08-004201 City Of Groveland And Lake County vs. Niagara Bottling Company, Llc, And St. Johns River Water Management District Status: Closed Settled and/or Dismissed prior to entry of RO/FO on Wednesday, January 5, 2011.

Summary: Niagara demonstrated that it was entitled to the comsumptive water use permit. In consumptive use permitting under Chapter 373, Florida Statutes, the public interest inquiry is limited to matters affecting the water resources.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CITY OF GROVELAND, )

)

Petitioner, )

)

vs. ) Case No. 08-4201

)

NIAGARA BOTTLING COMPANY, LLC, )

and ST. JOHNS RIVER WATER )

MANAGEMENT DISTRICT, )

)

Respondents. )

)

RECOMMENDED ORDER

The final hearing in this case was held on April 8-10, and

14-15, 2009, in Orlando, Florida, before Bram D. E. Canter,

Administrative Law Judge of the Division of Administrative

Hearings (DOAH).

APPEARANCES

For Petitioner: Edmund T. Baxa, Jr. , Esquire

Foley & Lardner LLP

111 North Orange Avenue, Suite 1800

Orlando, Florida 32801

For Respondent Niagara Bottling Company LLC:

Edward P. de la Parte, Esquire

Nicolas Porter, Esquire

de la Parte & Gilbert, P.A

101 East Kennedy Boulevard, Suite 3400

Tampa, Florida 33602

For Respondent St. Johns River Water Management District:

William Congdon, Esquire

Kealey A. West, Esquire

St. Johns River Water Management District

4049 Reid Street

Palatka, Florida 32177

STATEMENT OF THE ISSUE

The issue in this case is whether Niagara Bottling Company,

LLC (Niagara), is entitled to Consumptive Use Permit (CUP) No.

114010 issued by the St. Johns River Water Management District

(District), which authorizes Niagara to withdraw and use 484,000

gallons per day (gpd) of groundwater to produce bottled water at

a facility in Lake County.

PRELIMINARY STATEMENT

On August 11, 2008, the City of Groveland and Lake County

filed a Petition for Formal Administrative Hearing with the

District, challenging the District’s intent to issue the CUP to

Niagara. In addition to claiming that its substantial interests

would be affected by the issuance of the CUP to Niagara,

Groveland filed a verified pleading pursuant to Section

403.412(5), Florida Statutes (2008), 1/ asserting that Niagara’s

water withdrawal will have the effect of impairing or otherwise

injuring the water or other natural resources of the State. The

District referred the matter to DOAH.

On March 3, 2009, Lake County voluntarily withdrew its

petition. Groveland’s Petition was amended twice. On March 26,

2009, Groveland filed a notice of withdrawal of a number of

claims asserted in its Second Amended Petition.

At the final hearing, Niagara presented the testimony of

Andrew Still; Barclay Griffiths; Paul Kirkman; Matthew Zimmer,

who was accepted as an expert in bottled water facility design;

Grant Newhouse, who was accepted as an expert in the design and

servicing of systems for water reuse, recycling, and treatment

and reverse osmosis systems; Sarah Whitaker, P.G., who was

accepted as an expert in hydrology, groundwater flow modeling,

well design installation and construction, aquifer performance

testing, water quality and water quality monitoring, and

environmental assessment; Shirley Denton, Ph.D., who was

accepted as an expert in wetland and lake ecology; and William

Armentrout, P.E., who was accepted an expert in water and

wastewater engineering. Niagara Exhibits 2 through 25, 30

through 49, 53 through 56, 60, 61, 63 through 69, 71, 72, 74

through 78, 82 through 99, 101, 102, 105, 108 through 113, 116,

120 through 123, 126 through 130, 134, 138, 141 through 148,

166, 167, 169 through 171, 173 through 177, 179, 180, 185, 207

through 213, 215 through 220, 504, 505, 508, 509, 662, 701, 911,

950, and Rebuttal Exhibits 1 through 3 were admitted into

evidence.

The District presented the testimony of Robert Fewster, who

was accepted as an expert in botany, environmental biology, and

wetlands ecology; and Dwight Jenkins, P.G., who was accepted as

an expert in geology and hydrogeology. District Exhibits 3, 4,

15, 17, 20, 25, 29, 33, and 39 were admitted into evidence.

Groveland presented the testimony of Charles Drake, P.G.,

who was accepted as an expert in hydrogeology and groundwater

flow models; Jay Exum, Ph.D., who was accepted as an expert in

wetland ecology and wetland jurisdictional determinations; and

Larry Walker, utilities director for Groveland. Groveland

Exhibits 14, 77, 78, and 128a were admitted into evidence.

The parties stipulated to the admission into evidence of

portions of the deposition testimony of Hal Wilkening in lieu of

his live testimony. Official recognition was taken of the

Applicant’s Handbook for Consumptive Uses of Water, Florida

Administrative Code Chapter 40C-2, and the Code of Federal

Regulations, Title 21, Parts 129 and 165.

The nine-volume Transcript of the final hearing was filed

with DOAH. The parties filed Proposed Recommended Orders that

were carefully considered in the preparation of this Recommended

Order.

FINDINGS OF FACT

The Parties

1. Groveland is a municipal corporation located in Lake

County.

2. Niagara is a water bottling company registered to do

business in Florida. Niagara currently owns and operates six

water bottling facilities in the United States, including a

bottling facility in unincorporated Lake County, northwest of

Groveland. Niagara currently operates one bottling line at its

Groveland facility, which can be used to bottle either spring

water or purified water.

3. The District is a special taxing district created by

the Florida Water Resources Act of 1972, with jurisdiction over

a sixteen-county area that includes Groveland and the site of

Niagara’s proposed water withdrawal. The District administers a

permitting program for the consumptive use of water.

The Proposed Permit

4. The top geologic layer in the region is the surficial

aquifer, which starts at the ground surface and extends down

about 50 feet to the Intermediate Confining Unit. Below the

Intermediate Confining Unit is the Upper Floridan Aquifer, which

starts at a depth of about 150 feet and extends downward to

about 550 feet below the ground surface. Below the Upper

Floridan Aquifer is the Middle Semi-Confining Unit, which

extends down another 450 feet. Below the Middle Semi-Confining

Unit is the Lower Florida Aquifer, which extends down to about

2,200 feet below sea level.

5. Nearly all of the groundwater withdrawn for consumptive

uses in central Florida comes from the Upper Floridan Aquifer.

Groveland’s public water supply wells, for example, withdraw

water from the Upper Floridan Aquifer.

6. The proposed CUP authorizes Niagara to withdraw 484,000

gpd from the Upper Floridan Aquifer to produce bottled water.

The CUP authorizes the installation of three water supply wells

for the facility: a 16-inch production well, a 16-inch backup

well, and a 4-inch supply well for domestic uses at Niagara’s

facility.

7. Of the 484,000 gpd that Niagara would withdraw,

approximately 454,000 gpd would be treated and bottled as

“purified water” and approximately 30,000 gpd would be used for

cooling some of the equipment used in the bottling process.

8. Under federal regulations, bottled water sold as

purified water must meet certain maximum contaminant levels,

including a total dissolved solids (TDS) level of less than 10

parts per million. By regulation, purified water is distinct

from tap water and from bottled spring water.

9. Niagara would treat the groundwater by filtration and

reverse osmosis (RO), primarily to remove TDS. At a customer’s

request, minerals can be added to the water to enhance taste.

Also before the water is bottled, it disinfected with ozone.

10. The RO process at the Niagara facility is projected to

turn 454,000 gpd of groundwater into about 363,000 gpd of

purified drinking water for bottling and 91,000 gpd of RO

concentrate/wastewater. Reject water from the cooling water

system would add some additional wastewater.

11. Niagara has arranged to send its RO concentrate to the

Frozen Grove Wastewater Treatment Facility to be blended and

used for irrigation at the Mission Inn Golf and Tennis Resort in

Howey-in-the-Hills. The City of Minneola has also agreed to

take Niagara’s RO concentrate.

12. Niagara and the District requested that the proposed

CUP be modified to add the City of Minneola wastewater treatment

facility as an alternative recipient for Niagara’s RO

concentrate. Niagara and the District propose the following

change to Condition 10 of the Technical Staff Report:

Withdrawals of groundwater from Well Nos. 1

(GRS Id No 145009) and 2 (GRS Id No 145010

for commercial/industrial type use shall not

be initiated until Niagara Bottling LLC and

the Frozen Grove WWTF or alternatively

Niagara Bottling LLC and the City of

Minneola WWTF have obtained all necessary

permits to create and use the blend of

process waste water (R/O concentrate) and

reclaimed water for irrigation, as described

in Attachment 4 of the application materials

submitted to the District on May 9, 2008 for

the Frozen Grove WWTF and the material

submitted to the District on March 4, 2009

for the City of Minneola WWTF . The permittee

shall provide documentation to the District

that the necessary permits have been

obtained within 30 days of initiating

withdrawals of groundwater for

commercial/industrial type use from Well

Nos. 1 (GRS Id No 145009) and 2 (GRS Id No

145010).

13. The proposed CUP includes a conservation plan with

provisions for monitoring water use, repairing leaks, conducting

quality assurance inspections, using totalizing flow meters, and

minimizing spillage.

14. Niagara’s proposed CUP contains conditions for

environmental monitoring. Niagara would be required to collect

water level and rainfall data, and basic vegetation and soils

conditions at Lake Arthur. Lake Arthur was selected for

monitoring because hydrologic modeling indicated that Niagara’s

greatest potential impact to the water table was near Lake

Arthur. The monitoring is intended to detect any unexpected

adverse environmental impacts caused by Niagara’s proposed

withdrawal so that they can be addressed.

15. The proposed permit has an expiration date of

December 31, 2013.

Stipulations and Withdrawn Claims

16. Before the final hearing, Groveland withdrew a number

of allegations made in its Second Amended Petition for Hearing.

Groveland stated that its intent was to withdraw the claims that

its substantial interests were affected by Niagara’s proposed

groundwater withdrawal. Groveland no longer contends that it

would be specially injured by the proposed water use.

17. In the parties’ Joint Pre-Hearing Stipulation,

Groveland stipulated that Niagara’s proposed water use would not

interfere with any legal uses of water. Groveland also

stipulated that Niagara’s proposed use would not cause adverse

or significant impacts to lake stages or vegetation, would not

impact adjacent land uses, would not cause significant saline

water intrusion, would not cause or contribute to flood damage,

would not harm the quality of the water source, would not cause

or contribute to a violation of state water quality standards,

would not impact minimum flows and levels established by the

District, would not cause the water table or aquifer

potentiometric surface to be lowered so that lake stages or

vegetation would be adversely and significantly affected, would

not affect spring flows or water levels, and would not use water

reserved by the District from consumptive use.

18. The record evidence supports the stipulations

identified above.

Economic and Efficient Utilization

19. The Upper Floridan Aquifer is capable of producing the

requested amount of water.

20. Florida Administrative Code Rule 40C-2.301(4)(a) and

Section 10.3(a) of the Applicant’s Handbook require that a water

use be in such quantity as is necessary for economic and

efficient utilization. The District’s determination of economic

necessity focuses on preventing “water banking,” which is

securing rights to water in excess of an applicant’s actual

needs, for possible future use.

21. Niagara’s 484,000 gpd allocation is based on the peak

maximum daily output of the processing equipment operating at 74

percent capacity, which is the average capacity that Niagara

achieves at its bottling facilities.

22. Groveland contends that the consumer demand for

bottled water could be met by other water bottlers and,

therefore, there is no need for Niagara’s proposed withdrawal.

However, no statute or rule requires Niagara to demonstrate that

this particular CUP is the only means to meet the consumer

demand for bottled water. The District’s evaluation of need

focuses on the applicant’s need for the requested volume of

water.

23. In determining whether a requested use of water is

necessary, the District does not evaluate the appropriateness of

the associated business or activity, but only whether the

applicant can reasonably be expected to use the requested volume

of water, and do so efficiently based on industry standards.

24. The evidence presented regarding the bottled water

market and Niagara’s position in the market was sufficient to

demonstrate that the requested volume of water is necessary

through the duration of the CUP.

25. The 30,000 gpd that Niagara would use for its cooling

system is a reasonable amount of the water for that purpose.

The technology to be used at Niagara’s facility is state-of-the-

art, using constant online monitoring to reduce reject water.

The cooling equipment and its operation have been designed to

minimize water use.

26. RO is the industry treatment standard for production

of purified bottled water. It is the most cost-efficient

treatment method in terms of energy use and water consumption.

27. The proposed RO equipment and its operational

parameters are designed to optimize treatment efficiencies. The

volume of RO concentrate that would be produced depends on the

TDS levels in the groundwater. The estimate of 91,000 gpd of RO

concentrate is conservatively high, based on the TDS levels in

groundwater samples. The actual volume of RO concentrate

produced by Niagara could be smaller.

28. Groveland was critical of Niagara’s wastewater volume,

contending that the conversion of 91,000 gpd of groundwater to

wastewater is inefficient and contrary to the public interest.

The fact that Niagara’s bottling process would produce 91,000

gpd of wastewater does not make it inefficient. Nearly every

commercial and industrial water use has a wastewater component.

In the context of water bottling processes and water treatment

systems, Niagara’s operation is efficient.

29. Groveland asserts that sending Niagara’s RO

concentrate to the Mission Inn golf course or the City of

Minneola for irrigation purposes is inefficient because a large

portion of irrigation water is usually lost to evaporation and

does not recharge the aquifer. This assertion fails to account

for the fact that every gallon of RO concentrate used for

irrigation reduces by one gallon the volume of groundwater that

would otherwise be withdrawn for irrigation. Using Niagara’s

wastewater for irrigation contributes to the efficiency of

Niagara’s proposed use.

30. There is typically a deficit of reclaimed water from

public wastewater treatment systems in the summer when the

demand for reclaimed water for irrigation and other purposes

increases. Niagara’s supply of RO concentrate, however, would

remain constant throughout the year. Mission Inn and Minneola

would benefit if they were able to use Niagara’s RO concentrate.

31. Niagara’s conservation plan for water use at its

facility is equal to or better than the conservation plans

incorporated into the CUPs that the District has issued to other

beverage bottlers.

32. Niagara’s proposed use was shown to be of such a

quantity as is necessary for economic and efficient utilization.

Sources of Lower Quality Water

33. Florida Administrative Rule 40C-2.301(4)(f) states

that reclaimed water must be used if it is “readily available.”

Section 10.3(g) of the Applicant’s Handbook requires that the

“lowest acceptable quality water source, including reclaimed

water or surface water” must be used for a consumptive use,

unless the applicant demonstrates that the use of a lower

quality water source is not economically, environmentally, or

technologically feasible.

34. The requirement to use a lower water quality source,

however, is not applicable when the water is for “direct human

Handbook. Groveland argues that the word “direct” should mean

unaltered and, therefore, Niagara’s bottled water is not

intended for direct human consumption because the water is

treated before it is bottled.

35. The District, however, does not interpret or apply the

term “direct human consumption” to mean drinking water directly

from the source without treatment. In the case of the water

delivered to households and businesses by public water

suppliers, which also must be treated before it is delivered,

the District regulates the water as being for direct human

consumption.

36. The fact that Niagara would filter the groundwater,

apply RO treatment, add acid to prevent mineral buildup in the

RO equipment, and add minerals for taste if requested by

customers, does not disqualify Niagara’s bottled water as being

for direct human consumption.

37. Because 454,000 gpd of Niagara’s proposed water

withdrawal would be processed for direct human consumption,

Niagara did not have to seek to use a source of lower water

quality for that volume. The requirement to use available

sources of lower quality water would apply to the 30,000 gpd

that Niagara intends to use for cooling.

38. There are technical and economic problems associated

with using water of lower quality for the cooling process at the

Niagara facility because higher TDS levels would damage the

cooling equipment.

39. Using water with higher TDS levels would also require

greater volumes of water to achieve cooling. Niagara’s cooling

system is designed to reject water when the dissolved solids

reach a certain high level, and to replace the reject water with

fresh water. Operating at higher dissolved solid levels would

cause the system to reject water more frequently, so greater

volumes of water would be needed for cooling and greater volumes

of wastewater would be generated.

40. Using surface water from the St. Johns River, which

has TDS levels much higher than in the groundwater, would

require twice as much water to operate Niagara’s cooling system.

In addition, a 44-mile pipeline would be needed to convey water

from the St. Johns River to the Groveland facility, which would

involve much higher costs.

41. Seawater has even higher TDS levels and would require

desalinization and a different cooling system. Using seawater

would require much greater volumes of water for treatment and

cooling. Disposal of the brine concentrate generated by the

treatment process would create additional costs. The use of

seawater would require the construction of a 120-mile pipeline,

which would involve large capital and operating costs.

42. Groveland insists that the much higher costs

associated with these sources of lower quality water are still

economically feasible for Niagara based on Niagara’s projected

income from its bottling operations. The District does not

determine feasibility based on the balance sheet of the

individual permit applicant. The District evaluates relative

costs of alternative sources in the context of normal practices

and expected benefits.

43. Reliable volumes of reclaimed water to use in

Niagara’s cooling system are not readily available to Niagara

from domestic wastewater treatment facilities in the area.

44. The spring water sources that Niagara is currently

using are not sources of lower quality water. These sources are

of equivalent quality to the groundwater that Niagara proposes

to withdraw.

45. Groveland contends that Niagara did not investigate

the quality of the Lower Floridan Aquifer as a potential source

of lower water quality water for Niagara’s proposed use.

Groveland believes, but did not prove, that the Lower Floridan

has lower quality water.

46. Studies conducted by the U.S. Geological Survey

indicate that the water quality of the Lower Floridan Aquifer is

about the same or better quality than the quality of the water

in the Upper Floridan Aquifer. Water quality data from a Lower

Floridan well in the vicinity also indicates that the quality of

the water in the Lower Floridan is as good as, or better than,

the water quality in the Upper Floridan in this area.

47. Withdrawals from the Lower Floridan create a risk of

saline water intrusion into the fresh portion of the Lower

Floridan or Upper Floridan.

48. Niagara demonstrated that it is not technically nor

economically feasible to use a source of lower quality water for

its cooling water.

Individual Effect on Wetlands and Lakes

49. To identify the “zone of influence” of Niagara’s

proposed withdrawal of water and to assess the individual and

cumulative effects of the drawdown associated with the

withdrawal, Niagara’s consulting hydrogeologist used a steady-

state numerical groundwater model developed by the District,

known as the East Central Florida (ECF) groundwater model. It

is a steady-state model, which produces a value that represents

a long-term average effect.

50. The ECF model predicts the level of drawdown in the

surficial aquifer. The model assumes that wetlands and other

surface waters are directly connected to the surficial aquifer

so that a given drawdown of the surficial aquifer causes the

same drawdown of the water levels in wetlands and other surface

waters.

51. The ECF model is calibrated to water level data from

1995. A drawdown predicted by the model is a drawdown from 1995

water levels. The ECF model results are graphically depicted as

drawdown contours that are overlaid on aerial photography.

52. The District considers the condition and functions of

the surface waters in and around the withdrawal site to

determine how they might be affected by a predicted drawdown.

The dominant surface waters in the area of the proposed

withdrawal are sand hill lakes. There are few wetlands.

53. In sand hill lake systems, water table levels

fluctuate widely, as much as eight or ten feet. Consequently,

these systems are colonized by herbaceous plants that are

adapted to widely fluctuating water levels.

54. The wetlands and lakes in the area are not currently

showing signs of environmental harm as a result of existing

groundwater withdrawals.

55. Niagara’s modeling predicted that the proposed water

withdrawal, by itself, would cause a maximum drawdown in the

surficial aquifer of 0.1 feet, except for one small area where

the predicted drawdown was 0.2 feet. All the expert witnesses

were in agreement that Niagara’s drawdown, by itself, is

unlikely to cause environmental harm. In fact, the impacts of

such a small drawdown on the physical conditions or functions of

wetlands or lakes in the area would probably be impossible to

detect.

Cumulative Effect on Wetlands and Lakes

56. For the analysis of cumulative impacts, the ECF model

takes into account all permitted withdrawals for the year 2013,

because that is the key year for the regulation of water uses in

the Central Florida Coordination Area (CFCA), which includes the

site of Niagara’s bottling facility. The CFCA is discussed in

greater detail later in this Recommended Order.

57. The ECF model predicated that the cumulative surficial

aquifer drawdown within the area of influence of Niagara’s

proposed withdrawal would be less than one foot except for one

small area where the drawdown is predicted to be 1.1 feet.

58. Niagara submitted an environmental assessment report,

the Lotspeich report, with its permit application. The

Lotspeich report concluded that no ecological harm would be

caused by Niagara’s proposed withdrawal.

59. Subsequently, Niagara’s consulting ecologist,

Dr. Shirley Denton, who has extensive experience with the

effects of drawdowns on wetlands and other surface waters,

reevaluated the potential effects of Niagara’s proposed

withdrawal. Dr. Denton visited all of the natural systems in

the field. It was her opinion that the cumulative drawdown

would not cause unacceptable harm to these natural systems.

60 . The District’s environmental expert agreed with

Dr. Denton. In the Central Florida sand hill lakes area, a

drawdown of this magnitude is not an uncommon cumulative impact

from groundwater withdrawals that the District has determined to

be acceptable.

61. Groveland presented the testimony of Dr. Jay Exum who

opined that the cumulative drawdown in the area of Niagara’s

proposed withdrawal would adversely impact wetlands. Dr. Exum’s

opinion was based on his prediction that the cumulative drawdown

would result in a substantial reduction in the size of the

wetlands in the area. However, his opinion about the loss of

wetland acreage is not persuasive because of the unconventional

methodology 2/ that he used and the unreasonable assumptions upon

which his opinion was based.

62. Dr. Exum reviewed land cover maps of Lake County,

calculated the size and topography of eight wetlands in the area

(only one was within Niagara’s zone of influence), came up with

an estimated reduction in wetland acreage for these wetlands,

and then extrapolated from that number a prediction of the total

area of wetlands within Niagara’s area of influence that would

be lost as a result of the cumulative drawdown.

63. Dr. Exum did not account for the fact that the

wetlands and lakes in the area already reflect most of the

cumulative drawdown. The cumulative drawdown predicted by the

modeling is not a drawdown below today’s average water levels;

it is a drawdown below 1995 levels.

64. In addition, Dr. Exum assumed that a drawdown in the

surficial aquifer of .5 foot will cause the future loss of the

vegetation at the outer edges of a wetland in an amount that can

be calculated simply by determining how much area .5 feet of

water would occupy. That assumption would only apply in a

hypothetical, unnatural situation where water levels are

constant and the wetland vegetation will not survive if the

water table drops .5 feet. However, the actual situation is

that the water table fluctuates widely in these natural systems

and the vegetation is adapted to the fluctuations. The area

“formerly” occupied by the .5 feet of water could still be

inundated frequently enough to sustain the vegetation.

65. Dr. Exum’s opinion about the environmental effects

that would be caused by the cumulative drawdown of the surficial

aquifer was given less weight than the opinions offered by

Niagara’s and the District’s ecologists because Dr. Exum has

little or no prior experience with the effects of drawdowns on

natural systems. Dr. Exum’s professional experience is almost

entirely with the impacts associated with construction

activities in or near wetlands, which would not acquaint him

with the unique, long-term responses of natural systems to water

table drawdowns caused by groundwater withdrawals.

66. Dr. Denton, who has over 25 years of experience with

monitoring wetlands affected by groundwater withdrawals, stated

that drawdowns in the surficial aquifer do not usually cause

reductions in the size of a wetlands.

67. The more persuasive evidence in the record

demonstrates that Niagara’s proposed withdrawal would not cause

adverse impacts to wetlands on an individual or a cumulative

basis. Niagara provided reasonable assurance that any

environmental harm caused by the proposed use has been reduced

to an acceptable amount.

68. The five-year duration of the permit is reasonable and

appropriate.

Public Interest

69. Section 9.3 of the Applicant’s Handbook defines

“public interest” as:

those rights and claims on behalf of the

people in general. In examining whether an

application is consistent with the public

interest, the District considers whether a

particular use of water is going to be

beneficial or detrimental to the overall

collective well-being of the people or to

the water resource in the area, the District

and the State.

70. The policy and practice of the District has been to

limit its public interest analysis to matters directly related

to water resources and the management of those resources. Other

matters, such as vehicle traffic generated by the applicant, are

not considered by the District.

71. Groveland suggests that Niagara’s proposed use, and

perhaps all commercial/industrials uses, are less important and

worthy than public water supply uses like its own, and should

not be allowed to take water that a public water supplier might

need in the future. As discussed in the Conclusions of Law, all

reasonable beneficial uses of water are equal under Chapter 373,

except in certain contexts which are not applicable here.

72. Commercial and industrial activities that make

consumptive uses of water, when conducted in conformance with

regulations established to efficiently use and protect the water

resources, are generally beneficial to the collective well-being

of the people.

73. Groveland also claims that Niagara’s CUP is not in the

public interest because a portion of Niagara’s bottled water

will be shipped out of Florida. Although Niagara cannot project

precisely the amount of bottled water that would end in the

hands of consumers residing out-of-state, an estimate of 20

percent was given.

74. For beverage bottlers or any other commercial or

industrial water users that incorporate water into their

products, the District deems the location of the water use to be

where the water is bottled or incorporated into the products.

The District does not look to where products are ultimately

purchased by a retail consumer. Therefore, the District did not

consider the fact that a portion of Niagara’s bottled water

would be consumed outside of Florida as a factor in the

District’s determination of whether the proposed water use is in

the public interest.

75. Niagara’s withdrawal is within the Central Florida

Coordination Area (CFCA), an area covering parts of the

jurisdiction of three water management districts and which

includes the City of Groveland and the site of Niagara’s

proposed water withdrawal. The CFCA is a highly productive area

for groundwater withdrawals, but the water management districts

have determined that it does not have sufficient water to serve

water needs above the levels that have been allocated through

the year 2013. To protect the water resources of the CFCA,

rules were adopted to require public water suppliers and other

water users within the CFCA to use “supplemental water supplies”

to meet their increases in demand after 2013. Supplemental

water supplies are identified in the CFCA rules as reclaimed

water, stormwater, surface water, and seawater desalinization.

76. Niagara is not requesting additional water above its

2013 demand and, therefore, is not subject to the restrictions

imposed by the various CFCA rules. Nevertheless, the District

treated Niagara’s location within the CFCA as a matter affecting

the public interest.

77. The District determined that it was inconsistent with

the public interest to allow Niagara to withdraw groundwater in

the CFCA unless Niagara was required to participate in the

development of supplemental water supplies. Therefore, Niagara

Staff Report, to identify potential partners for the development

of supplemental water supply projects, determine the viability

of developing the partnerships, evaluate potential supplemental

water supply projects available, and submit a comprehensive

written report evaluating whether identified projects are

feasible future water supply sources for Niagara.

78. The District imposed a permit expiration date of

December 31, 2013, to enable the District and Niagara to

reevaluate Niagara’s ability to use a lower quality water source

after that date.

79. Groveland does not believe the conditions imposed by

the District go far enough and asserts that Niagara’s water

withdrawal from the CFCA is still contrary to the public

interest.

80. Niagara’s proposed withdrawal is also within a

Priority Water Resource Caution Area (PWRCA) designated by the

District. The District designates priority water resource

caution areas as part of its water supply 20-year planning

process. In the PWRCA, the District has determined that there

is inadequate groundwater in the Floridan Aquifer to meet all

existing and future water needs, without having unacceptable

impacts on the water resources.

81. The District stated that the designation of a priority

water resource caution area is strictly a planning tool and does

not preclude the issuance of permits. CUPs are commonly issued

for proposed withdrawals in priority water resource caution

areas in the District.

CONCLUSIONS OF LAW

82. DOAH has jurisdiction over the parties to and the

subject matter of this case pursuant to Sections 120.569 and

120.57, Florida Statutes.

83. Groveland withdrew its claims that Niagara’s proposed

water use would affect Groveland’s substantial interests.

Groveland’s standing is based on Section 403.412(5), Florida

Statutes, which provides that local governments and private

citizens may intervene in ongoing administrative proceedings by

filing a verified pleading asserting that an activity to be

licensed by an agency will have the effect of impairing,

polluting, or otherwise injuring the air, water, or other

natural resources of the State.

84. Section 403.412(5), Florida Statutes, states that

“this section does not authorize a citizen to . . . initiate

. . . a proceeding under s. 120.569 or s. 120.57.” Because only

citizens are mentioned in this express limitation, and not local

governments, the statute can be reasonably interpreted as

authorizing local governments to initiate an administrative

proceeding.

85. Niagara argues that Groveland lacks standing because

it failed to prove that Niagara’s proposed water use would

injure the air, water, or other natural resources of the State.

However, a petitioner’s standing is not dependent on proving its

claims. Palm Beach County Envtl. Coalition v. Dep't of Envtl.

Prot. , 34 Fla. L. Weekly D 1106 (Fla. 4th DCA 2009). It is

undisputed that Niagara’s proposed withdrawal of water would

have an effect on nearby wetlands and other surface waters.

Groveland has standing to attempt to show that the effect would

amount to unacceptable harm to the environment.

86. This is a de novo proceeding, intended to formulate

final agency action. McDonald v. Dep't of Banking and Finance ,

346 So. 2d 569, 584 (Fla. 1st DCA 1977). Therefore, the

agency’s final action can deviate from its proposed action when

the record contains substantial competence evidence to support

the changes.

87. As the permit applicant, Niagara has the burden to

prove by a preponderance of the evidence that it is entitled to

the permit. Dep't of Transp. v. J.W.C. Co., Inc. , 396 So. 2d

778, 787 (Fla. 1st DCA 1981).

88. However, an applicant need not prove anew all items in

a permit application down to the last detail. The petitioner in

a case must identify the specific areas of controversy. Id. at

789.

89. Once the applicant has made a preliminary showing of

entitlement, the burden of presenting contrary evidence shifts

to the petitioner. A petitioner must then present evidence of

equivalent quality to prove the truth of the facts alleged in

the petition. Id.

90. Niagara must demonstrate compliance with Section

373.223(1), Florida Statutes, which requires a permit applicant

to establish that a proposed use of water: (a) is a reasonable-

beneficial use; (b) will not interfere with any presently

existing legal use of water; and (3) is consistent with the

public interest.

91. The disputed issues in this case were narrowed by the

parties’ Joint Pre-Hearing Stipulation. For example, Groveland

stipulated that Niagara’s proposed water use would not interfere

with any presently existing legal use of water. With regard to

all statute and rule criteria applicable to Niagara’s proposed

water use for which there was no dispute raised by Groveland,

Niagara provided reasonable assurances of compliance. The

disputed issues are addressed below.

Reasonable Beneficial Use

92. Florida Administrative Code Rule 40C-2.301(4) requires

the following criteria to be met in order for a use to be

considered reasonable-beneficial:

(a) The use must be in such quantity as is

necessary for economic and efficient

utilization.

(b) The use must be for a purpose that is

both reasonable and consistent with the

public interest.

(c) The source of the water must be capable

of producing the requested amounts of water.

(d) The environmental or economic harm

caused by the consumptive use must be

reduced to an acceptable amount.

(e) All available water conservation

measures must be implemented unless the

applicant demonstrates that implementation

is not economically, environmentally or

technologically feasible. Satisfaction of

this criterion may be demonstrated by

implementation of an approved water

conservation plan as required in Section

12.0., Applicant's Handbook: Consumptive

Uses of Water.

(f) When reclaimed water is readily

available it must be used in place of higher

quality water sources unless the applicant

demonstrates that its use is either not

economically, environmentally, or

technologically feasible.

(g) For all uses except food preparation

and direct human consumption, the lowest

acceptable quality water source, including

reclaimed water or surface water (which

includes stormwater), must be utilized for

each consumptive use. To use a higher

quality water source an applicant must

demonstrate that the use of all lower

quality water sources will not be

economically, environmentally or

technologically feasible. If the applicant

demonstrates that use of a lower quality

water source would result in adverse

environmental impacts that outweigh water

savings, a higher quality source may be

utilized.

(h) The consumptive use shall not cause

significant saline water intrusion or

further aggravate currently existing saline

water intrusion problems.

(i) The consumptive use shall not cause or

contribute to flood damage.

(j) The water quality of the source of the

water shall not be ser iously harmed by th e

consumptive use.

(k) The consumptive use shall not cause or

contribute to a violation of state water

quality standards . . . .

(l) The consumptive use must not cause

water levels or flows to fall below the

minimum limits set forth in Chapter 40C-8,

F.A.C.

93. Niagara’s compliance with paragraphs (c) and (h)

through (l), above, was not disputed by Groveland.

94. Niagara demonstrated by a preponderance of the

evidence that the proposed consumptive use of water is necessary

for economic and efficient utilization as required by Florida

Administrative Code Rule 40C-2.301(4)(a). In this context, the

District’s interpretation and application of the term

“necessary” is a reasonable one.

95. The Florida Water Resources Act is based largely on a

model water code developed at the University of Florida College

of Law. See A Model Water Code , (Maloney, et al., 1972). The

original enactment was taken almost verbatim from the model

water code. Therefore, the commentary in A Model Water Code is

helpful to determine the meaning and intent of provisions of

Chapter 373, Florida Statutes. See , e.g. , A. Duda and Sons,

Inc. v. St. Johns River Water Mgtm. Dist. , 34 Fla. L. Weekly D

972 (Fla. 5th DCA 2009); Southwest Florida Water Mgmt. Dist. v.

Charlotte County , 774 So. 2d 903 (Fla. 2nd DCA 2001).

96. The commentary in A Model Water Code pertaining to the

reasonable-beneficial use standard states:

The reasonable-beneficial use standard also

requires that the water (regardless of

amount) be used “for a purpose . . . which

is both reasonable and consistent with the

public interest.” The requirement means that

the purpose must be reasonable in relation

to other uses. This criterion does not

require that the use be the most economical

use of water possible but only that the use

not be detrimental to other users or totally

inconsistent with the character of the

watercourse from which the supply is taken.

Id. at 171.

97. Chapter 373, Florida Statutes, and the consumptive use

permitting rules adopted by the District do not elevate the

status of one water use over another except in certain specified

contexts. For example, water can be reserved for a particular

future use. See § 373.223(4), Fla. Stat. During a declared

water shortage, certain uses may be given priority. See

§§ 373.175 and 373.246, Fla. Stat. When there are pending

applications for a volume of water that is inadequate for all,

the District can approve the application which best serves the

public interest. See § 373.233, Fla. Stat. None of these

situations are applicable in this case.

98. Niagara demonstrated by a preponderance of the

evidence that the proposed use is for a purpose that is both

reasonable and consistent with the public interest, as required

by Florida Administrative Code Rule 40C-2.301(4)(b).

99. Niagara demonstrated by a preponderance of the

evidence that the potential for environmental harm has been

reduced to an acceptable amount as required by Florida

Administrative Code Rule 40C-2.301(4)(d).

100. Niagara demonstrated by a preponderance of the

evidence that all economically, environmentally, or

technologically feasible conservation measures will be

implemented, as required by Florida Administrative Code Rule

40C-2.301(4)(e) and Section 12.3 of the Applicant’s Handbook.

101. Niagara is prohibited by Florida Administrative Code

Rule 62-610.650(4) from using reclaimed water for its bottled

water product.

102. Niagara demonstrated by a preponderance of the

evidence that there is no readily available reclaimed water that

is economically, environmentally, or technologically feasible to

use for cooling water, as required by Florida Administrative

Code Rule 40C-2.301(4)(f).

103. Niagara demonstrated by a preponderance of the

evidence that it will use the lowest acceptable quality water

source, as required by Florida Administrative Code Rule 40C-

application of the term “direct human consumption” is a

reasonable one.

104. In summary, Niagara demonstrated by a preponderance

of the evidence that its proposed water use is reasonable-

beneficial.

Public Interest

105. As explained above, consistency of the public

interest is a component of the reasonable-use standard, the

second prong of the three-prong test. The authors of A Model

Water Code did not explain why they repeated consistency with

the public interest as a third prong.

106. Groveland contends that the third prong calls for the

consideration of matters affecting the public that are not

limited to water resources. These could include, for example,

vehicle traffic and other land use issues normally decided by a

local government in zoning and comprehensive planning

proceedings. However, other than the structure of Section

373.223(1), Florida Statutes, there is nothing to support that

argument. The evidence presented by Groveland on this point was

not persuasive.

107. There is nothing in Chapter 373, Florida Statutes,

Florida Administrative Code Rule 42-2.301, or A Model Water Code

that directs the water management districts to consider matters

of public interest that are not related to water resources.

108. In the recent case of Marion County v. Greene , 5 So.

2d 775 (Fla. 5th DCA 2009), the court addressed Marion County’s

argument that the third prong allows for the consideration of

whether a proposed water use interferes with county plans and

regulations. In holding to the contrary, the court accepted the

District’s position that the public interest inquiry in the

third prong is a consideration of “whether the use of water is

efficient, whether there is a need for the water requested, and

whether the use is for a legitimate purpose; and the inquiry

focuses on the impact of the use on water resources and existing

legal users.” Id. at 779. As explained above, that inquiry is

the same used in the context of the second prong –- whether the

water use is reasonable-beneficial.

109. When confronted with the question of whether the

public interest inquiry in environmental permitting required the

Department of Environmental Protection to consider matters other

than those affecting the environment, the courts have held that

the Department’s public interest inquiry is limited to impacts

to the environment. Save Anna Maria, Inc. v. Dep't of Transp. ,

700 So. 2d 113, 116 (Fla. 2d DCA 1997); Miller v. Dep't of

Envtl. Reg. , 504 So. 2d 1325 (Fla 1st DCA 1987).

110. The third prong of the three-prong test in Section

373.223(1), Florida Statutes, appears to do no more than give

consideration of the public interest a prominent place in water

use permitting, on the same footing as reasonable-beneficial and

avoiding interference with existing water users. The third

prong does not expand the public interest inquiry beyond water

resource-related issues.

111. Some of Groveland’s public interest arguments are

water resource-related. Groveland argues that Niagara’s

expectation of distributing 20 percent of its bottled water for

ultimate retail purchase and consumption out of state should

have been considered by the District, and that it requires

denial of the permit.

112. Niagara’s proposed water use is not an interdistrict

transfer of groundwater that is regulated pursuant to Section

373.2295, Florida Statutes.

113. Groveland does not identify any provision of Chapter

373, Florida Statutes, that expressly authorizes the water

management districts to prohibit or restrict the issuance of

CUPs to water bottlers if a portion of the bottled water will be

consumed out-of-state. Groveland relies solely on the third

prong and argues that withdrawing Florida groundwater for use

outside of Florida is contrary to the public interest.

114. The District deems water incorporated into a

commercial or industrial product as “used” at the place where

the product is made. Therefore, the District’s position is that

the water Niagara has requested would be used at its bottling

facility in Lake County, not out of state. That is a reasonable

interpretation and application of Chapter 373, Florida Statutes,

and Florida Administrative Code Rule 40C-2.301.

115. Whether water bottlers and other water users that

incorporate water into their products should be prohibited or

limited from selling their products out-of-state, is a matter

that should first be addressed by the Legislature. In Florida,

agencies can only exercise authority that has been specifically

granted to them by statute. See Southwest Fla. Water Mgmt.

Dist. v. Save the Manatee Club, Inc. , 773 So. 2d 594 (Fla. 1st

DCA 2000). The water management districts have not been granted

specific authority to prohibit or limit the out-of-state sale of

bottled water.

116. If, however, Groveland is correct, and the District

must determine whether Niagara’s distribution of 20 percent of

its product out-of-state would be inconsistent with the public

interest, then it is concluded that this factor does not make

Niagara’s proposed water use inconsistent with the public

interest.

117. Groveland also argues that Niagara’s proposed

withdrawal of water is inconsistent with the public interest

because it is located within the CFCA and a priority water

resource caution area (PWRCA).

118. Special regulations in Section 12.10 of the

Applicant’s Handbook are applicable to water users within the

CFCA. Primarily, the rules restrict applicants to a maximum

allocation of groundwater based on their 2013 demand. Increased

water use in excess of an applicant’s 2013 demands must be

obtained from “supplemental water sources,” i.e. , sources other

than groundwater.

119. Niagara is not requesting an increase in water in

excess of its 2013 demand, so the CFCA regulations do not apply

to Niagara’s proposed water use. Nevertheless, the District

determined that Niagara’s proposed water use would be

inconsistent with the public interest unless Niagara was

required to participate with other water users in developing

supplemental water sources.

120. Section 12.10 of the Applicant’s Handbook was adopted

pursuant to public rulemaking proceedings. The rule contains

the measures that the District and interested persons considered

appropriate to protect and promote the public interest

associated with the water resources of the CFCA. The District’s

authority to impose free-form, CFCA-type permit conditions on

Niagara when, according to the CFCA rule, Niagara is not subject

to the rule’s requirements, is far from clear. The District did

not adequately explain how a general public interest criterion

is sufficient authority to impose conditions on persons who are

made exempt by the specific rule on the subject.

121. Niagara has agreed to comply with the CFCA-related

permit conditions in its proposed CUP.

122. Niagara’s proposed withdrawal of groundwater from the

CFCA is consistent with the pubic interest.

123. Chapter 373, Part II, Florida Statutes, and the rules

adopted thereunder, establish the exclusive criteria for the

regulation of consumptive uses of water. § 373.217(2), Fla.

Stat. Neither Part II of Chapter 373 nor any rule of the

District adopted pursuant thereto imposes additional criteria

that must be met by an applicant for a permit to withdrawal

water from a PWRCA. Because the District has chosen not to

adopt a rule to impose additional criteria for water withdrawals

within a PWRCA, a general public interest criterion is

insufficient authority to make an exception for Niagara’s

proposed withdrawal.

124. Niagara’s proposed withdrawal of groundwater from the

PWRCA is consistent with the pubic interest.

125. Groveland suggests that Niagara’s reduction of the

naturally occurring groundwater, in and of itself, is an injury

to the water resources and inconsistent with the public

interest. However, the common law of water rights, reflected in

the Florida Water Resources Act of 1972, grew out of principles

associated with the use of water and how best to allocate water

among competing users. See , e.g. , Water Law 1980 , (Maloney et

al. 1980). If a water use meets the first two prongs of the

three-prong test, the use will not fail the third prong –-

consistency with the public interest –- merely because the

volume of water remaining at the source has been reduced.

126. In summary, Niagara’s proposed water use is

consistent with the public interest.

127. Florida Administrative Code Rule 40C-2.301(5)(a)

describes six effects of a proposed water use that would require

the use to be denied. Groveland only disputed Niagara’s

compliance with Rule 40C-2.301(5)(a)4, pertaining to lowering

the water table and harming vegetation. Niagara demonstrated by

a preponderance of the evidence that Niagara’s water use would

not cause the water table or surface water level to be lowered

so that stages or vegetation will be adversely and significantly

affected on lands other than those owned, leased, or otherwise

controlled by the applicant.

128. Niagara’s proved by a preponderance of the evidence

that it is entitled to the permit it is seeking.

129. DOAH retains jurisdiction to consider and rule on

Niagara’s motions for attorney’s fees after issuance of the

Final Order.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is

RECOMMENDED that the District enter a final order granting

Consumptive Use Permit No. 114010 with the conditions specified

in the Technical Staff Report and the additional condition

proposed by the District and Niagara and set forth in paragraph

12, above.

DONE AND ENTERED this 7th day of August, 2009, in

Tallahassee, Leon County, Florida.

BRAM D. E. CANTER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 7th day of August, 2009.

ENDNOTES

1/ All references to the Florida Statutes are to the 2008

codification.

2/ Dr. Exum was unaware of any other ecologist who has used this

methodology.

COPIES FURNISHED :

Edmund T. Baxa, Jr. , Esquire

Foley & Lardner LLP

111 North Orange Avenue, Suite 1800

Orlando, Florida 32801

Edward P. de la Parte, Esquire

Nicolas Porter, Esquire

de la Parte & Gilbert, P.A

101 East Kennedy Boulevard, Suite 3400

Tampa, Florida 33602

William Congdon, Esquire

Kealey A. West, Esquire

St. Johns River Water Management District

4049 Reid Street

Palatka, Florida 32177

Kirby B. Green, III, Executive Director

St. Johns River Water Management District

4049 Reid Street

Palatka, Florida 32177

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions

within 15 days from the date of this Recommended Order. Any

exceptions to this Recommended Order should be filed with the

agency that will issue the Final Order in this case.