89-003368RP Gte Telephone Operations vs. Department Of Transportation Status: Closed DOAH Final Order on Thursday, March 8, 1990.

Summary: Proposed rule requiring utility to defend DOT from delay claims not invalid; proposal that utility pay for negligence of DOT is invalid; Estimate of Economic Impact inaccurate.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

GTE FLORIDA, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 89-3368RP

)

DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

_________________________________)

FLORIDA POWER AND LIGHT COMPANY, )

)

Petitioner, )

)

vs. ) CASE NO. 89-3567RP

)

DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

_________________________________)

SOUTHERN BELL TELEPHONE AND )

TELEGRAPH COMPANY, )

)

Petitioner, )

)

vs. ) CASE NO. 89-3570RP

)

DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

_________________________________)

UNITED TELEPHONE COMPANY, )

)

Petitioner, )

)

vs. ) CASE NO. 89-3572RP

)

DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

_________________________________)

FLORIDA NATURAL GAS ASSOCIATION, )

)

)

Petitioner, )

)

vs. ) CASE NO. 89-3577RP

)

DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

_________________________________)

FINAL ORDER

Pursuant to notice, the above-styled matter was heard before the Division

of Administrative Hearings ) by its duly designated Hearing Officer, Daniel M.

Kilbride, on November 2 and 3, 1989, and by stipulation on January 29, 1990, in

Tallahassee, Florida. The following appearances were entered:

APPEARANCES

For Petitioner Lorin H. Albeck, Esquire

GTE FLORIDA, General Attorney

INC., GTE Florida Incorporated

Post Office Box 110, Mail Code 7

Tampa, Florida

For Petitioner Jean G. Howard, Esquire

Florida Power Law Department

and Light Co. Florida Power and Light

Company

Post Office Box 029100

Miami, Florida

For Petitioner Robert G. Beatty, Esquire

Southern Bell Southern Bell Telephone

Telephone and Legal Department

Telegraph Co. Museum Tower, Suite 1910

150 West Flagler Street

Miami, Florida

For Petitioner Kay L. Wolf, Esquire

United Telephone Assistant Vice President-

Company Law

United Telephone Company

of Florida

Post Office Box 5000

Altamonte Springs, Florida

For Petitioner Richard Brightman, Esquire

Florida Natural Post Office Box 6526

Gas Association Tallahassee, Florida

For Respondent Robert P. Daniti, Esquire

Senior Litigation Attorney

Department of Transportation

605 Suwannee Street

Tallahassee, Florida

STATEMENT OF THE ISSUES

Whether Respondent's proposed Rule 14-46.0011 is an invalid exercise of

delegated legislative authority.

Whether paragraph 12 of the revised DOT utility permit, incorporated by

reference in the proposed amendments to Rule 14- 46.001, Florida Administrative

Code, is an invalid exercise of delegated legislative authority.

Whether paragraph 15 of the revised DOT utility permit, incorporated by

reference in the proposed amendments to Rule 14- 46.001, Florida Administrative

Code, is an invalid exercise of delegated legislative authority.

Whether the economic impact statement prepared by DOT was inadequate so as

to amount to an invalid exercise of delegated legislative authority.

PRELIMINARY STATEMENT

By notice in the Florida Administrative Weekly, Volume 15, Number 24, June

16, 1989, the Florida Department of Transportation (DOT) initiated Section

120.54 rulemaking proceedings to amend Rule 14-46.001, Florida Administrative

Code, including a revised Utility Accommodation Guide (UAG) which is

incorporated by reference. The revised UAG supersedes the 1979 edition which is

incorporated by reference in Rule 14-15.014, which will be repealed. The notice

also initiates rulemaking proceedings for proposed Rule 14-46.0011. Rule 14-

46.001(3) requires utilities to obtain permits for use of DOT's right of way.

The permit is to be issued in conformance with DOT's UAG. The revised UAG

contains the revised Utility Permit (Permit) which is the subject of this rule

challenge. In initiating rulemaking, the DOT filed with the appropriate

agencies the documentation required by the applicable procedural rules at this

stage of the rulemaking proceeding. The notice contains a summary of the

estimated impact of the proposed amendments and provides for a public hearing.

The subject of the proposed amendments is DOT's policies regulating the

accommodation of utility facilities on public roads and rights of way under DOT

jurisdiction, including the location and manner of installing, adjusting or

relocating these facilities. The revised UAG contains the reVised Utility

Permit which is the primary subject of this rule challenge proceeding.

Five petitions to invalidate have been consolidated for hearing by order

dated July 10, 1989. At the October 24, 1989 motion hearing, the undersigned

granted the DOT and Florida Power and Light Company (FPL) motions for summary

final order regarding the validity of proposed Rule 14-46.0011. That rule will

be addressed in this order.

At the October 24, 1989 motion hearing, the undersigned also granted DOT's

motion for partial abeyance of all issues raised by each Petitioner, except as

stated in the issues section of these findings of fact. At the beginning of the

final hearing, the undersigned also abated Florida Natural Gas Association's

(FNGA) issue concerning the sufficiency of DOT's notice of incorporation by

reference of the revised Utility Accommodation Guide. Jurisdiction over the

abated issues is relinquished to the DOT to the extent necessary to resolve

these issues through formally announced and noticed changes to the proposed

rule.

Petitioner Southern Bell Telephone and Telegraph Company's (Southern Bell)

Motion in Limine is denied. See: Buy-Low Save Centers, Inc. v. Glinert, 547

So.2d 1283 (Fla. 4th DCA 1989).

On November 2, 1989, the formal hearing commenced. Petitioners GTE Florida,

Inc. (GTE) and FNGA did not present any evidence. Petitioner FPL presented

three witnesses: Terry Vogel, a fact witness employed by FPL as a division

relocation coordinator and permit administrator; Dennis LaBelle, an expert in

the relocation of electric utilities; and Paul LaPointe, an expert in public

utility accounting.

Petitioner FPL introduced 19 exhibits which were received into evidence,

subject to DOT's objections as to relevancy and materiality as noted in the

transcript. Petitioner Southern Bell introduced eight exhibits, including the

Affidavit of an expert economic and financial consultant. These exhibits were

admitted into evidence, subject to DOT's objections as to relevancy and

materiality as noted in Southern Bell's stipulation with DOT. Petitioner United

Telephone Company of Florida (UTF) presented five exhibits which were admitted,

subject to DOT'S objections as to relevancy and materiality pursuant to UTF's

stipulation with DOT. Respondent DOT presented the testimony of Robert D.

Buser, P.E.; DOT Director of Construction; and Robert I. Scanlan, DOT Deputy

General Counsel; together with Exhibits 1 through 9 and 13, which were admitted

into evidence. The transcript of the hearing on November 2 and 3 was filed with

the Clerk of the Division on December 4, 1989. As a result of stipulations by

the parties, the need for a third day of hearing was obviated, and the

evidentiary record as defined by Section 120.57(1)(a)6., Florida Statutes, was

closed on January 29, 1990. By the amended order dated February 2, 1990, the

parties were afforded an opportunity to present written proposed findings of

fact, conclusions of law and argument of counsel by February 20, 1990, in which

Petitioners GTE, FPL and Southern Bell and Respondent have submitted proposals.

UTC joined in the proposals submitted by Petitioners. Each have been carefully

considered and are addressed in the Appendix.

Based upon all of the evidence, the following findings of fact are

determined:

FINDINGS OF FACT

1. Respondent, Florida Department of Transportation (DOT), an agency of

the State of Florida, was created. and defined pursuant to Section 20.23,

Florida Statutes, for the purposes delineated in that section, including the

building and maintaining of public transportation facilities.

2. Petitioner, GTE Florida, Inc. (GTE), is a foreign corporation

authorized to do business and doing business in the State of Florida. The

company operates a telephone system in this State and, therefore, is regulated

by the Florida Public Service Commission, pursuant to Chapter 364, Florida

Statutes.

3. Petitioner, Florida Power and Light Company (FPL) is a Florida

corporation and operates an electrical generating, transmission and distribution

system in this State and, therefore, is regulated by the Florida Public Service

Commission pursuant to Chapter 366, Florida Statutes.

4. Petitioner, Southern Bell Telephone and Telegraph Company (Southern

Bell) is a foreign corporation authorized to do business and doing business in

the State of Florida. The company operates a telephone system in this State

and, therefore, is regulated by the Florida Public Service Commission pursuant

to Chapter 364, Florida Statutes.

5. Petitioner, United Telephone Company of Florida (UTC) is a Florida

corporation. The company operates a telephone system in this State and,

therefore, is regulated by the Florida Public Service Commission pursuant to

Chapter 364, Florida Statutes.

6. Petitioner Florida Natural Gas Association (FNGA) is a Florida

corporation. FNGA is a trade association whose members are in the business of

providing natural gas utility services in Florida.

7. All Petitioners are substantially affected persons who have standing to

initiate this rule challenge proceeding.

8. By notice in the Florida Administrative Weekly, Volume 15, Number 24,

June 16, 1989, DOT initiated Section 120.54 rulemaking proceedings to amend Rule

14-46.001, including a revised Utility Accommodation Guide (UAG). The revised

UAG supersedes the 1979 edition which DOT had incorporated by reference in Rule

14-15.014, which will be repealed. The notice also initiates rulemaking

proceedings for proposed Rule 14- 46.0011.

9. In initiating rulemaking, the DOT filed with the appropriate agencies

the documentation required by the applicable procedural rules at this stage of

the rulemaking proceeding. The notice contained a summary of the estimated

economic impact of the proposed amendments and provides for a public hearing.

10. The subject of the proposed amendments is DOT's policies regulating

the accommodation of utility facilities on public roads and rights of way under

DOT's jurisdiction, including the location and manner of installing, adjusting

or relocating these facilities.

11. Proposed Rule 14-46.0011 challenged by FPL provides:

14-46.0011 Utilities Liaison. Recognizing

that all utility owners serving the public

have a common obligation to provide their

services in cost effective manner, the

Department will coordinate its advance

planning of highway projects with the

affected utilities to facilitate the

relocation of the utility in order to

eliminate costly construction delays. As

part of the project planning and

process the Department will consider the cost

of utility work necessary for the proposed

project. The Department will keep utility

agencies informed of future transportation

projects and request the utility agencies to

advise the Department of the location of

existing and proposed structures within

proposed project corridors.

12. This entire section (14-46.0011) is new and is a statement of policy

direction. It announces DOT's determination to coordinate the advance planning

of highway projects with affected utilities; to consider the cost of utility

work necessary for a proposed project; and to keep utilities informed of future

transportation projects. As such, DOT is free to refine this policy and to

develop procedures to implement this rule on a case by case basis.

13. All Petitioners challenge paragraphs 12 and 15 of the amended Utility

Permit form which appears at pages 36 and 37 of the UAG.

14. The new paragraph 12 of the Utility Permit provides:

12. It is agreed that in the event

the relocation of said utility facilities

are scheduled to be done simultaneously

with the Department's construction work,

the permittee will coordinate with the

Department before proceeding, shall

cooperate with the Department's

contractor to arrange the sequence of

work so as not to unnecessarily delay the

work of the Department's contractor,

defend any legal claims of the

Department's contractor due to delays

caused by the permittee's failure

comply with the approved schedule, and

shall comply with all provisions of the

law and Rule 14-46, Florida

Administrative Code. The Permittee shall

not be responsible for delays beyond its

normal control.

15. The new paragraph 15 of the Utility Permit provides:

15. Permittee convenants and agrees

that it will indemnify and hold harmless

Department and all of Department's

officers, agents, and employees from any

claim, loss damage, cost, charge or

expense arising out of any act, action,

neglect or omission by Permittee during

the performance of the contract, whether

direct or indirect, and whether to

person or property to which Department or

said parties may be subject, except that

neither Permittee nor any of its

subcontractors will be liable under this

section for damages arising out of

or damage to persons or property directly

caused or resulting from the sole

negligence of Department or any of its

officers, agents or employees.

16. Public utilities are on DOT right-of-way by permit and statutory

invitation. Frequently such utilities increase the cost to DOT for

accomplishing its mission. These costs include expanded liability for DOT.

17. DOT has a separate utilities section that reports to the director of

construction who is responsible for coordinating, in an orderly manner, the

permitting of utilities on the right of way. This includes adjustments

necessary because of new construction or improvements to existing roads.

18. Prior to 1987, the DOT was criticized by the Legislature and the

public for delays in completing road construction projects.

19. The DOT formed a DOT Quality Improvement Team to study utility delays.

The DOT team identified the root causes of DOT's problems with utility

relocation delays and the DOT practices and procedures. Time delays caused by

utilities constituted more than 17% of the total time extensions the DOT granted

on road work. However, approximately one-half of utility-caused time delays

were due to water and sewer utilities.

20. The DOT team further determined that the majority of the utility delay

claims were located in one area. Of 425 delay claims statewide, only 27 were

utility related. Of the 27 utility related claims, 14 were in DOT District I,

and 11 of the claims came out of one office within that District. Twelve of the

14 claims involved city or county utilities. After study and analysis of these

facts, the DOT Team came up with solutions to help reduce utility delays. These

solutions did not include the provisions of paragraphs 12 and 15 of the Utility

Permit.

21. The DOT sends the utility a set of plans at the 60% and 90% completion

stage. Usually the utility would submit a relocation schedule to DOT after it

receives the 90% plans. In the DOT's District NO. 1, where most of the problems

are, DOT sends the 60% and 90% plans together, so the utility is submitting a

relocation schedule based on DOT plans, the utility gives DOT its "approved

schedule," the estimate of the number of days that the utility will need in the

field to relocate the utility facilities. The estimate is usually tied to the

start of the DOT construction, e.g., the utility estimates that it will need 60

days in the field after starting of construction to relocate its facilities.

22. In DOT District 1, there is an average of four utilities involved on

all road projects. Each utility files its own schedule with the DOT, and that

schedule becomes part of the contract which the DOT signs with the contractor.

DOT construction plans can change before construction starts. There can be a

delay of as much as two or three years after the utility submits its relocation

schedule and the start of the DOT construction.

23. Prior to the study, each individual utility would submit its own

relocation schedule months, sometimes years, before the construction actually

begins. An average of four different utilities are involved in a DOT relocation

project at the same time. The project schedule did not coordinate the work of

the utilities with that of the DOT contractor, resulting in delays to the

project.

24. As a consequence of delays (other than for weather), including delays

attributable to utilities, contractors file delay claims. Frequently delay

claims are approved which increase the cost of road construction projects for

DOT.

25. The increased costs stem from the amount of time the DOT contractor is

forced by the delays, such as delays attributable to utilities, to exceed the

contract time. These costs are the cost of labor, equipment, other resources

and overhead which the contractor experiences when it does not finish the

project on time.

26. Any delay in road construction work, including time delays caused by a

utility's failure to comply with its DOT approved relocation schedule, presents

significant disks to the safety of the traveling public and construction workers

on the extended job since the construction zone is a hazard6us area. By

reducing delays, DOT reduces the exposure of the public and the workers, thereby

limiting safety risks. These risks include drop-offs, barricades, lane changes,

and other road abnormalities that motorists endure when they drive through a

road construction project.

27. As a result of its study of utility-related time delays to its road

construction projects, DOT implemented the several recommendations it had made

in its study of time delays.

28. One recommendation was to require any utilities affected by a road

construction project to submit to DOT a detailed schedule of the utility's part

of that project. DOT implemented this recommendation in September 1987, and

this is now an ongoing DOT policy and practice.

29. Under the new procedures, where utilities are involved in a DOT road

construction project, DOT requires the utilities to develop a schedule for

relocating or installing their facilities. The DOT now involves the utilities

at every stage of its road construction. Not only does DOT involve utilities at

an early stage in the planning of the project, but it also gets the contractor

and the utility to confer to reconcile their schedules at a preconstruction

conference so that the road construction can proceed in an orderly fashion with

utilities being relocated in a manner least disruptive to the job.

30. The relocation or installation schedule developed by utilities is

incorporated by the road contractor in its master schedule for the road

construction and is approved by the district construction engineer, resident

engineer or project engineer when the job is let for bidding.

31. The utilities agreement forms the basis for DOT's contract with its

road contractor so that the contractor knows what effect the utility will have

on the project, with the aim that all parties work together in a coordinated

fashion to get the road built.

32. Since utility time delays were one factor contributing to time delays

in DOT road construction, DOT rationally chose to address all facets of the time

delay problem, including utility-caused time delays. However, the claims

tracking reports upon which DOT relied in determining the need for proposed rule

changes do not reflect any reduction in delay claims from the new liaison

procedure since it was not implemented at the time of DOT's claims reports.

33. As a further outgrowth of its study of road construction time delays,

DOT determined that the addition of a defense to delay claim provision in the

utility permit would increase utilities' compliance with their relocation or

installation schedule.

34. DOT relied upon its claims tracking report as a source of data about

the cost to DOT for utility-caused delay claims to support this new permit

provision.

35. While the dollar amounts attributable to settled road contractor delay

claims caused by utility time delays are often less than the initial amounts

claimed by the contractors, the cost to DOT is a significant total.

36. The DOT has a policy and procedure for the direct review, processing

and resolution of all categories of road contractor claims against DOT and has a

specific procedure for processing contractor delay claims attributable to

utility delays.

37. Proposed Paragraph 12 of the Utility Permit will have limited impact

with respect to the utility schedules and there is limited connection between

paragraph 12 of the permit and reducing contractor delay claims.

38. The requirement that the utility defend any legal claims of DOT's

contractor due to delays caused by the utility's failure to comply with the

approved schedule is likely to result in increased litigation and expense for

DOT and the Utility.

39. The DOT utilizes the phrase in paragraph 12 of the Utility Permit:

"The permittee shall not be responsible for delays beyond its normal control" in

the same way it grants its road contractors extensions of time for circumstances

beyond the control of the contractor. This determination is an issue of fact

which can be made by the DOT district construction engineer on a case by case

basis, following general guidelines developed by the DOT.

40. The DOT's intent in including the defense requirement in paragraph 12

of the Permit is to give DOT "extra clout" with which to threaten the utility

with revocation of the Permit if the utility refuses to defend DOT or fails to

comply with the schedule.

41. DOT's recently adopted practice and procedure for processing delay

claims and for determining whether a utility should defend DOT from a delay

claim attributable to utility delays, provides written notice to the utility and

contains extensive levels of review by the DOT professionals involved in the

particular road project. If the road contractor's claim of utility delay is not

deemed valid, DOT will not require the utility to defend against the claim.

42. The majority of Petitioner FPL's facilities are not covered by the

Permit, in that the facilities are not installed on DOT right-of-way or were

installed on DOT right-of- way under the old permit which did not have this

provision.

43. Petitioner Utilities cooperate with DOT in utility relocations, and

the utility relocation is a complex process in which there will be projects on

which there are problems.

44. The DOT intends that both paragraphs 12 and 15 of the revised utility

permit also become part of its standard form contract for utility installation

or relocation, so that the contract mirrors these permit provisions.

45. The DOT's utility contract or agreement is a separate document,

distinct from the DOT utility permit.

46. The purpose of the permit process is the grant or denial of utility

access to DOT's right-of-way and to ensure utility compliance with DOT rules.

47. The purpose of the DOT utility agreement is to negotiate the time

within which a utility must complete its relocation or installation on the DOT

right-of-way and provide specific provisions relating to the particular job

embraced by the agreement.

48. The DOT currently requires any utility which seeks to be accommodated

on DOT right-of-way to indemnify DOT as follows:

a) The existing Utility Permit provides:

15. It is understood and agreed that the

rights and privileges herein set out are

granted only to the extent of thin State's

right, title and interest in the land to be

entered upon and used by the holder, and the

holder will, at all times, assume all risk of

and indemnify, defend, and save harmless the

State of Florida and the Department from and

against any and all loss, damage, cost or

expense arising in any manner on account of

the exercise or attempted exercises by said

holder for the aforesaid rights and

privileges.

b) Master Agreements and project specific agreements with DOT contain

provisions resembling the existing paragraph 15 of the utility permit.

c) The Master Agreement states:

2. The COMPANY further agrees that said

adjustment, changes or relocation of

facilities will be made by the COMPANY with

sufficient promptness so as to cause no delay

to the DEPARTMENT or its contractor in the

prosecution of such construction or

reconstruction work; provided, however, that

the COMPANY shall not be responsible for

delay beyond its control; and that such

"Relocation Work" will be done under the

direction of the DEPARTMENT'S engineer; and

the COMPANY further agrees that in the event

the changes, adjustments or relocation of

such facilities or utilities are bone

simultaneously with the construction project,

that it will be directly responsible for the

handling of any legal claims that the

contractor may initiate due to delays caused

by the COMPANY'S negligence; and that the

COMPANY will not either proceed with the

"Relocation Work" with its own forces or

advertise or let a contract for such Work

until it has received the DEPARTMENT'S

written authority to proceed.

49. Only a small percentage (6%) of Petitioner FPL utility facilities are

on DOT right-of-way, and this percentage will remain constant in the future

because of FPL's design philosophy.

50. Since DOT's utility permit is not required for utility facilities

unless the facilities are on the right-of-way, nor for existing facilities not

being relocated, the challenged paragraphs of the revised utility permit will

not impact a vast majority (94%) of Petitioner FPL facilities.

51. Utility relocation within DOT right-of-way is at the utility's

expense; but if the relocation is from private property to the right-of-way it

is at DOT's expense.

52. For both types of relocations, DOT requires the utility to indemnify

and to defend DOT for the utility's own negligence.

53. The utility is not a party to the contract between the DOT and the

road contractor. The control of the DOT contract, contractor and relocation

procedures is with the DOT.

54. Utility relocation schedules do not require work to commence on a

calendar date, but rather references definable markers in the progress of the

road work.

55. The DOT did not intend paragraph 12 to require a utility to defend a

vehicle owner against claims of the DOT road contractor.

56. DOT's utility coordinator alerts the utility as to the commencement of

the utility's deadline for completing its schedule, and the preconstruction

conference also provides the utility with information and guidance.

57. The DOT road construction plans show all utilities on the project and

the location of their facilities.

58. Proposed paragraph 15 requires a utility, as a condition of its

permit, to indemnify the DOT for any act or omission of the utility under its

contract (with DOT) to install or relocate utility facilities in the right-of-

way, except where the DOT is the sole negligent party.

59. Since 1984, the DOT has required its construction contractors to

indemnify DOT for everything, except for DOT's sole negligence, through a

supplemental specification practically identical with proposed paragraph 15.

60. The indemnification provision of paragraph 15 of the Permit requires

as a condition of use of DOT right-of-way that the utility pay for the DOT's

joint negligence. This will lessen DOT's exposure to liability and free up more

dollars for DOT to spend on roads.

61. As an example, under paragraph 15 of the Permit, if there were a

judgment that DOT was 99% negligent and the utility was 1% negligent, the

utility would have to pay the entire judgment under the proposed indemnification

clause.

62. The control of road design and maintenance is with DOT.

63. DOT intends proposed paragraph 15 to pertain only to tort liability,

and the utility must indemnify DOT for DOT's joint liability and not the joint

liability of any other person or entity.

64. Utility installations on DOT right-of-way raise land use issues

relating to adequate and efficient use of land which include: (a) reduced

overall cost of DOT road improvements; (b) the private landowner's property is

not encumbered by utility facilities, which are installed in the DOT right-of-

way; (c) less clearing of trees or other vegetation is needed if facilities are

installed on the DOT right-of-way; and (d) efficiency of land use is maximized.

The utility in some instances has no choice but to put its facilities on public

right-of-way. In cases involving building setbacks or road crossings, the

utility must obtain a permit and put its facilities in DOT or other public

right-of-way. The DOT did not consider these important public policy and land

use considerations in proposing the defense and indemnification provisions of

paragraphs 12 and 15.

65. The requirement that the utility defend any legal claims of DOT's

contractor due to delays caused by tube utility's failure to comply with the

approved schedule and the requirement that the utility indemnify DOT for DOT's

joint negligence will shift DOT expenses to the utility and cause the utility to

incur additional costs and expenses for use of DOT right-of-way.

66. Utilities do not pass all of their operating costs on to the

ratepaying customers; shareholders bear the increase until, and unless, the

increase is favorably accepted by the Public Service Commission for inclusion as

a factor in the utility's rate structure.

67. The utilities, in some instances, have no choice but to install their

facilities on the DOT right-of-way.

68. Having utility facilities on DOT right-of-way is an efficient use of

land.

69. The DOT is attempting to force provisions on the utilities through

rulemaking because the utilities will not voluntarily sign contracts which

contain the indemnification and defense provisions.

70. The EIS prepared by DOT and incorporated in the June 16, 1989 edition

of the Florida Administrative Weekly states in pertinent part:

* * *

The following specific statements of economic

impact are provided as required by 120.54(2),

Florida Statutes:

* * *

(2) An estimate of the costs on the economic

benefit to all persons directly affected by

the proposed action:

Provisions presumed to have cost impact

on utilities include:

Utilities Liaison: Favorable cost impact

is anticipated from advance coordination

provisions of the rule chapter as amended.

Current reports indicate approximately 22

construction claims for $3.7 million relate

to utilities problems. A significant number

of these will be reduced or eliminated by

consistent liaison during the design process.

Maintenance of Traffic: Specific new

requirements for training of onsite

supervisors of Utilities Work Zones may

impact certain utilities who do not conduct

required training at present. This overhead

should be of such limited nature that it will

be offset by benefits such as improved

safety, reduced hazards, and lower costs of

accidents attributable to improperly

supervised traffic control in utility work

zones.

The Florida Utilities Coordinating

Committee has been materially involved in the

development process for these matters and has

provided continuous input to this revision of

the Utility Accommodation Guide.

71. As stated in the EIS, the Florida Utilities Coordinating Committee

provided continuous input to the revision of the Utility Accommodation Guide; it

did not consider whether the "delay claims" provision should be added to

paragraph 12 or whether the "indemnification" provision should be added to

paragraph 15 of the new Utility Permit.

72. The EIS prepared by DOT and incorporated in the June 16 edition of the

Florida Administrative Weekly is inaccurate and misleading in claiming

construction delays of $3.7 million are attributable to utilities.

73. The DOT did not consider in the EIS the costs to the utilities of

defending "delay claims" filed by the road contractor.

74. The DOT did not consider in the EIS that in shifting the cost of DOT's

joint negligence to the utility, DOT is imposing substantial costs on the

utility.

75. The DOT did not consider that the indemnification amounts which the

utility would have to pay DOT for DOT's joint negligence could be in excess of

the $100,000-$200,000 allowed under the waiver of sovereign immunity statute,

Section 786.28, Florida Statutes (1989).

CONCLUSIONS OF LAW

76. The Division of Administrative Hearings has jurisdiction over the

subject matter of this proceeding, and the parties thereto, pursuant to Sections

120.54(4) and 120.57(1), Florida Statutes.

77. Each Petitioner in this proceeding has the burden to demonstrate that

it is a substantially affected person in order to have standing to seek an

administrative determination of the invalidity of any proposed rule on the

ground that the proposed rule is an invalid exercise of delegated legislative

authority. Section 120.54(4)(a), Florida Statutes (1989).

78. A trade or professional association has standing to institute a rule

challenge proceeding even though it is acting solely as the representative of

its members. Florida Homebuilders Association v. Department of Labor and

Security, 412 So.2d 351 (Fla. 1982). The elements of associational standing

recognized by the Supreme Court in Florida Homebuilders are elements of proof,

which a trade or professional association must prove up at hearing in order to

demonstrate that the association has standing to institute a rule challenge

proceeding. At hearing, all parties stipulated that FNGA is substantially

affected by the challenged rule.

79. Each of the Petitioners in this consolidated rule challenge matter has

met its burden and has standing to seek an administrative determination of the

invalidity of the proposed rules.

80. Petitioners have the burden to demonstrate by the preponderance of the

evidence that the proposed rule constitutes an invalid exercise of delegated

legislative authority, as that phrase is defined in Section 120.52(8), Florida

Statutes (1989). Adam Smith Enterprises, Inc. v. Florida Department of

Environmental Regulation, 553 So.2d 1260, 1274, 14 FLW 2722, at footnote 23,

(Fla. 1st DCA 1989).

81. The phrase "invalid exercise of delegated legislative authority" is

statutorily defined in Section 120.52(8), Florida Statutes, as follows:

(8) "Invalid exercise of delegated

legislative authority" means action which

goes beyond the powers, functions, and

duties delegated by the Legislature. A

proposed or existing rule is an invalid

exercise of delegated legislative authority

if any one or more of the following apply:

(a) The agency has materially failed

to follow the applicable rulemaking

procedures set forth in S. 120.54;

(b) The agency has exceeded its grant

of rulemaking authority, citation to

which is required by S. 120.54(7);

(c) The rule enlarges, modifies, or

contravenes the specific provisions

of law implemented, citation to which

is required by S. 120.54(7);

The rule is vague, fails to

establish adequate standards for

agency decisions, or vests unbridled

discretion in the agency; or

The rule is arbitrary or

capricious.

This subsection was added to the definitions section of Section 120.52 by

legislative act in 1988, and essentially codified judicial interpretation of the

term "invalid exercise of delegated legislative authority." See: Grove Isle,

Ltd. v. Department of Environmental Regulation, 454 So.2d 571, 573, 575 (Fla.

1st DCA 1984); Department of Business Regulation v. Salvation Limited, Inc., 452

So.2d 65 (Fla. 1st DCA 1984).

82. The Petitioners, by asserting the affirmative of the issues, have the

burden of proof which includes the ultimate burden of persuasion. Florida

Department of Transportation v. J.W.C. Co., Inc., 396 So.2d 778 (Fla. 1st DCA

1981).

83. In Department of Professional Regulation, Board of Medical Examiners

v. Durrani, 455 So.2d 515 at 517 (Fla. 1st DCA 1984), the court stated:

The well recognized general rule is that

agencies are to be accorded wide discretion

in the exercise of their lawful rulemaking

authority, clearly conferred or fairly

implied and consistent with the agencies'

general statutory duties . . . An

construction of the statute it administers

is entitled to great weight and is not to be

overturned unless clearly erroneous .

Moreover, the agency's interpretation of a

statute need not be the sole possible

interpretation or even the most desirable

one; it need only be within the range of

possible interpretations . .

It is not this tribunal's function to say if the Department's interpretation is

preferable; this tribunal is concerned only if the proposed rule is within the

range of permissible construction that comports with and effectuates discerned

legislative intent. Florida League of Cities v. Department of Insurance, 540

So.2d 850, 857-858 (Fla. 1st DCA 1989); Department of Administration v. Nelson,

424 So.2d 852 (Fla. 1st DCA 1982)

84. Petitioners' attack on the propriety and constitutionality of the

rules on grounds that they are an impairment of contract under Section 10, of

the Florida Constitution, are more appropriately dealt with by another forum,

since they are not invalid on their face. Department of Administration,

Division of Personnel v. Department of Administration, Division of

Administrative Hearing, 326 So.2d 187 (Fla. 1st DCA 1976); Department of Revenue

v. Young American Builders, 330 So.2d 864 (Fla. 1st DCA 1976); Smith v. Willis,

415 So.2d 1331 (Fla. 1st DCA 1982).

85. The DOT has followed the rulemaking procedure, as set forth in Section

120.54, Florida Statutes, in every material way. DOT gave proper notice, and

followed the correct procedure for incorporating by reference the permit

provisions in the proposed amendments to Rule 14-46.01, Florida Administrative

Code. Section 120.52(8)(a), Florida Statutes (1989)

86. The DOT cites as specific authority in support of the proposed rules

Sections 120.53(l) and 334.044(2), Florida Statutes, and, as the law

implemented, cites Sections 337.401, 337.403, 337.404 and 339.05, Florida

Statutes. These provisions provide in pertinent part:

334.044 Powers and duties of department.--

The Department shall have the following

general powers and duties:

(2) To adopt rules, procedures, and

standards for the conduct of its business

operations and the implementation of any

provision of law for which the department is

responsible.

* * *

337.401 Use of right-of-way for utilities

subject to regulation; permit; fees.--

(1) The department and local governmental

entities, referred to in ss. 337.401-337.404

as the "authority," that have jurisdiction

and control of public roads are authorized to

prescribe and enforce reasonable rules or

regulations with reference to the placing and

maintaining along, across, or on any road

under their respective jurisdictions any

electric transmission, telephone, or

telegraph lines; pole lines; poles; railways;

ditches; sewers; water, heat, or gas mains;

pipelines; fences; gasoline tanks and pumps;

or other structures hereinafter referred to

as the "utility."

(2) The authority may grant to any person

who is a resident of this state,. or to any

corporation which is organized under the laws

of this state or licensed to do business

within this state, the use of a right-of-way

for the utility in accordance with such rules

or regulations as the authority may adopt.

No utility shall be installed, located, or

relocated unless authorized by a written

permit issued by the authority. The permit

shall require the permitholder to be

responsible for any damage resulting from the

issuance of such permit. The authority may

initiate injunctive proceedings as provided

in S. 120.69 to enforce provisions of this

subsection or any rule or order issued or

entered into pursuant thereto.

337.403 Relocation of utility; expenses.--

(1) Any utility heretofore or hereafter

placed upon, under, over, or alone any public

road that is found by the authority to be

unreasonably interfering in any way with the

convenient, safe, or continuous use, or the

maintenance, improvement, extension, or

expansion, of such public road shall, upon 30

days written notice to the utility or its

agent by the authority, be removed or

relocated by such utility at its own expense

except as provided in paragraphs (a) and (b).

(a) If the relocation of utility facilities,

as referred to in S. 111 of the Federal-Aid

Highway Act of 1956, Pub.L.No. 627 of the

Eighty-Fourth Congress, is necessitated by

the construction of a project on the federal-

aid interstate system, including extensions

thereof within urban areas, and the cost of

such project is eligible and approved for

reimbursement by the Federal Government to

the extent of 90 percent or more under the

Federal Aid Highway Act, or any amendment

thereof, then in that event the utility

owning or operating such facilities shall

relocate such facilities upon order of the

department, and the state shall pay the

entire expense properly attributable to such

relocation after deducting therefrom any

increase in the value of the new facility and

any salvage value derived from the old

facility.

(b) When a joint agreement between the

department and the utility is executed for

utility improvement, relocation, or removal

work to be accomplished as part of a contract

for construction of a

facility, the department may participate in

those utility improvement, relocation, or

removal costs that exceed the departments

official estimate of the cost of such work by

more than 10 percent. The amount of such

participation shall be limited to the

difference between the official estimate of

all the work in the joint agreement plus 10

percent and the amount awarded for this work

in the construction contract for such work.

The department may not participate in any

utility improvement, relocation, or removal

costs that occur as a result of changes or

additions during the course of the contract.

(2) If such removal or relocation is

incidental to work to be done on such road,

the notice shall be given at the same time

the contract for the work is advertised for

bids, or 30 days prior to the commencement of

such work by the authority.

(3) Whenever an order of the authority

requires such removal or change in the

location of any utility from the right-of-way

of a public road, and the owner thereof fails

to remove or change the same at; his own

expense to conform to the order within the

time stated in the notice, the authority

shall proceed to cause the utility to be

removed. The expense thereby incurred shall

be paid out of any money available therefore,

and such expense shall, except as provided in

subsection (1), be charged against the owner

and levied and collected and paid into the

fund from which the expense of such

relocation as paid.

337.404 Removal or relocation of utility

facilities; notice and order; court review--

(1) Whenever it shall become necessary for

the authority to remove or relocate any

utility as provided in the preceding section,

the owner of the utility, or his chief agent,

shall be given notice of such removal or

relocation and an order requiring the payment

of the cost thereof, and shall be given

reasonable time, which shall not be less than

20 or more than 30 days, in which to appear

before the authority to contest the

reasonableness of the order. Should the

owner or his representative not appear, the

determination of the cost to the owner shall

be final. Authorities considered

for the purposes of chapter 120 shall

adjudicate removal or relocation of utilities

pursuant to chapter 120.

(2) A final order of the authority shall

constitute a lien on any property of the

owner and may be enforced by filing an

authenticated copy of the order in the office

of the clerk of the circuit court of the

county wherein the owner's property is

located.

(3) The owner may obtain judicial review of

the final order of the authority within the

time and in the manner provided by the

Florida Rules of Appellate Procedure by

filing in the circuit court of the county in

which the utility was relocated a petition

for a writ of certiorari in the manner

prescribed by said rules or in the manner

provided by chapter 120 when the respondent

is an agency for purposes of chapter 120.

339.05 Assent to federal aid given.--The

state hereby assents to the provisions of the

Act of Congress approved July 11, 1916, known

as the Federal Aid Law, which Act of

is entitled "An act to provide that the

United States shall aid the states in the

construction of rural post roads and for

other purposes," and assents to all

subsequent amendments to such Act of Congress

and any other act heretofore passed or that

may be hereafter passed providing for federal

aid to the states for the construction of

highways and other related projects. The

department is authorized to make application

for the advancement of federal funds and to

make all contracts and do all things

necessary to cooperate with the United States

Government in the construction of roads under

the provisions of such Acts of Congress and

all amendments thereto.

A. Rule 14-46.0011

87. The DOT's proposed Rule 14-46.0011 concerning DOT's liaison with

utilities is a statement of general policy, and is a reasonable rule authorized

by Sections 334.044(2), 337.401, 337.403, 337.404 and 337.405, Florida Statutes

These statutes are correctly cited by DOT in support of this proposed rule. On

its face, this proposed rule does not offend any of the provisions of Sections

120.52(8) or 120.54(4), Florida Statutes, and, therefore, does not constitute an

invalid exercise of delegated legislative authority. As a statement of general

policy it is not vague. Since no decisions affecting substantial interest are

intended under this proposed rule, the rule need not specify any standards for

agency decisions. Since the rule directs DOT to coordinate with utilities in

planning its highway projects, the rule does not vest unbridled discretion in

DOT.

B. Rule 14-46.001 - Utility Permit, Paragraph 12

88. Proposed paragraph 12 of the Utility Permit provides:

12. It is agreed that in the event the

relocation of said utility facilities are

scheduled to be done simultaneously with the

Department's construction work, the permitee

will coordinate with the Department before

proceeding, shall cooperate with the

Department's contractor to arrange the

sequence of work so as not to unnecessarily

delay the work of the Department's

contractor, defend any legal claims of the

Department's contractor due to delays caused

by the permittee's failure to comply with the

approved schedule, and shall comply with all

provisions of the law and Rule 14-46, Florida

Administrative Code. The Permittee shall not

be responsible for delays beyond its normal

control.

89. The DOT cites in support of the proposed rule, in particular, Sections

334.044(2), 337.401, 337.403, 337.404 and 339.05, Florida Statutes. This

statutory scheme authorizes DOT to make and enforce reasonable rules with which

utilities must comply before receiving a permit to be accommodated on the DOT

right-of-way. The DOT's mission under the State Transportation Code is to plan,

construct and maintain transportation facilities. Section 334.404(13), Florida

Statutes (1989). The accommodation of utilities by permit is subject to

compliance by utilities with reasonable DOT rules. Section 337.401(1), Florida

Statutes (1989), authorizes DOT to "prescribe and enforce reasonable rules or

regulations" with reference to the accommodation of utilities on roads within

DOT's jurisdiction. While Section 337.401(2), Florida Statutes, states, in

pertinent part:

(2) . . . No utility shall be installed,

located or relocated unless authorized by a

written permit issued by the authority. The

permit shall require the permitholder to be

responsible for any damage resulting from

the issuance of such permit.

90. It is clear that a statutory condition of the permit requires that the

utility shall be responsible for any damage resulting from the issuance of a

permit [Section 337.401(2)], and also, the utility must, at its own expense,

restore any public road which it damages or impairs in any way because of the

installation, inspection or repair of its facilities located on the road. The

DOT may charge the cost of such restoration to the utility if the utility fails

to act. Section 337.402, Florida Statutes.

91. Under this statutory scheme, the right of utilities, including

whatever rights are provided telephone companies under Section 362.01, Florida

Statutes (1987), are subordinate to DOT and the rights of the traveling public

to the use of the public roads of this state.

92. The DOT argues that it is requiring the utility to bear the burden of

defense only for claims which DOT would not have had but for the utility's

failure to follow its schedule, and only if the failure was within the utility's

control. This is a reasonable interpretation of the statutory requirement that

a permitholder shall be responsible for "any damage resulting from the issuance

of such permit." Section 337.401(2), Florida Statutes.

93. The DOT has a problem with the mechanics of implementing paragraph 12.

The DOT cannot explain which utility would defend the DOT if more than one

utility is involved, a frequent occurrence. The DOT testified that the

utilities' duty to defend did not extend to "delays beyond its normal control,"

and that "normal control" is construed to mean a precondition of the defense

duty. "Normal control" could be interpreted in different ways even if

guidelines were established. The DOT admitted that there could be litigation

over the term "normal control." However, the sentence is not so vague that a

person of common intelligence cannot say with certainty from the terms of such

rule or statute what is required. See: D'Alemberte v. Anderson, 349 So.2d 164

(Fla. 1977).

94. The DOT put the defense provision in the Permit to force such

provisions upon the utility without its consent, because they would not

voluntarily consent to the provision during contract negotiations.

95. The DOT wants this provision: (l) to enforce the provision that

utilities will do what they are supposed to do to keep a contractor from being

delayed in relocation work; and (2) to give the DOT an additional remedy, a

"clout of enforcement," with respect to relocations whereby the DOT could revoke

the utility permit in the event of noncompliance. The DOT's intent is to force

the provisions through rulemaking into the Permit; then, by the fact the

provisions are in the Permit, to require the same type of language be included

in a relocation contract.

96. The utility permit is issued when the utility installs its facilities

on the DOT right-of-way; a separate agreement controls relocations. A DOT

permit )S only to a utility's facilities that are located on the DOT right-of-

way and not to those facilities located in public right-of-way owned by other

government agencies, platted utility easements or private easements. Any of

these facilities -- to which the Permit does not apply -- could be relocated as

the result of a DOT construction project.

97. The DOT Quality Improvement Team, after studying delay claims,

determined the primary root cause of the problems were outdated and inadequate

DOT procedures. The recommended solutions to help reduce utility delays did not

include the defense and indemnification provisions contained in proposed

paragraphs 12 and 15 of the Permit.

98. The DOT did not consider all relevant facts. The DOT looked at only

three things in considering the impact of the proposed rule. The conclusion

that the proposed rule would result in a $2 million saving due to reduction in

utility delays is an estimate only. The DOT did not consider settlement amounts

or the fact that the majority of delay claims were associated with water and

sewer relocation. The DOT made no effort to break the claims down into type of

utilities and, even though it is not surprised that the majority of claims

involved water and sewer facilities, doesn't know why that should be so.

99. It is the DOT and the DOT's contractor who are responsible for

coordinating the various utility schedules and the construction work into one

project schedule. The DOT contractor submits this project schedule to the DOT

and the DOT project engineer and the district construction engineer review that

schedule and have authority to disapprove that schedule. It is not this project

schedule, however, but the "approved" utility schedule of the individual utility

which gives rise to the utility's duty to defend the DOT against the claims of

the DOT's contractor in paragraph 12 of the Permit This approved schedule is

prepared at the time that the utility has no knowledge of how the contractor

wants to proceed on the job --. the contractor may have a different approach to

constructing the job which could result in the utility changing their plane as

to where they planned to start work.

100. The requirement of a pre-construction conference and a project

schedule was implemented by the DOT only toward the end of 1987, when DOT's

standard form contract was amended to include scheduling requirements on the

part of the contractor. It is too early, and there is no data yet available, to

tell whether this new procedure will be effective, as it is anticipated to be,

in helping to reduce delays caused by utility relocations.

101. Further, the DOT in proposing paragraph 12 did not reasonably

consider the fact that the utility is not a party to the construction contract

between DOT and the DOT contractor. The utility has no control over the terms

and conditions of that contract, including the ability of the DOT contractor to

sue the DOT for delay claims. When the DOT contractor sues because of a utility

delay, it sues the DOT based on its construction contract with the DOT and may

allege the DOT's failure to coordinate the relocation efforts of the utility

owners constituted a breach of the Contract. DOT may then join the utility as a

third party.

102. Although it may not be wise or efficient, it is not arbitrary to

force a utility as a condition of right-of-way use to defend the DOT against

DOT's own contractors, when the delay claim is allegedly due to delays caused by

the utility's failure to comply with the approved schedule.

103. The preponderance of evidence is that the phrase

". . . defend any legal claims of the Department's contractor due to delays

caused by the permittee's failure to comply with the approved schedule . . . "

within DOT's proposed paragraph 12 of the new Utility Permit is not an invalid

exercise of delegated legislative authority, as defined in Section 120.52(8),

Florida Statutes.

C. Paragraph 15 of the Utility Permit Indemnification of DOT's Joint

Negligence

104. The proposed paragraph 15 of the Utility Permit, which is a part of

the Utility Accommodations Guide (UAG), is incorporated by reference into Rule

14-46.001. By its terms, the "except [for the] . . . sole negligence"

provision requires the utility to pay for the joint negligence of the DOT as a

condition of use of the DOT right-of-way.

105. Under the provisions of Section 337.401, Florida Statutes, DOT can

require the utility to be responsible for any damage resulting from the issuance

of a permit. Under the existing provisions of paragraph 15 of the Utility

Permit, utilities are required to indemnify, defend, and save harmless the DOT

from all loss, damage, cost or expense arising from the permit. The proposed

new paragraph 15 provision which requires indemnification, except for DOT's sole

negligence is an extension of that provision. Paragraph 12 of the existing

standard form Master Agreements, previously executed by Petitioners, requires

utilities to defend against contractor delay claims due to delays caused by the

utilities' negligence that were not beyond its control. The new permit requires

the utility to defend DOT from any delay claims caused by the utility's failure

to comply with its approved work schedule other than for delays beyond the

utility's normal control, and indemnify DOT for any claim, loss, damage, cost,

charge or expense except for damages resulting from the sole negligence of the

DOT.

106. Under proposed paragraph 15, if there was a judgment finding that the

DOT was 99% negligent and the utility was 1% negligent, the utility would have

to pay the entire judgment. Under the general law relating to comparative fault

and contribution among tort-feasors, the utility would have a judgment entered

against it and, therefore, have to pay for only 1% of that liability -- the part

directly attributed to the utility's own fault. Paragraph 15 of the Utility

Permit modifies Florida negligence law, Section 768.81, Florida Statutes, and

enlarges, modifies or contravenes the specific provisions of Section 337.401(2),

Florida Statutes, permitting the DOT to hold the utility responsible for any

damage that the utility causes. State Board of Optometry v. Florida Society of

Ophthalmology, 539 So.2d 878. As the court stated at p. 885

We recognize that in [Department of

Professional Regulation, Board of Medicine v.

Durrani, 455 So.2d 515 (Fla. 1st DCA 1984] we

indicated that the court must approve the

agency's selection of any possible

interpretation of the enabling statute. But

in so stating, we did not mean that any

conceivable construction of a statute must be

approved irrespective of how strained or

ingeniously reliant or implied authority is

might be; rather, as made clear in the cases

cited in Durrani in support of the stated

proposition, only a permissible construction

by the agency that comports with and

effectuates discerned legislative intent will

be sustained by the court. (citations

omitted)."

DOT's interpretation of the statute goes beyond the permissible construction

that can be given to the statute and is an invalid exercise of delegated

legislative authority.

107. The DOT found it necessary to put the indemnification provision in

the Permit because the utilities would not sign a contract with that language in

the contract. Because Florida law views indemnification of another for that

other's own negligence with disfavor, it allows such indemnification only in

contracts freely entered into, provided that the indemnification is expressed in

clear and unequivocal terms. See: Charles Poe Masonry, Inc. v. Spring

Scaffolding Rental Equipment Company,

108. The DOT strongly relies on the case of Mitchell Maintenance Systems

v. State, Department of Transportation, 442 So.2d 276 (Fla. 4th DCA 1983), in

its justification for implementing paragraph 15. The sole issue decided by the

court in Mitchell, supra, is that the indemnification language identical to the

language which DOT proposes for paragraph 15 of the Permit is clear and

unequivocal. However, the Mitchell case is limited by its facts to a contract

situation. It is limited to a contract willingly entered into by a private

individual who wished to perform maintenance work on DOT utility poles. Mitchell

does not involve rulemaking, does not involve public utility use of right-of-way

and does not involve the public policy issues of providing economic utility

service or land use discussed above.

109. Further, unlike the situation in Mitchell where the maintenance work

is completely under the control of the party agreeing to indemnify the DOT with

respect to any damage arising out of that maintenance work, the control on the

right-of-way situation is with the DOT or third persons. The road construction

and maintenance of the road is under the control and is the responsibility of

DOT. The DOT's use of the Mitchell case, as justification for shifting the cost

of the DOT's joint negligence to the utility through rulemaking is not legal

authorization for requiring the utility to pay for DOT's joint negligence.

110. Prior to the adoption of any rule, Section 120.54(2)(b), Florida

Statutes, mandates that an agency prepare an economic impact statement (EIS) to

promote agency introspection in administrative rulemaking; to ensure a

comprehensive and accurate analysis of economic factors which work with social

and legislative goals to facilitate informed decision making and to expose the

administrative rulemaking process to public scrutiny. Florida-Texas Freight,

Inc. v. Hawkins, 379 So.2d 933, at 946 (Fla. 1979). In Dept. of Health &

Rehabilitative Services v. Wright, 439 So.2d 937 (Fla. 1st DCA 1983), the court

held that an economic impact statement which insufficiently addressed the

potentially substantial economic repercussions of a proposed rule change was

invalid and, hence, the rule was an invalid exercise of delegated legislative

authority. The court said:

. . .materiality of the economic impact

statement to the rulemaking process cannot be

given short shrift. Preparation of the

statement is a sobering task, one designed to

arrest agency discretion bordering on the

despotic, and to channel it through logic and

reason to a rational end. Id. at 641

111. The EIS prepared by DOT and incorporated in the June 16 edition of

the Florida Administrative Weekly is inaccurate and misleading in claiming that

construction delays of $3.7 million are attributable to utilities. The costs of

claims for delays related to utilities' problems are insignificant overall and

cannot serve as a reasonable basis for adoption of the proposed rules.

112. A public utility has a general requirement under Section 366.03,

Florida Statutes (1989), to provide the public with adequate and economical

utility installations and services. The DOT did not consider the fact in the EIS

that in shifting the cost of DOT's joint negligence to the utility, DOT is

imposing substantial costs on the utility and is, in fact., increasing those

costs by an unquantifiable amount. These additional costs can have a negative

impact on the utility's ability to provide economical service.

113. The DOT did not consider that the indemnification amounts which the

utility would have to pay DOT foil DOT's joint negligence could be in excess of

the $100,000 - $200,000 allowed under the waiver of sovereign immunity statute,

Section 786.28, Florida Statutes (1989).

114. The EIS discussing the costs and benefits of the proposed rule

change, completely ignores the cost of requiring utilities to assume all of

DOT's tort and contract liability, except where the Department is solely

negligent.

Section 120.54(2), Florida Statutes (1989), provides that an agency's

failure to include within its rule an "adequate" statement of economic impact is

grounds for invalidation of the rule. The Florida Supreme Court has observed

that the procedure envisioned by this section does not "command adherence to

form over substance," Florida-Texas Freight, supra, and that provision does not

require perfection but only "substantial compliance" with Section 120.57(2)(b),

Florida Statutes (1989). In the matter before this tribunal, DOT gave no

consideration at all to the economic impact of shifting liability from the

Department to the utility and ultimately the utility's ratepayers. This section

of the rule could be devastating economically to the utility permitholder and,

therefore, the Department's reasoning for its adoption is not supported by law

or logic and is invalid. Department of Health and Rehabilitative Services v.

Wright, 439 So.2d 937 (Fla. 1st DCA 1983).

115. Paragraph 15 of the Utility Permit enlarges, modifies or contravenes

the law implemented, and the EIS is not adequate as pertains to this section and

is, therefore, an invalid exercise of delegated legislative authority under

Sections 120.52(8)(c) and 120.54(2)(b), Florida Statutes (1989). Therefore,

based on the foregoing findings of fact and conclusions of law it is

ORDERED, as follows:

1. Proposed Rule 14-46.0011 is not an invalid exercise of delegated

legislative authority;

2. Proposed Rule 14-46.001 and the Utility Accommodation Guide, adopted by

reference therein, Which includes a new form Utility Permit, are not an invalid

exercise of delegated legislative authority, except for Paragraph 15 of the

Utility Permit, contained within the UAG and adopted by reference in proposed

Rule 14-46.001, which is held to be invalid. Section 120.52(8)(c) and

120.54(2)(b), Florida Statutes (198).

3. Except for the issues abated (see: Preliminary Statement), all other

issues are dismissed, and the Department of Transportation is free to conclude

its rule promulgation of the rules and Utility Accommodation Guide.

Jurisdiction of the abated issues are remanded to the Department of

Transportation for resolution through formally announced and noticed changes to

the proposed rules.

DONE and ORDERED this 8th day of March, 1990, in Tallahassee, Leon County,

Florida.

__________________________

DANIEL M. KILBRIDE

Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 9th day of March, 1990.

APPENDIX

The following constitutes my specific rulings, in accordance with section

120.59, Florida Statutes, on findings of fact submitted by the parties.

Proposed Findings of Fact - GTE Florida Inc.

Accepted: Paragraphs 1, 2, 4, 5 (impart) , 6, 7, 8 (in substance) 9, 10, 13,

14, 15

Rejected: Against weight: 3, 5 (in part) Argument: 11, 12

Proposed Findings of Fact-Florida Power and Light Co.

Accepted 1, 2 (in substance), 3, 6, 7, 8, 9, 10, 11, 12, 13, 15, 16, 17, 18, 19,

20, 21, 23, 24, 25 (in substance), 26, 27, 28 (in substance), 29, 31

Rejected: - Against greater weight of the evidence: 4, 5

- Subservient: 14

- conclusions of law: 22, 30, 32

Proposed Findings of Fact - Southern Bell Telephone and Telegraph Co.

Accepted: 1, 2, 4, 5, 6, 7, 10 (in substance), 12 (in substance) Rejected:

Resolved in the Preliminary Statement: 3

- conclusion of law: 8, 9, 13, 14, 17

- not supported by the greater weight of the

evidence: 11, 15, 16

Proposed Findings of Fact - Department of Transportation

Accepted: (as stated or in substance): 10, 11, 12, 13, 15, 16, 17, 18, 19, 20,

21 (in part), 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 36, (in

part), 42, 46, 47, 48, 49, 50, 51, 55(in part), 57, 60, 62, 63, 64, 65, 68, 69,

70, 71, 72, 75, 77, 82, 84, 87, 88

Rejected as resolved in the Preliminary Statement: 1, 2, 3, 4, 5, 6, 7, 8, 9,

14

Rejected as irrelevant or subservient: 58, 79, 80, 81, 85, 94

Rejected as argument: 44, 45, 54, 56, 61, 66, 67, 73, 74, 78, 83, 90, 91, 95,

96, 91

Rejected as not supported by the greater weight of the evidence: 21 ( in part),

37, 38, 39, 40, 41, 43, 52, 53, 55 (in part), 59, 76, 85, 86, 87

COPIES FURNISHED:

Robert P. Daniti, Esquire Ben G. Watts, Esquire

Senior Litigation Attorney Secretary

Department of Transportation Department of Transportation

605 Suwannee Street 605 Suwannee Street

Tallahassee, FL 32399-0458 Tallahassee, Fl 32399-0458

Attn: Eleanor Turner, MS 58

Lorin H. Albeck, Esquire

General Attorney Thomas H. Bateman, III

GTE Florida Incorporated General Counsel

Post Office Box 110, Mail Code 7 Department of Transportation

Tampa, FL 33601-0110 562 Haydon Burns Building

Tallahassee, FL 32399-0458

Jean G. Howard, Esquire

Law Department

Florida Power and Light Company

Post Office Box 029100

Miami, FL 33102

Robert G. Beatty, Esquire

Southern Bell Telephone

Legal Department

Museum Tower, Suite 1910

150 West Flagler Street

Miami, FL 33130

Kay L. Wolf, Esquire

Assistant Vice President-

Law

United Telephone Company

of Florida

Post Office Box 5000

Altamonte Springs, FL 32716-5000

Richard Brightman, Esquire

Post Office Box 6526

Tallahassee, FL 32314

NOTICE OF RIGHT TO JUDICIAL REVIEW

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL

REVIEW PURSUANT TO SECTION 102.68, FLORIDA STATUTES. REVIEW PROCEEDINGS ARE

GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH PROCEEDINGS ARE

COMMENCED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE

DIVISION OF ADMINISTRATIVE HEARINGS AND A SECOND COPY, ACCOMPANIED BY FILING

FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR

WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY

RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE

ORDER TO BE REVIEWED.