The Issue Whether the Petitioner's request for variance should be granted.
Findings Of Fact Petitioner owns an undeveloped parcel of land in Palm Beach, County which is zoned industrial and on which he intends to construct a storage building to house and repair farm equipment. To provide sewage treatment at the site, Petitioner had designed an on site sewage disposal system and applied for a septic tank permit which was denied as was his variance request. The closest public sewage treatment plant to the property is over five miles from the site, and the closest private treatment is approximately three miles from the subject site. Petitioner has no easement to either site if capacity were available and if he chose to connect. However, the proof did not show capacity at either site. Although Petitioner does not intend to pollute the groundwater, the proof demonstrated that waste disposal into a septic tank from the maintenance and repair of farm equipment could result in the disposition of prohibited hazardous waste into the groundwater. Alternative methods of waste disposal are available which would properly dispose of the waste and, yet, protect the groundwater from contamination by hazardous waste. Such systems include certain aerobic treatment units and package plants. The monetary costs of these systems is greater than the septic tank proposal; however, the proof did not demonstrate that the cost was prohibitive or a hardship. Although the hardship, if any, caused by the denial of the variance was not caused by Petitioner, the proof failed to demonstrate lack of reasonable alternatives of waste disposal and the absence of adverse effect of the operation to the groundwater. Additionally, the proof failed to establish the ameliorating conditions of soil, water table or setback conditions although a survey of the property dated September 3, 1985, indicates that the subject parcel was not platted. Accordingly, the denial of the variance was proper.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered denying the variance. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 6th day of July 1989. JANE C. HAYMAN 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 6th day of July 1989. COPIES FURNISHED: Lee B. Sayler, Esquire 50 South U.S. Highway One Suite 303 Jupiter, Florida 33477 Peggy G. Miller, Esquire Department of Health and Rehabilitative Services 111 Georgia Avenue Third Floor West Palm Beach, Florida 33401 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 John Miller General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
The Issue The issues to be resolved in this proceeding concern whether the Petitioner is entitled to a permit permitting installation of an on-site sewage disposal system (OSDS) on his property located in Dixie County, Florida, in the vicinity of the Suwannee River and whether he is entitled to seek a variance from the statutes and rules concerning permitting of such systems.
Findings Of Fact The department hereby adopts and incorporates by reference the findings of fact set forth in the Recommended Order.
Recommendation Having considered the foregoing Findings of Fact and Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is therefore RECOMMENDED: That a Final Order be entered denying the Petitioner's application for an OSDS permit, without prejudice to the applicant applying for and seeking a variance from the statutory and rule requirements related to permitting for the reasons found and concluded above, and without prejudice to applying for and pursuing an OSDS permit application should the applicant, at a later time, be able to demonstrate that alternative methods of treatment and disposal of the sewage effluent at issue can feasibly be performed, within the bounds of the standards enunciated in the above-cited statutes and rules concerning on- site sewage disposal permitting. DONE and ENTERED this 21st of December, 1990 in Tallahassee, Leon County, Florida. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of December, 1990. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 90-2487 PETITIONER'S PROPOSED FINDINGS-OF FACT Accepted. Accepted. 5-14. Accepted. RESPONDENT'S PROPOSED FINDINGS OF FACT 1-7. Accepted. COPIES FURNISHED: Sam Power, Agency Clerk Department of HRS 1323 Winewood Boulevard Tallahassee, FL 32399-0700 Linda K. Harris, Esquire General Counsel Department of HRS 1323 Winewood Boulevard Tallahassee, FL 32399-0700 John K. McPherson, Esquire 22 South Main Street Gainesville, FL 32601 Frances S. Childers, Esquire Assistant District III Legal Counsel Department of HRS 1000 Northeast 16th Avenue Gainesville, FL 32609 =================================================================
The Issue The issue is whether Respondent should be required to obtain a current operating permit for his aerobic treatment unit and have a $500.00 fine imposed for violating an agency rule for the reason cited in the Citation for Violation issued by Petitioner on December 1, 1999.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: In this dispute, Petitioner, Department of Health (Department), has alleged that Respondent, Dr. Anthony Massaro, a retired public health physician, failed to obtain an annual operating permit for an aerobic treatment unit (ATU) located at his residence at 3402 North Oceanside Boulevard, Flagler Beach, Florida. The Flagler County Health Department (Health Department) is charged with the responsibility of issuing such permits. That department is under the direction and control of Petitioner. While Respondent readily admits that he failed to obtain a permit, he contends that he was misled by the Health Department when he first installed an ATU at his residence; the Health Department is not enforcing the law regarding ATUs and thus another system would be more appropriate; and the law, as he interprets it, allows him to install another type of on-site sewage disposal unit on his property. Respondent purchased his property in Flagler County in 1997. The property is located in Ocean View Estates Subdivision (subdivision), which has an Urban Single-Family Residential District (R-1b) zoning classification under the Flagler County Land Development Code (Code). Section 3.03.05A of the Code requires that owners within the R-1b classification use "public or community water and sewer facilities," but makes an exception for "[s]mall R-1b subdivisions, fifty (50) lots or less, utilizing a public community water system," in which case residents "may utilize Class I aerobic onsite sewage disposal systems." Further, "[t]he use of individual onsite sewage disposal systems must be consistent with adopted county policies and standards." Because the subdivision has 50 lots or less, and public or private sewer facilities were not available in the area, the subdivision's Plat Agreement recorded in 1995 provided that "[i]ndividual aerobic onsite sewage disposal systems are to be permitted and constructed as each lot is developed." Another type of onsite sewage disposal system is the anerobic system, which has a septic tank and larger drainfield, is far less expensive, but does not conform with "county policies and standards" in this locale. Thus, this type of system requires a variance from the zoning regulations before one can be installed in the subdivision. Even so, Respondent says "all" of his neighbors have installed such a system. Because of the Plat Agreement, the zoning restriction, the difficulty in obtaining a variance, and the lack of a sewer line, Respondent had no choice except to use an ATU system for his residence. This meant that he had to apply for a permit from the Health Department. Once a permit is obtained and an ATU installed, the owner must renew his operating permit annually at a cost of $150.00, and he must enter into a maintenance agreement with a licensed contractor. The $150.00 fee is used to defray the costs incurred by the Health Department in making quarterly inspections and performing annual sampling and laboratory analysis of effluent. The record does not reflect precisely when a sewer line became operational across the street from Respondent's property, but the sewer project was accepted "for service" in April 1998, or before Respondent's ATU was installed in August 1998. Had Respondent known this, he would have obviously chosen that option rather than an ATU. The evidence reflects that in November 1997 Respondent made application for an ATU with the Health Department, a permit was issued in December 1997, and the system was installed and approved in August and September 1998, respectively. In early April 1998, the Health Department was advised by the private utility company that it would accept new sewer connections in a service area that included Respondent's home. However, Health Department representatives made no mention of this to Respondent since they were under the impression that he desired to use the ATU option, they do not normally "counsel" applicants on onsite sewage disposal system options, and Respondent had made no inquiry. Disclosure of this fact would have saved Respondent considerable money (and grief) in the long run; unfortunately, however, while good public relations would dictate otherwise, the Health Department had no legal obligation to do anything other than process the pending application. Likewise, it has no obligation in law to now pay the costs for Respondent to hook up to the line because of its non-disclosure. Respondent has now invested more than $5,000.00 in his ATU. This type of system is operated by a compressor in Respondent's garage, which must be run 24 hours per day, and is very noisy. Because of this, Respondent understandably wishes to change to an anerobic system, which has a traditional septic tank, larger drainfield, no unsightly "mound" in the yard, no annual permits, and is far cheaper than an ATU. Also, it does not require a noisy motor to sustain operations. However, this type of system is prohibited by the Code except where a variance from Flagler County (County) has been obtained. It appears to be unlikely that Respondent can obtain a variance from the County. Because Respondent's property is so low in relation to the sewer line, to achieve the proper gravity, he must install a lift station and pay a connection fee, both totaling $3,540.00, before hooking up to the sewer system. Given these costs, and the considerable investment he already has in an ATU, Respondent does not consider this to be a viable alternative. Respondent pointed out that, despite the requirement that they do so, many ATU owners in the County are not running their systems 24-hours per day because of the noise from the compressor. He also pointed out that the Health Department has consistently found numerous violations of such systems during its inspections. He further asserted that while the $150.00 annual fee is to defray certain sampling and laboratory analysis costs associated with inspecting ATUs, the Health Department has done neither on his ATU. Finally, Respondent pointed out that prior to 1999 the regulations were enforced by sampling the compliance of a very small percentage of total ATU systems (ten percent), rather than all systems, in the County. Given these considerations, Respondent concludes that ATUs are the least effective way to treat sewage, and that existing laws and regulations have not been enforced. Assuming these allegations to be true, and they were not seriously disputed, they are legitimate concerns. However, until the law is changed, they do not constitute a lawful basis for allowing Respondent to switch to an anerobic system. Respondent further contended that under his interpretation of the general law, which was not fully understood by the undersigned, he is not required to use an ATU. But local zoning regulations clearly require that he do so, and until the state or local regulations are changed or waived, he cannot use an anerobic system. Finally, Respondent has cooperated with the Department throughout this process. With his lengthy public health background, Respondent initiated this action with good intentions, seeking to point out the flaws in the ATU systems, and to remedy a problem which none of his neighbors apparently have. Given these considerations, a civil penalty should not be imposed.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Health enter a final order sustaining the charge in the Citation for Violation and requiring that Respondent obtain an annual permit for his ATU. A civil penalty is not warranted. DONE AND ENTERED this 20th day of June, 2000, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 20th day of June, 2000. COPIES FURNISHED: Angela T. Hall, Agency Clerk Department of Health Bin A02 2020 Capital Circle, Southeast Tallahassee, Florida 32399-1703 Charlene J. Petersen, Esquire Department of Health 420 Fentress Boulevard Daytona Beach, Florida 32114 Dr. Anthony Massaro 3402 North Oceanside Boulevard Flagler Beach, Florida 32136 Amy M. Jones, General Counsel Department of Health Bin A02 2020 Capital Circle, Southeast Tallahassee, Florida 32399-1701
The Issue The issue for resolution in this proceeding is whether the Respondent's license should remain suspended because of statutory and rule violations related to failure of the septic tank and drainfield, as alleged in the August 7, 1987, Emergency Order of Suspension and Notice to Show Cause. In his Request for Hearing dated August 8, 1987, P. Rohemtulla states as his disputed issues of fact: "Septic pumps are now working. (The same has [sic] been repaired and septic tanks are emptied on a regular basis.)"
Findings Of Fact Respondent, Serengetti Properties, Inc., for all relevant periods was licensed by the Division of Hotels and Restaurants as a public lodging, doing business as Red Carpet Inn, located at 4810 West Space Coast Parkway, Kissimmee, Florida. License number 59-00522H was suspended with an emergency order by the Division of Hotels and Restaurants ("Division") on August 8, 1987. Minez Rahemtulla is President of Serengetti Properties, Inc. His father, Pyarali Rahemtulla, is a representative of the corporation. The Osceola County Health Department has had problems with the septic tank and drainage field at the Red Carpet Inn for approximately a year and a half. Sewer service is available and the facility was initially required to connect to the system within a year. This requirement was waived and the Division of Hotels and Restaurants allowed the motel to expand its drainfield. That measure failed after a short time. The motel has two or three pumps which are intended to dispense effluent to various parts of the drainfield on a rotating basis to avoid over- saturation. Those pumps have periodically been inoperative. George Jackow is the Environmental Health Supervisor for the Department of Health and Rehabilitative Services at the Osceola County Health Department. In June 1987, his supervisor, Frank Wolf, requested an update of the sewage system functioning and assigned staff to conduct inspections and report their findings. George Jackow first visited the licensed premises on July 6, 1987 and did a comprehensive inspection of the septic tank and drainage field. He found overgrown vegetation and vegetation called "dollar grass", both indicia of the presence of effluent on the ground surface. He found very wet ground on the drainfield area and at times stepped into malodorous sewage. He visited the premises later on July 20, 1987, with Frank Wolf. Again, they found evidence of untreated sewage effluent in various parts of the drainfield. Some effluent was flowing down to Lake Cecile, at the back of the property. This lake is abutted by Red Carpet Inn and other motels, who use it for recreational purposes for their guests. The strong odor of human waste was still evident, along with partially disintegrated shreds of toilet paper. At one point in the inspection, the pump kicked on and bubbling action was observed in one of the standing pools of waste. The manager of the motel claimed that the fluid was "just water." George Jackow came back again the same day and took samples. The laboratory report revealed fecal coliform in the amount of more than 2,400 units of measurement in each of four samples taken. Any fecal matter is a hazard, but anything over 100 units is very dangerous. Infectious hepatitis and other diseases result from exposure to the bacteria. Red Carpet is in a highly populated area, consisting of tourist attractions and motels. During the inspection, a visitor from the next door attraction was strolling around in the drainfield and was curious about the activities of these inspectors in knee-high boots. HRS informed the Division of Hotels and Restaurants that the property was condemned by the local health department. As a temporary measure, the facility was required to spread lime to impede the growth of bacteria. The motel was also required to employ a service to pump out the septic tank in an amount based upon 150 gallons times the number of rooms rented each day. Neither measure was effective, and on August 6, 1987, an inspection by Laird Lane, Environmental Health Specialist for the Division, revealed that the pumping was not being conducted with sufficient frequency or volume to meet the requirements. The foul odor and obvious existence of effluent continued on the date that the Emergency Suspension was served, August 8, 1987. Samples taken on August 10th revealed continued fecal coliform content. As of the morning of the date of hearing, August 14th, the facility was padlocked and unoccupied. There was still some odor but the drainfield would be drying up if it were not for very recent rainy weather. The septic tank was, as of the date of hearing, approximately one- fourth full, as opposed to the overflowing condition observed in earlier inspections. At the hearing, Counsel for the Division argued that the suspension should remain in effect until the system is approved by HRS. Frank Wolf, the HRS Environmental Health Director at the Osceola County Health Department, insists that hookup to the sewer system is the only means of avoiding continuing extremely hazardous conditions in the septic tank and drainfield. No amount of expansion or modification of the existing septic tank system is going to provide a remedy, according to Wolf.
The Issue Whether Petitioner has just cause to terminate Respondent.
Findings Of Fact The City is a municipality located in Pinellas County, Florida. Alexander was hired by the City on October 7, 2002, as a Service Worker in the Sanitation Division of the Public Works Department. He was a backup sanitation driver, working on residential collection routes. Grover Smith (Smith), the City's Sanitation Supervisor, supervises 17 employees, including Alexander. He is responsible for the daily operations of the collection of solid waste by the City's Sanitation Division. Smith has worked for the City as a sanitation supervisor for five years and was employed in the City's Sanitation Department for 17 years prior to becoming a supervisor. His work experience includes driving a sanitation truck and being a crew leader in the Sanitation Division. As an employee of the City, Alexander was subject to the City's Code of Conduct, which lists different groups of offenses for which City employees may be disciplined. The City's Code of conduct lists the following offense as a Group I offense: Tardiness, as defined as reporting late for work, overextending breaks or meal periods within one year of the first occurrence. Occurrences of tardiness shall only be considered for a year in applying progressive discipline. When determining the proper discipline go back only one year from the most recent occurrence and follow the progression of discipline as indicated. (Guide for determining tardiness: three times in any thirty (30) calendar day period, or six (6) times in any ninety (90) calendar day period or a continuous pattern of tardiness. From May 12, 2003, through June 6, 2003, Alexander was tardy to work four times. On June 10, 2003, Smith issued a verbal warning to Alexander for his tardiness. During November 2003, Alexander was tardy ten times. Smith issued Alexander a written warning on November 26, 2003, for his tardiness. Alexander was warned that any further violations would result in progressive disciplinary action up to and including termination. The City's Code of Conduct provides that "[f]ailure to immediately report an accident or injury in which the employee is involved in while on the job" is a Group II offense for which a City employee may be disciplined. On December 9, 2003, Alexander struck a pine tree in a trailer park while driving a sanitation truck. Alexander did not immediately report the accident. Smith learned of the accident from another employee on December 9, 2003. Smith questioned Alexander the same day about the accident, and Alexander denied hitting the tree. The next day Smith investigated the incident and found evidence that a pine tree in the trailer park had been struck and that there were remnants of the pine tree on the bumper of the right side of the sanitation truck that Alexander had been driving. Smith again questioned Alexander, who continued to deny that he hit the tree. Only after two other employees who had been working with Alexander on the day of the accident admitted that the truck had struck the tree did Alexander admit that he had hit the pine tree. On December 16, 2003, Smith issued Alexander a written warning for failing to immediately report the accident. From February 27, 2004, through March 22, 2004, Alexander was tardy four times. Alexander received a two-day suspension for this offense, which was in accordance with the guidelines of the City's Code of Conduct which provides for a one to three-day suspension for a third Group I offense. The City's Code of Conduct provides that "[n]eglect or carelessness which results in a preventable accident" is a Group I offense for which a City employee may be disciplined. On May 20, 2004, Alexander, while driving a City sanitation truck, made a left turn and failed to swing wide enough, striking a series of mailboxes. The following day Alexander had another accident when he was backing a City sanitation truck down the street in a mobile home park and struck an awning on a mobile home. Both of these accidents occurred on the driver's side of the vehicle and could have been avoided if Alexander had been paying attention. The City's Code of Conduct provides that a City employee may be discharged for a Group IV offense, which includes the following: Chronic offender of the Code of Conduct. (Guide: four (4) violations of any departmental or City rule or regulation in an eighteen (18) month period which results in a Verbal Warning or other disciplinary action (effective upon adoption of the revised Personnel Rules). Smith recommended to Kurt Peters (Peters), the Director of Public Works for the City, that Alexander be suspended for five days. Peters consulted the City's Personnel Director, Bill Cropsey (Cropsey). Cropsey determined that Alexander was a chronic offender and could be discharged. On June 9, 2004, Cropsey sent Alexander a letter advising him that he was in violation of the City's Code of Conduct as a chronic offender of the Code of Conduct and that a pre-disciplinary hearing was scheduled for June 14, 2004. Alexander was placed on administrative leave with pay, pending the pre-disciplinary hearing. The pre-disciplinary hearing was held on June 14, 2004, at which time Cropsey and Peters determined that Alexander should be discharged as a chronic offender. By letter dated June 14, 2004, Cropsey advised Alexander that he was terminated from his employment with the City.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered terminating Christopher Alexander's employment with the City. DONE AND ENTERED this 5th day of November, 2004, in Tallahassee, Leon County, Florida. S SUSAN B. KIRKLAND Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 5th day of November, 2004. COPIES FURNISHED: Christopher T. Alexander 6324 150th Avenue, North Clearwater, Florida 33760 Alan S. Zimmet, Esquire Zimmet, Unice, Salzman, Heyman & Jardine, P.A. Post Office Box 15309 Clearwater, Florida 33766 Jeff Bronson, Chairman Personnel Review Board City of Safety Harbor 750 Main Street Safety Harbor, Florida 34695
The Issue The issue in this case is whether the Department of Health and Rehabilitative Services (HRS) should grant the Petitioner's applications, filed under F.A.C. Rule 10D-6.045, for variances from the F.A.C. Rule 10D-6.046(1)(c) requirement that on-site treatment and disposal systems (OSTDS's) be placed no closer than 200 feet from public drinking water wells serving a facility with a sewage flow of more than 2,000 gallons per day (gpd).
Findings Of Fact The Petitioner, Joseph DiGerlando, owns three lots (1, 2 and 26) in the San Remo subdivision in Hillsborough County, which was platted in 1977. There is a public water well located between lots 1, 2 and 26. The well serves the entire San Remo subdivision, a 55-lot residential development having a total sewage flow much greater than 2,000 gallons per day (gpd) (although the sewage flow from homes built on lots 1, 2 and 26 can be expected to total no more than approximately 1350 gpd.) There is no way for the Petitioner to construct an on-site sewage treatment disposal system (OSTDS) on each of the three lots so that no part of any OSTDS will be closer than 200 feet from the San Remo well, measured horizontally across the ground surface to the well head. Measuring horizontally across the ground surface to the well head: an OSTDS on lot 1 could be placed no farther than 156 feet from the well; an OSTDS on lot 2 could be placed no farther than 184 feet from the well; according to drawings in the Petitioners' application, an OSTDS on lot 26 could be placed no farther than approximately 185 feet from the well. (Although lot 26 is larger than the others, it is contiguous to a surface water body, and the required setback from the surface water body decreases the area available for siting an OSTDS on the lot. The evidence was not clear exactly how far an OSTDS on lot 26 would be from the San Remo well.) HRS concedes: (1) that requiring 200-foot setbacks from the San Remo well will place the Petitioner under a hardship that was not caused intentionally by his own actions; and (2) that no reasonable alternative exists for the treatment of sewage on his lots 1, 2 and 26. (It is not clear how or why HRS determined that utilization of a joint OSTDS to serve all three lots through the imposition of cross-easements on the lots would not be a reasonable alternative to at least one or two of the variance applications.) The San Remo well, which is 400 feet deep, has a steel casing from the surface of the well to 100 feet below the ground surface. The steel casing prevents the entry of ground water into the well above the bottom of the casing. If the distances between the proposed OSTDS's and the San Remo well were measured diagonally, through the ground, from the proposed OSTDS's to the bottom of the steel casing of the well: the proposed OSTDS on lot 1 would be 185 feet from the well; the proposed OSTDS on lot 2 would be 209 feet from the well; and the proposed OSTDS on lot 26 would be even farther from the well. (The evidence was not clear exactly how much farther.) In fact, due to the draw-down effect of the well, the path groundwater would travel from the proposed OSTDS's to the bottom of the steel casing of the San Remo well would curve upward somewhat from, and be somewhat longer than, the diagonal line running directly between those two points. (The evidence is not clear exactly how much longer the curved path would be.) If the distances between the proposed OSTDS's and the San Remo well were measured first horizontally across the ground surface to the well head and then vertically down to the bottom of the steel casing of the well: the proposed OSTDS on lot 1 would be 253 feet from the well; the proposed OSTDS on lot 2 would be 281 feet from the well; and the proposed OSTDS on lot 26 would be even farther from the well. (Since the bottom of the OSTDS's will be three feet below the ground surface, the vertical component of the measurement is only 97 feet instead of the full 100 feet between the well head and the bottom of the casing.) When applying the HRS rules on distances required between OSTDS's and existing public water wells, HRS measures from the OSTDS horizontally across the ground surface to the well. The evidence was that HRS's method of measurement is consistent both with the methods used by the federal EPA and with the scientific data on which the technical advisory board based the distances in the HRS rules. The Petitioner's expert witness testified that there is a 17-foot thick layer of sand and clay between 53 and 70 feet below the ground surface in the vicinity of the San Remo well and that the sand and clay layer would prevent contamination from the OSTDS's from reaching the bottom of the steel casing of the well. (He also testified that is a white lime rock layer between 70 and 90 feet below the ground surface and inferred that the white lime rock layer would add some degree of protection.) The opinions of the Petitioner's expert are accepted. Petitioner's expert is a civil, sanitary and environmental engineer, not a geologist or hydrogeologist; however, his experience is in the area of wastewater treatment and disposal is extensive. Meanwhile, HRS presented no competent evidence whatsoever to contradict the Petitioner's expert. The Petitioner proposes to use Norweco Singulair Bio-Kinetic Waste Water Treatment Systems. These systems treat waste better than a standard septic tank system. Instead of the single septic tank, they have three distinct chambers: first, a retreatment chamber; second, an aeration chamber to reduce biological oxygen demand (BOD) and total dissolved solids (TDS); and, finally, a clarification or filter chamber that further reduces BOD and TDS. With the proposed systems, BOD and TDS will be reduced to approximately a fourth of the BOD and TDS levels that would enter the drainfield from a septic tank system. In addition, unlike in a septic tank system, the proposed systems utilize chlorine tablets in conjunction with the clarification chamber to kill bacteria and viruses. It is found that the evidence presented in this case, taken as a whole (and in particular in the absence of any competent evidence to contradict the credible opinions of the Petitioner's expert) was sufficient to prove that the proposed OSTDS's would not adversely affect the health of members of the public. Except for a fleeting reference in its Proposed Recommended Order, HRS has not taken the position that the Petitioner's proposed OSTDS's will significantly degrade the groundwater or surface waters. The reference in the Proposed Recommended Order would seem to reflect that HRS's concern about the impact of the Petitioner's proposed OSTDS's on groundwater quality is limited to its public health concerns.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Health and Rehabilitative Services (HRS) enter a final order granting the Petitioner's applications for variances, on the condition that the Petitioner utilizes the proposed Norweco Singulair Bio- Kinetic Waste Water Treatment Systems. RECOMMENDED this 30th day of June, 1995, in Tallahassee, Florida. J. LAWRENCE JOHNSTON 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 30th day of June, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-6483 To comply with the requirements of Section 120.59(2), Fla. Stat. (1993), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. Accepted but conclusion of law, subordinate and unnecessary. Accepted and incorporated. 3.-6. Accepted but subordinate and unnecessary. Accepted and incorporated. Rejected as to "significantly degrade the groundwater or surface waters"; HRS did not make this an issue, except with respect to public health concerns. Otherwise, accepted and incorporated. Rejected as not proven and contrary to the greater weight of the evidence. However, accepted that HRS presented no evidence sufficient to support a finding on the issue. See Section 120.58(1)(a), Fla. Stat. (Supp. 1994). Accepted but subordinate and unnecessary. Rejected as to "relevant criteria"; not proven and as contrary to the greater weight of the evidence. Otherwise, accepted and incorporated. Accepted and incorporated. Respondent's Proposed Findings of Fact. Accepted but conclusion of law, subordinate and unnecessary. Accepted and incorporated. 3.-7. Accepted but subordinate and unnecessary. Accepted and incorporated. Rejected as contrary to facts found and as contrary to the greater weight of the evidence. (As found, HRS did not contend that the Petitioner's OSTDS's would "significantly degrade the groundwater or surface waters." HRS only raised this issue with respect to public health concerns.) 10.-12. Accepted but subordinate and unnecessary. (These were hearsay statements that were not sufficient to support findings as to the matters asserted. See Section 120.58(1)(a), Fla. Stat. (Supp. 1994).) COPIES FURNISHED: Raymond R. Deckert, Esquire Department of Health and Rehabilitative Services 4000 W. Dr. Martin Luther King, Jr., Boulevard Tampa, Florida 33614 Nelson D. Blank, Esquire Trenam, Kemker, Scharf, Barkin Frye, O'Neill & Mullis, P.A. 2700 Barnett Plaza 101 E. Kennedy Boulevard Tampa, Florida 33601-1102 Robert L. Powell Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Kim Tucker, Esquire General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
Findings Of Fact Northwest Utilities of Broward County, Inc. and WPC Utilities are the two investor-owned utilities primarily involved in these proceedings. The stock of Northwest is wholly-owned by Ralph Bates and Marlene Bates, his wife. The stock of WPC is owned by Northwest. The Bateses were involved in land development plans in the early 1970's in the subject area of North Broward County lying west of the Florida Turnpike. No utility service was available at that time to serve that area; so the Bateses applied to the Commission in 1973 for water and sewer certificates. After appropriate proceedings territory lying west of the Turnpike, entirely in Broward County, was granted and certificated to Northwest. Within this territory, the Bateses had plans approved for development of a high-density planned unit development (PUD), (depicted on Exhibit 3, as numbers 1 and 2). At the instance of the Bateses', this land was annexed into the City of Coconut Creek. The advent of the 1973-1975 economic recession, coupled with a refusal to fund a loan commitment and the inability to obtain debt financing elsewhere, resulted in an inability to develop this PUD. The Bateses had, however, initiated steps to provide service to the development. In 1973 they purchased a one million gallon-per-day (mgd) sewage treatment plant at a cost of $192,879, of which there is now a current balance due of $75,000. No development occurred during 1974 or 1975, when the economic climate in the construction and real estate industry was depressed and the utility received no request for service. A fifteen-acre tract of land for the plant site had been acquired, but that land was relinquished when the need for service failed to materialize. In 1976 the Bateses bought the Coral Lakes Mobile Home Park (Parcel #4 on Exhibit 3). This park lies in Broward County and is surrounded by the City of Coconut Creek. In 1978 the Bateses sold the mobile home park, but the Northwest Corporation retained ownership of the water and sewer treatment plants and service to the area has since been provided by Northwest by means of these on-site "package' treatment plants. In 1977 the prospects for development improved and the Bateses entered into a phased purchase agreement for 175 acres of land (Parcel 3 on Exhibit 3). The intent was to develop this property for single family residences. Service was to be provided to the area through the water and sewer treatment plant located in the WPC utility territory and consequently the certificate transfer application in PSC Docket No. 770625-WE was filed. Northwest also constructed 2500 feet respectively of water and sewer transmission and collection lines in the territory west of the Turnpike (Exhibit 9) at a cost of $90,000. Development of this property was frustrated, however, due to the refusal of the City of Coconut Creek to grant favorable zoning for the property. In conjunction with the development of this parcel, Northwest received a request for service from WOK, Inc. ,a subsidiary of ATICO Mortgage Investors, for an 8.5 acre parcel which was part of the original Bates PUD. This developer, however, never executed the proffered development agreement with Northwest. Northwest demonstrated a willingness to contractually commit itself to provide service if needed and initiated acquisition and construction of a plant and other facilities to provide that service. The need for water and sewer service actually arose only in the area east of the Turnpike (Parcel "b" on Exhibit 3) and necessitated use of the existing WPC treatment plants to provide service to the area. York Development Company was the first entity actually requiring service in any area reflected on Exhibit 3. York acquired land in the City of Deerfield Beach (parcel #5 in area "b" on Exhibit 3) in December, 1977. York sought service from Deerfield Beach and prepared plans which were approved by the City. After determining that Northwest was certificated to serve the area, the City refused to provide service, and York entered into a developers agreement with Northwest on October 16, 1978. The agreement reserved water and sewer plant capacity for the 239 residential units of York's first phase of development. A second agreement entered into March 30, 1979 reserved capacity for an additional 270 units. Approximately 7 months prior to Northwest's execution of the first agreement with York, the proceedings in the certificate transfer case described above were concluded with the issuance of Order No. 8821 on March 27, 1978. The application filed had sought the transfer of the certificates from WPC Utilities to Northwest Utilities. After negotiations with the Commission (Exhibit 64), Northwest elected to maintain its application as one to transfer the certificates of WPC to Northwest rather than convert it to an application for a stock transfer. The only active developer in the pertinent territory besides York, FDV- Westport Properties (FDV), began development of a tract of 110 acres in the area identified as Parcel 10 in "b" on Exhibit 3 in October, 1979. A concomitant agreement was signed with Northwest on January 15, 1980. Development is proposed to be in phases, and the provisions of the agreement are similar to those of the York agreement submitted to the Public Service Commission in October, 1978. The first phase of development provides for 80 single family residential units. The only other customers of Northwest presently receiving service besides those customers in Coral Lakes Mobile Home Park and the York Development (Gates of Hillsborough) are customers in a small mobile home park known as El Rancho Seven, also identified as Parcel 7 in area "a" on Exhibit 3. Service to that development is provided from on-site package treatment plants, and the customers are individually metered. Rates, Charges and Guaranteed Revenues (Docket No. 800230-WS) The issuance of Order 8821 providing for a stock transfer rather than a transfer of WPC's certificate to Northwest, coupled with the inauguration of these developments, set the stage for the issuance of Show Cause Order No. 9324 in Commission Docket No. 800230-WS raising the issue of whether the rates, charges and guaranteed revenues charged to these developers should be those approved for Northwest Utilities or WPC Utilities. The essence of the issue has been stated above. The action by Northwest in Commission Docket No. 770625-WS, the transfer application, is significant in the context of this rates and charges problem. Northwest and WPC, as determined above, applied for a transfer of certificates and not for a transfer of stock from the latter to the former. It was the intent of the parties in that proceeding that Northwest was to be the only remaining operating entity serving the areas identified as "a" and "b" on Exhibit 3 lying both east and west of the Turnpike. Since the issuance of Order 8821, Northwest has been the only operating utility entity in those areas. Northwest has been the entity entering into all developer agreements regardless of the location of development, and has submitted these agreements to the Commission. The York agreement was submitted to the Commission by the utility in October, 1978, which revealed to the Commission that Northwest was operating east of the Turnpike in the original WPC territory. WPC has filed a final corporate return with the IRS, and its annual report for the year ending December 31,1978 filed with the Commission indicated that the stock and assets of WPC had been transferred to Northwest. The application and other documents in Docket No. 770625-WS bear the caption "Application for Transfer of Certificate" but the final Order No. 8821 bears the caption "Application for Transfer of the Outstanding Stock of WPC Utilities Services, Inc. to Northwest Utilities of Broward County, Inc., Broward County, Florida, Pursuant to Section 367.071, Florida Statutes". That order then authorizes the transfer of only the stock. Northwest operated under the belief that the certificates had been transferred as requested. Although a technical construction of the order could imply a denial of the application, such an interpretation would only naturally follow if the commission had complied with Section 120.59(2), Florida Statutes which states in pertinent part: If, in accordance with agency rules, a party submitted proposed findings of fact, or filed any written application or other requests in connection with the proceeding, the order shall include a ruling upon each proposed finding and a brief statement of the grounds for denying the application or request. Nowhere in that order is there any statement indicating an intention to deny the application as filed. Therefore, it must be inferred that the commission actually intended the certificates to be transferred to Northwest. At the time the transfer application was filed there were no customers in either the territory of Northwest or WPC. Therefore, there could be no adverse affect to any existing customer by granting the application as filed. Northwest has treated the action of the Commission as amounting to a merger of the two utility companies. If the Commission had acted in accordance with the application as filed as, inferentially, it must have intended, then no question would have arisen regarding Northwest's assessment of these charges. York Development executed a developer's agreement with Northwest on October 16, 1978 and is the first developer executing such an agreement and actually obtaining service from Northwest. Section 367.081(1), Florida Statutes states as follows: Rates and charges being charged and collected by utilities shall be changed only by approval of the commission. When Northwest signed the development agreement on October 16, 1978 no rates or charges were being charged or collected by either utility. Therefore, neither WPC nor Northwest required Commission approval to alter rates and charges prior to October 16, 1978. Thus, at that point in time, the rates and charges which York agreed to pay in that agreement were not improper. Indeed WPC could have increased its rates to the same level as Northwest and signed such an agreement with York and York would be in the same posture regarding the propriety of the rates as it presently is. Therefore, the rates contracted for with York are proper. Thus, all the parties, including the Commission, originally intended that the two utility operations should merge or that Northwest should remain the only utility entity providing service to the subject territories. The language in Order 8821 transferring stock only was in error. The only questions then remaining regarding this subject matter involve the charging of guaranteed revenues to York and FDV. The level of guaranteed revenue to be charged was determined by adding together Northwest's minimum charge for water and sewer, which coincidentally, is the same method of computing then employed by South Palm Beach Utilities (SPB), and is a method approved by the Commission in past decisions when confronted with a dearth of data required by Rule 25-10.121(12), Florida Administrative Code. The level of guaranteed revenues is thus appropriate. Northwest was required to charge guaranteed revenues in order to recover costs of operation so as to make the agreement to provide service to York and FDV financially feasible. Both those developers agreed in writing to pay guaranteed revenues as defined in the above rule and, inasmuch as they are a device to place the risk of development on a developer instead of on a utility, the agreements between Northwest and those developers accomplished that end. See Rule 25-10.138, Florida Administrative Code. There is no rule extant that requires a utility to have an approved service availability policy as a condition precedent to charging guaranteed revenues. In fact, of the more than 500 utilities regulated by the Public Service Commission, less than ten percent have approved service availability policies. And, indeed, Rule 25-10.138 contemplates the filing of "special contracts" with the Commission. That portion of the above developers agreements dealing with guaranteed revenues renders those agreements to be "special contracts" within the meaning of the Rule, and since the Rule provides that the Commission shall approve such contracts, the fact of such approval has become an issue in this proceeding. The Commission has alleged that the York contract was never-approved since no document approving it was ever transmitted to the utility. Nor was any timely disapproval ever served on the utility. The Commission never responded to the filing of the contract between October, 1978 and the issuance of Show Cause Order 9324 in April, 1980. In 1979 York inquired regarding the filed agreement and received no response. Thus, under the facts of this case, the Commission's silent acquiescence must be found to constitute tacit approval of the contract. Northwest should not be penalized for failure of the Commission to act. It is not unreasonable for Northwest and York, after so much passage of time, to have assumed that the contracts were appropriate. Indeed, York and Northwest, as well as FDV, entered further similar agreements in reliance on the lack of objection by the Commission. There is then no justification for cancellation of Northwest's certificates to serve the subject territory (area "b" on Exhibit B). Further, the evidence submitted by the City of Deerfield Beach is deemed irrelevant to any matters under consideration in this docket, since that City is not authorized to serve in Northwest's certificated territory. Even assuming arguendo that Northwest's certificates (or WPC's) were cancelled, serious legal impediments must be overcome before Deerfield Beach could serve the York development. For instance, all the lines through which service would be provided are owned by Northwest Utilities, and the public interest would certainly not be served by duplication of those lines or by duplicate payments of contributions in aid of construction to Deerfield Beach, or by the rendering useless of a new water treatment plant which is presently approximately 50 percent completed and represents a substantial investment. The Certificate Application (Docket #780902-WF) Section 367.041(1), Florida Statutes, provides as follows: Application.-- Each applicant for certificate shall: Provide information required by the commission which may include a detailed inquiry into the ability of the applicant to provide service, the territory and facilities involved, and the existence or non-existence of service from other sources within geographical proximity to the territory applied for; Section 367.051(3), Florida Statutes, provides in pertinent part as follows: (3) In either event, the commission may grant a certificate, in whole or in part or with modifications in the public interest, or, after notice and hearing, deny a certificate. Resolution of the certification issue requires consideration of the capability of Northwest to provide the proposed service, a consideration of the quality of the service to be provided and the feasibility of the proposed extension of service from a financial, economic and technical point of view. Markborough Properties has a substantial need for water and sewer service to be provided its development which will ultimately consist of approximately 5,000 homes as previously described. Northwest presently has a sewage treatment plant with a capacity of 260,000 gallons per day, although the present capacity is limited to 100,000 gallons per day (GPD) until the percolation ponds are approved for additional flow. The 260,000 GPD plant will be utilized to full capacity in the immediate future. Northwest also has facilities to provide water to the York and Coquina Lake Developments which is chlorinated, but not otherwise treated. The Broward County Health Department has mandated fully treated water for these developments in the very near future, and water supplied residents of the York Development at Gates of Hillsborough should be likewise improved even though all water produced presently meets state regulatory standards. There is no question that if Boca del Mar II is to be served by the applicant, additional facilities for water and sewage treatment must be developed. In order to provide service to Boca Del Mar II as well as to existing or potential users in the area east of the Florida Turnpike (area "b" on Exhibit 3), a 1.5 MGD sewage treatment plant will be added to the existing 260,000 GPD sewage plant with the result that Northwest will be capable of treating sewage in the amount of at least 1.76 million gallons per day. Thereupon, the plant would have the capability to treat all sewage produced by Boca Del Mar II as well as the other developments named. The sewage from Boca Del Mar II would be collected in that development then pumped to the treatment facility located at the present plant site south of the Hillsborough Canal. The sewage would be given secondary treatment there, with the effluent stored in percolation ponds on the treatment plant site until the treated effluent is pumped to a golf course within the Boca Del Mar II development for disposal by spray irrigation. All sewage generated in the developments served by Northwest in Broward County would eventually be pumped south to the North Broward County regional sewage treatment facility. In order to implement this concept Northwest has entered into a "large user's agreement" with the Broward County Utilities Department. The sewage generated in Broward County would be treated initially in the sewage treatment plant constructed on Northwest's site. When that sewage treatment plant is used to 50 percent of its capacity, Northwest would be contractually obligated with Markborough Properties to start procedures that would permit the Broward County generated sewage to be treated elsewhere (the North Broward Regional Sewage Treatment Facility), leaving the Northwest Sewage treatment plant dedicated for the use of Markborough alone. Northwest has entered into a contract with Davco, Inc. to purchase and construct 1.5 MGD sewage treatment plant, conditioned upon favorable action by the Commission on this certificate application. The plant can be constructed and in full operation within nine months. Northwest has prepared detailed engineering plans for a two MGD water treatment facility to provide fully-treated water to Boca Del Mar II as well as the existing developments of York and Coquina Lakes. This facility has been permitted for construction by the Department of Environmental Regulation, and a permit has been obtained from the South Florida Water Management District (SFWMD) authorizing withdrawal of 315 million gallons of ground water per year. SFWMD does not object to Northwest's crossing the Hillsborough Canal with the necessary water main. Construction is approximately 50 percent complete on the water treatment plant, and the plant can be operational in approximately four months. The water treatment concept espoused by Northwest is feasible and practical. (The legislature has mandated removal of any consideration of political or property boundaries in the allocation and use of water in the state. See Section 373.223, Florida Statutes.) Similarly, with the sewage treatment concept proposed by the utility, there is no statutory impediment to crossing political boundaries in the process of sewage collection and treatment. Both the Broward County Environmental Quality Control Board and the Department of Environmental Regulation are agreeable to the proposed concept of sewage treatment and are willing to resolve any problems occasioned by the crossing of the county boundary with collection lines in favor of the utility's proposal. Northwest has developed detailed cost analyses regarding construction of the water and sewage treatment facilities to serve Boca Del Mar II. Northwest has also developed engineering cost estimates to provide transmission facilities to enable connection to the Broward County Regional Sewage Treatment Facility. The costs of construction were developed in accordance with sound engineering principles and current market prices for materials, equipment and labor and are reasonable. Several factors contribute to the reasonableness of the construction costs. Ralph Bates, a contractor experienced in this type construction, will perform a substantial part of the plant construction and can accomplish this work for substantially less than a third party contractor. Additionally, Northwest has obtained a loan commitment at an extremely favorable interest rate considering the cost of money in today's market. When these facilities are constructed Northwest will be capable of providing water and sewage collection and treatment service to Boca Del Mar II and to the territory east the Florida Turnpike (area "b" of Exhibit 3). Northwest will be able to provide good quality service with the facilities to be constructed, and the proposed financing arrangement discussed hereinafter will render the extent and type of service proposed by Northwest financially and economically feasible. The remaining issue to be addressed in this certificate proceeding, having determined the capability of the applicant, concerns the question of the availability of adequate service from other sources. Section 367.051(3), Florida Statutes, states in pertinent part: . . .The commission shall not grant a certificate for a proposed system, or for the extension of an existing system, which will be in competition with, or duplication of, any other system or portion of a system, unless it shall first determine that such other system or portion thereof is inadequate to meet the reasonable needs of the public or that the person operating the system is unable or refuses or neglects, after hearing on reasonable notice, to provide reasonably adequate service. Section 367.041(1) states in pertinent part as follows: . . . Provide information required by the commission, which may include a detailed inquiry into the ability of the applicant to provide service, the territory and facilities involved, and the existence or non-existence of service from other sources within geographical proximity to the territory applied for . . . The potential sources of service within a reasonable, feasible geographical proximity to Boca Del Mar II are the City of Boca Raton and South Palm Beach Utilities (SPB). The City of Boca Raton raised no objection to a grant of the certificate and authority sought by Northwest. The city previously refused to serve the Boca Del Mar area, and if Markborough were to attempt to obtain service from the city inordinate delays would result. Markborough is experiencing a cost of capital of $100,000 per week in interest and other charges for each week that its development is delayed. The consistent ability of the City of Boca Raton to provide adequate water service to the development has not been adequately demonstrated. The city has a sporadic water shortage problem and is in the process of constructing new water treatment facilities that may partially alleviate the problem, but that relief is 18 months away. The city is contemplating embarking on what is known as a "201 plan" to construct and operate a regional sewage treatment facility pursuant to the Federal Water Pollution Control Act as amended in 1972. 33 USCS Section 1281. This plan is only in its initial stages, and it will be several years before the study and any resulting construction is completed and sewage treated. Markborough has no desire to have service provided by South Palm Beach Utilities. It is also questionable whether SPB is seriously interested in providing service. No application for a certificate for this territory has ever been filed by SPB, and the protest to the Northwest application has been withdrawn by SPB. If service were provided by SPB to Boca Del Mar II, it would disrupt the provision of service to York and FDV from an operational and financial standpoint. Such an eventuality would not serve the public interest and since the same application process undertaken by Northwest would also be a prerequisite to the provision of service by SPB, there would be an unacceptable delay attendant to any provision of service by SPB, even assuming no engineering or financial impediments arose. Further, a minimum of seven months would be necessary for completion of necessary expansion to provide service even if it already had authority to do so. Nearly all of SPB's present water and sewage plant capacity is already committed. Thus, the present and future customers would be most clearly satisfied and served by a grant of a certificate to Northwest. That entity is the most capable from an an engineering and operational standpoint of constructing and providing required adequate service in the shortest time and, as will be seen, will have adequate financial resources available to underwrite this effort. Application for Approval of Debt Financing (Docket #800299-WS) In order to have the financial resources available to expand facilities to provide service to Boca Del Mar II and to upgrade quality of service to other customers, Northwest must obtain capital from outside sources. These funds are most readily available from Markborough Properties in the form of a loan. Markborough is keenly interested in a resolution of these and other delays to Boca del Mar II's development, particularly due to the fact that it is experiencing interest and opportunity costs of $100,000 per week for every week of delay in implementing its development plans. Consequently, Markborough has signed a loan commitment to Northwest for an aggregate principal sum of $2,610,000. A loan agreement to accompany this commitment has been proposed which contains the requirements of the lender and the terms of the arrangement. The loan up to the above aggregate amount will be evidenced by a promissory note with interest at a less-than-market rate of 10 percent per annum. The agreement provides for various advances under the terms of the note for specific items of construction of the water and sewage facilities. Interest would be paid monthly upon the outstanding principal balance of the note commencing one month after its execution, and interest only will be paid for two years or until the note is fully advanced. At that point, called the advance date, the entire principal and interest will be set up on a 30-year amortization schedule, with level principal and interest payments, with those payments to be made over a period of five years. After five years, the existing balance on the note would be fully due and payable as a "balloon" payment. There are provisions for pre-payment of principal and interest out of various developer contributions-in-aid-of construction (CIAC) that would be attributed to the interest and then principal outstanding on the note. The note would be secured in a customary manner. There would be a first mortgage lien on the real property, which is basically the water and sewer plant site and improvements. Security interests in the present and future personal property, equipment and inventory on the two plant sites would also be given the lender. The entire agreement would be personally guaranteed by the stockholders, Ralph and Marlene Bates, and in conjunction with that they would also pledge all the capital stock which they own in Northwest, as well as the stock which that company owns in WPC. There further is an assignment of present and future developer contributions-in-aid-of construction that would be attributed to the reduction of principal and interest by a stated formula. All CIAC payments would be directed to Markborough to be applied as called for by Paragraph 9.2 of the loan agreement. The allocation of those payments would be as follows: 75 percent of the CIAC from developers within the Boca Del Mar II development would be retained by Markborough, specifically to reduce the principal and interest on the loan. The remaining 25 percent of those CIAC payments would be disbursed to the borrower, Northwest. Twenty-five percent of the CIAC from developers not within the Boca del Mar II area would be similarly retained and used for reduction of the loan. Fifty percent would be retained by Markborough in an interest-bearing escrow account for use by Northwest to facilitate either the expansion of its plant facilities, to assist it in rendering service to other developers or to make the necessary capital payments to enter into a bulk sewage treatment contract with Broward County. The remaining 25 percent of non Boca Del Mar II CIAC payments would go to Northwest. Because of the low interest rate, Markborough and Northwest have agreed to what is commonly referred to in the construction and financing industry as an "equity kicker". This equity incentive or right of the lender is an amount equal to 40 percent of such portion of the net proceeds of the sale or disposition of assets or stock, (after debts securing such assets or stock and sales expenses, but prior to income taxes) as the number of units under service by Northwest (and number of units to be built upon land then under contract to be sold to a subdeveloper) in Boca del Mar II bears to the total number of units under service by Northwest, including units under contract, but not yet in service. This provision is customary in such financing arrangements and is allowed by Section 687.03(4), Florida Statutes. This "equity kicker" in effect provides an additional incentive to the lender to offset the below-market interest rate, and it survives the satisfaction of the mortgage debt and loan if there is ever a sale of all or a portion of the stock or assets of the utility. This "equity kicker" provision would inure to the benefit of customers of the utility by providing lower utility rates through the effect of the lower interest cost provision. Northwest would provide this "additional interest" out of any profits from a sale, and therefore only the principals of Northwest would ever feel any impact from this arrangement. The safeguards to the lender are numerous, but they are safeguards similar to conditions normally imposed for construction loans of this type and magnitude. The principal disadvantage of this loan proposal and agreement is that Markborough would have great control over virtually all the operations of the utility. It would have representation on its board of directors, would participate in all major decisions and possibly even in the day-to-day operations of the utility, which control could potentially extend to other developments and not just Boca Del Mar II. In fact, the agreement ultimately calls for the utility's capacity to be largely dedicated to the sole use of Markborough. The major advantage of the loan agreement is that the utility would be able to obtain financing at a low rate of interest in order to construct the facilities necessary to serve Boca Del Mar II. Through this construction, the utility will be able to serve a much larger customer base and will be able to obtain a more viable financial position. York Development and other creditors of the utility would be paid off, capital available for future use would be accumulated under the terms of this agreement, and finally management expertise would be available from Markborough which could greatly enhance the effectiveness of the utility's operation. In order to hasten construction of improved water treatment facilities, York has made various short-term loans to Northwest. Both York and Northwest contemplate that the indebtedness would be discharged upon securing of long-term financing. Under the terms of the Markborough loan, Northwest would draw down a substantial portion of the loan at closing. The monies obtained on the first "draw" would satisfy substantially all the current indebtedness of Northwest. All existing mortgages, some of which are in default, would be satisfied, and Markborough would become the first lien holder. The Markborough loan is thus designed to achieve the objectives of providing the utility with funds to construct a plant to serve Boca Del Mar II; to help Northwest become a financially viable utility able to provide quality service to customers; to enable Northwest to repay current creditors, including York Development to whom it owes some $185,000; to accumulate enough CIAC to aid in retiring the debt; and to provide Markborough with an equity interest and sufficient control over the operations of the utility to ensure continuous quality service to its development. The Markborough loan, then, is part of a comprehensive plan by this utility to ensure financial viability and continuous quality water and sewer service to York and other customers in an expanding territory in the future. The Markborough loan proposal achieves all the above objectives and represents the only viable means offered to achieve them. The remaining issue concerning this financing arrangement is whether the utility has the ability to repay the debt. If only the known developments in the area east of the Florida Turnpike are considered, with only the minimum rates chargeable to them used to forecast operating revenues, Northwest will have the capability of repaying the money borrowed from Markborough. However, there are two occasions in the projections of available cash flow to service debt (to 1985) when a cash deficit might occur. At the end of 1980 there is a relatively immaterial predicted deficit. There will be a deficit at the end of 1983, when it will be necessary to construct the transmission line to the Broward County sewage treatment facility. That deficit at the end of 1983 has been provided for, however, in that York Development has agreed to advance money to cover that deficit if it should prove necessary. In effect, the worst conceivable situation that could occur should Northwest be unable to service the debt would be foreclosure and ultimate ownership by a financially sound development company, Markborough, which has a high degree of management expertise as well as a keen interest in having quality water and sewer service provided its development in order to successfully market it. Thus, should Markborough ever become the operator of the utility, there is no conceivable way that such an event would not inure to the benefit of all customers served. Show Cause Order No. 9305 (Docket #800181-WS) Certificates 170-W and 121-S were granted to Northwest after application made in 1973. The area encompassed by these certificates is identified as "a" on Exhibit 3. The certificates were ultimately granted to the utility in April, 1974, and the above-referenced Show Cause Order contains allegations proposing that the Commission cancel these certificates. The allegations in the Show Cause Order are essentially that the certificates were issued on the premise that service was needed in this service area, but that no service has been provided, and therefore the premises upon which the certificates were issued no longer exist and they should be cancelled. The certificates were issued on the premise that service was needed in the territory, and service was initially needed at that time for the high density Bates PUD discussed above. The need for service ultimately failed to materialize because of economic conditions, but since economic conditions change, the need for service can and has arisen once again. Thus, consideration of this issue must take into consideration current developments and economic realities, including the steps recently taken by Northwest to expand its service. Northwest has built or acquired plant facilities for the purpose of providing service in this territory. It purchased in 1973 a one-MGD-sewage- treatment plant, which is now stored on the Bates's, property and available for use if an appropriate development should require it in this territory. Further, to provide service where needed, Northwest has invested in the on-site package plants to serve Carol Lakes Mobile Home Park. A need for service arose in the park in 1976, and Northwest provided it. Another apparent need arose in 1977 in the area identified as Parcel 3 on Exhibit 3, and Northwest took steps to provide that service. Mains were installed at a cost of $9,000, and the acquisition of the WPC plants was undertaken at a cost of $300.,000. The actual need for service did not materialize, but there is no question that Northwest stood ready and held itself out to provide service upon request. Its investment of substantial amounts of money, and its demonstrated willingness to provide service when requested, indicates that Northwest has taken the obligation imposed by those certificates seriously, and any actual cancellation would, in effect, deprive Northwest of effective use of a substantial investment in property without just compensation. Given that the rate-making criteria in Section 367.081, Florida Statutes, provides that a return through rates can only be allowed a utility on property or investment which is "used and useful" in the public service, the Commission has uniformly insisted, for rate-making purposes, that investments be prudent and in accordance with this statutory standard. Therefore, Northwest should not be required to run the risk imposed by this Show Cause Order of losing its territory merely because it has not built a plant and laid down mains and lines throughout the territory in question, since no service in that territory has heretofore been needed. There is no requirement in the above- cited statute nor in decisional law which would provide that a utility should place lines and/or plants throughout a territory where no service is yet required and for which no request has been received; and indeed the Commission has uniformly discouraged and penalized that practice in numerous past decisions. The only possible alternative source of service to this territory is the City of Coconut Creek. The city has no sewage or water treatment facilities and would serve the area by having sewage treated at the Broward County facility which Northwest would probably use in the future. There is no showing that the public would gain any cost advantage by obtaining service from the City of Coconut Creek as opposed to Northwest. The city's argument that it should serve the territory since it lies within its city limits is unpersuasive. Many cities or portions of cities are served by privately-owned facilities in this state. Further, only certain portions of Northwest's territory lie within the city limits of Coconut Creek. Those are the areas where the highest density development is probable, such that if it were given the right to serve those areas, only Coconut Creek would obtain the bulk of the revenue, leaving Northwest to serve low density areas with only marginal practicality due to the low resultant revenues. The provision of service to the area outside the city limits of Coconut Creek is only feasible if the utility serving the area also retains the right to serve those within the city limits. An additional problem would occur if this certificated territory were cancelled. Coral Lakes Mobile Home Park lies surrounded by the City of Coconut Creek, so if the area within the city limits of Coconut Creek was deleted from the Northwest certificates, the mobile home park would become isolated, rendering it extremely difficult to upgrade and maintain quality service to the park by Northwest, which would remain obligated to serve it. Thus, deletion of the territory within the city limits of Coconut Creek from the certificates of Northwest would render service to those areas and contiguous areas operationally and financially unfeasible. Northwest has not failed to provide service to any person reasonably entitled thereto or requesting it. It has thus far offered service to every person or entity making a request.
Recommendation Having considered the substantial, competent evidence in the record, the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the application of Northwest Utilities of Broward County, Inc. to extend water and sewer service to the territory known as Boca Del Mar II, be granted. It is further, RECOMMENDED that the application of Northwest Utilities of Broward County, Inc. for authority to borrow the principal amount of $2,610,000 from Markborough Properties Ltd. be granted. It is further, RECOMMENDED that Public Service Commission Show Cause Orders Nos. 9324 and 9305 be dismissed. It is further RECOMMENDED that the Motion for a Corrective Order addressed to Order No. 8821 in Public Service Commission Docket No 770625-WS filed by Northwest Utilities of Broward County, Inc. be granted. DONE and ENTERED this 21st day of August, 1980, in Tallahassee, Florida. P. MICHAEL RUFF, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: David B. Erwin, Esquire Johnston and Erwin 1030 E. Lafayette Street Suite 112 Suite 601 Tallahassee, Florida 32301 Marta Crowley, Esquire James O. Collier, Class B. Practitioner Public Service Commission 101 E. Gaines Street Tallahassee, Florida 32301 Peter A. Knocke, Esquire Carlton, Fields, Ward, Emmanuel, Smith and Cutler, P.A. Post Office Drawer 190 Tallahassee, Florida 32302 William E. Sundstrom, Esquire 1020 E. Lafayette St. Suite 103 Tallahassee, Florida 32301 Betty Lynn Lee, Esquire Prominski and Lee 800 E. Broward Boulevard Ft. Lauderdale, Florida 33301 Andrew S. Maurodis, Esquire 4540 N. Federal Highway Fort Lauderdale, Florida 33308 Burton Harrison, Esquire Bretan and Marks 7200 Bird Road Miami, Florida 33130 Milton A. Galbraith, Jr. City Attorney 201 W. Palmetto Park Road Boca Raton, Florida 33432
Findings Of Fact The Department of Transportation, pursuant to its decision to procure certain sewer line cleaning equipment, issued an Invitation to Bid to potential vendors of such equipment. The specifications in that Invitation to Bid which are at issue in this proceeding concern the specified ability of the machine being proposed to vacuum gutters while being driven or, that is, in motion. The other specification at issue was that the machine had to be a standard production model with five of such machines in service for one year prior to May 1988. The sewer line cleaner specified had to have a nine cubic yard capacity. The bids were received, including that of Vac-Con, Inc. and Jet Vac Sanitary Service. The bid results were posted on June 3, 1988, noticing the Department's intent to award the contract for the nine cubic yard sewer line cleaner to Vac- Con, Inc. Jet Vac Sanitary Service timely filed a formal protest of that intended bid award on June 17, 1988. The Petitioner's formal protest was transmitted to the Division of Administrative Hearings and duly came on for hearing. The Petitioner is contending that the Vac-Con model V290 storm sewer line cleaner does not meet the specifications in the Invitation to Bid because it will not vacuum gutters while in motion in the configuration set forth in Vac-Con's published specifications for its standard models. It asserts, in conjunction with this argument, that the alternative configuration proposed by Vac-Con would in effect render this a nonstandard production model of which Vac- Con has not had five in service prior to May 1988, which would represent a departure from the bid specifications and thus result in a non-responsive bid. The Respondent, however, contends that the alternative configuration proposed by Vac-Con is merely an options package to an existing standard production model machine and thus is in conformance with the specification. The Respondent has been advised by Vac-Con that the V290 machine will perform as specified and that at least five machines have been so configured and have been in service for the required one year or greater period. It is stipulated that Jet Vac Sanitary Service was the next lowest bidder after Vac-Con and has standing to protest the Intent to Award. Jet Vac was a responsive bidder. It is also stipulated that the configuration of the model V290 depicted in Vac-Con's promotional material itself will not meet the specifications set forth in Respondent's Invitation to Bid. The dispute is whether the Vac-Con machine, as optionally modified, as proposed by Vac-Con, meets the specification concerning the machine being a standard production model. In response to the Invitation to Bid, Vac-Con, Inc. submitted a bid for its Vac-Con model V290. It accompanied that bid with a written statement of the model specifications which coincided with the specifications required by the Invitation to Bid. It specified, that is, that it would comply with the requirement that the vehicle be able to vacuum gutters while being driven in motion. Jet Vac in turn submitted a bid which was responsive, but it was not the lowest bid. Vac-Con, Inc., in other bids submitted in the past year as well as in its advertising literature, describes the V290 model of sewer line cleaner as one in which the vacuum compressor is driven by the truck engine, that is the engine which provides the motive power to the vehicle. In order to operate the vacuum compressor as described in that literature, the rear axle of the truck has to be disengaged, with the result that the unit cannot vacuum and drive at the same time. This configuration of the V290 model which has the vacuum being operated by the truck engine or chassis engine, is the normal type of unit offered by Vac-Con in its vehicle demonstrations and literature, as recently as one week prior to trial. In order for the V290 to comply with the bid specifications at issue, it must be reconfigured so that the vacuum compressor is run by an auxiliary engine and not the motive power engine. The power available to operate the vacuum compressors which vacuum trash from gutters and so forth, would be reduced from the chassis engine which, in the normal configuration of that model, operates the vacuum compressors. The reconfiguration whereby the vacuum compressors would be run off the auxiliary engine, and not the motive engine, would require a reversal of the V-belt drives used by the normal unit. This alternate configuration would be obvious to the casual observer. The intent of the term "standard production model" in the specifications at issue is to ensure that a machine purchased will have ready availability of manufacturer's replacement parts out of stock. This serves to prevent the purchaser from having to do development work on new models which are not in standard production runs and do not have inventories of spare parts in the manufacturer's stock as yet. Because the alternate configuration of the unit, whereby it would vacuum while moving, running its vacuum equipment off of its auxiliary engine, requires new engineering and reevaluation of the power of the V290's auxiliary motor, the specification language requiring a "standard production model" and requiring that five such units be operational in the field, requires in this instance that five units in the alternate configuration at issue be found to have been in satisfactory field service for one year. The written description submitted by Vac-Con, Inc. in response to the bidding documents, describes a machine which complies with the specification requiring the ability of the machine to vacuum while it is in motion. That description was specially prepared for purposes of this bid. Indeed it is not a machine represented, at the time of the bid, in the company's advertising literature, catalog data or other published brochures and like sources of information in order to verify that indeed Vac-Con did have five units in the alternative configuration in satisfactory service. The Department's representative, Mr. Burt, telephoned individuals whose names had been supplied him by Vac-Con as being persons who could verify that the alternative, which could vacuum in motion with the vacuum blower run off the auxiliary engine, was indeed in service. Using these names supplied him by Vac-Con and names of persons some of those people in turn gave him, who had such altered machines operating in satisfactory service, Mr. Burt telephoned each of the individuals whose names had thus been furnished by Vac-Con and its customers. He thus confirmed that there were indeed at least five units in service in the field, for at least one year, which had the ability to vacuum gutters while in motion, with the vacuum equipment being operated by the auxiliary engine on the machine. The Department has a policy of relying upon the representations of its suppliers. It does not inspect each piece of equipment before it writes a purchase order after awarding a bid. It instead reserves the right to reject any piece of equipment that does not meet specifications, after purchase. The Department does not wish to get into an adversary relationship with its suppliers and, in turn, vendors typically do not want an adversary or unfavorable relationship with the Department and do not want future disqualifications from bidding based upon any lack of integrity or misrepresentations in responding to bid specifications. Accordingly, the representations made on the bidding document have historically been quite accurate and have a high degree of probability of reliability. Hence, the Department has not, in the exercise of its discretion, followed a policy of physically inspecting each piece of equipment and independently verifying its existence or capabilities. It rather has effectively, in the past, relied upon the vendor's representations regarding the capacities or capabilities of equipment. In fact, the Department has neither the staff nor the time to make any further pre-award investigations, especially due to the nationwide market and indeed, to some extent, international market, in which it seeks to procure equipment of all sorts. In any event, being satisfied that the equipment would perform as represented and verifying that at least five such configured machines were in active field service for a year or more, the Department concluded that, in the exercise of its discretion, that the specifications had been adequately responded to and that the award should be made to Vac-Con as lowest, most responsive bidder. Insufficient proof to the contrary was offered at the hearing.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore RECOMMENDED that a Final Order be entered awarding the contract for Florida DOT Bid Number MY3188B5 to Vac-Con, Inc. DONE and ENTERED this 8th day of December, 1988, in Tallahassee, Florida. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of December, 1988. COPIES FURNISHED: Ray Heath William B. Singleton Jet Vac Sanitary Services Post Office Box 186 New Smyrna Beach, Florida 32070 Bruce A. Campbell, squire Senior Litigation Attorney Office of General Counsel Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0450 Kaye N. Henderson, P.E., Secretary ATTN: Eleanor F. Turner, M.S. 58 Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0450
Findings Of Fact Petitioner's application for a Class B waste water treatment plant operator was received by Respondent on September 20, 1991. Ms. Setchfield who is in charge of reviewing and approving and/or denying all applications, reviewed Petitioner's application. Based on the documentary evidence submitted by Petitioner, he was given constructive credit for 58 months and actual credits received was 27.6 months for a total credit time of 85.6 months. To receive credit for educational experience, an applicant must demonstrate that his major area of study is in science or biology. Alternatively, an applicant may receive credit provided he furnish Respondent a transcript which would delineate the areas of his studies he successfully completed and the credits received. However, in such instances, an applicant only receives partial credit. Petitioner has been advised (by Respondent) that if he furnish a copy of his transcript, it will be reviewed and if it demonstrates that he is entitled to credit for courses he successfully completed, he would be awarded such credit. Petitioner steadfastly refuses to provide a transcript to Respondent. To be eligible for certification as a Class B waste water treatment plant operator, an applicant must demonstrate, at minimum, that he/she has the required minimum of 96 months total creditable time.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that: Respondent enter a Final Order denying Petitioner's application for certification as a Class B waste water treatment plant operator, as he has failed to satisfy the minimum total time requirement for such certification. 1/ DONE and ENTERED this 29th Tallahassee, Leon County, Florida. day of May, 1992, in JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of May, 1992.
