09-003817 Tetra Tech Ec, Inc. vs. Mitigation Services Pbc, Llc And Board Of Trustees Of The Internal Improvement Trust Fund Status: Closed Recommended Order on Friday, October 8, 2010.

Summary: Petitioner failed to prove that the Board of Trustees did not comply with Rule 18-2.018(2)(i) when it waived the requirement for competitive bidding.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

TETRA TECH EC, INC. , )

)

Petitioner , )

)

vs. ) Case No. 09 - 3817

)

MITIGATION SERVICES PBC, LLC )

AND BOARD OF TRUSTEES OF THE )

INTERNAL IMPROVEMENT TRUST )

FUND , )

)

Respondents . )

)

RECOMMENDED ORDER

Pursuant to notice, a final hearing was held in this case

on August 25, 2010, in Tallahassee, Florida, before Bram D.E.

Canter, Administrative Law Judge of the Division of

Administrative Hearings ("DOAH") .

APPEARANCES

For Tetra Tech EC, Inc .:

Mary F. Smallwood , Esquire

GrayRobinson, P.A.

301 S outh Bronough St reet, Suite 600

Tallahassee, F lorida 32301

For Mitigation Services PBC, LLC:

John L. Wharton , Esquire

Frederick L. Aschauer, Jr. , Esquire

Rose, Sundstrom & Bentley, LLP

2548 Blairstone Pines Dr ive

Tallahassee, F lorida 32301

For t he Department of Environmental Protection:

W. Douglas Beason , Esquire

Ronald W. Hoenstine, III, Esquire

Department of Environmental Protection

3900 Commonwealth B oulevard , M ail Station 35

Tallahassee, F lorida 32399 - 3000

STATEMENT OF THE ISSUE

Whether the action of the Board of the Internal Improvement

Trust Fund ("Board") in authorizing the Department of

Environmental Protection to enter into a contract with

Mitigation Services PBC, LLC ("Mitigation Services") to operate

a mitigation ba nk on state lands is subject to review under

Chapter 120, Florida Statutes, and, if so, whether the Board's

action compli es with the requirements of applicable law.

PRELIMINARY STATEMENT

On March 10, 2009, the Board a uthorized the Department to

negotiate a contract pursuant to which Mitigation Services would

operate a mitigation bank on approximately 263 acres of state

lands in Palm Beach County. O n April 30, 2009, Petitioner,

Tetra Tech EC, Inc. (ÐTetra TechÑ) filed with the Board a

p etition for h earing , claiming that the Board acted improperly

when it authoriz ed a "sole - source" contract for the use of state

lands without determining that it was in the public interest to

do so, which Tetra Tech claimed was required by a Board rule.

The Board dismissed the p etition on the ground that its

action was a settlement of a legal dispute involving contracts

rights and real property and, therefore, was not subject to

administrative review. Tetra Tech was granted leave to amend

its petition and filed an amended petit ion o n July 2, 2009. The

Board referred the amended petition to DOAH.

The Board then filed a m otion to d ismiss the amended

petition for l ack of s ubject m atter j urisdiction . Mitigation

Services filed similar motions . The m otions were denied.

At the fina l hearing, the parties ' J oint Exhibits one

through five were admitted into evidence. Tetra Tech presented

the testimony of Jonathan Weiss, its Executive Vice President.

Mitigation Services presented the testimony of Robert Ballard,

Deputy Secretary of La nd and Recreation for the Department, and

David McIntosh, a principal of Mitigation Services.

The one - volume T ranscript of the final hearing was filed

with DOAH. T he parties filed post hearing submittals that were

carefully considered in the preparation of this R ecommended

O rder.

FINDINGS OF FACT

Parties

1. Tetra Tech is a Delaware corporation registered to do

business in Florida. Tetra Tech is engaged in the business of

mitigation banking and operate s the Loxahatchee Mitigation Bank

in Palm Beach Coun ty under a contract with the South Florida

Water Management District ("SFWMD") .

2. The Board is the Governor and Cabinet and is vested and

charged with the acquisition, administration, management,

control, supervision, conservation, protection and dispos ition

of state lands.

3. Mitigation Services is a Florida limited liability

company and is engaged in the business of mitigation banking in

Florida.

Background

4. In November 2002, the Board app roved an option to

purchase 2,020 acres in Pal m Beach County from the County. The

County had acquired these lands from the John D. and Catherine T.

MacArthur Foundation (" Foundation ") . The lands included

approximately 263 acres known as the Lemon Grove property.

5. At the time that the Board approved the o ption, Palm

Beach County and the Foundation had a Mitigation Agreement which

allow ed the Foundation to use certain lands , including the Lemon

Grove property, for mitigation activities .

6 . On September 3, 2003, the Foundation assigned its rights

under the Mitigation Agreement to Mitigation Services.

7. In May 2004, the Board acquired title to the lands that

included the Lemon Grove property .

8. Mitigation Services contends that the Board, upon its

purchase of the lands that were the subject of the Mitigation

Agreement, took title subject to the terms of the agreement,

including the right of Mitigation Services to operate a

mitigation bank on the Lemon Grove property.

9. Mitigat ion Services submitted a n application to SFWMD

for a permit to operat e a mitigation bank on the Lemon Grove

property. SFWMD required Mitigation Services to provide

evidence that the Board agreed to the proposed use of the

property for mitigation banking . Mitigation Services asked the

Department to provide evidence that the Board approved the

intended use of the Lemon Grove property , but t he Department

declined to do so.

10. The Department did not believe that the Mitigation

Agreement allowed Mitigation S ervices to operate a mitigation

bank on the Lemon Grove property , despite the fact that there

were letters from Palm Beach County and the MacArthur Foundation

acknowledging that a mitigation bank was one of the uses

contemplated by both parties to the Miti gation Agreement.

Mitigation Services and the Department were unable to resolve

their disagreement and Mitigation Services requested that the

matter be agendaed for review by the Board.

11 . The matter was first placed on the Board's agenda for

August 2008, but was withdrawn and rescheduled for the Board's

public meeting held on October 28, 2008. The agenda item was

identified as:

Consideration of (1) an extension of an

existing mitigation agreement covering the

Lemon Grove property within the Pal - Mar

Florida Forever Project; and (2)

authorization to operate a mitigation bank on

the property.

12. At the October 28, 2008, meeting, Department Secretary

Sole presented the item, stating:

Gover nor and Cabinet, the DEP recommended

denial of the applicant's request. And

there are two bases for that recommendation.

I just want to hit those real brief. One,

just to be clear, when we looked at the

mitigation agreement, it was our

interpretation, a nd we've had our counsel

look at that, that the mitigation agreement

did not authorize a mitigation bank. It did

authorize the applicant to go do what we

call a project - by - project mitigation, but

not a specific mitigation bank.

* * *

Also the other reason for the Agency's

recommendation of denial is in 1998 the

Board of Trustees actually identified that

mitigation banking on state - owned lands were

rejected. The agency brought that forward

to the Board of Trustees at that time. The

Board of Trustees did acknowledge and

approve the use of project - by - project

mitigation on Board of Trustees lands but

did reject the concept of mitigation

banking.

Joint Exhibit 1, at 72 - 75.

13. David McIntosh, representing Mitigation Services, made

a presentation to t he Board, which included the following

comments:

What we seek from you is recognition,

ratification and protection of our legal

rights that DEP has refused to acknowledge.

We also request from you an extension, as a

matter of fairness of those rights, und er

fair and practicable terms, so that we can

do what we thought we had a right to do when

we initially contracted for this.

* * *

We formed a company to do that, an exclusive

wetland mitigation banking company. We

promptly and very expensively -- w e've spent

probably $400,000 in this process already --

applied for a permit to the South Florida

Water Management District.

* * *

[T]he Water Management District, said to us,

well, of course, in doing this on somebody

else's land, we need the consent of the

landowner. That when we tried to contact

DEP. And it's been three and a half years

trying to get their consent.

* * *

What we ask is that you recognize our

rights, that you instruct the state agencies

to cooperate with us as represen tatives of

the landowner in our permit process and that

you extend those rights so that we have a

reasonable amount of time to do our business

and to exercise our contractual rights.

Id. at 76 - 83.

14. Agriculture Commissioner Bronson indicated that "it

sounds to me like these are legal issues that are going to

probably have to go to court somewhere else . " Attorney General

McCollum said that he had looked at the Mitigation Agreement and

the letters from the County and the Foundation about the

intended us es of the Lemon Grove property. He stated:

[U] nder law, of course, the State assumes

the status of this property at the time and

with this understanding there that Mr.

McIntosh's company has. So I ' m worried that

we 're here today with a point where we cou ld

get involved in a protracted bit of

litigation for the State that might be

unnecessary. There is certainly at the very

least is a case Î - what they call a case in

controversy here , as to interpreting this,

and with the two original parties to this

sayi ng there's a mitigation bank right.

* * *

Plus it looks to me like this has been

before you for a long period of time. And

it would have been fairer perhaps to

Mr. McIntosh and his firm if this had gotten

before us or you denied it or something had

been resolved before now. And that disturbs

me as well. So I would like to think we can

work this out, Governor, in some way and let

this banking operation exist, as it

apparently was intended by the parties,

whether or not the contract literally says

th at or not.

Id. at 88 - 89 .

15. C hief Financial Officer Sink stated :

General McCollum, like you, I went back and

looked at the original mitigation agreement.

And I could easily interpret it to say, it

doesn't say that you can't operate a

mitigation bank. Clearly, the applicant

thought -- I mean, he's put a lot of money

into this property thinking that he could

operate a mitigation bank.

Id. at 92.

16. The final motion was to " defer , with some guidance for

the Department to negotiate and come back to us at the December

meeting with their proposal . " Id. at 99.

17. The matter was placed on the December 9, 2009, agenda

of the Board, but was withdrawn and rescheduled for the

March 10, 2 009, meeting of the Board. The agenda item was

identified as:

Consideration of a request to (1) allow

Mitigation Services PBC, LLC to operate a

mitigation bank, or other mitigation

project, on approximately 263.05 acres of

state - owned land known as the Le mon Grove

property within the Pal - Mar Florida Forever

Project for one ten - year term followed by

one five - year renewal term; (2) authorize

negotiation of a contract pursuant to the

terms outlined below to allow Mitigation

Services PBC, LLC to establish a mi tigation

bank, or other mitigation project, on the

Lemon Grove property and delegate authority

to the Secretary of the Department of

Environmental Protection, or designee, to

approve and consent to the contract between

the Board of Trustees, Mitigation ser vices

PBC, LLC and Florida Fish and Wildlife

Conservation Commission; (3) determine that,

pursuant to paragraph 18 - 2.018(1)(a),

F.A.C., the proposed contract is not

contrary to the public interest; (4)

determine it is in the public interest to

waive the co mpetitive bid requirements of

paragraph 18 - 2.018(2)(i), F.A.C.; and (5)

authorize Florida Fish and Wildlife

Conservation Commission to be the long - term

operation and maintenance entity pursuant to

the South Florida Water Management District

permit.

18. T he item was moved, seconded, and adopted by the

Board. Part of the Board's action was to delegate to the

Department the authority to produce a contract with Mitigation

Services that incorporated the terms presented to the Board in

the staff report . Th e c ontract was being f inalized when Tetra

Tech filed its petition . The process was stopped, pending the

outcome of this proceeding.

Public Interest

19. The staff report which accompanied this agenda item

contained the following statements (bold type in ori ginal):

Public Interest Determination

Pursuant to paragraph 18 - 2.018(1)(a),

F.A.C., the decision to authorize the use of

the Board of Trustees - owned land requires a

determination that such use is not contrary

to the public interest. DEP is recommending

th e Board of Trustees make such a

determination in this case because the Board

of Trustees purchased the Lemon Grove

property subject to the mitigation

agreement. While DEP and Mitigation

Services disagree as to whether the original

mitigation agreement aut horized a mitigation

bank, this recommendation is an effort to

resolve the disagreement over what rights

existed under the mitigation agreement at

the time the Board of Trustees purchased the

property. In addition, the activity will

help in the restoratio n of the property and

is a compatible use within FWC's management

plan.

Request to Waive Competitive Bid Requirement

Pursuant to paragraph 18 - 2.018(2)(i ),

F.A.C., the Board of Trustees may waive the

requirement for competitive bids if

determined to be in the public interest.

Mitigation Services has been working towards

a mitigation bank permit under its existing

mitigation agreement with the County on th e

Lemon Grove property prior to the Board of

Trustees purchasing the property.

Mitigation Services claims they have a

significant amount of time invested with the

SWFWMD staff in preparing for the mitigation

bank permit and also a financial investment

for expenditures for the completed surveys

and site assessments on the parcel. These

investments of time and money were made to

receive the SFWMD permit approval necessary

to start the mitigation/restoration work and

will enable Mitigation Services to begin the

restoration in a timely manner. Mitigation

Services has seven years experience in

mitigation banking at a separate site and

according to SFWMD has been found to be in

compliance with its current permit. DEP is

recommending the Board of Trustees waive the

competitive bid process because of these

factors.

20. At the March 10, 2009, meeting, Department Secretary

Sole stated:

And, again, I cannot emphasize more that

this really is unique because of the prior

history of this site, specific to this

proper ty. Mitigation Services, LLC, has

been working this permit with the South

Florida Water Management District for

several years, has invested a lot of money

in developing a mitigation bank, which

actually takes quite a bit of time and

money, which is somewh at to address your

concern of why we didn't do a competitive

bid.

Joint Exhibit 2, at 58.

21. Because the agenda item included a request to

"determine it is in the public interest to waive the competitive

bid requirements of [Rule] 18 - 2.018(2)(i)," the affirmative vote

of the Board was to make this determination.

22. Tetra Tech contends that the Board did not make findings

regarding the public interest factors described in Florida

Administrative Code Rule 18 - 2.018, such as general environmental

concerns, land use, recreation, aesthetics, economics, and public

health and safety, but b ased its decision solely on the potential

adverse impacts on Mitigation Services. However, it must be

assumed that the decision of the Board wa s based on all of the

supporting reasons presented to the Board.

23. An important reason that is reflected in the comments

of individual Trustees, in the staff reports, and in the

official minutes of the Board meetings is that there existed a

colorable le gal claim that Mitigation Services had the right to

operate a mitigation bank on the Lemon Grove property, subject

to its obtaining a regulatory permit to do so. The colorable

legal claim and the perceived equities were integral to the

Board's stated beli ef that it was in the public interest to avoid

litigation.

24. Other public interest factors reflected in the

comments of individual Trustees, in the staff reports, and

in the official minutes of the Board meetings are the

restoration of the Lemon Grove property, the ability of

Mitigation Services to accomplish the restoration, the

compatibility of the use of the property with the

management plan of the Fish and Wildlife Conservation

Commission, the establishment of a permanent endowment for

the maintenan ce of the property, and the equitable

compensation that the State would derive from the operation

of the mitigation bank.

Standing

25 . The Lemon Grove property is not far from the Loxahatchee

Mitigation Bank operated by Tetra Tech. If Mitigation Services

operates a mitigation bank on the Lemon Grove property, it is

reasonably likely that the two mitigation banks will be

competitors in the sale of mitigation "credits."

26 . Although the record does not contain sufficient evidence

to determine with certaint y, there is a reasonable likelihood that

the terms of Mitigation Services' contract with the State will

enable it to sell credits at a lower price than the credits sold

by Tetra Tech for the Loxahatchee Mitigation Bank.

27. Tetra Tech contends that, if th e State solicited bids

for the operation of a mitigation bank on the Lemon Grove

property, it is likely that Tetra Tech would have submitted a bid.

28. Tetra Tech showed that it is reasonably likely that the

revenue that the State would receive from Mitig ation Services f rom

the operation of a mitigation bank on the Lemon Grove bank would

be less than the amount the State would receive if the contract

were competitively bid. The record does not contain sufficient

evidence to determine the difference in rev enue.

29 . Respondents contend that, based on prior Board policy

not to allow mitigation banks on state lands, there would be no

solicitation of bids for the operation of a mitigation bank on the

Lemon Grove property. This allegation is given little weigh t

because it is a matter of speculation. The Board has no written

policy to prohibit the operation of mitigation banks on state

lands, and no statute has been cited that prohibits the use of

state lands for mitigation banking. The Board is apparently fre e

to authorize such uses.

CONCLUSIONS OF LAW

Subject Matter Jurisdiction

30 . The Department and Mitigation Services assert that DOAH

lacks subject matter jurisdiction over this dispute because the

action of the Board was a settlement of a legal dispute involving

the contractual rights of Mitigation Services under the Mitigation

Agreement. Respondents assert that DOAH has no jurisdiction to

adjudicate contract or real property claims . No adjudication of

contract or real property claims is requested in Tetra Tech's

petition for hearing, and no adjudication of such claims is

attempted herein. Therefore, there is no need to address this

particular jurisdictional argument.

31. Respondents repeatedly characterize the action of the

Board as the settlement of a lawsuit and urge the importance of

settling lawsuits. They cite Kruer v. Bd. of Trustees of the

Internal Imp. Trust Fund , 647 So. 2d 129 (Fla. 1 st DCA 1994) , and

other judicial decisions which involved settlements of lawsuits.

However, this matter does not involve the settlement of a lawsuit.

There neither was, nor is, a lawsuit pending between Mitigation

Services and the Board. This matter involves action taken by t he

Board which was justified in part by the public interest in

avoiding a lawsuit with Mitigation Services.

32. It is made clear in Kruer and many other Florida cases

that settlement agreements are not shielded from scrutiny and

can be challenged by affec ted third parties. I f the action of

the Board were the settlement of a lawsuit , the n the court's

opinion in K ruer suggests that the appropriate forum for review

-- " the court in which the challenged settlement agreement and

judgment is entered " -- would b e the Board (and DOAH, via the

Board's referral of this case to DOAH). However, this case does

not involve the settlement of a lawsuit.

33. T he Board has been granted the power and duty to

administer all state lands and is responsible for the

management, and disposition of state lands to ensure their

maximum benefit and use. See § 253.03(7)(a), Fl a. Stat. (2009) .

The Board has promulgated rules to implement this broad

authority. With regard to authorizations by the Board for the

private use of state la nds for private gain, the Board

established its policy in Florida Administrative Code Rule 18 -

2.018(2)(i) that such authorizations shall be awarded on the basis

of competitive bidding unless otherwise determined by the Board to

be in the public interest :

E quitable compensation shall be required when

the use of uplands will generate income or

revenue for a private user or will limit or

preempt use by the general public. The Board

of Trustees shall award authorization of such

uses on the basis of competitive bidding

rather than negotiation unless otherwise

provided herein or determined by the Board of

Trustees to be in the public interest

pursuant to the results of an evaluation of

the impacts, both direct and indirect, which

occur as a result of the proposed use.

Relevant factors to be considered in the

evaluation shall include those specified in

subsection 18 - 2.018(1), F.A.C .

34. Untenable are the notions suggested by Respondents'

arguments that the Board can waive competitive bidding in

authorizing the private use of state lands without complying

with its own rule on the subject, or that, when the

authorization is characterized as the "settlement of a legal

dispute," the waiver can not be questioned. Opportunity for

misuse of such a prerogative should be obvious. Most matters

that come before the Board involve laws, the construction of

which is frequently disputed by interested pe rsons.

35. The Board may not act arbitrarily in its proprietary

role as the owner of state lands . Bd. of Trustees of the Internal

Imp. Trust Fund v. Lost Tree Village Corp. , 600 So. 2d 1240 (Fla.

1 st DCA 1992).

36. Mitigation Services' request for Boar d authorization

to use the Lemon Grove property to operate a mitigation bank was

expressly presented to the Board as an action requiring the

Board's determination, pursuant to Rule 18 - 2.018(2)(i) , that

waiving the competitive bidding process was in the pub lic

interest. The Board approved the item as presented.

37. The provisions of Section 120.569, Florida Statutes,

apply "in all proceedings in which the substantial interests of

a party are determined by an agency." The action of the Board

taken on Marc h 10, 2009, authorized the use of state lands by a

private person, as do many of the Board's actions which are

regularly the subject of DOAH proceedings. The Board's action

determined the substantial interests of Mitigation Services by

authorizing Mitigat ion Services' use of state lands for private

gain pursuant to negotiation rather than by competitive bidding.

Therefore, the Board's action was subject to review under

Chapter 120, Florida Statutes, upon the timely filing of a

petition for hearing by a pe rson whose substantial interests

were affected.

Standing

38 . To demonstrate standing, Tetra Tech must show that it

will suffer an injury in fact which is of sufficient immediacy and

the type or nature that the proceeding is intended to protect.

See Agr ico Chem. Co. v. Dep ' t of Envtl. Reg. , 406 So. 2d 478 (Fla.

2d DCA 1981) .

39. As a potential bidder who was denied the opportunity to

submit a bid when the Board decided to negotiate a contract with

Mitigation Services , Tetra TechÓs substantial interests were

affected. See Advocacy Center for Persons with Disabilities, Inc.

v. Dep ' t of Children and Families , 721 So. 2d 753 (Fla. 1 st DCA

1998) (potential bidder has standing) .

40. Counsel for the Board states that the B oard did not

intend to accept competitive bids for the operation of a

mitigation bank on the Lemon Grove property and, therefore,

Tetra Tech cannot have been injured as a potential bidder. That

statement misses the point. It is undisputed that the Board was

authorizing the negotiation of a new contract for the use of

state lands by a private person for private gain. Rule

18 - 2.018(2)(i) requires the Board to use competitive bidding for

such an authorization, rather than negotiation, unless a

determination is made that it is in the public interest to not

use competitive bidding. The Board made this public interest

determination, which effectively excluded all persons who would

have participated in a competitive bid.

41. Respondents' argument that the Boa rd would not have

accepted bids because it had a policy not to allow mitigation

banking on state lands is unpersuasive because it is based on an

assumption that the current Board is bound by this non - rule

policy. That assumption is given no weight. The B oard has the

authority to allow mitigation banking on state lands, and the

Board acknowledged in this case that the public can benefit when

a private entity is allowed to restore state lands as part of a

mitigation banking operation.

42. In addition to b eing deprived of the opportunity to

submit a bid , Tetra Tech demonstrated that the proposed contract

with Mitigation Services would provide a competitive advantage to

Mitigation Services b ecause it would be able to sell mitigation

credits at a lower price than Tetra Tech.

43. Respondents assert that Tetra Tech's alleged injur ies

are not the type intended to be protected by Chapter 253, Fl orida

Statutes. However, this matter involves a Board rule regarding

equitable compensation to the State and the selec tion of services

by negotiated contract or competitive bidding. The rule expressly

addresses competition and economics.

44. Tetra Tech has standing to challenge the action of the

Board.

Public Interest

45 . Rule 18 - 2.018(2)(i) provides in relevant part:

Equitable compensation shall be required when

the use of uplands will generate income or

revenue for a private user or will limit or

preempt use by the general public. The Board

of Trustees shall award authorization of such

uses on the basis of competiti ve bidding

rather than negotiation unless otherwise

provided herein or determined by the Board of

Trustees to be in the public interest

pursuant to the results of an evaluation of

the impacts, both direct and indirect, which

occur as a result of the propos ed use.

Relevant factors to be considered in the

evaluation shall include those specified in

subsection 18 - 2.018(1), F.A.C .

46 . Rule 18 - 2.018 (1) provides:

Public Interest Evaluation . The decision to

authorize the use of Board of Trustees - owned

uplands requires a determination that such

use is not contrary to the public interest.

The public interest determination requires an

evaluation of the probable impacts of the

proposed activity on the uplands. All direct

and indirect impacts related to the propo sed

activity as well as cumulative effects of

those impacts shall be taken into

consideration. Relevant factors to be

considered include: conservation, general

environmental and natural resource concerns,

wetlands values, cultural values, fish and

wildli fe values, flood hazards, floodplain

values, land use, recreation, aesthetics,

economics, public health and safety, relative

extent of the public need for the proposed

activity, reasonable alternative locations

and methods to accomplish the objective of

th e proposed activity; potential detrimental

effects on the public uses to which the area

is otherwise suited, the effect on cultural,

scenic and recreational values, and the needs

and welfare of the people.

47. Rule 18 - 2.018(2)(i) states that the public i nterest

factors to be considered when determining whether to waive

competitive bidding shall include those specified in Rule 18 -

2.018(1) . The words "include", "includes," and "including" are

generally words of enlargement rather than limitation. See

McLa ughlin v. State , 698 So. 2d 296, 298 (Fla. 3d DCA 1997); Yon

v. Fleming , 595 So. 2d 573, 577 (Fla. 4th DCA 1992). Moreover, in

the full context of Rule 18 - 2.018, it does not appear that the

Board intended to be limit itself to the public interest factors

identified in Rule 18 - 2.018(1) when making the public interest

determination required by Rule 18 - 2.018(2)(i).

48. T he Board made the public interest determination

required by Rule 18 - 2.018(2)(i) , based on the public interest

factors discussed in paragraphs 23 and 24, above .

49. It is not uncommon in DOAH proceedings that contract

terms and real property matters are taken into account and

affect findings of fact and conclusions of law. This process

does not amount to an adjudication of contract or property

rights. One example is the determination of riparian rights in

cases involving dock permits issued by the Department of

Environmental Protection. The Department determines whether a

proposed dock would interfere with the riparian rights of

ad jacent landowners. See Fla. Admin. Code R. 18 - 21.004(3)(c).

In making this determination, the Department is not adjudicating

the riparian rights of the affected persons. The parties may

present evidence and argument on riparian rights in the DOAH

hearin g, and related findings of fact and conclusions of law are

included in the recommended order. However, if a person

disputes the Department's final action because of a dispute

regarding riparian rights, the dispute can only be resolved by

seeking declarato ry or similar relief in circuit court. See

Patricia Ward v. Secret Oak Owners' Ass n. , Case No. 98 - 5190

(Dep't of Envtl. Prot. Mar. 24, 2000).

50. In this case, the Board did not adjudicate the rights

of Mitigation Services under the Mitigation Agreement , and no

adjudication is made by the Administrative Law Judge. However,

in order for the Board to use the avoidance of litigation as

part of its public interest determination for waiving the

competitive bidding process otherwise required by Rule

18 - 2.018( 2)(i), Mitigation Services had to have a colorable, or

seemingly meritorious, legal claim. It is concluded that the

Board's determination that Mitigation Services had a colorable

claim was a reasonable determination. Therefore, avoiding a

lawsuit with Mi tigation Services was a reasonable public

interest consideration.

51. The competitive disadvantage caused to Tetra Tech is

based on comparing the Board's action with an outcome where

Mitigation Services is not allowed to operate a mitigation bank

on the Lemon Grove property. However, if a comparison is made

between the Board's action and the scenario where Mitigation

Services has the right under the Mitigation Agreement to operate

a mitigation bank without paying compensation to the State,

Tetra Tech is benefited because Mitigation Services' competitive

advantage has been reduced.

52. Tetra Tech failed to prove that the Board's action on

March 10, 2009, was not in compliance with the requirements of

Rule 18 - 2.018(2)(i).

RECOMMENDATION

Based on the fore going Findings of Fact and Conclusions of

Law it is

RECOMMENDED that the Board of Trustees of the Internal

Improvement Trust Fund enter a Final Order which authorizes the

use of the Lemon Grove property by Mitigation Services under the

terms identified in the Board's action taken on March 10, 2009.

DONE AND ENTERED this 8th day of October, 2010, in

Tallahassee, Leon County, Florida.

S

BRAM D. E. CANTER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 8th day of October, 2010.

COPIES FURNISHED :

Mary Frey Smallwood, Esquire

GrayRobinson, P.A.

Post Office Box 11189

Tallahassee, Florida 32302

W. Douglas Beason, Esquire

Ronald Woodrow Hoenstine, III, Esquire

Department of Environmental Protection

Douglas Building, Mail Station 35

3900 Commonwealth Boule vard

Tallahassee, Florida 32399 - 3000

John L. Wharton, Esquire

John J. Fumero, Esquire

Rose, Sundstrom & Bentley, LLP

2548 Blairstone Pines Drive

Tallahassee, Florida 32301 - 1567

Mimi Drew, Secretary

Department of Environmental Protection

Douglas Buil ding

3900 Commonwealth Boulevard

Tallahassee, Florida 32399 - 3000

Tom Beason, General Counsel

Department of Environmental Protection

Douglas Building, Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399 - 3000

Lea Crandall, Agency Clerk

Department of Environmental Protection

Douglas Building, Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399 - 3000

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.