and operating permit will be issued when the S.T.P. is built, subject to conditions discussed under "discharge to groundwater". The S.T.P. and land disposal site will be located at the northeast corner of Unit 2. Additional acreage, if needed, can be provided at the adjacent school site (Figure 19-10). How does the development's sewage system relate to the county's sewer and water treatment facilities objectives? During Phase IV this responsibility will shift to the City of Tallahassee. 16/ Killearn Lakes sewage then will be treated at the Tallahassee Northeast Treatment Plant (+ 1984). What assurances will the developer provide that such a system will indeed be completed? Construction? Performance bonds? Agreement with Talquin. 15/ Sewer connection to the City of Tallahassee depends on resolution of differences between the City and Leon County. The City/County Technical Coordinating Committee recently passed resolution urging priority action on this matter. Talquin Electric Cooperative builds and operates many total - utilities packages in the area, including sewer systems. It has been in business as a Rural Electric Cooperative for several decades. In addition, in the environmental assessments section, Paragraph 19.b.(2)(a) at pages 7 and 8 dealing with discharges into surface water of detergents and solvents reference is made to commercial and residential sewer service. Figure 19-4, at page 8, related to land disposal speaks of the temporary land disposal site for sewage effluent. Again the section on economics found at page 49 in the ADA comments that Talquin Electric Cooperative is responsible for all utility installation. Table 1, item 25 discusses sewage and notes that all areas to be served by Talquin Electric will be phased into a regional facility in 1984 to meet county objectives. No exception to this requirement is stated. Paragraph 31.c., at page 71, concerning alternative means of providing sewer states: What alternative power, water, sewer and solid waste disposal sources or mixes were considered and evaluated in selecting this particular site? The City of Tallahassee, Leon County, and Talquin Electric Cooperative are the alternative sources and they were selected through a combination of availability, common practice and cost. Contrary to the opinion of the county, this reference is unambiguous and does not contemplate the use of septic tanks at any time as a possible alternative to sewer service. The statement of availability describes the choice between utilities, not the choice between sewer service and septic tanks. Killearn's Agreement With Talquin Electric The sewer service agreement between Killearn and Talquin Electric Cooperative concerning provision of sewer service commented on in Footnote 15 to the ADA addresses provision of sewer service for the entire project controlled by the development order upon request by Killearn with cost or return of the total cost to be guaranteed by Killearn as recited in the agreement. It makes Killearn responsible for depositing funds with Talquin Electric Cooperative as construction work progresses as may be required by Talquin. Those funds must be sufficient to cover Talquin's and Killearn's "actual direct costs related to the installation of said utilities, including engineering and debt service." Killearn is refunded or credited with one-half of all utility revenue received by Talquin in excess of $5 per month per customer. Those excess customer revenues would be credited first to repay amounts borrowed by Talquin for the installation of utilities to meet debt service. The excess of those revenues would be refunded to Killearn to the extent that Killearn had deposited funds with Talquin Electric for project purposes. The refund to Killearn would include any interest paid by Killearn associated with funding. By the agreement Talquin would borrow funds for the installation of the utilities if it could obtain better rates than were available to Killearn. All the funds borrowed by Talquin are subject to Killearn's guarantee on the repayment of all debt service required and if the aforementioned refunds and credits are insufficient to meet that requirement by Talquin, Killearn agrees to deposit with Talquin the amount of that deficiency which would be counted as a cost to Killearn and subject to some future refund. Killearn had agreed to execute the necessary documents for individual loans if requested to do so by Talquin. The agreement has a duration of 20 years beyond the date of completion of the last utility construction. The agreement allows Talquin to place a sewer service tap fee on lot purchasers in the project area at rates which are normal and competitive. Talquin is to deduct the direct cost of installation related to tap fees with agreement to credit or refund the remainder to Killearn. By the agreement Talquin committed to pay Killearn the cost of any land required by Talquin for sewer treatment facilities. Those purchase costs would be included in the total cost of utilities which required deposits or guarantees from Killearn to Talquin. Nothing in the agreement between Talquin Electric and Killearn spoke to the means by which successor developers would assure that sewers were provided for units developed in the DRI area. The development order in addition to not being subject to recording in the Public Records of Leon County, Florida, based upon its own terms or requirements in law, did not obligate Killearn to advise purchasers of parcels in the DRI area who bought those parcels for development purposes, that the subsequent developer would need to provide sewers in accordance with the development order either through Talquin Electric or an appropriate utility. The failure of the development order to require disclosure is not unexpected given the county's willingness to allow the ADA to serve as the development order. The ADA informs the county of the project features. It is not designed to anticipate development controls, in this instance to set out the process by which the initial developer would alert subsequent developers to the terms of the ADA to include the requirement to provide sewer service. Nonetheless, the permission to develop was granted to Killearn as applicant and to the extent that right to develop was assigned to another developer by conveyance which removed Killearn as the responsible developer, it would be reasonable to expect Killearn to give notice of the existence of the development order and its salient features. The need to provide sewer service as development proceeds is among those features. Transactions and Notice to Subsequent Purchasers What did Killearn tell subsequent purchasers about the requirement to provide sewers? J. T. Williams, Jr., CEO and President of Killearn offered testimony on that subject. Williams identified that he had sold by warranty deed to Holt Robinson the Channel 40 television station property. The notice of violation refers to this property as Ton Realty Partnership. Killearn sold parcels to Dennette Rainey on contracts for deed for areas known as Mallard Bluff and Mallard Point. Parcels between Mallard Point and Mallard Bluff were sold to Perry Bodin on contracts for deed. The sales described occurred between 1979 and 1981. The balance of the project which is in dispute has been developed by Killearn and sewer has been installed in those developed areas that Killearn had not sold or agreed to sell. According to Williams the contracts for deed to Rainey and Bodin included references about central sewer. Unfortunately, copies of the contracts for deed were not presented in the hearing to establish the exact nature of those references and the notice they may have given the purchasers concerning their obligations to arrange for sewer service contemporaneous with development (the building of residences). Williams said that the agreement was to provide sewer at the developer's request, meaning to Rainey and Bodin, pursuant to Killearn's agreement with Talquin Electric. As stated, Talquin Electric has no commitment to provide sewer service to a subsequent developer under the terms of its agreement with Killearn. More importantly the agreement with Killearn requires that the developer provide a substantial deposit before installation of sewer service. It is unclear from the record whether Rainey, Bodin or Robinson understood this. Given the arrangement described at hearing which Williams said that he would make between Talquin Electric and Respondents Kinhega Landing and Kinhega Oaks, as liaison, in which the expectation would be that those two developers would be responsible for funding or deposits to move the work forward, the possibility exists that Rainey, Bodin and Robinson had also been made aware that this funding would be needed to bring about the installation of sewer lines in areas to be developed by those purchasers. By contrast they may have understood Williams' explanation to be that Killearn would arrange for provision of the sewer service in the areas to be developed upon their request without the need for initial funding provided by the subsequent developers. The state of the record does reveal that none of the areas described in the contracts for deed between Killearn and Rainey and Killearn and Bodin have sewer service from a central location. Homes in those areas are served by septic tanks. The property conveyed to Ton Realty Partnership may or may not have sewer service based upon proof in this record. Williams stated that he told his immediate purchasers that there was a DRI on the property and bragged that it would not be necessary for those persons who bought from him to go back through a process of project review. This does not signify that those purchasers were familiar with the contract with Talquin Electric which is spoken to under Footnote 15 to the ADA. In a more general sense, the record does not indicate that the immediate purchasers read the ADA. Again, they would not have been aware of the development order and its terms by resort to the Public Records in Leon County, Florida. In addition to Robinson, Killearn gave warranty deeds to other purchasers of parcels within the DRI. Killearn sold the parcel known as Mallard Bluff to Olin Mannheimer while under contract for deed to Rainey. The warranty deed under those circumstances went directly to Olin Mannheimer as developer. The terms of the warranty deed were not identified in the record nor any explanation made of Mannheimer's awareness of the requirement for sewers if he had an impression of that requirement. Williams established that Rainey developed Mallard Point. As Williams describes, for the property between Mallard Point and Mallard Bluff that had been sold to Perry Bodin in which the parcels known as Kinhega Landing and Kinhega Oaks are found, together with Kinhega Estates and the Kinhega Lodge, title was released per warranty deed as acreage was paid off. Except for the last parcel within the Bodin contract for deed with Killearn, that parcel being associated with Kinhega Landing group of Respondents (Southern Heritage Development, Inc., Seay Enterprises, Inc. and Jimmy Boynton Realty, Inc.), Killearn gave warranty deeds directly to persons who purchased property that had been identified under the contract for deed between Bodin and Killearn. Killearn conveyed the Kinhega Landing parcel to Bodin by warranty deed. The terms of that warranty deed were not identified in the record. Killearn conveyed by warranty deed that property known as Kinhega Oaks. That conveyance was subject to restrictions, reservations, covenants and easements of record, if any. The conveyance to the Kinhega Oaks group of Respondents (Stephen John Stoutamire, Lewis Hill, Sr. and Lewis Hall, Jr.) took place on May 19, 1989. Kinhega Landing, Kinhega Oaks and Other Particulars The Kinhega Landing purchase by the present Respondents was based upon a deposit and receipt contract for sale and purchase between Bodin and his wife and James Jarrett followed by a warranty deed from Bodin and his wife to the Kinhega Landing group. No explanation is made concerning Jarrett's understanding of the need to provide sewers. The warranty deed to the Kinhega Landing group of Respondents was executed December 13, 1989, and refers to restrictions, easements, and reservations and covenants that are of record, if any. As with other conveyances and throughout the history of this project no reference to the development order could be found by a search of the Public Records. Neither does the deposit and receipt contract for sale and purchase identify the existence of the development order for the edification of the Kinhega Landing group. Killearn had no direct dealing with purchasers of property contemplated within the agreement for deed between Killearn and Bodin other than the act of preparing and delivering a warranty deed to the Kinhega Oaks group and others similarly situated who took title directly from Killearn based upon the agreement for deed between Killearn and Bodin. To the extent that the agreement for deed with Bodin may have informed the reader that Killearn had disclosed the nature of the requirement for provision of sewer as set forth in the development order, no indication was given in the record that someone other than Killearn may have then made the Kinhega Oaks and Kinhega Landing groups mindful of that caveat or that Bodin or someone that he was affiliated with otherwise disclosed the need to provide sewers for the parcels to be developed by the Kinhega Oaks and Kinhega Landing groups. Bodin is not named as a Respondent nor was he called as a witness in this hearing to explain his position in these matters. Likewise Rainey, Mannheimer and Jarrett are not parties nor were they called as witnesses. In that a warranty deed was given directly from Killearn to Kinhega Oaks, opportunity was presented by that conveyance for Killearn to have alerted the Kinhega Oaks group concerning the DRI and its terms, even if seen from Williams' viewpoint as principally being a favor to Bodin to avoid tax implications of a transfer from Bodin and thus to the Kinhega Oaks group. Although this opportunity was presented to Killearn to describe the existence of the requirements for sewer set out in the development order when making a direct conveyance to the Kinhega Oaks group, the warranty deed did not reveal that information and no discussion was entered into with Kinhega Oaks concerning any aspects of the purchase beyond the conveyance itself. Williams asserts in his testimony in further explanation of the events that Bodin would be responsible for arranging the furnishing of sewer to the Kinhega Landing group, but that Killearn would voluntarily arrange for that sewer service as a matter of a favor, not a matter of contract. This would be upon provision of the payment of 30 per cent of cost of the installation by Kinhega Landing to Talquin Electric. At hearing Williams offered to make a similar arrangement for the Kinhega Oaks group as Williams described as having been done for Rainey under his contract with Killearn, a contract not presented at hearing. Again, this contemplates that Kinhega Oaks would pay 30 per cent of the total costs and that Killearn would get all rebates that pertained for coverage of interest and carrying costs during the rebate period. Notwithstanding Killearn's offer to make these arrangements with Talquin Electric to provide sewer for the benefit of the subsequent developers, those arrangements have not been made. Nothing in the record establishes or suggests that the Kinhega Oaks group and the Kinhega Landing groups were aware of the existence of the development order and its requirement for installation of sewer contemporaneous with development when they purchased their parcels. Had they understood that requirement was incumbent upon them, they would not have undertaken the purchases and incurred debt obligations which they now are experiencing difficulties meeting, in part due to the possible outcome here which could prohibit development absent the contemporaneous installation of sewers. Petitioner argues that no authority exists to allow septic tanks at individual lot sites as an interim condition prior to sewer lines being made available in the areas undergoing development by Kinhega Oaks and Kinhega Landing. This is contrary to the attitude expressed by the county in granting preliminary plats to the two developers and individual permits for septic tank installation until sewer is made available, if that eventuality occurs. Raymond Richard Yates, Jr. testified. He is President of Southern Heritage Development Inc. and together with Jimmy Boynton Realty, Inc. and Seay Enterprises, Inc. owns the property known as Kinhega Landing. Those individuals became involved with the property through contacts between Yates and Jarrett. As alluded to, Jarrett did not tell Yates that the property was subject to the development order and its requirements for provision of sewer. At the inception of their dealings the Kinhega Landing group intended to substitute for Jarrett and his contract and to purchase the property if plat approval could be gained. The record is not clear about Jarrett's position with Bodin and Killearn beyond the previously described deposit and receipt contract for sale and purchase Bodin to Jarrett. The Kinhega Landing group arranged to have a search made of the Public Records of Leon County to discover any easement, development orders and/or restrictions affecting the property in question effective through December 13, 1989. That report of April 22, 1991, did not reveal the existence of the development order. On November 16, 1989, the Tallahassee-Leon County Planning Commission voted to approve the preliminary plat for Kinhega Landing subject to conditions. This was in accordance with the county ordinance on recording subdivision plats that became effective in 1984. (Other developers in the area of Lake Iamonia within the DRI as described had undertaken development before passage of the ordinance.) Among those conditions was the requirement for mound type septic tank systems in lieu of ordinary septic tank systems where subsurface conditions would require the mounded approach. Another condition required that the Kinhega Estates Home Owners Association's covenants and restrictions would apply. A condition was established that homeowners would be required to hook up to a central sewer system if and when it became available. The Kinhega Landing group paid $240,000 for the land or an amount approximating that cost with a fee of $30,000 paid to Jarrett for the assignment of the contract. The Kinhega Landing group obtained a loan for $425,000 to develop the land. In furtherance of the project roads have been installed, clearing has been done and some holding facilities for stormwater runoff put in place. Other permits for development have been acquired to include environmental permits from the county and the State of Florida, Department of Environmental Regulation. After plat approval and purchase, the Kinhega Landing group first discovered that the property was subject to the development order. In addition to the prohibition against the use of septic tanks contemplated by the notice of violation, the county has told the Kinhega Landing group that they may not proceed with development. At present the property in question, which is 29.71 acres with 44 lots and a unit density of 1.65 units per acre lies dormant. No septic tanks have been installed as this developer had anticipated doing. Yates testified that he is not in a financial position to address the sewer requirements in an instance where deposit money would have to be made available for that activity. His other partners have decided they no longer wish to participate and Yates is in jeopardy with his financing institution. On April 20, 1989, the Tallahassee-Leon County Planning Commission voted to approve the preliminary plat for Kinhega Oaks. That parcel has an acreage of 11.87, with 15 lots of a unit density of 1.4 per acre. The preliminary plat has the same conditions that have been described for Kinhega Landing. Kinhega Oaks is owned by Stephen John Stoutamire, Lewis Hill, Sr. and Lewis Hill, Jr. The property was purchased through a real estate agency known as Rae Roeder Realty in the person of Bob Cole. The Kinhega Oaks group did not deal with Perry Bodin directly or anyone other than the realtor. The Kinhega Oaks group bought the property for purposes of development of single-family residential lots of approximately one-half acre size. Improvements intended to be installed included a county maintained road. They did not intend to install a central sewer system. The project contemplated the use of septic tanks. In furtherance of the project the purchasers paid approximately $100,000 and had site evaluations done on two lots that were in the most sensitive area of the project near Lake Iamonia. An engineering firm was hired to gain that preliminary plat approval. Title work was done. Closing on the property was contingent upon activities by the engineering firm, soil samples and title insurance. For the two lots which were the most sensitive in terms of use of septic tanks, soil studies were done and the necessary approvals were gained for the use of septic tanks. In purchasing the property, the Kinhega Oaks group relied upon the conditions for development which were set out in the preliminary plat, including allowances for septic tanks to be used on an interim basis. If the preliminary plat had not been approved, the Kinhega Oaks group would not have purchased the property, nor would they have purchased the property if they had been aware of the existence of the development order. They would not have developed if the studies related to the use of septic tanks had been adverse. Since the purchase of the property, a road has been built, and water service and underground electric service has been provided. A concrete ditch has also been put in place and sod. Approximately $40,000.00 has been expended on improvements. In pursing the project, necessary permits have been obtained. The closest available central sewer is approximately one mile away. To install the sewer system, it would be necessary to tear up the road and lay the sewer line in the middle and T-off on the sides and re-pave the road. Five lots have been sold in the subdivision. Two houses have been constructed and one is underway. All of those houses have septic tanks. The Kinhega Oaks purchasers became aware of the existence of the development order after making improvements and selling the five lots. The Kinhega Oaks group first became aware of the development order when served with a notice of violation. Under the orders for corrective action and the development order, the Kinhega Oaks group and the Kinhega Landing group are confronted with a requirement to provide sewer service within a year of a final order, if Petitioner's position is sustained. The Kinhega Oaks group understands that limits have been imposed on the installation of septic tanks. Had it realized that it would become necessary to place the sewer lines, it would not have purchased the property. If required to make the corrections that are contemplated by the Petitioner, Stephen Stoutamire on behalf of the Kinhega Oaks group, testified that he would "go broke". The County: Application of The Development Order Martin Patrick Black, the present Chief of Land Use Administration for the county, testified. He has held that position since December, 1989. He concedes that the ADA does not mention septic tanks. The person who was principally responsible for considering the applications for plat approval from Kinhega Landing and Kinhega Oaks is Wade Pitt, a planner for the county. He knew of the existence of the development order from when he was initially employed in 1983. He testified that Mallard Bluff, Mallard Point and Kinhega Estates existed before the subdivision regulations were passed in 1984 and did not need to obtain plat approval as was necessary with Kinhega Landing and Kinhega Oaks. This did not excuse development without provision of sewer service. When he reviewed the subject requests for preliminary plat approval after the ordinance was enacted, he referred to the development order and ADA, in addition to the county subdivision regulations. On the issue of sewage disposal, he concluded that the ADA stated that central sewer would be provided by phases in the DRI; however, provision of central sewer was predicated on availability. Given that central sewer was not available at the time that the plat approval was considered, he decided that septic tanks were an acceptable alternative to the installation of sewer until sanitary sewer became available. In effect, he believed septic tanks were an available and appropriate interim measure until sewer became available. His perceptions led to the above described conditions on wastewater treatment which were placed in the preliminary plat approval for both Kinhega Landing and Kinhega Oaks. His interpretation is erroneous. His position, as adopted by the county in the preliminary plat approvals, is incorrect in a setting in which the requirements announced in the development order/ADA are not fairly debatable. There is no allowance for septic tanks as an interim response, especially not when the contingency in the plat approvals is for provision of sewer only when it becomes available, if at all. This is as contrasted with the absolute requirement of sewer service at the project inception, when development commences, found in the development order. The record is devoid of any statement that someone other than the subsequent developers would make the necessary financial contribution to bring about sewer service in those areas which were not developed by Killearn. It appears unlikely that sewer service will become available in substitution for septic tanks under the present circumstances. To the extent that the applicant in responding to the questionnaire which formed the basis of the application considered alternative methods for wastewater treatment, those alternatives did not include septic tanks. The statement of how Killearn would respond to wastewater treatment did not set forth septic tanks as the means, even as an interim measure. For the county to perceive that the ADA/development order would allow septic tanks as an interim condition is contrary to reason and in contravention of the development order which it issued. More About Covenants and Restrictions On November 29, 1979, certain Declarations of Covenants and Restrictions for that portion of the DRI known as Mallard Point were recorded in the Public Records of Leon County, Florida. They are in substance the same as those associated with Kinhega Estates, Unit I, as recorded on December 21, 1982, and those for Kinhega Lodge recorded on February 23, 1987. All were recorded by Killearn as the developer and signed by J. T. Williams, as President of Killearn. The restrictive covenants by Killearn executed in 1979, 1982 and 1987 call for single-family residential development in an area of the DRI which was approved for condominium development. Kinhega Landing and Kinhega Oaks per the terms of the preliminary plats received by those developers must abide by the Kinhega Estates Declaration of Covenants and Restrictions. Pursuant to the definitional section in that document, the term "improvements" includes sewers. Under Article IX, having to do with the preservation of the natural environment, lakes, and Green Areas at Section 5, the developer, Killearn, reserves the right for itself and successors and assigns to go over and around the ground to erect and maintain and use sewers and for other suitable equipment for conveyance and use of sewers in the Green Areas. Right is reserved to locate pumping stations and treatment plants in the Green Areas; however, the rights which may be exercised by the developer and any licensee of the developer, also referred to as the company, shall not be considered as an obligation of the company to provide or maintain the utility, in this dispute, the sewer service. In Section 9 of Article IX, further mention is made of the idea that the granting of the easement in no way places a burden of affirmative action on the developer, and the developer is not bound to make any of the improvements noted or to extend service of any kind. Article XVIII speaks specifically of sewage disposal where it says: "No individual sewage disposal system shall be permitted on any site unless such system is designed, located and constructed in accordance with the requirements, standards and recommendations of the State of Florida's Department of Pollution Control. Approval of such system as installed shall be obtained from such department or departments." These provisions fail to mandate the requirements for provision of sewer service by the original developer or subsequent developers. They also allow septic tanks in contravention of the development order. Other Departures Given the proposed stipulations in law among the parties in which consideration of the factual significance of those other departures from the terms of the development order is not anticipated, intricate treatment of those matters is not undertaken to examine the significance of these deviations from the development order. It suffices to say that the following improvements: the golf course known as Golden Eagle, the single-family residences in the vicinity of Lake Iamonia in lieu of the condominiums identified in the ADA, a school site under the ADA which has been converted to single-family residences in Golden Eagle Units 1 and 3, and the Television 40 site developed by Ton Realty Partnership in an area approved for a single-family residential development or a school site depart from the terms of the development order. Forgiveness Petitioner has not named individual lot owners who purchased property prior to the notice of violation as Respondents.
Recommendation Upon consideration of the facts found and the conclusions of law reached, it is recommended that a Final Order be entered which: Requires Killearn to: comply with the requirements of the stipulation requiring an amendment to the development order incorporating the reduction in density from condominiums to single-family residences in the area bordering Lake Iamonia; the elimination of a school site in an area of residential development; the construction of a golf course and the construction of a television station in an area designated for a school site or alternatively for single-family residential development. provide written notice in all it sells for development by others after the date of the final order that a development order exists and that all new development must have contemporaneous sewer service, and if Killearn intends to broker the contract between Killearn and Talquin Electric as a means of meeting the central sewer requirement the purchaser must be made aware that Talquin Electric must be paid a deposit from the subsequent developer before Talquin Electric will undertake the project. record the development order/ADA and its amendments in the Public Records of Leon County, Florida. Requires the County to: amend the development order pursuant to the stipulation between the county and Killearn described at I.A. refrain from issuing any permits which would allow development in the DRI area not served by a central sewer, excepting those situations set forth in the conclusions of law. In those instances development permits could be issued to successors in interest. In the exceptional cases the permit should provide that the lot owner will be required to connect to a central sewer system when made available. faithfully fulfill the terms of its development order. dismisses the notice of violation against Kinhega Landing, Kinhega Oaks and Ton Realty Partnership. RECOMMENDED this 28th day of August, 1991, in Tallahassee, Florida. CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of August, 1991.
The Issue Whether petitioner has standing to challenge a consent order negotiated by respondents to resolve an enforcement proceeding? If so, whether the consent order comports with statutes and rules regulating dredging and filling in wetlands?
Findings Of Fact Without securing DER permits, TLC built two dirt roads, one perpendicular to the other, both in Gulf County, east and south of property petitioner John L. Sullivan, Jr. owns and lives on. Between them, the roads, each 20 to 25 feet wide, traversed wetlands (recognized as such by DER regulations and the DER environmental specialist when he visited the site in May of 1990) in three separate places. None of the affected wetlands drain in the direction of petitioner's property. TLC dredged and placed 36-inch culverts before filling at two of the sites, and placed fill at all three sites, constructing roadbed and shoulders. One of the sites, connected by a 200-foot ditch to other wetlands, DER's Larry Taylor eventually characterized as "isolated." He directed TLC to fill the ditch to destroy the connection, on the theory this would divest DER of jurisdiction. At hearing, John L. Sullivan, Jr. testified that the project had not affected him financially, and said he was affected only as a citizen of Florida. The wetlands crossed by the roads drain (or, in one instance, did drain before the ditch was filled) easterly to Stonemill Creek, which flows southeasterly toward the Dead Lakes.
Recommendation It is, accordingly, recommended that DER dismiss the letter or petition with which these formal administrative proceedings began. RECOMMENDED this 10th day of June, 1991, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of June, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NO. 91-0282 Petitioner's proposed finding of fact No. 1 has been adopted in substance. Petitioner's proposed findings of fact Nos. 2 and 3 pertain to immaterial matters. Petitioner's proposed finding of fact No. 4 was not proven. Respondent's proposed findings of fact Nos. 1, 2, 5, 6 and 10 (i.e. the final proposed finding of fact) have been adopted, in substance, insofar as material. With respect to respondent's proposed finding of fact No. 3, a parcel 96 feet by 60 feet was involved at only one of the three sites. With respect to respondent's proposed finding of fact No. 4, the conclusion that "the jurisdictional aspect ceased to exist" is not adopted. With respect to respondent's proposed finding of fact No. 7, whether the violation was "resolved" is a conclusion of law. With respect to respondent's proposed finding of fact No. 8, the allegations of the petition were not proven. With respect to respondent's proposed finding of fact No. 9, not all uncontradicted evidence has been credited. COPIES FURNISHED: Carol Browner, Secretary Department of Environmental Regulation Twin Towers Office Building 2600 Blair Stone Road Tallahassee, FL 32399-2400 Daniel H. Thompson, General Counsel Department of Environmental Regulation 2600 Blair Stone Road Tallahassee, FL 32399-2400 John L. Sullivan, Jr. Post Office Box 1298 Wewahitchka, FL 32465 Richard L. Windsor, Esquire Department of Environmental Regulation 2600 Blair Stone Road Tallahassee, FL 32399-2400 Bill R. Hutto, Esquire Hutto, Nabors, Bodiford and Warren 101 East 23rd Street Panama City, FL 32405
