CHARLOTTE COUNTY v. SOUTHWEST FLORIDA WATER MANAGEMENT DISTRICT

PREVIOUS SECTION

IV. Existing Rules, Proposed Rules, and Agency Statements Concerning Minimum Water Levels and Flow Rates

A. Existing Rule 40D-8.041

1289. ECOSWF has challenged the District's existing minimum level provisions in Rule 40D-8.041(2),(3) and (4), F.A.C., alleging that they are arbitrary and capricious, contravene Chapter 373, and exceed the District's grant of rulemaking authority under Chapter 373. The District has conceded that Rule 40D-8.041(4) was premised upon the "water crop" methodology which was invalidated in the Water Crop Rule Challenge. The District has agreed there is no need to reach the resource issues raised by ECOSWF and that this provision constitutes an invalid exercise of delegated legislative authority. No similar concession was made in the District's proposed final order with respect to subsections (2) and (3) of Rule 40D-8.041 even though the testimony of District staff at the hearing did not provide any scientific support for the methodologies.

1290. With regard to the stream flow provision, Rule 40D-8.041(2), ECOSWF argues that the rule should be invalidated because significant harm can occur to water resources even when flow rates are above the minimum levels set by this rule. In response, the District does not disagree that harm could occur to some streams if this methodology is used, but the District argues that the rule does not establish a minimum level for any specific water body. The District notes there is no requirement that water be allocated up to the point of reaching the minimum level and that it has generally been far more conservative than the requirements of this rule in allocating water from streams. The District further states that no evidence was presented that this rule has been applied to any particular stream in a manner which caused significant harm. Similar arguments have been made with respect to the water table methodology in Rule 40D-8.041(3).

1291. Application of these methodologies is qualified by the opening phrase of each provision which says "unless otherwise deemed appropriate by the [Governing] Board." Thus, application of the methodologies is not mandatory, but there is no delineation of the factors that will be considered in determining whether they should be used.

1292. The District seldom, if ever, utilizes any of the methodologies in Rule 40D-8.041. It is not clear why they are not used and it is not clear why they remain on the books. Absent some guidelines or standards for when these provisions would be applied, the provisions are unacceptably vague. See, Cortes, supra, 655 So.2d 132. Moreover, the District admits that application of the methodologies could in certain cases cause significant harm to a resource. Thus, these methodologies do not satisfy the statutory goal for MFLs. It is arbitrary and capricious for the District to retain these methodologies without any explanation as to when they will be applied and without any scientific basis to support them. See, Merritt, supra.

B. Proposed Rules Concerning Minimum Water Levels and Flow Rates - Proposed Rule 40D-8.628 and BOR Section 4.3

1. Overview

1293. The proposed rules pertaining to minimum levels for the UFAS in the SWUCA are the result of an extensive effort by the District after numerous workshops, much debate and study over the course of several years. The District's efforts included considerable public input and discourse with various interest groups through which it sought to strike a balance between preservation of the water resources for future generations, preservation of recreational and ecological values, and permitting utilization of the water resources to meet human needs. In reaching its conclusions, the District decided to accept a certain degree of harm to the water resources. Many of the issues raised regarding the proposed minimum level for the SWUCA involve difficult policy choices. Those choices should not be invalidated simply because there is disagreement as to the proper course. Nonetheless, the District must implement its choices within the existing statutory framework.

1294. As discussed in more detail below, the more persuasive evidence indicates that the District's scientific analysis of the saltwater intrusion problems in the SWUCA area was thorough and based upon the best available data. The proposed methodology for calculating the minimum level is reasonable and scientifically sound and the selection of the level was not arbitrary, capricious or otherwise invalid. However, there are serious problems with how the District proposes to implement the minimum level.

1295. Some of the Petitioners have suggested that the District has unreasonably delayed adopting minimum levels for the UFAS and other water bodies. Such complaints are beyond the scope of this proceeding. It is clear, however, that establishment of a minimum aquifer level is an extremely complex task that is dependent upon enormous amounts of data.

2. SWUCA Boundaries

a. Highlands Ridge

1296. Some Petitioners have challenged the inclusion of the Highlands Ridge within the SWUCA.

1297. Petitioners failed to demonstrate that the District lacks a rational basis for including the Highlands Ridge within the SWUCA. The more credible evidence supports the District's decision to regulate the SWUCA as an interconnected groundwater basin. Inclusion of the Highlands Ridge area will assist with lake level protection along the Ridge and is also helpful because the Highlands Ridge is a high recharge area for the Southern Basin as a whole. In addition, the more persuasive evidence supports the District's decision to include within the SWUCA the portion of the Highlands Ridge which lies east of the groundwater divide. This decision was reasonable because of the influence that pumpage within the area could have upon lakes that lie along the divide, many of which are already stressed. This area is also a high recharge area where the effects of pumpage can be critical.

1298. Polk has specifically alleged that the stated rationale of lake level protection is "not supported by the computer modeling developed in connection with the rule." ECOSWF suggests that maintenance of the 1991 potentiometric surface would still result in significant deterioration in the condition of impacted lakes. While it is difficult to determine the precise extent to which the decline in lake and stream levels in the SWUCA has been influenced by withdrawals from the UFAS, the evidence did establish that such withdrawals are a significant factor influencing the decline of at least some of the levels.

1299. In recent years, lake levels have begun to show improvement along the Highlands Ridge. The District's experts believe that maintenance of the 1991 potentiometric surface throughout the UFAS will result in stabilization and perhaps even continued improvement in the condition of adversely affected lakes and streams in the region. While the District's conclusions have been challenged as both overly protective and not protective enough, no persuasive evidence was presented that the District's analysis was scientifically invalid or in any way arbitrary and/or capricious.

b. Hillsborough Triangle and Polk County Nub

1300. Based upon the evidence presented, it cannot be concluded that the District's decision to exclude the area identified as the Hillsborough Triangle Area from the SWUCA was without thought or reason, or unsupported by facts or logic. While a strict interpretation of the hydrogeology could lead to inclusion of this area, the District has articulated a reasonable basis for its decision not to include it. The District retains the ability on an individual permit basis to ensure that increased use within the Hillsborough Triangle area will not have a significant effect upon the potentiometric surface within the SWUCA.

1301. On the other hand, no reasonable basis was provided for the inclusion within the SWUCA of that portion of Polk County lying south of Interstate 4 and north of the line between Townships 29 and 30 South, referred to in these proceedings as the "Polk County Nub". This area is outside the persistent flow lines and the groundwater divide identified by the District and the evidence indicated that there are no stressed lakes in this area. The District's rationale that this area should be included because it is not presently covered by any WUCA regulations is irrelevant unless it can be shown that such regulation is necessary. While the District claims the hydrologic regime in this area is similar to that of the HR WUCA, it was not included in the HR WUCA and no convincing scientific reason has been provided for including it now.

3. Use of the 1991 Potentiometric Surface as the Minimum Level

1302. In view of the conclusions reached below regarding the invalidity of the District's application of the proposed minimum level to the renewal of existing permits and reallocation permits, the "self-destruct" provision in proposed Rule 40D-8.628 renders moot many of the other issues raised with respect to the proposed minimum level. However, because of the uncertainty in this area of the law and the significance of the issues, it is important to address some of the matters and objections that have been raised to the proposed minimum level.

1303. As noted above, the Model Water Code clearly anticipated that minimum flows and levels would reflect a balancing of societal interests between maximizing the beneficial use of water and protecting the resource. ECOSWF argues that the proposed SWUCA minimum level provisions should be declared invalid because they do not go far enough in restricting withdrawals for the purpose of protecting environmental systems. ECOSWF also contends that the District gave "unlawful consideration...to the socioeconomic costs of reducing existing groundwater withdrawals within the SWUCA." ECOSWF correctly points out that ecological values should be part of the balancing, but socio-economic factors are also part of the equation.

1304. Once the first water was withdrawn from the UFAS in the SWUCA, saltwater intrusion began. Thus, some degree of impact is unavoidable if water is withdrawn. It would be unreasonable to attempt to restore or maintain levels in the UFAS that approximate pre-development conditions. ECOSWF has not met its burden of proving that the proposed minimum level permits the spread of saltwater intrusion to such an extent as to be arbitrary or capricious or that it otherwise contravenes Chapter 373.

1305. Section 373.042 provides the water management districts with broad discretion in the interpretation and determination of what constitutes "significant harm" to the water resources. The minimum level selected by the District must be evaluated in the context of the entirety of Chapter 373, including the declaration of policy contained within Section 373.016, F.S., and the state water use planning provisions of Section 373.036, F.S. Unless it can be shown that the District has failed to consider pertinent information or has not given good faith consideration to relevant factors, a challenger faces a difficult burden under the APA in existence at the time of this hearing in overturning the District's selection of a minimum level.¹⁶⁷ See, Dravo, supra, 602 So.2d at 633; Adam Smith, supra, 553 So.2d 1274.

1306. Some Petitioners have complained that the minimum level selected by the District would allow saltwater intrusion to continue for decades into the future. Chapter 373 does not mandate equilibrium be achieved within an aquifer upon adoption of a minimum level. The evidence establishes that saltwater intrusion is a slow-moving process and absent drastic cuts or a halt in pumping it will take several hundred years for the UFAS to reach equilibrium. It is clear that if the 1991 potentiometric surface is maintained, ultimate equilibrium will be achieved through significant additional inland movement of the saltwater interface with a corresponding deterioration of water quality and/or well failures in many areas, particularly near the coast. Nonetheless, the long-term Ghyben-Herzberg projection of the saltwater interface in equilibrium upon achievement of the 1991 level indicates that a head of freshwater will remain from inland to the coast. Thus, some important goals would be achieved with the District's selection. The District states it is aware of and has considered the implications of continued movement of the interface. Its decision to accept these consequences because of concerns over the socio-economic impacts associated with more aggressive choices is an exercise of discretion that should not be overturned except in unusual circumstances. See, Agrico, supra, 365 So.2d at 763.

1307. The District acknowledges that the projected additional saltwater intrusion over the next 50-years will cause additional well failures and continued deterioration of water quality in some areas, particularly along the coast. Nonetheless, the District projects the UFAS will still have the ability to meet most anticipated needs during this period. There is a considerable degree of uncertainty involved in predicting the movement of the saltwater interface. The proposed rules expressly provide that the District will continue to analyze water quality trends, and that adjustment of the minimum level may be deemed necessary based upon the results of this analysis. See, proposed Rule 40D-8.628(4). In the meantime, achievement and maintenance of the 1991 potentiometric levels throughout the SWUCA provides some important protections. Most importantly, because the 1991 potentiometric surface is projected to provide a seaward gradient for freshwater all the way to the coast, it minimizes the potential for a negative gradient of freshwater flow such as occurred with 1989 pumping levels. Such a negative gradient could dramatically accelerate the rate of saltwater intrusion.

1308. ECOSWF claims that the District has abandoned the concept of "safe yield" in selecting the 1991 potentiometric surface as the minimum level, and that such abandonment renders the proposed rules arbitrary and capricious. In response, the District states that "safe yield" is a quantity driven concept, whereas the concept of a minimum level is resource-based and is not tied to any specific quantity. As proposed by the District, the minimum level for the SWUCA is aimed at achieving and maintaining a seaward flow gradient in the potentiometric surface of the UFAS. This minimum level does not guarantee that any particular quantity will be available for withdrawal and is not directly tied to a numerical "safe yield", although an analysis of safe yield was a consideration in the selection of the acceptable level. The District's approach has not been shown to be arbitrary, capricious or otherwise invalid.

1309. ECOSWF objects because the District has changed its position from initially seeking to halt the further spread of saltwater intrusion to accommodating what ECOSWF views as an unacceptable degree of harm. This change occurred after the Supplemental Investigations Report indicated that the original modeling efforts in the ETB Wrap tended to under-predict the further spread of saltwater intrusion under the various computer modeling scenarios.¹⁶⁸

1310. Nothing in Chapter 373 precludes the District from scaling back its goals based upon newly developed information as part of the balancing of the various objectives and purposes of Chapter 373. While valid arguments can be made in favor of selecting a different minimum level, the legislature has chosen to vest the District with authority to balance the competing considerations inherent in determining what constitutes "significant harm to the resource."

1311. ECOSWF is concerned that the damage to the resource may be greater than anticipated because total permitted quantities within the SWUCA are between 1.3 to 1.5 BDG while estimated "safe yield" is about 700 MGD.¹⁶⁹ The District is aware of these figures, but has taken into account the historical difference between permitted and actual usage in the SWUCA in selecting its minimum level. In addition, the District has noted that actual usage within the SWUCA since 1991 has approximated the usage necessary to achieve and maintain the 1991 potentiometric surface.

1312. Some of the Petitioners have challenged the District's decision to not require an immediate cutback in permitted quantities upon adoption of the minimum level. ECOSWF complains that the District has essentially decided to legalize the damage that has occurred to the resource rather than require existing users to cut back.

1313. The District responds that existing users would not be exempt under the SWUCA Rules from taking measures to reduce usage in furtherance of the objective of achieving the 1991 potentiometric surface. These users would be subject to increased efficiency standards and conservation measures, some of which would take effect immediately upon adoption of the SWUCA Rules. The District claims that applying the SWUCA minimum level to eliminate or reduce withdrawals in excess of the increased efficiency standards could result in severe economic dislocations. To some degree, these issues are inconsequential in view of the conclusions below regarding the District's proposed implementation of the minimum level with respect to renewal permits. However, distinct issues arise in connection with the suggestion that the District must impose immediate cutbacks on permittees.

1314. Chapter 373 contemplates that the District will use minimum levels in the permitting process, but it does not require immediate cutbacks to existing uses when an established minimum flow and level is not achieved.

1315. In this regard, it should be noted that every provision within Section 1.07 of the Model Water Code was enacted into law by the legislature essentially verbatim except sub section 1.07(6), which provides:

The Florida Legislature did not adopt this provision which would mandate that minimum levels be enforced through permit conditions. Instead, Section 373.219(1), F.S. provides the District with authority to "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."

1316. The District notes that it is required to consider the economic impact of its regulations on the regulated public, with special emphasis accorded to the impact upon small business. See, Section 120.54(2), F.S. However, as discussed below, this conclusion does not extend so far as to justify the District's proposed method of applying (or not applying) the minimum level to renewals of existing permits.

1317. It should also be observed that the District is required to administer a permitting program based upon the Three-Prong Test, one element of which is the protection of existing legal uses. While arguments can be made in favor of more stringent restrictions, it cannot be concluded from the record in this case that the District has contravened Chapter 373 by not ordering more drastic or immediate cutbacks on existing legal uses.

1318. In this regard, the District responded that the wide variance between permitted and actual usage in the SWUCA results largely from agricultural permittees, many of whom are small businesses that rely upon large plantings when market conditions warrant, to obtain the capital needed to finance their operations. The District was concerned that substantial cutbacks in permitted quantities would essentially deprive agricultural enterprises of this opportunity. The District believes these enterprises would be required under the proposed rules to make significant additional capital investments in order to achieve the increased efficiency standards. Thus, the District believes further burdens were not appropriate under the current circumstances. If the minimum level is not being achieved, the District is not precluded by the proposed rules from using water shortage declarations or other available mechanisms to control water use.

1319. The District is faced with a situation where existing permitted quantities already greatly exceed what it has deemed to be the appropriate minimum level. In other words, the resource is more than fully allocated before the minimum level is in place. Indeed, the District says that in retrospect, the UFAS within the SWUCA was probably fully allocated when existing common law uses were converted to permitted uses in the 1970s.

1320. Because of the relatively slow movement of the saltwater interface in response to potentiometric pressures, the District has chosen to address what it views as long-term problems in a way that avoids draconian economic impacts.¹⁷⁰ Based upon extensive input from the regulated public, the District determined that socioeconomic considerations warrant a gradual approach to remediation of a problem that has been developing since withdrawals from the UFAS began to significantly increase in the 1960s. The District's conclusion that measures dealing with existing uses could be adopted and implemented over time has not been shown to be unreasonable, arbitrary or capricious provided the measures are implemented in accordance with the regulation framework of Chapter 373.

1321. ECOSWF objects because nothing in the SWUCA Rules requires the minimum level to be achieved by any particular time. ECOSWF argues that the District's permitting rules must be calculated to achieve the minimum level within a certain timeframe otherwise the legislative goal would be nullified.

1322. However, so long as the District is operating within the statutory framework, nothing in the current statute mandates that the minimum level be achieved by a specific date. As noted above, Florida did adopt Section 1.07 of the Model Water Code which would have provided a condition on all permits that could be immediately enforced when minimum levels were not met.

1323. ECOSWF presented evidence that wetlands within the SWUCA have been impacted by hydroperiod changes due to water table and perhaps groundwater changes. ECOSWF characterizes the impacts as widespread and dramatic, but the District views them as relatively limited. No conclusion can be reached from the record in this case as to how widespread the impacts are. In any event, ECOSWF has not met its burden of demonstrating that the impacts render the District's minimum level selection arbitrary, capricious or otherwise invalid.

1324. Wetlands, like rivers and streams, are subject to many influences other than the potentiometric surface within the UFAS. It is not clear whether the wetlands impacts that have occurred within the SWUCA were influenced by heavy withdrawals in the immediate vicinity or were reflective of regional conditions. More importantly, because of the hydrogeology of the SWUCA, and the high degree of confinement of the UFAS throughout most of the SWUCA, it is not clear from the evidence presented that a minimum level can effectively address wetlands issues.

1325. ECOSWF also contends that the 1991 potentiometric surface is inadequate to ensure the protection of surficial systems within the SWUCA. The more persuasive evidence was that the SWUCA is essentially a highly confined basin and, unlike the NTB region, a lowering of potentiometric surface pressures of the UFAS in the SWUCA does not typically have a significant impact upon surficial wetland systems (with the exception of the Highlands Ridge area).

1326. The District recognizes that the minimum level it has selected will only protect against wetlands or surface water impacts on an isolated basis at best. No persuasive evidence was presented to explain how a minimum level can effectively address what are largely site-specific issues in the SWUCA.

1327. Petitioners Hardee and DeSoto allege that the proposed minimum level is arbitrary and capricious and violates equal protection and due process because its effect "is to deny or, at minimum, greatly and unreasonably restrict any new groundwater withdrawals from the Floridan Aquifer in the SWUCA" so as to "impose a de facto moratorium on all new water withdrawals or uses from the upper Floridan Aquifer . . . ." Polk asserts similar challenges. These issues are addressed in Sections, IV B.5 and 7 below.

4. Methodology for Deriving the 1991 Potentiometric Surface

1328. The evidence established that the District's utilization of a 1,000 square meter grid interpolation of the average of the May and September USGS maps for the purpose of deriving a numerical average reflecting the conditions of the potentiometric surface has a rational scientific basis and is neither arbitrary nor capricious.

5. Method of Applying the Minimum Level to Subareas

1329. Petitioners Polk, Hardee, DeSoto and GBS have challenged the proposed requirement in the SWUCA Rules that the minimum level be met in the ETB sub-area, the HR sub-area and the SWUCA as a whole before new quantities would be allocated anywhere in the SWUCA. As noted in the Preliminary Statement, under the District's original proposals, if any potentiometric contour line within the SWUCA fell below the 1991 potentiometric surface, the issuance of new groundwater quantities throughout the SWUCA would have been restricted. The April 14 Modifications represent a significant relaxing of the rules in this respect.

1330. The District's decision to require water levels within the ETB and HR sub-areas to be above the minimum level was prompted by concern that water resource problems in these areas could be obscured if a basin-wide average was the only mechanism relied upon to trigger application of the minimum level provisions. The HR sub-area is intended to focus upon the lake level problem, while the ETB sub-area focuses upon saltwater intrusion along the coast. The District has articulated a rational basis for retaining these sub-areas as separate trigger mechanisms and Petitioners have not met their burden of showing the District's decisions in this regard were arbitrary, capricious, or otherwise invalid under Section 120.52(8).

1331. The data indicates that if the SWUCA Rules became effective immediately, only the ETB sub-area would be below the proposed minimum level as calculated using the five-year averaging methodology. Such a scenario would preclude the issuance of any new permits throughout the SWUCA in the immediate future. Some Petitioners argue that users outside the ETB would in effect be penalized by the inability of water users within the ETB sub-area to limit their demands upon the resource. These Petitioners suggest that usages in the ETB sub-area should be more drastically restricted instead of requiring reductions in other portions of the SWUCA.

1332. The ETB sub-area has already been severely restricted since the MIA rules for the ETB WUCA went into effect in 1991 and there have essentially been no new quantities issued in this area since that time. More importantly, the evidence established that the problems in the ETB sub-area are due in part to prior withdrawals along the flow path to the coast. Without question, the measured impacts of an individual withdrawal are greater in the vicinity of the point of withdrawal. However, credible scientific evidence was presented to establish the interrelationship between withdrawals within the Southern Basin. The District's proposed regulatory scheme would enable it to address these cumulative, regional impacts.

1333. The more persuasive evidence supported the District's conclusion that it would not be a sound regulatory practice from a hydrologic standpoint to allow new quantities to be withdrawn in portions of the SWUCA while other portions of the SWUCA were not meeting the minimum level.

6. Procedure for Authorizing New Groundwater Withdrawals after the Minimum Level Requirements Are Met

1334. At the hearing, District witnesses represented that after the minimum level is achieved in accordance with the SWUCA Rules, proposed new withdrawals would be cumulatively evaluated for their potential impact on the minimum level based upon permitted quantities. The District claims this approach is consistent with its current permitting procedures and is conservative in favor of the resource. The use of permitted quantities for modeling after the minimum level is achieved could significantly extend the time before new applications are approved. There is no way an applicant for a new quantity could calculate or even recognize this additional time from the face of the rules. Moreover, the SWUCA Rules provide no guidance or information as to how the District would address potential pent-up demand in the event the minimum level is achieved after a number of years when no new uses were permitted. Potential applicants have no way of ascertaining how the District will prioritize or process new applications once the level is met and/or the factors that will be considered in making those decisions. In this regard, the proposed Rules are vague and vest unbridled discretion with the District. See, Cortes, supra, and Merritt, supra.

7. Application of the Minimum Level on Renewal

a. Generally

1335. While the District's decision to not apply the proposed SWUCA minimum level provisions to immediately reduce existing permitted quantities has not been shown to be arbitrary or otherwise invalid, the decision to not apply the minimum levels to the renewal of existing uses is more problematic. In effect, the proposed rules would allow existing legal uses to renew their permitted quantities from the UFAS while applicants seeking new quantities from the UFAS are denied access to this resource until the minimum levels have been met for the required five year period. Even after the minimum levels are met, because the District would model proposed new uses with permitted quantities, it is likely to be much longer before any new permits would be approved. This favored treatment of renewal permits contravenes Chapter 373 and is invalid.

1336. Under Chapter 373, a permit is not automatically entitled to renewal upon expiration of the permit term. As discussed above, all users are subject to the three-prong test of Section 373.223 upon permit renewal. See, Section 373.229, F.S. In situations where demand exceeds supply, such as in the SWUCA, existing users are not entitled under current law to a perpetual preference to maintain their use while proposed new users are totally denied access to the public resource.

1337. A key component of the legislative scheme established in Part II of Chapter 373 is the flexibility to shift water uses to more productive uses. See, Commentary to Model Water Code, pp. 74-75 and 189. "[T]he authors believe that water rights exercised under the proposed code should not become so inflexible that water resources cannot meet new needs and demand..."

Id. at p. 173 and 189.

1338. The Commentary to the Model Water Code recognizes that one of the most important attributes of a permit system is that it provides some certainty to water users.

Id. at p. 79.

1339. The District believes that without the special treatment for renewal uses, it would be required to deny or drastically reduce permits as they came up for renewal so long as the minimum levels had not been met in each of the three areas for five years. The District claims that it could be placed in the position of "arbitrarily denying renewal of a permit when the actual level was below the minimum level, while similar uses which had not yet come up for renewal would continue unabated". Moreover, the District claims that "if water levels fluctuated above and below the minimum level, renewal of uses which were more in the public interest might be denied when below the minimum level, while renewal of uses less in the public interest would be granted when above the minimum level." However, procedures could be adopted, including adjustments to permit duration and/or pooling of applications, so that the determination on renewal would not be simply the random process of when permits happen to come up for renewal in relation to the minimum level at that time.

1340. The District argues that the increased efficiency standards in the SWUCA Rules which are aimed at achieving reductions in both actual and permitted quantities upon permit renewal, are technically and economically tailored to what is reasonably achievable for specific user groups. The District contends that its approach is preferable to arbitrary denials as permits come up for renewal or case-by-case adjudication of severe reductions. This argument presupposes that there is a vested right to continuation of a use after the expiration of a permit. Such a right does not exist under Chapter 373 outside the competing applications process. The authors of the Model Water Code noted "...under the Code, permits are not granted in perpetuity...while priority in time has a place in the Code's permit system, it is not determinative of water rights as in the prior appropriation system." Commentary to Model Water Code, p. 159. See also, Commentary to Section 2.05(2), pp. 188-189.

1341. The District claims that the public interest was given great consideration throughout the rule development process and factored into the determination that existing uses should be addressed at the time of permit renewal through increased efficiency standards rather than the minimum level. As explained by Joe L. Davis, Jr., Chairman of the Governing Board during the SWUCA Rule development process, the District was concerned about the economic consequences to existing users who may be unable to recoup their capital investments during the term of the permit. The District believes that significant capital improvements have been made based upon the assumption that the UFAS would be an available source of supply for the foreseeable future. The District fears the losses of productive capital could be considerable and place a permittee, who had to obtain an alternative source of supply, at a competitive disadvantage with respect to new uses that were not encumbered with similar investments.

1342. The Model Water Code contemplates that such factors can be considered in establishing permit duration. See, Commentary to Model Water Code, p. 173 and Section 2.06, p. 189. In addition, such issues could arguably be pertinent in certain permitting contexts in evaluating the public interest. However, the automatic preferential treatment provided to renewal applications in the SWUCA minimum level proposals impermissibly enlarges the priority that can be accorded to such applications under Chapter 373. See, Booker Creek, supra, 534 So.2d 419.

1343. As discussed in more detail below, Section 373.233, F.S. provides a preference for the renewal of a permit in the competing applications context, all other things being equal. Beyond that, there is no statutory authority for the District to presuppose by rule that a renewal should be granted before new applications will be considered. Such a preference can only come from the legislature.¹⁷¹ See, Capeletti Bros., supra, 499 So.2d 855.

1344. The District claims that the Water Resources Act did not anticipate a situation where a resource was fully allocated at the time a minimum level was adopted and, therefore, it should be accorded wide discretion in dealing with users who may have made capital investments and/or incurred expenses in anticipation of continued access to the resource. Admittedly, the statute does not provide easy answers to address a situation where a resource has been overcommitted. Nevertheless, whenever access to the resource must be limited, difficult choices are inevitable. In making those choices, the District cannot act beyond the authority granted by the legislature. See, Booker Creek, supra, 534 So.2d 419. The current law mandates a flexible regulatory scheme that allows proposed new users an opportunity to demonstrate that their use meets the statutory criteria and best serves the public interest.

1345. Significantly, the authors of the Model Water Code recognized that prioritizing uses may be unavoidable when demand exceeds supply. See, Commentary to Model Water Code, pp. 74-75, 188-189. In fact, the authors suggest that there is a partial hierarchy implicitly built into the Code. Id. at p. 85. See, Sections 373.036(7) and (9), F.S. The District has deliberately chosen not to specify a hierarchy of uses from a public interest perspective. Indeed, some District witnesses indicated that the District desires to avoid such politically charged decisions if at all possible. Instead, the District asserts that all types of use can continue to be accommodated provided they maximize efficiency. The District also notes that no other district has attempted to categorize uses based upon the public interest.

1346. However, in attempting to avoid the prioritization of uses, the District must stay within the statutory framework created by the legislature. The District claims that it has done so and that instead of establishing a hierarchy of uses by rule, it has chosen a case-by-case approach. In this regard, the District points to the competing applications process.

b. Competing Applications

1347. Section 373.233, F.S., provides a mechanism to choose among applicants when granting water use permits from a limited supply. This statute gives the district governing boards the responsibility and the authority to choose among competing users for water supplies and to allocate water to the use(s) which "best serves the public interest."

1348. The District's only rule on competing applications, Rule 40D-2.311, F.A.C., essentially reiterates the competing applications statute. The District has never had occasion to apply the statute or rule.

1349. At the hearing, the District claimed that the competing applications procedure provides it with a mechanism to allocate existing quantities to a new applicant when they come up for renewal if the proposed new use is more in the public interest. This concept is not specifically referenced or incorporated in the SWUCA Rules.

1350. While there are significant unanswered questions as to how the competing applications process works, the District claims that since it is "on the books," it is available to applicants. However, potential applicants have no way of knowing how it will be applied, when and for what quantities they can compete or the procedures that will be followed. The District states that these issues have "not been fleshed out simply because the scarcity situation with respect to the resource has not become focused until the promulgation of the proposed SWUCA rules. [They] will, however, be fleshed out either through case-by-case adjudication or, if so determined by the District, rule adoption at some future date. [The competing applications process] can be applied, however, directly from the statute, and further rules are not necessary in order that it be utilized by applicants. It provides a mechanism for upholding the facial validity of the proposed rules, inasmuch as there is nothing in the proposed rules which facially conflicts with or precludes the application of this procedure." See, District's proposed Conclusions of Law, No. 142, pp 89-90.

1351. The competing applications process can not be considered a viable alternative for new users to access the groundwater resources in the SWUCA absent further clarification. See, Upjohn, supra, 496 So.2d 147. To the extent the District relies on this procedure to support the preference accorded to renewal permits, the rules are impermissibly vague and grant unbridled discretion to the District. See, Cortes, supra, 655 So.2d 132.

1352. There are provisions in the SWUCA Rules that would, at a minimum, complicate the competing applications process and could potentially preclude it from being effectively implemented. See e.g., proposed BOR Section 4.3 and the "determinations" in proposed Rule 40D-2.301(2). The District claims that these provisions would not be applicable in a competing application setting. However, this interpretation is not clear from the face of the rules.

c. "Determinations" in proposed Rule 40D-2.301(2)

1353. As noted in the Findings of Fact, proposed Rule 40D-2.301(2) was amended during the course of these proceedings so that the "presumption" became a "determination". The original and revised versions of this provision were the subject of considerable inquiry and debate during the course of these proceedings. Both versions are awkward and potentially problematic in their application. In view of the conclusions reached herein regarding reallocation and the preference accorded in the proposed rules to renewal applications, this provision is also found to be invalid and further discussion is unnecessary. See, Merritt, supra, 654 So.2d 1051.

8. Self-destruct clause

1354. Hardee and DeSoto have challenged the "self-destruct" provision of proposed Rule 40D-8.628(1) as being arbitrary and capricious, contrary to Chapter 373 and other WMD permitting rules, and violative of equal protection and due process. ECOSWF has also challenged this provision.

1355. This provision codifies the District's intention to withdraw the minimum level rule in its entirety if any portion of the proposed rule is invalidated. The District states that this provision reflects its desire to not proceed with a piecemeal regulatory approach. The District wants the opportunity to recommence rulemaking so that it can revisit the entire SWUCA regulatory scheme in light of the outcome. This provision was apparently intended, in part, to facilitate settlement with certain parties who initially challenged the proposed rules.

1356. This self-destruct clause is within the District's authority pursuant to Section 120.54(13)(b), F.S., which provides:

Pursuant to Section 120.54(11)(b), the filing of a petition pursuant to Section 120.54(4) "will toll the 90-day period during which a rule must be filed for adoption until the hearing officer has filed his order with the clerk." Therefore, the time period for filing the rule for adoption has been tolled until the conclusion of these proceedings and the District retains the authority to withdraw the proposed rules in whole or in part.¹⁷²

C. Repeal of Existing Standard Permit Conditions Requiring Compliance with Minimum Levels

1357. ECOSWF has challenged the proposed repeal by the District of Rule 40D-2.381(3)(i), F.A.C. and BOR Section 6.1.9 which require a permittee to cease or reduce withdrawals as directed by the District if minimum aquifer levels are not met. The proposed repeal does not extend to the existing permit conditions regarding minimum lake levels and stream flows.

1358. Upon adoption, the proposed SWUCA minimum levels would be the only minimum levels in the District. Thus, no established minimum aquifer level is affected by the proposed repeal of the existing permit conditions. Under these circumstances, it cannot be concluded that the District's decision to repeal these conditions relating to aquifers is arbitrary or capricious.

1359. The repeal of the standard permit conditions regarding aquifers was intended to facilitate the implementation of the SWUCA Rules. In view of the conclusions reached herein, the repeal of these conditions may be unnecessary. However, it cannot be concluded that the District is obligated to retain these permit conditions. As noted above, the Florida Legislature did not adopt Section 1.07(6) of the Model Water Code which specifically requires permits to comply with adopted minimum levels. This omission indicates that the legislature intended for the District to have discretion in developing an appropriate strategy to implement and enforce minimum levels. ECOSWF argues that without an effective implementation mechanism, the adoption of any minimum levels is meaningless. This contention is beyond the scope of the instant proceeding.

D. Repeal of limitations on withdrawals from the Intermediate Aquifer in the MIA

1360. ECOSWF has challenged the proposed repeal of BOR Sections 4.5.2 and 7.2.8 which limit the withdrawal of new groundwater quantities which impact the MIA of the ETB WUCA. ECOSWF is concerned that if these provisions are repealed, the only existing protections for the intermediate aquifer in the MIA will be lost.

1361. ECOSWF has failed to demonstrate that the resource impacts of this decision would be so detrimental across-the-board as to render the proposed repeal of the existing protections for the intermediate aquifer in the SWUCA facially invalid. The evidence establishes that the intermediate aquifer is extremely variable in its characteristics, particularly with respect to its interconnection with other aquifer systems. The District states withdrawals from the intermediate aquifer can be restricted on a case-by-case basis when site-specific data reveals that a significant interconnection exists between aquifer systems.

1362. ECOSWF has also alleged that the District has violated a mandatory duty under Section 373.042, F.S., by failing to adopt minimum levels for the intermediate aquifer system. Because of the highly variable characteristics of the intermediate system in the SWUCA and its limited utility as a source of supply, the District has decided it is not cost-effective at this time to devote limited resources to developing the extensive information needed to establish minimum levels when there may be no feasible way to regulate the intermediate aquifer with a minimum level and there are many other pressing water resource needs. This issue is not ripe for consideration and need not be resolved in this proceeding. A petition to initiate rulemaking filed in accordance with Section 120.54(5), F.S. and Rule 40D-1.311, F.A.C., is the proper procedure under Chapter 120 to challenge an agency's alleged failure to comply with a mandatory rulemaking directive. No such petition was filed in this case.

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