10-002335 Acl Bahamas Limited And Indian River Terminal, Inc. vs. Department Of Business And Professional Regulation, Pilotage Rate Review Committee Status: Closed Recommended Order on Tuesday, January 31, 2012.

Summary: There was not sufficient credible and persuasive evidence presented at hearing to support findings of fact materially different from the findings of the Board in its Notice of Intent.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ACL BAHAMAS LIMITED AND INDIAN )

RIVER TERMINAL, INC., )

)

Petitioners, )

)

vs. )

)

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

PILOTAGE RATE REVIEW COMMITTEE, ) Case No. 10 - 2335

)

Respondent, )

)

and )

)

THE FLORIDA STA TE PILOTS )

ASSOCIATION, INC.; AND FORT ) )

PIERCE PILOTS ASSOCIATION, )

)

Intervenor s . )

)

RECOMMENDED ORDER

Pursuant to n otice, a hearing was held in this case before

W. D avid Watkins, Administrative Law Judge of the Division of

Administrative Hearings in Vero Beach, Florida on April 26 - 28,

2011 , and by telephone on August 23, 2011.

APPEARANCES

For Petitioner: J. Michael Pennekamp, Esquire

Sand ra I. Tart, Esquire

F owler , W hite , B urnett , P.A.

Espirito Santo Plaza, 14th Floor

1395 Brickell Avenue

Miami, Florida 33131

For Respondent: Timothy Dennis, Esquire

Assistant Attorney General

Tom Barnhar t, Esquire

Special Counsel

Office of the Attorney General

The Capitol, Plaza Level 01

Tallahassee, Florida 32399 - 1050

For Intervenor: Warren Husband, Esquire

M etz , H usband & D aughton , P.A.

P.O. Box 10909

Tallahassee, Florida 32302

(Florida State Pilots Association)

For Intervenor: Captain William Wetzel

620 Colonial Drive

Vero Beach, Florida 32962

(Ft. Pierce Pilots Association)

STATEMENT OF THE ISSUE

Whether the application of the Fort Pierce Pilots

Association for an increase in the pilotage rates for the Port

of Fort Pierce should be granted in whole or in part , or denied.

PRELIMINARY STATEMENT

On or about March 30, 2009, the Fort Pierce Pilots

Association ( FPPA) submitted an application to the Department of

Business and Professional Regulation, Pi lotage Rate Review Board

(Board ) seeking an increase in the pilotage rates for the Port

of Fort Pierce.

On March 31, 2010, the Board issued a decision granting in

part and denying in part the application for a rate increase.

The FPPA did not challenge the BoardÓs decision to approve a

rate increase that was less than the rate applied for. However,

ACL Bahamas Limited ( ACL) and Indian River Terminal, Inc. (IRT)

tim ely filed a Petition for Formal Administrative Hearing

challenging the BoardÓs decision to allow a pilotage rate

increase at the Port of Fo rt Pierce pursuant to s ections

310.151(4), 120.569, and 120.57(1), Florida Statutes.

The Board forwarded ACLÓs and IRTÓs petition to the

Division of Administrative Hearings (DOAH) for assignment of an

administrative law judge, and DOAH took jurisdiction of the

matter pursuant to s ection s 310.151(4)(a), 120.569 and

12 0.57(1) .

On July 1, 2010, Petitioners filed an unop posed motion to

amend their petition and accordingly, Petitioners' amended

petition was accepted for filing by Order of July 6, 2010.

On July 20, 2010, the Florida State Pilots Association (FSPA)

filed a p etition for l eave to i ntervene , which was granted on

July 29, 2010.

Chapter Law 2010 - 255, which became effective on July 1,

2010, made substantial changes to the administrative body

responsible for setting pilotage rates at each of Florida's deep

water ports. Pursuant to this legislation, the initial

R espondent in this matter, the Pilotage Rate Review Board, was

essentially abolished and replaced by a new Pilotage Rate Review

Committee, which comprise s of seven specified members of the

Florida Board of Pilot Commissioners ("Committee").

See Ch. 2010 - 255, § 5, at 9, Laws of Fla. Any matters pending

before the Pilotage Rate Review Board as of July 1 , 2010, were

transferred for further action to the Committee. See id . at

§ 6, at 14.

Chapter Law 2010 - 225 effectively created a "Type Two

Transfer" of the duties and activities of the Board to the

Committee. Section 20.06 ( 2), provides in pertinent part that

when an executive branch agency is reorganized in th is manner:

Such a transfer does not affect the validity

of any judicial or administrative proceedin g

pending on the day of the transfer, and any

agency or department to which are

transferred the powers, duties, and

functions relating to the pending proceeding

must be substituted as a party in interest

for the proceeding.

On August 2, 2010, the undersi gned granted the Committee's

m otion to s ubstitute the Committee for the predecessor B oard .

This proceeding was then set for hearing and continued several

times on joint motions filed by the parties and separately filed

by the Respondent Committee and Peti tioners, to allow time for

additional discovery and settlement discussions. On January 25,

2011, the FPPA was granted i ntervenor status in this proceeding.

The final hearing was scheduled for April 26 - 28, 2011. Prior to

the hearing, the parties filed a j oint p rehearing s tipulation

and an a mended j oint p rehearing s tipulation ; however , t he

parties were unable to stipulate to any undisputed facts.

At the commencement of the final hearing Petitioners

limited their disputed issues of material facts to eight subject

areas in the former Board's factual findings set forth in the

Notice of Intent . All of the subject areas designated by

P etitioners involve material facts set forth in the former

Board's Notice of Intent and fall within one or more of the

mandatory factors to be considered as set forth in s ection

310.151(5)(b), by the Committee in deciding any application for

a change in rates of pilotage. The subject areas are:

a. The pilotÓs boat related expenses;

b. The pilotÓs time spent on piloting and

on other essential support services;

c. The comparable maritime employment to

that of a pilot;

d. The prevailing compensation in the

maritime industry as to those comparable

jobs;

e. The projected changes in the vessel

traffic at the port;

f. The need for a rate increase to attract

or retain a pilot at the Ft. Pierce port;

g. The pilotÓs gross revenue, revenue per

handle, net income and expenses; and

h. The comparative port data that is in the

investigative committee report.

At the hearin g, Petitioners presented the testimony of Sal

Litrico and offered into evidence Exhibits 1, 7 and 50.

Subsequently, Petitioners filed the transcript of the

proceedings held on August 23, 2011 , and by motion dated

September 19, 2011, offered into evidence the e - mails of Captain

William Wetzel that were produced after the conclusion of the

hearing in April 2011. Respondent and Intervenor FSPA filed a

joint response in opposition to the admission of the Wetzel

e - mails. By Order dated September 27, 2011, P etitionersÓ motion

to introduce the e - mails was denied because it was filed nearly

four weeks after the conclusion of t he final hearing, and the

record was closed as of August 23, 2011.

Respondent and Intervenors FPPA and FSPA presented the

testimony of C aptain George Quick, Commander Galen Dunton,

Captain William Wetzel and Richard Law, CPA. RespondentÓs

Exhibits 1 through 8, 12, 13, 14, 16, 18, 19 and 28 were

received into evidence. Intervenor FPPA's Exhibit 1 was

admitted into evidence. The parties agreed that the deposition

testimony of Capt. William Messer be admitted in lieu of his

live testimony.

Near the conclusion of the final hearing, Petitioner s

asserted that in responding to a discovery request, Captain

Wetzel had failed to produce all of his e - mails relating to the

pilot boat purchased by the FPPA . The undersigned ordered, sua

sponte, that Captain Wetzel review all of his e - mails to

determine whether all responsive documents had been produced to

Petitioner, and if not, to immediately prov ide them to

Petitioner. It was further ordered that should additional

e - mails be produced by Captain Wetzel, Petitioner would be given

an opportunity to cross - examine Captain Wetzel about them.

Accordingly, the hearing was adjourned in the afternoon of

April 28, 2011 , and was concluded via telephone on August 23,

2011.

A six - volume transcript of the proceedings was filed with

DOAH on August 29, 2011. A one - volume transcript of the hearing

held on August 23, 2011 , was filed on September 20, 2011. The

p arties timely filed proposed findings of fact and c onclusions

of law which have been considered in preparing this Recommended

Order.

All citations are to Florida Statutes (2010) unless

otherwise indicated. 1 /

FINDINGS OF FACT

Based on the testimony and do cumentary evidence presented

at the hearings on April 26 - 28 and August 23, 2011, and on the

entire record of this proceeding, the following findings of fact

are made:

The Parties

1 . Petitioner ACL is the largest user of the Port of Fort

Pierce (the Port ) . ACL operates three vessels on a regular

"liner" schedule operating six days per week from the Port to a

few foreign ports. Approximately 95 percent of the vessel

traffic at the Port is generated by these three vessels. ACL is

affected by the rates of pilotage set for the Port since it is

required by c hapter 310, Florida Statutes, to utilize and

compensate a s tate - licensed pilot each time one of its vessel s

enters or departs the Port . T he rates that must be paid by ACL

are established by Respondent , D epartment of Business and

Professional Regulation, Pilotage Rate Review Committee.

Accordingly, ACL is substantially affected by and has standing

to maintain this challenge to the former Board's preliminary

decision set forth in the Notice of Intent .

2 . Petitioner IRT owns the terminal at the Port, as well

as warehouses, offices and equipment at the Port. The pilotage

rate increase preliminarily approved by the Board in the Notice

of Intent will make the pilotage rates at the Port higher for

the small v essels which can utilize the Port than the rates

these same size vessels would pay at the Port of Palm Beach,

Port Canaveral and/or Port Everglades. This is significant

because IRT competes to attract new business from vessel owners

and/or operators whose vessels call on South Florida.

Accordingly, IRT is substantially affected by and has standing

to mainta in this challenge to the Board's preliminary decision

set forth in the Notice of Intent .

3 . The Pilotage Rate Review Committee (formerly the

Pilotage Rate Review Board), Department of Business and

Professional Regulation (DBPR) , is a state agency created by

s ection 310.151, Florida Statutes. It is established as part of

the Board of Pilot Commissioners, and consists of seven members.

With regard to a n application for a change in pilotage rates,

the Committee must investigate and determine whether a rate

change will result in fair, just and reasonable rate s of

pilotage pursuant to c hapter 310, Florida Statutes, and rules

implementing those provisions. The decisions of the Committee

however, are made independent of the Board of Pilot

Commissioners, and are not appealable to the Board of Pilot

Commissioners.

4 . Intervenor F ort Pierce Pilots Association ( FPPA) is an

association of harbor pilots with one member, William Wetzel,

LLC. Captain William Wetzel is, in turn, the sole member of

William Wetzel, LLC and is the state - licensed p ilot for the

Port . The FPPA, through Captain Wetzel and occasionally a

cross - licensed pilot from the Port of Palm Beach , p erform the

pilotage services at the Port.

5 . The Florida State Pilots Association, Inc. (FSPA) has a

business address in Tallahassee, Florida. FSPA is a voluntary

organization representing the interests of FloridaÓs 97 state -

licensed harbor pilots, who participate in the FSPA through the

11 local pilot association s that serve FloridaÓs deepwater

ports.

The Piloting Profession

6 . Chapter 310, Florida Statutes, sets forth a

comprehensive body of regulation addressing the practice of

piloting in this stat e. The purpose of such regulation, as

elsewhere in the country, is to ensure the efficient movement of

maritime commerce while guarding against vessel incidents that

could injure persons and property, as well as the stateÓs

economy and environment. From this standpoint, the most

dangerous part of any sea voyage for the ship and for the public

at large is when the ship is moving into or out of port.

7 . In the maritime industry, the crew of a vessel, which

is employed by the shipÓs owner or operator, is u nder

significant pressure to bring that vessel into and out of port

efficiently and without delays. In light of the risks posed if

those economic interests were to override public safety,

Florida, and every other state with a significant maritime

industry , requires vessels to utilize the services of an

independent state - licensed pilot. The pilot is a mariner with

many years of experience who is thoroughly familiar with every

facet of a particular port and who has the skills necessary to

maneuver a wide va riety of ships. Because the pilot is not

employed by the vessel owner, the pilot can exercise independent

judgment, free from the pressures normally associated with the

shipÓs business operations.

8 . The value added by the pilot in terms of safety is

wi dely recognized throughout the maritime industry, as evidenced

by the fact that even ships calling on U.S. ports for which a

pilot is not required by state law, i.e., U.S. - flagged vessels ,

routinely use the services of the portÓs state - licensed pilots.

9 . The risks faced by pilots are unique. Pilots are

transferred from their pilot boat out at sea onto and off of

large moving vessels. Once the pilot boat maneuvers alongside

the vessel, the pilot typically boards the ship by stepping from

the pilot boat onto a ladder hanging from the shipÓs side.

Unfortunately, pilots are frequently injured and sometimes

killed in the c ourse of this dangerous transfer, particularly in

bad weather . One expert in the piloting profession testified

that over the course of a 30 - year career, a pilot has a

one - in - 20 chance of being killed in a boarding accident.

10 . Once on board, the pilot must familiarize himself or

herself with the shipÓs navigational equipment, performance

characteristics, and mechanical condition. The pilot conducts a

conference with the shipÓs master, during which the two exchange

technical information on the ship, as well as details of the

planned passage.

11 . If the vessel is fit for the transit, the pilot then

Ðtakes the conn,Ñ assuming navigati onal control of the vessel

and directing the shipÓs movements by giving verbal commands on

steering and engine power to the shipÓs crew. The crew will

have varying levels of maritime experience and often speak

little or no English.

12 . The pilot must d eal with a wide variety of ships and

equipment. The vast majority of ocean - going vessels are flagged

in foreign countries rather than the U.S., thus avoiding a great

deal of regulation, as well as taxation.

Piloting Selection and Training

13 . A mariner wanting to become a state pilot in Florida

must await an opening declared by the stateÓs Board of Pilot

Commissioners in one or more ports where he or she has an

interest in serving. If the mariner is determined to have

sufficient experience and qualifica tions, the next step in the

process of deputy pilot selection is successful completion of a

very difficult written examination, designed and administered by

the State of Florida.

14 . This comprehensive two - day examination encompasses

International & Inla nd Rules of the Road, Seamanship &

Shiphandling, Federal & State Pilotage Laws, and port - specific

Chart Work & Local Knowledg e, and require s the candidate to

reproduce from memory a complete and accurate chart of the port

and its channels. These examinati ons are extremely difficult,

and candidates will have typically spent several mo nths and

hundreds of hours in preparation. Only about 20 percent of

those who sit for the exam will pass.

15 . The examination, however, is not one where the

applicant is onl y required to achieve a minimum score to

demonstrate basic compete ncy. Rather, in Florida, the goal of

the deputy pilot candidate is to achieve the top score among a ll

candidates taking the exam. T h is is because th e DBPR Secretary

will be presented with a list of the top five scores on the exam

and will typically appoint as the deputy pilot the person

scoring highest.

16 . Once the DBPR Secretary has selected a deputy pilot to

fill an opening at a Florida port, the deputy is issued a

12 - month temporary certificate. The temporary certificate

becomes permanent when the deputy has proven suitable in all

respects for continued training as a state pilot. Once in

receipt of the temporary certificate, the deputy pilot then

begins a minimum two - year training p rogram at the port, as

approved and monitored by the Board of Pilot Commissioners.

17 . Under the supervision of the fully licensed pilots of

the port, this training program allows the deputy pilot to

initially handle smaller vessels of limited size and t onnage,

with gradual increases in size and tonnage over time. While in

training, the deputy earns only a portion of what a full pilot

would earn. The Board of Pilot Commissioners approves each

deputy pilotÓs advancement to a higher level in the training

program, after thorough review of the records and the

recommendations of the local pilots in the port. Some deputy

pilots Ðwash outÑ of training and fail to complete the program,

never becoming pilots.

18 . Upon completion of all training, the deputy pil ot must

pass yet another rigorous exam administered by the state before

he or she can be appointed and licensed by DBPR as a full state

pilot for the specific port in which the deputy pilot has

trained.

The Rate Application and Review Process

19 . On or a bout March 30, 2009, the FPPA submitted an

a pplication (the Application) to the former Board , requesting an

increase in pilotage rates at the Port . The Application sought

an increase in the rates of pilotage at the Port over a four -

year period, as follows : 157% in year one, 13.9% in year two,

16.7% in year three and 18.7% in year four. The total requested

increase from year one to year five w as 206%, from a $150.00

minimum fee before the Application , to a $608.00 minimum fee

after the final requested year four rate increase.

20 . As prescribed by statute and the CommitteeÓs rules,

two contract consultants were assigned to be the Investigative

Committee. One consultant, Richard Law, is a CPA, and has

served as an investigative consultant on pilotage rate

proceedings f or DBPR for 16 years. The other consultant, Galen

Dunton, is a retired Coast Guard commander with 18 years of

experience as an investigative consultant for DBPR in pilotage

matters.

21 . The I n vestigative C ommitte e made its initial visit to

the Port on July 10, 2009. During this process of

investigation, several interested persons provided comments in

opposition to the requested rate increase. Following the

investigation, the Investigative Committee submitted its

findings to th e former Boar d on September 8, 2009.

22 . The FPPA requested the following pilotage rate

increases in its application:

Year 1 Year 2 Year 3 Year 4

Draft Charge $12.50 $26.60 $30.25 $35.20 $41.20

(min. of 10 feet)

Tonnage $.015 $.060 $.0685 $.080 $.098

(min. of 1667 GT)

_____ _____ ______ _____ ______

Total Min. Fee $150.00 $386.00 $439.50 $512.00 $608.00

% Increase 157% 13.9% 16.7% 18.7%

23 . On December 11, 2009, at a Board public meeting, a

number of interes ted persons provided comments and testimony in

opposition to and in support of, the requested change in rates.

Captain Wetzel, as well as representatives of both Petitioners,

addressed the Board.

24 . The Investigative Committee included in its Report

fi ndings and comments relating to each of the criteria

enumerated in s ection 310.151(5) , Florida Statutes (2009) . The

Board reviewed the Investigative CommitteeÓs findings and the

statutory criteria and approved the requested rate increase for

Year 1 only. The increases requested for Years 2, 3 and 4 were

denied. The statutory criteria reviewed by both the

I nvestigative Committ ee and the Board (now Committee) consist ed

of the following:

(5)(a) In determining whether the requested

rate change will result i n fair, just, and

reasonable rates, the board shall give

primary consideration to the public interest

in promoting and maintaining efficient,

reliable, and safe piloting services.

(b) The board shall also give consideration

to the following factors:

1 . The public interest in having qualified

pilots available to respond promptly to

vessels needing their service.

2. A determination of the average net

income of pilots in the port, including the

value of all benefits derived from service

as a pilot. F or the purposes of this

subparagraph, "net income of pilots" refers

to total pilotage fees collected in the

port, minus reasonable operating expenses,

divided by the number of licensed and active

state pilots within the ports.

3. Reasonable operating expenses of pilots.

4. Pilotage rates in other ports.

5. The amount of time each pilot spends on

actual piloting duty and the amount of time

spent on other essential support services.

6. The prevailing compensation available to

individuals in othe r maritime services of

comparable professional skill and standing

as that sought in pilots, it being

recognized that in order to attract to the

profession of piloting, and to hold the best

and most qualified individuals as pilots,

the overall compensation accorded pilots

should be equal to or greater than that

available to such individuals in comparable

maritime employment.

7. The impact rate change may have in

individual pilot compensation and whether

such change will lead to a shortage of

licensed stat e pilots, certificated deputy

pilots, or qualified pilot applicants.

8. Projected changes in vessel traffic.

9. Cost of retirement and medical plans.

10. Physical risks inherent in piloting.

11. Special characteristics, dangers, and

risks of th e particular port.

12. Any other factors the board deems

relevant in determining a just and

reasonable rate.

(c) The board may take into consideration

the consumer price index or any other

comparable economic indicator when fixing

rates of pilotage; however, because the

consumer price index or such other

comparable economic indicator is primarily

related to net income rather than rates, the

board shall not use it as the sole factor in

fixing rates of pilotage.

§ 310.151(5), Fla. Stat.

25 . On March 31, 2010, t he Board issued a Notice of Intent

to approve in part and deny in part the application by FPPA to

increase the pilotage rates at the Port. In its decision, the

Board determined findings of fact with respect to each of the

criteria listed in s e ction 310.151(5), Florida Statutes.

26 . In granting the FPPAÓs requested rate increase for the

first year the Board approved the following charges at the Port ,

effective May 1, 2010:

1. A draft charge of $26.60 per draft foot,

measured up to the next 1/ 10th foot, with a

minimum charge for ten (10) feet; i.e.,

$266.00;

2. A tonnage charge of $.0600 per Gross

Registered Ton (GRT) with a minimum charge

for 2000 GRT, i.e., $120.00;

3. Docking/undocking fees are eliminated;

4. Shifting rates are increas ed as follows:

Same Slip - $250.00

Different Slip - $386.00

5. A towed barge charge of .0300 per GRT

with no minimum charge.

27 . Pursuant to s ection 310.151(5)(a), the Committee

Ðshall give primary consideration to the public interest in

promoting and maintaining efficient, reliable, and safe piloting

services Ñ when dealing with a requested pilotage rate change.

However, the Board is also required to consider additional

specific factors in determining whether to approve or deny a

requested rate ch ange.

Statutory Pilotage Rate Review Criteria

A. The public interest in having qualified pilots available

to respond promptly to vessels needing their service.

( s ection 310.151(5)(b)1, Florida Statutes )

28 . In its Notice of Intent , the Board accepted th e

findings of the Investigative Committee as reflected on page C - 1

of the Investigative Committee Report. Among other things, the

Investigative Committee observed with respect to this criterion:

The pilots are essential to the safe

movement of vessels wit hin the pilotage

waters of the State. In addition to their

navigation and supervisory skills, they must

be knowledgeable of local weather, hazards,

silting, speed and direction of currents,

and timing and direction of tidal movements.

They provide develo pment of safety and

operational guidelines for the port

operation and participate in the process of

port and professional regulations.

29 . Petitioners assert that this record does not support a

finding that the use of a state - licensed pilot at the Port is

"essential" to safety at the port. Petitioners argue that the

captains of ACL's three small vessels have more experience

entering and exiting the Port than does Captain Wetzel, and that

the use of a state - licensed pilot , although mandated by law,

does not increase safety for ACL's vessels, the Port, or the

public at large. Petitioner's contention in this regard is

rejected. As noted above, ha rbor pilots must not only possess

excellent navigational skills, they must also be knowledgeable

of a host of c onstantly - changing variables that affect the safe

transit of vessels within their home port. Moreover, even if

the current captains of ACL's three vessels have more experience

entering and exiting the Port than does Captain Wetzel, there is

no assurance t hat those same captains will continue in the

employ of ACL in the future .

30 . The record of the hearing held before DOAH does not

contain any evidence to form a basis for findings of fact

different from, or in addition to, the facts relied on by the

Boar d in its Notice of Intent with respect to this criterion.

B. A determination of the average net income of pilots in

the port, including the value of all benefits derived from

service as a pilot. For the purposes of this subparagraph,

Ðnet income of pilotsÑ refers to total pilotage fees

collected in the port, minus reasonable operating expenses,

divided by the number of licensed and active state pilots

within the ports. ( s ection 310.151(5)(b)2, Florida

Statutes )

31 . There are approximately 1 , 200 state - l icensed har bor

pilots in the United States . The average compensation for a

state - licensed pilot nationally is about $400,000.00 per year.

However, state regulatory boards do not set pilot compensation,

they set pilotage rates. Thus, a pilotÓs compensati on depends

upon how much revenue is generated by the vessel traffic in that

port, net of operating expenses. T he pilot in a small port like

Ft. Pierce would not be expected to make the same amount as a

pilot in a larger port, such as Miami or Tampa. In t hese larger

ports, large draft and tonnage vessels generate higher pilotage

fees and this revenue supplements the cost of bringing in

smaller vessels. In Ft. Pierce, that is not possible because of

the physical limitations of the Port, which will not acco mmodate

large vessels. Higher minimum rates therefore have to be set in

Ft. Pierce because of the small size of the vessels , and to

compensate a Palm Beach pilot (cross - licensed for Ft. Pierce)

for making the two - hour plus drive to Ft. Pierce to handle a

vessel if the Ft. Pierce pilot is unavailable for some reason .

32 . In its Notice of Intent , the Board accepted the

findings of the Investigative Committee, as reflected on page

C - 2 of the Investigative Committee Report, as corrected at the

public hearin g, which set the pilotÓs net income for years 2007

and 2008 at $112,800 .00 and $92,700 .00 respectively. In the

"Analysis and Decision" section of the Notice of Intent, the

Board also stated:

Further, the pilots are charged with

maintaining or securing ade quate pilot

boats, office facilities and equipment, and

other equipment and support services

necessary for a modern, dependable piloting

operation. Although the Pilot currently has

an arrangement with the PortÓs largest user

regarding the use of a convert ed crew boat,

the evidence presented to the Board shows

that in some aspects this assignment has

been less than satisfactory. The Board

opines that an increase in pilotage rates

sufficient to permit the Pilot to procure an

adequate pilot boat and/or sec ure such

services is warranted.

(Notice of Intent, p. 10, 11)

33 . Compared to the typical piloting operation in which

the pilots in a port provide their own pilot boat to ferry them

to and from transiting ships, the Investigative Committee

dete rmined that Captain WetzelÓs operating expenses were very

low , since ACL had been providing the pilot boat in Ft. Pierce.

34 . In its Notice of Inten t, the Board approved the first

year schedule of rate increases only, specifically noting that

the increas e was intended in part to address the unsatisfactory

pilot boat arrangement between FPPA and ACL:

Based upon these findings, the Board

determines that the proposed three - year

schedule of rate increases sought by the

Pilot should not be granted in its entir ety

at this time. The Board finds that a more

modest increase to account for the

progressively higher operating costs,

inflation, and to permit the Pilot to obtain

or secure pilot boat services, will provide

fair, just and reasonable rates, and will

conti nue to ensure that sufficient back - up

pilots will be available to serve Fort

Pierce. Accordingly, the Board approves the

requested first - year schedule of increase

only.

(Notice of Intent, p. 12)

35 . The FPPA application projected the pilot boa t as an

expense of $325,000.00, with annual depreciation of $32,500 .00 .

After the issuance of t he BoardÓs d ecision in March 2010 ,

granting only the first year of the FPPAÓs re quested rate

increase, circumstances dictated that the FPPA purchase a less

expe nsive pilot boat than the one anticipated in the FPPA rate

application. 2 / Specifically , when Capt ain Wetzel began to look

for a suitable pilot boat , he was significantly hindered by the

pending challenge to the BoardÓs decision. Pursuan t to s ection

310.1 51(4)(b) , the difference between the old rate and the new

rate for each vessel movement was being deposited into an escrow

account pending resolution of the PetitionersÓ challenge, so the

increased cash flow could not be relied upon by a lender to

secure t he loan necessary to obtain the desired $325,000.00

boat. Captain Wetzel and the Petitioners discussed the

possibility of continuing to use the Kacey Lynn (owned by I.R.T)

as a pilot boat, but negotiations were unsuccessful . Captain

Wetzel then had to ob tain his own pilot boat and settle on

getting a much less expensive one that will not be as durable or

long - lived as necessary. Ultimately, FPPA purchased a temporary

pilot boat from Ameracat for about $92,000.00 and it was

delivered to Capt ain Wet zel in mid - May 2010. As noted , the

evidence established that the type of pilot boat purchased by

Captain Wetzel will have a shorter lifespan than a typical pilot

boat, because it will not be able to withstand the banging and

pounding that occurs when a pilot boa t comes alongside a

commercial vessel.

36 . In order t o purchase the Ameracat pilot boat, Captain

Wetzel had to withdraw money from his retirement account so he

could pay cash for the boat.

37 . Petitioners do not take issue with the BoardÓs

decision th at an increase in pilotage rates in Ft. Pierce is

warranted so that Captain Wetzel can procure an adequate pilot

boat. However, they contend that Captain WetzelÓs decision to

purchase a pilot boat that cost significantly less than the one

contemplated in the A pplication results in undue income to

Captain Wetzel, which should result in the rates being decreased

to reflect reduced expenses, including the boatÓs purchase

price, maintenance costs and interest expense.

38 . As will be discussed in greater deta il infra , FPP AÓs

projected costs as set forth in the A pplication were accurate at

the time submitted. The evidence of record does not support a

finding that Capt ain Wetzel intended to mislead the Board in the

projected cost of $325,000 .00 for a pilot boat , or that he does

not intend to purchase a more durable replacement once the

escrowed funds from the approved rate increase are released .

Rather, g iven the circums tances of the administrative chall enge

to the rate increase, Captain Wetzel acted reasonably and of

necessity in purchasing a less expensive , temporary pilot boat.

39 . Petitioners' contention that Captain WetzelÓs purchase

of a pilot boat cost ing less than the one projected in his rate

application will result in undue income to Captain Wetzel

(justifying elimination or reduction in the approved rates) is

not supported by the greater weight of evidence in this record,

and is rejected.

40 . The record of the hearing held before DOAH does not

contain evidence sufficient to form a basis for findi ngs of fact

different from, or in addition to, the facts relied on by the

Board in its Notice of Intent with respect to this criterion,

except as s pecifically set forth in the preceding paragraphs.

C. Reasonable Operating Expenses of Pilots ( s ection

310 .151(5)(b)3, Florida Statutes)

41 . In its Notice of Intent , the Board accepted the

findings of the Investigative Committee shown on pages C - 2 an d

C - 3 of the Report. The record of the hearing held before DOAH

does not contain evidence sufficient to for m a basis for

findings of fact different from, or in addition to, the facts

relied on by the Board in its d ecision with respect to this

criterion, except as specifically set forth in the following

paragraphs.

42 . Prior to the rate increase under challeng e in this

proceeding, the pilota ge rates in effect at the Port were

unchanged since their initial adoption in 1980 - Î a minimum

draft and tonnage charge of $150 .00 plus a docking/undocking fee

of $60 .00 , for a total minimum pilotage fee of $210 .00 . In lat e

2007, ACL stopped having the pilot perform docking and undocking

of ACLÓs vessels and discontinued payment of the corresponding

$60 .00 fee to the pilot, reducing the effective minimum pilotage

fee for ACL and most other vessels to $150 .00 .

43 . A rate increase application in 2003 filed by the

previous Ft. Pierce pilot was withdrawn, based upon an informal,

unwritten agreement that Petitioners would provide an old crew

boat formerly used on the Great Lakes (the Kacey Lynn ) to ferry

the pilot to and from vessels at no cost, dropping the $75 .00

fee previously charged to the pilot for each use of the crew

boat.

44 . At that time, the Port was primarily being served by

cross - licensed pilots from other ports, as the permanent pilot

in Ft. Pierce was injured a nd unable to continue working. In

light of the circumstances, the cross - licensed pilots were not

eager to invest in a pilot boat and other infrastructure, so use

of the Kacey Lynn , while not ideally suited for safely

transferring the pilot to or from a tr ansiting ship, was a

useful accommodation while a new permanent pilot was sought for

Ft. Pierce. For non - ACL vessels, IRT billed the owners of some

of those vessels from $75 .00 up to $150 .00 for the use of the

Kacey Lynn to ferry the pilot to or from a sh ip. In the only

other Florida port in which the pilots do not provide their own

pilot boats, Pensacola, the pilot is ferried to and from

transiting ships by a tug company that charges $400 .00 per trip.

45 . As set forth in its application, FPPAÓs project ed

pilot boat cost of $325,000.00 with $32,500 .00 per year

d epreciation is reasonable, especially when compared to the

costs of pi lot boats serving other ports. Credible testimony

established that a pilot boat in a major port would cost

$1.2 million to $2 million , with annual maintenance costs

typically at 5% of the purchase price. The pilot association in

Jacksonville, Florida , recently spent $1.2 million on a pilot

boat , while p ilots in Miami purchased a pilot boat several years

ago for approximately $6 00,000.00. More recently, the Miami

pilots association rebuilt two of their pilot boats a t a cost of

approximately $350,000.00.

46 . In compar ison to the cost of pilot boats in other

ports, FPPAÓs projected operating costs as set forth in its

application are relatively conservative. As noted above,

Captain Wetzel's purchase of a temporary pilot boat (with

correspondingly lower operating expenses) for use during the

pendency of this administrative challenge does not render the

projected operating expenses in the application unreasonable.

D. Pilotage Rates in Other Ports ( s ection

310.151(5)(b) 4 , Fl orida Statutes

47 . In the Notice of Intent, the Board accepted the

findings of the Investigative Committee as reflected on pages C -

4 through C - 7 of the Investigative Committee Report. The record

of the hearing held before DOAH does not contain evidence

sufficient to form a basis for findings of fact different from,

or in addition to, the facts relied on by the Board in its

Notice of Intent with respect to this criterion, except as

specifically set forth in the following paragraphs.

48 . Petitioners assert that Table 4 on page C - 6 of the

Investigative Committee Report understate s the FPPA's revenue

per handle hour by overstating the FPPA's average "hand le time . "

"Handle time" is generally defined as the time "that the pilot

takes the con n to the time he relinquishes it" , i.e. , the time

that the pilot is actually directing the guidance of the

navigation of a vessel.

49 . According to Petitioners, the av erage handle time for

pilots operating in the Port is closer to 30 minutes per handle

than the 1.5 hours per handle used by the Investigative

Committee. When a handle time of 30 minutes per handle is

applied, Petitioners argue, the FPPA is currently earni ng

$370 .00 per handle hour, rather than the $123 .00 per handle hour

shown in the Investigative Committee Report. 3 /

50 . There is evidence in this record that until recently,

there has not been a statewide standard for measuring handle

times. Although th e Board of the Florida State Pilots

Association recently adopted a definition, the data appearing in

Table 4 of the Investigative Committee Repor t relies upon older

historical data (2007 and 2008) , which in some cases may be

outdated due to the change in t he size of ships using various

ports . 4 / As such, it would be inappropriate to compare the

Ft. Pierce revenue per handle hour using a handle time of 30

minutes without also updating the handle times of the other

ports used in the comparison.

51 . Approval of the Year 1 rate increase would not create

a competitive disadvantage at the Port. The pilotage fee i s a

very small and relatively insignificant factor in the overall

decision on whether to bring a ship into a particular port. In

light of the consider able operating costs of a commercial

vessel, the $175 .00 difference between the new minimum pilotage

fee in Ft. Pierce and the lower minimum pilotage fee in Palm

Beach (the closest competing port) would not be significant

enough to warrant shifting a subje ct vessel from Ft. Pierce to

Palm Beach.

E. The amount of time each pilot spends on actual piloting

duty and the amount of time spent on other essential support

services. ( s ection 310.151(5)(b) 5 , Fl orida Statutes

52 . In the Notice of Intent the Boar d accepted the

findings of the Investigative Committee as reflected on pages C7

and C8 of the Investigative Committee Report. The record of the

hearing held before DOAH does not contain any evidence to form a

basis for findings of fact diffe rent from, or as a supplement

to, the facts relied on by the Board in its d ecision with

respect to this criterion, except as specifically set forth in

the following paragraphs.

53 . Time spent on actual piloting duty includes handle

time, transit time to and from the v essel, and administrative

time related to that handle. Time spent on other essential

support services generally involve matters pertaining to the

port in question, e.g., dealing with the Coast Guard on port

security or safety issues, dealing with the Army Corp of

Engineers regarding the ship channel, etc.

54 . In its Report, the Investigative Committee considered

"h andle time ' to be the time the pilot is actually engaged in

traveling to a ship, piloting the ship, and returning to home

port, i.e., dock to dock. The Investigative Committee did not

attempt to verify the historical data regarding handle time but

did utilize a shorter figure of 1.5 hours per handle. 5 /

No compelling evidence was presented that indicates that this

1.5 hour handle time figure w as grossly incorrect.

55 . While ACL operates a Ðliner serviceÑ with a published

schedule that its ships adhere to most of the time, actual

arrival and departure times for ACL ships frequently vary from

this schedule. Moreover, the pilot must be availab le to respond

to vessels requiring his assistance 24 - hours a day, seven days a

week. Although the Petitioners argue that actual handle time

might make a part - time job for the Ft. Pierce pilot, it does not

matter if it is an hour or two hours, it is still a huge time

commitment throughout each week to be available and on call to

serve the needs of the port. The Investigative Committee also

observed:

The schedule varies for each day of the

week. On Mondays, Wednesdays and Fridays he

must ÐmobilizeÑ early i n the mornings to

meet vessels arriving at 7:00 A.M. and then

re - mobilize later in the afternoon to handle

the 5:00 P.M. departures. Consequently, the

two - step mobilizations increase his daily

time requirements by an amount greater than

the average handle times. The schedule also

requires additional standby time between

some of the back - to - back handles.

(Investigative Committee Report, P. C - 7)

F. The prevailing compensation available to individuals in

other maritime services of comparable prof essional skill

and standing . ( s ection 310.151(5)(b)5, Florida Statutes )

56 . In its Notice of Intent , the Board accepted the

findings of the Investigative Committee, reflected on page C - 8

of the Investigative Committee Report , supplemented as follows:

A s was discussed in the Port Everglades

Order, supra , the Board accepts the

proposition that the pre - pilot

career path is the same for persons who

remain as senior bridge officers on

American - flagged ships and for those who

become pilots. As was noted in the

Port Everglades Order, however, pilots are

not employees but are rather professional

consultants and self - employed

business persons who take the risks and

accept the benefits of such status.

In addition, s ection 310.151(5)(b)6, F.S.,

sets the wage rate of Ðcomparable

professionsÑ as the floor for pilot income Î

not the ceiling. As was also noted in the

Port Everglades and Tampa Orders, the Board

has accepted that the wage rate of senior

masters on American - flagged ships varies

greatly and, thus, t he Board can find no

specific number to use as the only

acceptable ÐfloorÑ for pilot compensation .

The Board, thus, uses the range of mastersÓ

salaries as a range of ÐfloorsÑ on pilotsÓ

income to be applied depending on the

amount of vessel traffic at a port, the

characteristics of a port, and the need for

pilotage services at a port. Thus, a

pilotÓs berth at the major ports, such as

the Port of Tampa Bay, Port Everglades,

Miami, Jacksonville or Palm Beach would be

considered as akin to the most prestig ious,

responsible, and highly paid mastersÓ berths

(Master, Mates and Pilots scale Î

c. $220,000 .00 - $230,000 .00 per year) while

lesser ports, with correspondingly lesser

amounts of traffic and need for pilotage

services would have a lower ÐfloorÑ for

i ncome.

Nonetheless, the Board also finds that the

pilotage rates need to be sufficient to

ensure that licensed pilots remain willing

and financially able to serve the ports of

this State. As reflected in the Report of

the Investigative Committee, the cu rrent

PilotÓs schedule has grown to a full - time

position, with no backup pilot available.

Thus, the Pilot must rely on cross - licensed

pilots from Palm Beach for backup, who

currently earn substantially more at their

home port. Accordingly, the Board find s

that the rates must be increased

sufficiently to continue to attract

cross - licensed pilots to serve as back up at

Fort Pierce, and eventually, if traffic

warrants, candidates for a deputy pilot

position.

(Notice of Intent, pages 7, 8)

57 . T he record of the hearing held before DOAH does not

contain evidence sufficient to form a basis for findings of fact

different from, or in addition to, the facts relied on by the

Board in its Notice of Intent with respect to this criterion,

except as specif ically set forth in the following paragraphs.

58 . While background as a master or mate is useful, a

pilot must possess superior close - quarter ship handling skills

and the ability to handle a wide variety of vessels. Foreign

licensed mariners are not al lowed to become a pilot in Florida.

59 . There was contradictory evidence on the prevailing

annual compensation for masters serving on US - flagged ships of

comparable skill and standing to Florida state - l icensed pilots,

ranging from $143,000 .00 - $181,000 .00 ( inclusive of wages and

benefits) to $ 300,000 .00 for union personnel. However, it is

significant that these are salaried positions that do not

require the employee to invest in infrastructure or training, or

to directly participate in the eco nomic ris ks of the business .

60 . Petitioners argue that there are other maritime

industry position s, in addition to master of a U.S. - flagged

vessel, which are comparable in professional skill and standing

as that of a Florida state - licensed pilot. Specifically,

Petitioners assert that masters and deck officers of inland

vessels and U.S. - flagged integrated tug and barge units (ITBs)

require a comparable level of professional skill and standing.

Petitioners' witness on this issue opined that the master of an

"uppe r end" inland vessel (e.g., jumbo barge) would make a

salary ranging from $116,000.00 to $131,000.00, while a deck

officer would make less than $100,000.00. Similarly, the annual

salary for the master of a "premier" ITB would range from

$106,000.00 to $13 2,000.00, while senior mates would have total

compensation of less than $100,000.00.

61 . Generally, pilots receive about 50% more in total

compensation than masters on US - flagged ships. This disparity

is necessary in order to motivate the most desirable

professional mariners (a master or chief mate with 10 - 12 years

of experience) to leave their current maritime employment,

including giving up valuable pension benefits, to take on the

risks of self - employment as a pilot. This career change entails

signif icant physical risks, civil and criminal liability risks

in the event of accidents, investment in infrastructure,

management of a business, etc. While Petitioner may be correct

that masters and deck officers in other maritime industries are

generally comp ensated less than state - licensed pilots, those

employees bear none of the risks of self - employment.

62 . The pool of professional U.S. mariners qualified to

move into the pilot career path is relatively small - Î a little

over 2,000 , and ports across the U.S. compete against each other

to attract the best individuals to piloting. Indeed, ports

within Florida compete with each other for the best qualified

c andidates.

63 . While large Florida ports historically would have had

20 - 30 applicants for a pilot o pening, the number of applicants

for even large ports like Miami and Jacksonville has decreased

in the last 4 - 5 years. Most recently there were only 11

mariners testing for two openings at Jacksonville and eight

mariners testing for three openings in Miam i.

64 . The pilot in a small port like Ft. Pierce would not be

expected to receive the same compensation as the master of a

large container ship (or a pilot in a large Florida port like

Tampa or Miami), but the compensation must still be high enough

to a ttract and retain a qualified pilot and to pay for cross -

licensed pilots as back - up. Pilots in the port of Palm Beach,

where each of the five pilots recently worked about 600 handles

per year (similar to the number of pilot handles in Ft. Pierce),

netted annual income of approximately $150,000 .00 . E ven in a

best case scenario, Capt ain WetzelÓs net income would only match

those of Palm Beach pilots, and it is more likely that, due to

increased expenses, it will still fall below that level even

with the app roved rate increase .

G. The impact rate change may have in individual pilot

compensation and whether such change will lead to a shortage of

licensed state pilots, certificated deputy pilots, or qualified

pilot applicants. ( s ection 310.151(5)(b)7 , Florida Statutes )

65 . In the Notice of Intent , the Board accepted the

findings of the Investigative Committee as reflected on page C - 9

of the Investigative Committee Report . The record of the

hearing held before DOAH does not contain any evidence to form a

basis for findings of fact different from, or in addition to,

the facts relied on by the Board in its Notice of Intent with

respect to this criterion.

66 . At the hearing before the former Board, Petitioners

disputed the need for any pilotage rate increas e to enable the

FPPA to purchase and operate its own pilot boat. As of the time

of the administrative hearing, the pilot had already purchased a

temporary pilot boat, and Petitioners assert that the increase

approved by the former Board should be reduced to cover the

expenses relating to the pilot boat actually purchased, and

operating such boat, but not provide for an increase in net

revenue (compensation) to the pilot. For the reasons stated in

paragraphs 34 - 40 above, the Petitioners ' contention in this

regard is rejected as not supported by the greater weight of the

evidence .

67 . In addition, t he undersigned notes that the operating

expense projections contained in the Application were merely

that . . . projections. Moreover , the expense proj ection s ,

including the $325,000.00 expenditure for a pilot boat, were

expressly predicated upon approval of the rate increase s

request ed in the application . 6 / Although an applicant must

certify that the statements contained in a pilotage rate change

application ar e true and correct when made, expense projections

set forth in an application are not binding on the app licant,

and t he B oard (now Committee) has no authority to compel the

expenditure of specific funds identified in an application .

Give n the B oard ' s deni al of the requested rate increases (with

the exception of Y ear 1 ) it was not unreasona b l e for Captain

W etzel to refrain fro m makin g the specific expend itures

projected in the application , particularly for a $325,000.00

pilot boat. As noted above, the proj ections when made were

reasonable, but changed circumstances nece ssitated adjustment of

those expenditures . In the Notice of Intent, the B oard did not

" earmark " a specific portion of the revenue increase for the

purchase of a pilot boat, but rather recogn ized the need for "a

modest increase to account for the progressively higher

operating costs, inflation, and to permit the Pilot to obtain or

secure pilot boat services . . . " (Notice of Intent, p. 12)

H. Projected changes in vessel traffic. ( s ection

310 .151(5)(b)8 , Florida Statutes )

I. Cost of retirement and medical plans. ( s ection

310.151(5)(b)9 , Florida Statutes )

J. Physical risks inherent in piloting. ( s ection

310.151(5)(b)10 , Florida Statutes )

K. Special characteristics, dangers, and risks of the

particular port. ( s ection 310.151(5)(b)11 , Florida Statutes)

L. Any other factors the board deems relevant in

determining a just and reasonable rate. ( s ection

310.151(5)(b)12 , Florida Statutes)

M. The board may take into consideration the consum er price

index or any other comparable economic indicator when fixing

rates of pilotage; however, because the consumer price index or

such other comparable economic indicator is primarily related to

net income rather than rates, the board shall not use it as the

sole factor in fixing rates of pilotage. ( s ection

310.151(5)(c) , Florida Statutes)

68 . The record of the hearing held before DOAH does not

contain any evidence sufficient to form a basis for findings of

fact different from, or in addition to, th e facts relied on by

the Board in its Notice of Intent with respect to the criteria

set forth in 310.151(5)(b)8 - 12 , and 310.151(5)(c), above.

69 . Taken in its entirety, the evidence presented by the

Petitioners, Respondent and Intervenors in this proceed ing with

respect to the statutory factors set forth in s ection

310.151(5)(b) and ( c) , yielded findings of fact in addition to

those found by the Board in its Notice of Intent . There was not

sufficient credible and persuasive evidence presented by the

Peti tioners to support any findings of fact materially contrary

to the findings of the Board in its Notice of Intent .

CONCLUSIONS OF LAW

70 . The Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and of

the partie s thereto pursuant to sections 120.569, 120.57(1), and

310.151(4)(a) Florida Statutes.

71 . It is appropriate at this point to discuss the

truncated authority of a DOAH administrative law judge in

proceedings involving the setting of rates of pilotage in the

ports of this state. In s ection 310.151, the legislature

created the Pilotage Rate Review Committee as part of the Board

of Pilot Commissioners , established its composition, gave it the

authority to adopt rules to implement the duties conferred on it

in the section, and established a procedure by which

applications for pilotage rate changes shall be filed,

consi dered, and resolved by the Committee . The Committee is

given the authority to "investigate and determine whether the

requested rate change wi ll result in fair, just, and reasonable

rates of pilotage pursuant to rules prescribed by the

committee ." § 310 .151(3), Fla . Stat .

72 . Once the Committee has held a hearing, made a decision

on the application for a rate change, and reduced its decision

to writing, either the applicant or a person whose substantial

interests will be affected by the decision may request a hearing

"pursuant to the Administrative Procedures Act."

§ 310.151(4)(a), Fla . Stat. This section also provides, in

pertinent part:

If the committee concludes that the

petitioner has raised a disputed issue of

material fact, the committee shall designate

a hearing, which shall be conducted by

formal proceeding before an administrative

law judge assigned by the Division of

Administr ative Hearings pursuant to ss.

120.569 and 120.57 (1), unless waived by all

parties. If the committee concludes that

the petitioner has not raised a disputed

issue of material fact and does not

designate the petition for hearing, that

decision shall be considered final agency

action for purposes of s. 120.68 .

73 . Pursuant to the rulemaking authority delegated to it

in s ection 310.15 1(1)(d) , the former Board enacted Florida

Administrative Code R ule 61E13 - 2.012, which provides as follows:

Since the determination of the actual rate

of pilotage to be imposed at any port is a

quasi - legisla tive act, the resolution of any

disputed issue of material fact by a hearing

officer assigned by the Division of

Administrative Hearings shall not result in

a recommendation from the hearing officer

[now administrative law judge] as to the

appr opriate rate to be imposed at any port

area in question. The hearing officer's

[now administrative law judge's]

recommendation shall only extend to

resolving disputed issues of material fact

which result from a party's disputing the

underlying facts upon which the Board has

suggested intended rates for the port area

in question.

(Emphasis added.)

The validity of this rule was upheld in Pilotage Rate Review

Board v. S . Fla . Cargo Carriers Ass Ón , Inc. , 738 So. 2d 406

(Fla. 3d DCA 1 999).

74 . The correctness of the judgments of the Board in

weighing the facts and in balancing the considerations set forth

in the statutory criteria is an issue that cannot be resolved by

a DOAH a dministrative l aw j udge . Rather, the act of setting

rate s of pilotage is quasi - legislative, as opposed to an

executive or quasi - judicial act. See S . Fl a. Cargo Carriers

Ass Ón , Inc. v. Dep Ó t of Bus . & Prof Ó l Reg ., Pilotage Rate Review

Bd . & Port Everglades Pilots' Ass Ón , 738 So. 2d 391 (Fla. 3d DCA

1999).

75 . The FPPA , as the applicant for a rate increase, has

th e burden of proving to the Committee by a preponderance of the

evidence that it is entitled to a pilotage ra te increase at the

Port . See Dep Ó t of Banking & Fin . , Div . of Sec . & Investor

Protection v. Osborne Stern and Co. , 670 So. 2d 932 (Fla. 1996);

Dep Ó t of Trans . v. J.W.C. Co . , Inc. , 396 So. 2d 778, 787, (Fla.

1st DCA 1981).

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Pilotage Rate Re view Committee

consider the additional facts established by the evidence

presented at the hearing before the Division of Administrative

Hearings in determining, in accordance with its interpretation

of its statutory mandate, its expertise, and the appropri ate

policy considerations, whether the d ecision on the PFFA Pilotage

Rate Increase Application in the Port of Ft. Pierce, filed

March 30 , 200 9 , will result in fair, just, and reasonable

pilotage ra tes at the Port of Ft. Pierce .

DONE AND ENTERED this 3 1st d ay of January , 2012 , in

Tallahassee, Leon County, Florida.

S

W. DAVID WATKINS

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 3 1st day of January , 2012 .

ENDNOTES

1 / Although the 2008 Florida Statutes were in ef fect at the

time the FPPA submitted its application for a rate increase, the

2010 edition of the Florida Statutes are applicable in this

proceeding since the issue is whether the application should be

granted or denied. See Lavernia v. Dep Ó t of Prof Ó l Reg . , Bd . of

Med . , 616 So. 2d 53, 53 - 54 (Fla. 1st DCA 1993).

2 / During the Board meeting held by teleconference on

January 11, 2010, Captain Wetzel learned that the Board had

approved the requested first year rate increase only.

3 / Assuming a handle time of 30 minutes as urged by Petitioners,

r evenue of $370.00 per handle hour would place Ft. Pierce's

revenue per handle hour the fourth lowest of the eleven ports

compared.

4 / At the time the Board rendered its decision on the rate

request, it was fully a ware of the possibility that some of the

handle times used in the Inve stigative Committee analysis might

be outdated or inaccurate. The Investigative Committee

specifically advised the Board of this possibility in its

Report:

The investigative committee has asserted in

past Board Meetings, that the ÐhistoricalÑ

handle times have not been corroborated by

an independent study. On occasion, when the

pilot organization provides the

investigative committee with more accurate

handle times, we will update the

Ð historicalÑ handle times to more current or

accurate times. Meanwhile, some of the

ÐhistoricalÑ handle times that are presented

in various parts of the investigative

committeeÓs report may not be accurate, so

the Board should be aware of the potential

for misleading analyses when using

ÐhistoricalÑ versus ÐactualÑ handle times.

(Investigative Committee Report, P. B - 1)

5 / In its Report, the Investigative Committee noted the

following:

Page six of the Application, Part 8(b)

provides information regardi ng the actual

time spent on actual piloting duty versus

other essential support and standby time.

This part of the application presents a

ÐhistoricalÑ actual pilots time of 2.5 hours

per handle, whereas on page 9, part 10, the

application presents 1.25 ho urs for most of

the small vessels Î which make up 90% of

total handles, and occasionally 2.0 hours

for larger ships and for unusual weather

conditions. Using a weighted average, the

pilot agreed that a 1.5 hour handle time

would be a fair estimate of aver age handle

time.

6 / The FPPA Application states "[T]he purchase of a suitable

boat depends entirely upon the rate increase being approved."

FPPA Application, at P. 10.

COPIES FURNISHED :

J. Michael Pennekamp, Esquire

Fowler, White, Burnett, P.A.

Espir ito Santo Plaza, 14th Floor

1395 Brickell Avenue

Miami, Florida 33131

Sandra I. Tart, Esquire

Fowler White and Burnett, P.A.

777 South Flagler Drive,

Suite 901 - West Tower

West Palm Beach, Florida 33401

Timothy E. Dennis, Esquire

Office of the Attorney General

The Capitol, Plaza Level 01

400 South Monroe Street

Tallahassee, Florida 32399 - 1050

Warren Husband, Esquire

Metz, Husband & Daughton, P.A.

Post Office Box 10909

Tallahassee, Florida 32302 - 2909

William Wetzel

Fort Pierce Pilots Association

620 Colonial Drive

Vero Beach, Florida 32962

Robyn Barineau, Executive Director

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399

Layne Smith, Gen eral Counsel

Department of Business and Professional Regulation

Northwood Centre

1940 Nort h Monroe Street

Tallahassee, Florida 32399

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 wi th the agency that

will issue the Final Order in this case.