91-006036 City Of Sunrise vs. Indian Trace Community Development District And South Florida Water Management District Status: Closed Recommended Order on Friday, December 13, 1991.

Summary: Economic considerations of water use permit are not addressable under Ch. 373 criteria unless directly related to water resource preservation.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CITY OF SUNRISE, )

)

Petitioner, )

)

vs. ) CASE NO. 91-6036

)

INDIAN TRACE COMMUNITY DEVELOPMENT )

DISTRICT and SOUTH FLORIDA WATER )

MANAGEMENT DISTRICT, )

)

Respondents. )

___________________________________)

RECOMMENDED ORDER

A hearing was held in this case, by telephone conference call, on November

27, 1991, before Arnold H. Pollock, a Hearing Officer with the Division of

Administrative Hearings.

APPEARANCES

For the Petitioner: Phillip Gildan, Esquire

Elaine James, Esquire

Nason, Gildan, Yeager,

Gerson & White, P.A.

Suite 1200

1645 Palm Beach Lakes Blvd.

West Palm Beach, Florida 33401

For the Respondent: Donald J. Buettenmuller, Esquire

ITCDD John Cole, Esquire

Bill Duke, Esquire

Gunster, Yoakley & Stewart, P.A.

777 S. Flagler Drive, Suite 500E

West Palm Beach, Florida 33401

For SFWMD : Cecile I. Ross, Esquire

Beth Ross, Esquire

South Florida Water Management District

Post Office Box 24680

3301 Gun Club Road

West Palm Beach, Florida 33416 - 4680

This matter came before the undersigned on the parties' request for a pre-

hearing conference to, inter-alia, resolve several motions filed by the parties

at differing times up to the

date of hearing. Included among the motions filed are:

(a) The City's motion for a stay of the

proceedings until resolution of an allied

matter currently before the Circuit Court.

(b) SFWMD's motion to dismiss the City's

Petition for lack of standing.

(c) ITCDD's motion to dismiss the City's

Petition for lack of standing.

(d) The City's motion to strike SFWMD's

motion to dismiss because of lack of

timeliness.

(e) The City's motion to strike SFWMD's

Answer to its Petition for untimeliness.

(f) SFWMD's alternative motion for

clarification of City's Petition, and

(g) ITCDD's motion to compel discovery and

City's companion request for Protective Order.

At the telephone conference hearing referenced above, held on November 27,

1991, attended by all the aforementioned counsel and the undersigned, and

recorded and transcribed, each counsel had unlimited opportunity to speak in

support of his client's position on all the issues delineated in the list of

motions considered.

Having read the motions submitted in advance of the hearing, and the

memoranda in support of and in opposition thereto, and having heard and

considered the oral arguments propounded by counsel at the hearing, it is

FOUND THAT

1. ITCDD currently receives 100% of its treated potable water from the

City of Sunrise and delivers 100% of its wastewater to the City for treatment

and disposal under the terms of a contract or contracts in existence for over 10

years, having been entered into on October 29, 1980.

2. To provide this product and service over the years, the City has

expended substantial sums to provide the facilities, infrastructure, and staff

to serve ITCDD and its other customers, and has significant bond financial

obligations as a result thereof to which the revenues from the sale of product

and service, including that to ITCDD, are pledged.

3. ITCDD has applied to the SFWMD for a water use permit to withdraw water

from four proposed wells to be completed into the Floridan aquifer in Broward

County. This is not the same aquifer utilized by the City's wells. The

proposed wells will have an annual allocation of 1233.70 MGY, (3.38 MGD), and a

maximum daily allocation of 5.754 million gallons. ITCDD also proposes to

construct a reverse osmosis water treatment plant rated at 4.00 MGD, and an

additional 2.00 million gallon ground level concrete storage tank to supplement

the existing 1.5 million gallon storage tank. The two interconnects ITCDD

currently has with the City can transmit a combined flow in excess of 2.90 MGD.

4. On August 28, 1991, the SFWMD staff issued a staff report covering the

instant application in which it recommends approval of ITCDD's withdrawal of

water in the amounts sought over a 5 year period to expire on September 12,

1996, subject to 27 limiting conditions.

5. Petitioner, City, has filed its Petition in opposition to the staff

report contending that the proposed permit will allow ITCDD to directly

duplicate the facilities and staffing of the City's facility; will allow it to

directly compete with the City's utility service; will support ITCDD's intent to

disregard its legal and public policy responsibilities not to construct

duplicate and competing facilities; and will enable ITCDD to sever its customer

relationship with the City thereby depriving the City's remaining customers of

necessary revenues to meet the financial obligations incurred for the benefit of

ITCDD and the expenses to be incurred to maintain the thereafter dormant

facilities. The City claims this will result in the remaining City customers

paying twice for the same capacity with a resulting significant increase in

rates and charges paid by current and future City customers.

6. Section 3.1.1.1.5, Management of Water Use Permit Information Manual,

Volume III, June, 1985, requires conflicting service claims between applicants

to be resolved by the parties without intercession by the water management

district. In February, 1991, the SFWMD staff informed ITCDD of the rule

requirement and indicated it could not recommend allocation for the area if the

conflict were not resolved. At some point in time, the issues involved were

made the subject of a Circuit Court action between the parties which is

currently in litigation.

7. In its Petition for a hearing under Section 120.57(1), Florida

Statutes, the City disputes the allegation by ITCDD that it has a bulk user

agreement with the City; it disputes that the ITCDD has legal control over the

ability to supply potable water to the service area; it disputes the allegations

in certain paragraphs on pages 5 and 6 of the staff report dealing with the

City's ability to provide water from the Biscayne aquifer from which it draws,

and other matters of a non-resource nature; and it disputes the ultimate

conclusion by the staff that ITCDD's use as recommended would be a reasonable

and beneficial use of the resource that would not impact adjacent existing legal

uses and is in the public interest.

8. In paragraph F 2) - 6), City outlines certain "ultimate facts" on which

it relies to support its opposition to ITCDD's application. These include:

(a) City has a considerable investment in

capital facilities and considerable operations

and maintenance expense relative to its

service to ITCDD, and removal of ITCDD from

the City's service territory will have a

substantial negative impact on its remaining

customers.

(b) ITCDD's duplication of facilities will

have a material negative impact on raters and

charges to current and future customers to

approximately double the current rate.

(c) ITCDD is prohibited from constructing

competing or duplicative facilities by law.

(d) ITCDD is not a party to the 1980

agreement between the City and IT Municipal

Taxing District and has no rights under that

contract.

(e) Even if it had, that contract does not

permit ITCDD to construct facilities which

compete with the City.

9. While in its Petition the City indicates it disputes certain water

resource conclusions drawn by the SFWMD staff in its report, its discussion

clearly aims toward economic and contractual considerations rather than water

resource considerations. The Section 120.57(1) hearing provides for evaluation

of the application under the statutory and regulatory conditions for issuance of

a water use permit under Section 373.223, Florida Statutes, and Rule 40E-2.301,

F.A.C. The statute, at subsection (1), requires an applicant to establish that

the proposed use of water:

(a) Is a reasonable-beneficial use as defined

in s. 373.019(4);

(b) Will not interfere with any presently

existing use of water; and

(c) Is consistent with the public interest.

10. In addition, at Section 373.219(1), Florida Statutes, the statute

indicates:

The governing board or the department may

require such permits for consumptive use of

water and may impose such reasonable

conditions as are necessary to assure that

such use is consistent with the overall

objectives of the district or department and

is not harmful to the water resources of the

area....

11. From the above it is clear that a permit sought under Chapter 373,

Part II, Florida Statutes, is related to water resource considerations, and any

criteria for evaluation must, perforce, be evaluated within the parameters of

such considerations. Economic considerations, though perfectly valid for

evaluation in another forum, are not addressable under Chapter 373 unless

directly related to the preservation of water resources.

12. Petitioner has indicated its disagreement with certain conclusions

drawn by the SFWMD staff in its report, as they relate to water resource

preservation. This dispute, however, is not amplified or supported with any

evidentiary argument or citation. Any argument put forth by Petitioner relates

solely to economic concerns of the legal status of the parties which are not, as

urged by Petitioner, pertinent here.

13. Standing is, of course, pertinent, and to be a party to an

administrative challenge to the issuance of a permit, the claimant must be one

whose "substantial interest will be affected by proposed agency action." To

show its "substantial interest", the City must show, (1) that because of the

proposed agency action, it will suffer an injury in fact, and (2) that this

injury in fact is of a type or nature which the proceeding is designed to

protect. Agrico Chemical Company v. Department of Environmental Regulation, 406

So.2d 478, 482 (Fla. 2DCA 1981), pet.rev.den., 415 So.2d 1359. It is the second

part of this test, the zone of interest, where Petitioner falls short.

14. Going one step further, the courts have held that allegations of

economic harm are insufficient to establish the requisite "substantial interest"

to confer standing. Shared Services, Inc. v. Department of Health and

Rehabilitative Services, 426 So.2d 56, 58 (Fla. 1DCA 1983). As was pointed out

previously, Chapter 373 is a water resource allocation statute, and economic

concerns of the nature involved here are clearly not within the zone of interest

intended to be protected by this chapter.

15. Taken together, the pleadings indicate clearly that the City of

Sunrise does not have the requisite standing to challenge the SFWMD's intended

action approving ITCDD's application in this Section 120.57(1) hearing

notwithstanding it may have legitimate standing to do so elsewhere in another

forum. That being determined, resolution of the other motions at hand is moot.

It is, therefore:

RECOMMENDED THAT an Order be entered by the South Florida Water Management

District dismissing without prejudice the City of Sunrise's Petition in

opposition to ITCDD's application No. 910130- 13.

DONE and ENTERED in Tallahassee, Florida this 13th day of December, 1991.

______________________________

ARNOLD H. POLLOCK

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 13th day of December, 1991.

COPIES FURNISHED:

Phillip Gildan, Esquire

Elaine James, Esquire

Suite 1200

1645 Palm Beach Lakes Blvd.

West Palm Beach, Florida 33401

Donald J. Buettenmuller, Esquire

John Cole, Esquire

Bill Duke, Esquire

777 South Flagler Drive, Suite 500E

West Palm Beach, Florida 33401

Cecile I. Ross, Esquire

Beth Ross, Esquire

SFWMD

P.O. Box 24680

3301 Gun Club Road

West Palm Beach, Florida 33416-4680

Tilford C. Creel

Executive Director

SFWMD

P.O. Box 24680

3301 Gun Club Road

West Palm Beach, Florida 33416-4680

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended

Order. All agencies allow each party at least 10 days in which to submit

written exceptions. Some agencies allow a larger period within which to submit

written exceptions. You should consult with the agency which will issue the

Final Order in this case concerning its rules on the deadline for filing

exceptions to this Recommended Order. Any exceptions to this Recommended Order

should b e filed with the agency which will issue the Final Order in this case.