STATE OF MICHIGAN DEPARTMENT OF ENVIRONMENTAL QUALITY OFFICE OF ADMINISTRATIVE HEARINGS

STATE OF MICHIGAN DEPARTMENT OF ENVIRONMENTAL QUALITY OFFICE OF ADMINISTRATIVE HEARINGS SUBJECT: Part 31, Floodplain Occupancy Authority, Part 301, Inland Lakes and Streams, and Part 303, Wetland Protection of the Natural Resources and Environmental Protection Act (NREPA), 1994 PA 451, as amended. Petition of John C. Lamb File No. 99-09-0853-P FINAL DETERMINATION AND ORDER The above captioned matter was the subject of a contested case hearing resulting in the issuance of a Proposal for Decision dated October 26, 2001. Mr. John C. Lamb (Petitioner) filed written Exceptions to the Proposal for Decision consistent with this Tribunal s scheduling Order. The matter is now before the Director of the Department of Environmental Quality for a final agency decision pursuant to Executive Order 1995-18. The decision in this case is based solely on the Proposal for Decision, exceptions, stipulations, exhibits, pleadings and arguments. The Petitioner limited this case to one issue: whether the subject application was denied within the 90 day time-frame contained in Part 303. MCL 324.30307(2). If the application was not denied, or modified, within that statutorily mandated time-frame it is issued by operation of law. Id. The Proposal for Decision found the application was complete on May 4, 2000, the public hearing was held on July 10, 2000, and the denial letter was issued on September 7, 2000. Based on those findings the Proposal for Decision concluded the process comports with the statutory requirements, specifically the application was denied 77 days after the public hearing. Therefore, the Proposal for Decision concludes the Petitioner is not entitled to a permit under 30307(2). The Petitioner contends Land and Water Management Division (LWMD) cannot seek information verbally, so his written submission of information on March 24, 2000 completed the application. Under the foregoing chronology, the Petitioner asserts the denial was untimely and he is entitled to a permit by operation of law. In support, the Petitioner urges a

construction of AACS 1988, R 281.922 that requires a request for additional information only be made through written communication. The rule dictates an applicant provide, upon request, any additional information authorized by the act and necessary to reach a decision. AACS 1988, R 281.922(2). By its terms the rule does not limit the means of obtaining information to the written form. Obviously, in most instances the request will be made in writing. However, under the appropriate circumstances a verbal request is consistent with the rule. The Petitioner also advances what is essentially a policy argument that encompasses the legal issue addressed above. The Petitioner contends LWMD can circumvent the statutorily created time-frames by continually requesting clarification of information provided by an applicant. This argument is belied by the circumstances of this case. The Petitioner s initial application was deficient on a number of points. See Proposal for Decision, pgs. 3-4. The most glaring problem was the failure to indicate the presence of wetlands on the subject parcel, an oversight noted only through the diligence of LWMD staff. A request for information was promptly made to the Petitioner s agent, who responded some 90 days later. Significantly, AACS 1988, R 281.922(4) allows a file to be closed if a response is not received within 30 days. Rather than exercising its discretion to close the file after the 30 days elapsed, thereby leaving the Petitioner to file another application and start the process anew, LWMD accepted the proffered information. Proposal for Decision, pg. 5. As was the case with the application, the information was insufficient to allow the processing of the application. It was only through the verbal communication between LWMD staff and the Petitioner s agent that ultimately remedied the deficiencies in the application and response. On this record it is apparent that rather than impede the application review process, LWMD did everything it could to overcome the problems and delays attributable to the Petitioner. Upon the consideration of the entire record in this matter, the Proposal for Decision, including its Findings of Fact and Conclusions of Law, is adopted and affirmed in its totality. Further, the Proposal for Decision is incorporated into this Final Determination and Order by reference. Based upon those Findings of Fact and Conclusions of Law, it is DETERMINED that Mr. John C. Lamb is not entitled to a permit by operation of law. Therefore, the application for a permit submitted by Mr. John C. Lamb is DENIED. 2

NOW, THEREFORE, IT IS ORDERED: 1. The Proposal for Decision of October 26, 2001, is ADOPTED and INCORPORATED by reference into this Final Order. 2. Mr. John C. Lamb is not entitled to a permit by operation of law and the application he submitted under File No. 99-09-0853 is DENIED. 3. The Department of Environmental Quality does not retain jurisdiction in this matter. Dated: Russell J. Harding, Director Department of Environmental Quality 3

STATE OF MICHIGAN DEPARTMENT OF ENVIRONMENTAL QUALITY OFFICE OF ADMINISTRATIVE HEARINGS SUBJECT: Part 301, Inland Lakes and Streams, Part 303, Wetland Protection, and Part 31, Floodplain Occupancy Authority of the Natural Resources and Environmental Protection Act (NREPA), 1994 PA 451, as amended. Petition of John C. Lamb File No. 99-09-0853-P PROPOSAL FOR DECISION October 26, 2001 Richard A. Patterson Administrative Law Judge 4

Mr. John C. Lamb owns approximately 10 acres adjacent to Gun Lake in Yankee Springs Township, Barry County. Mr. Lamb applied for a permit that proposed [S]preading out (grading) of stockpiled spoils from canal excavation and construction of storm sewer outlets for development of Channel Drive and associated lots. Exhibit 1. The application was denied by the Michigan Department of Environmental Quality, Land and Water Management Division (LWMD). Subsequent to the denial Mr. Lamb timely filed a petition for a contested case as an aggrieved person under the provisions of Part 303 of the Natural Resources and Environmental Protection Act (NREPA), 1994 PA 451, as amended. MCL 323.30319(2). The contested case hearing was conducted pursuant to the Administrative Procedures Act. MCL 24.201 et seq. PROPERTY RIGHTS PRESERVATION ACT CONSIDERATION Pursuant to the Property Rights Preservation Act, 1996 PA 101, MCL 24.421 et seq., in formulating this Proposal for Decision, the undersigned has reviewed the Takings Assessment Guidelines and considered the issue of whether this governmental action equates to a constitutional taking of property. PARTIES Mr. John C. Lamb (Petitioner), represented by Mr. Adam E. Parsons of the firm of Silverman, Smith, Bingen & Rice in Kalamazoo, presented the testimony of Mr. Robert Boyle, acting as his attorney-in-fact and Mr. Steven Vanden Brink, a civil engineer. The LWMD, represented by Mr. Alan F. Hoffman, Assistant Attorney General, Department of Attorney General, presented the testimony of Mr. Oren Kennedy of its Permit Consolidation Unit. At the commencement of the hearing, the Parties stipulated to the entry of seven (7) exhibits. A list and description of these exhibits is included at the end of this Proposal for Decision. SCOPE OF THE HEARING At the commencement of the hearing on June 5, 2001, counsel for the Petitioner 5

indicated the sole issue in this case is whether he is entitled to the permit for which he applied by operation of law. In support of this argument the Petitioner relies on 30307(2): If a hearing is not held, the department shall approve or disapprove the permit application within 90 days after the completed permit application is filed with the department. If a hearing is held, the department shall approve or disapprove the permit application within 90 days after the conclusion of the hearing.***if the department does not approve or disapprove the permit application within the time provided by this subsection, the permit application shall be considered approved, and the department shall be considered to have made the determinations required by section 30311. MCL 324.30307(2). Based on the foregoing, the dispositive issue in this case is the date the application for a permit was complete. The Petitioner argues that date is March 24, 2000, while LWMD contends it is May 4, 2000. The Parties stipulated to the following chronology: 1. December 20, 1999 - LWMD received the Petitioner s application. 2. December 29, 1999 The Permit Consolidation Unit of the LWMD prepares and sends an Application Correction Request form. 3. March 24, 2000 Additional information provided by the Petitioner is received by LWMD. 4. May 4, 2000 - Date of a telephone conversation upon which the LWMD contends the application was complete. 5. May 10, 2000 LWMD issues the Public Notice of Application. 6. July 10, 2000 LWMD holds a Public Hearing on the Application. 7. September 6, 2000 LWMD issues the denial letter. While stipulations of law are not binding on a court, In re Finlay Estate, 430 Mich 590, 595; 424 NW2d 272 (1988), stipulations of fact are sacrosanct. Dana Corporation v Employment Security Commission, 371 Mich 107, 110 (1963). Furthermore, stipulations entered into by the parties shall be used as evidence at the hearing and are binding. MCL 24.278; MSA 3.560(178). The foregoing stipulations are factual, I find them to be legally correct, and I adopt them as findings. 6

FINDINGS OF FACT Mr. Boyle, who briefly testified to the history of the property, stated Flies & Vanden Brink Engineering, Inc. was retained to perform the engineering work for the project, including the preparation and submission of the application for permit. Mr. Steven R. Vanden Brink, P.E., acknowledged the application (Exhibit 1) indicated receipt by LWMD on December 20, 1999, and that the Application Correction Request (Exhibit 2) is dated December 29, 1999. The latter sought additional information in the nature of crosssections, and full and reduced size copies of the plans. He believed his response on March 24, 2000 satisfied the Application Correction Request, noting that the submittal states please begin processing the application. Exhibit 3 and Transcript, pg. 23. The response closed with the statement, If there are any questions, please call. Exhibit 3. Subsequent to the submission of Exhibit 3 Mr. Vanden Brink had no further communication with LWMD until May 4, 2000, when he had a one minute telephone conversation with Mr. Oren Kennedy of the Permit Consolidation Unit. He characterized that conversation as Mr. Kennedy having some questions of the material I submitted and I answered his questions, but could not specifically recall either the questions or his responses. Transcript, pgs. 24-25. Mr. Kennedy testified regarding his role in processing the application for LWMD. Generally, he indicated that during the initial review of an application he is looking for the proposed activity s nature, location and applicable regulatory statutes. As to the subject application, he testified his review would have commenced a week or two after it was received on December 30, 1999. The review raised a number of issues. First, the application was logged in under Part 301 because it did not reference any activity in regulated wetlands. However, he gleaned indicia from the plans, specifically the core samples showing the presence of peat soils, that wetlands existed on the site. This lead to his independent review of a National Wetland Indicator Map, which showed possible wetlands in the area. Second, the plans contained a flood plain contour that would invoke regulation under Part 31. Third, the precise location of the proposed road construction was unknown. Finally, there was no indication of the extent of the area of fill, only the volume. 7

The questions and inconsistencies were the impetus for Mr. Kennedy to send the Application Correction Request. That document sought clarification of the location of the road and storm sewer out-fall structures, or basins, as well as requiring a wetland determination. A clarification of the orientation of the cross-sections was also requested. Both requests were qualified by the statement in 9: Additional information may be required once the application is reviewed with information from this correction request. Mr. Kennedy characterized this statement as a sort of memory key, that when I get a correction request back, it may need a second go around because I didn t get enough information for a complete look to cover what regulations were going on what. Transcript, pg. 52. He also noted the statement on the request that the application would be considered withdrawn if no response is received in 30 days. Mr. Vanden Brink testified the delay of almost 2 months in complying with the request was attributable to the consideration of retaining an environmental firm, but that never occurred. Further, he believed a verbal request was made to extend the timeframe. Conversely, Mr. Kennedy testified a direct request for an extension was never received and no contact was made until the March 24, 2000, material was received. Mr. Kennedy testified that the March 24, submission did not resolve his concerns with the application, and based on his normal turn around time of two weeks he would have placed a telephone call to Mr. Vanden Brink sometime in April. The telephone call was intended to expedite the process by avoiding the sending of a second Application Correction Request. That telephone call, as indicated, was returned May 4, 2000. Mr. Kennedy testified his conversation with Mr. Vanden Brink did resolve the issue of precisely where the proposed road was to be placed. In addition, the additional information indicated the east-west section line as the marked property line, thereby raising the question in Mr. Kennedy s mind as to the extent of the fill. Specifically, the fact the acreage of the proposed fill corresponded precisely with the acreage of the wetland, which extended south of the property line, Mr. Kennedy was concerned that adjacent property not owned by the Petitioner may be involved. If that were the case, a written consent of that property owner would be needed. Following that conversation Mr. Kennedy prepared the public 8

notice because at that point he felt the application was about a good as I was going to get. Transcript, pg. 60. Mr. Vanden Brink testified to the Petitioner s position on the problems Mr. Kennedy identified with the application. First, he acknowledged the application did not mention any activity in regulated wetlands. However, it did refer to shaded areas as below the 100 year flood elevation. It was his understanding these areas corresponded to what the Department considered wetland in the 1980s, although he acknowledged a person unfamiliar with the history of the site may not reach that conclusion. Transcript, pgs. 26-27. He also acknowledged the preliminary plat referred to in the application did not indicate wetland, nor did it indicate who owned the property southerly of the Petitioners property. The property line is indicated thereon as the east-west quarter line, section 30. Transcript, pg. 29. As to the Petitioner s response to the Application Correction Request designated the cross-hatched area as wetland, it also indicated an area south of the property line outside of Petitioner s interest as being part of the fill area. Transcript pg. 35. In summary, the Petitioner contends the March 24 submission in response to the Application Correction Request rendered the application complete. LWMD asserts the information provided to Mr. Kennedy on March 24, left questions remaining as to the scope and intent of the project that were not resolved until a telephone conversation between Mr. Kennedy and Mr. Vanden Brink on May 4, 2000. The analysis of these claims must begin with the applicable provisions of the statute and administrative rules. I. When did the application become complete? Section 30306(1) requires an application for a permit contain: (a) The person's name and address. (b) The location of the wetland. (c) A description of the wetland on which the use or development is to be made. (d) A statement describing the proposed use or development. (e) The wetland owner's name and address. (f) An environmental assessment, on a form supplied by the department, of the proposed use or development if requested by the department, which assessment shall include the effects upon wetland benefits and the effects upon the water quality, 9

flow, and levels, and the wildlife, fish, and vegetation within a contiguous lake, river, or stream. MCL 324.30306(1). In addition, 1988 AACS, R 281.922 (Rule 2), provides: (1) An application for a permit shall be made on a form prescribed and provided by the department. (2) An application for permit shall not be deemed as received or filed until the department has received all information requested on the application form, the application fee, and other information authorized by the act and necessary to reach a decision. The period for granting or denying an application begins as soon as all such information and the application fee are received by the department. The Michigan Court of Appeals addressed the Department s authority to require additional information after an application is received in Harkins v DNR, 206 Mich App 317; 520 NW2d 653 (1994). In Harkins the applicant/plaintiff argued the Department was obligated to act on an application, irrespective of the fact a request for further information was made, within 90 days from the day the application was filed. In rejecting that argument the Harkins Court held: The DNR was not in a position to act on petitioner's original application because it did not contain sufficient information. Hence, the request for additional information was made. Given the DNR's obligation to effectuate the purposes of the WPA, we agree with the DNR that requests for additional information from applicants are not unreasonable. Therefore, if an application is such that it cannot be acted upon because of lack of information, we cannot fairly characterize the application as "complete." Instead, an application is to be considered "complete" when it contains sufficient information to be acted upon. In this case, the application was not complete until the DNR received the additional information from petitioner***[i]t is clear that the DNR did not violate the ninety-day statutory requirement. Harkins, 206 Mich App 322-323. The language of Rule 2 and the holding in Harkins presents a two part test. First, is the information sought authorized under the act? Second, is the information requested reasonable and necessary to make a decision on the application? Given that Rule 2(2) places the burden on the applicant to provide any information "necessary to make a 10

decision", it is the applicant's responsibility to provide any information which meets this test. In making the inquiry one must be cognizant that it is impossible to anticipate and address each and every bit of information that might become necessary in a dynamic process such permit application review. The initial filing by this Petitioner was obviously incomplete for a number of reasons; most striking is the failure to disclose the presence of 6.16 acres of wetlands on the subject parcel. The testimony of Mr. Vander Brink that the indication that the area was below the 100 year flood elevation was sufficient to reveal the presence of wetlands is rejected. It is the applicant s responsibility to clearly identify to features on the ground. Terming a wetland a floodplain clearly does not meet that obligation. While the remaining requests are not expressly mentioned in either the applicable statutes or administrative rules, there is nothing to demonstrate they are unreasonable or patently unrelated to the application review. For instance, using a floodplain contour, as opposed to disclosing the presence of wetlands, logically triggers further inquiry relative to the impact on the drain and its floodplain. The deficiencies in the application also factor in the determination of whether the March 24, submission was sufficient. Thus, while the legend on the cross-section was changed from floodplain to wetland, the relationship between the amount of wetland on and off the Petitioner s property and the location of the proposed roadway remained at issue. The significance of this is LWMD still did not know whether the activity was proposed to occur on property other than that owned by the Petitioner. If it was, then authorization from the owner of that property was necessary for the application to be deemed complete. Mr. Kennedy testified the May 4, telephone conversation resolved this issue to the point that he believed the application was complete and the substantive review process could begin. 1 Transcript, pg. 60. Mr. Vander Brink does not refute Mr. Kennedy s recollection of the conversation. The intent of the 90 day requirement is to ensure that applications receive prompt review. In this instance the initial request for information was made 9 days after the application was filed, and set for public notice 6 days after the telephone conversation that 1 The fact that in lieu of sending a second Application Correction Request a telephone call was made 11

LWMD contends clarifies the application. After a public hearing was held on July 10, 2000, the permit was denied September 6, 2000, which is 77 days thereafter. As for the Petitioner, his agent did not respond to the Application Correction Request dated December 29, 1999 until March 23, 2000. Further, Mr. Kennedy followed up on the additional material within his normal response time, which is quite reasonable in the overall time frame of this application review process. It is evident, therefore, that in processing the application LWMD was fulfilling its duty to fully and responsibly review the proposed activity as it was framed by the applicant. 2 Based on the foregoing, I find, as a Matter of Fact, the application at issue in this case was complete on May 4, 2000. I further find, as a Matter of Fact, the processing of the application complied with the requirements of 30307(2). LWMD has raised two additional arguments. First, it contends the Petitioner waived his right to assert that the denial was untimely based on this Tribunal s Scheduling Order of February 15, 2001, that directed that All motions in this matter shall be filed, and served, by May 7, 2001. LWMD asserts that since the timeliness of the denial was not formally raised until the commencement of the hearing, the Petitioner was not in compliance with the above deadline, and therefore, waived his right to raise the issue. This issue, or any other, could have been broached in a motion. However, as is evident by the foregoing analysis the question of the timeliness of the denial clearly demonstrates the existence of substantial questions of fact. This Tribunal suggests during the pre-hearing conference that the Parties stipulate that the processing of the application was correct in order to ensure a more expeditious and economical hearing. Absent such a stipulation, as was the case here, that issue must be determined in the contested case hearing, so the failure to file a motion does not constitute a waiver of the issue. Second, LWMD argues Petitioner s application was considered withdrawn by his or his agent s failure to respond to the Application Correction Request within 30 days. If the application was processed solely under Part 301 such an argument would be compelling indicates, if anything, diligence and intent to expedite the matter. 2 During the application review process 2000 MR 6, R 281.922(a) came into effect. Subsections 3 and 4 12

because the administrative rules mandate such a result. See 1985 MR 11, R 281.812(5). However, the Part 303 administrative rule on this point is discretionary, and allows a longer period of time if LWMD and the applicant agree in writing. See 1988 MR 6, R 281.922(4). While a written agreement was not made, LWMD chose to exercise its discretion to not close the file and proceeded to put the application out for public notice, hold a public hearing, conduct the statutory review and ultimately issue a denial. CONCLUSION OF LAW Based on the Findings of Fact, I conclude, as a Matter of Law, the application for a permit was not issued by operation of law. MCL 324. 30307. PROPOSAL FOR DECISION Based upon the above Findings and Conclusion, it is proposed that a final order be entered denying the permit. Date: October 26, 2001 Richard A. Patterson Administrative Law Judge further refine the information LWMD requires to effectuate the purpose of Part 303. See Harkins supra. 13