Title: Amended and Restated Interlocal Agreement Reorganizing the WCRWSA 3/16/98
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Title: Amended and Restated Interlocal Agreement Reorganizing the WCRWSA 3/16/98
Physical Description: Book
Language: English
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Spatial Coverage: North America -- United States of America -- Florida
 Notes
Abstract: Jake Varn Collection - Amended and Restated Interlocal Agreement Reorganizing the WCRWSA 3/16/98
General Note: Box 16, Folder 7 ( WCRWSA - 1998 ), Item 7
Funding: Digitized by the Legal Technology Institute in the Levin College of Law at the University of Florida.
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Bibliographic ID: WL00003978
Volume ID: VID00001
Source Institution: Levin College of Law, University of Florida
Holding Location: Levin College of Law, University of Florida
Rights Management: All rights reserved by the source institution and holding location.

Full Text






BOARD MEETING DRAFT
MARCH 16, 1998












AMENDED AND RESTATED INTERLOCAL AGREEMENT










reorganizing the


WEST COAST REGIONAL WATER SUPPLY AUTHORITY









TABLE OF CONTENTS


PAGE


ARTICLE I
INTRODUCTION


SECTION 1.01.
SECTION 1.02.
SECTION 1.03.
SECTION 1.04.


DEFINITIONS. .................. .................... 3
INTERPRETATION. ................................. 17
FIN D ING S ................ ......................... 17
REPRESENTATIONS OF THE MEMBER GOVERNMENTS. .. 18


ARTICLE II
CREATION AND GOVERNANCE


SECTION 2.01.
SECTION 2.02.
SECTION 2.03.
SECTION 2.04.
SECTION 2.05.
SECTION 2.06.
SECTION 2.07.
SECTION 2.08.
SECTION 2.09.
SECTION 2.10.


WATER SUPPLY AUTHORITY .......................
POWERS AND DUTIES OF THE AUTHORITY ..........
BOARD OF DIRECTORS. ..........................
BOARD MEETINGS ..................................
QUORUM AND VOTING ............................
OFFICERS OF THE BOARD ..........................
POWERS AND DUTIES OF THE BOARD................
ANNUAL BUDGET ..................................
MASTER WATER PLAN ............................
PERFORMANCE AUDIT AND MANAGEMENT STUDY.....


ARTICLE III
WATER SUPPLY PROVISIONS


SECTION 3.01.
SECTION 3.02.
SECTION 3.03.
SECTION 3.04.
SECTION 3.05.
SECTION 3.06.
SECTION 3.07.
SECTION 3.08.
SECTION 3.09.
SECTION 3.10.
SECTION 3.11.
SECTION 3.12.


REGIONAL COOPERATION .........................
EXCLUSIVITY. ............. ................... .......
OBLIGATION TO MEET WATER NEEDS................
UNIFORM RATE. ....................................
MASTER WATER SUPPLY CONTRACT ...............
ISOLATED WATER SUPPLY FACILITIES ..............
WALSINGHAM FACILITY. .............................
SURFACE WATER SOURCES .......................
RECLAIMED WATER..............................
CLEARWATER FACILITIES .........................
NOTICE OF SERVICE DISRUPTIONS ...................
PERMITS AND LICENSES. ..........................


L










SECTION 3.13.
SECTION 3.14.
SECTION 3.15.
SECTION 3.16.
SECTION 3.17.
SECTION 3.18.
SECTION 3.19.


HOST MEMBER GOVERNMENT DISPUTE RESOLUTION. ...
RESOLUTION OF RECLAIMED WATER USE ISSUES. ......
LOCAL LAND USE DECISIONS .................. .....
TAXES, FEES, AND SPECIAL ASSESSMENTS...........
PRODUCTION FAILURE. .. ...........................
REDUCTION OF ENVIRONMENTAL STRESS .............
IMPACT FEES FOR AUTHORITY FACILITIES .............


ARTICLE IV
OBLIGATIONS


SECTION 4.01.
SECTION 4.02.
SECTION 4.03.
SECTION 4.04.
SECTION 4.05.
SECTION 4.06.
SECTION 4.07.
SECTION 4.08.
SECTION 4.09.
SECTION 4.10.


GENERAL AUTHORITY ..............................
TERMS OF THE OBLIGATIONS. .........................
TEMPORARY OBLIGATIONS. ................. ..........
ANTICIPATION NOTES. ............................
TAXING POWER NOT PLEDGED. ....... : .............
TRUST FUNDS .....................................
REMEDIES OF HOLDERS. ............................
REFUNDING OBLIGATIONS. .............................
CONDUIT TRANSACTIONS..........................
MEMBER GOVERNMENT COOPERATION ...............


ARTICLE V
TRANSFER OF ASSETS


SECTION 5.01.
SECTION 5.02.
SECTION 5.03.
SECTION 5.04.
SECTION 5.05.
SECTION 5.06.
SECTION 5.07.
SECTION 5.08.
SECTION 5.09.
SECTION 5.11.
SECTION 5.12.


TRANSFER OF ST. PETERSBURG FACILITIES. .......... 86
TRANSFER OF PINELLAS FACILITIES. ................. 87
TRANSFER OF TAMPA FACILITY ...................... 88
TRANSFER OF PASCO FACILITY. ..................... 88
TRANSFER OF HILLSBOROUGH FACILITIES. ........... 89
TRANSFER OF NEW PORT RICHEY FACILITY. .......... 90
PERMITS FOR TRANSFERRED ASSETS. ............... 91
OPTION TO REPURCHASE TRANSFERRED ASSETS. ..... 91
TRANSFER OF AUTHORITY FACILITIES. ............... 92
JOINT USE OF AUTHORITY EASEMENTS. .............. 94
FORM OF PAYMENT FOR TRANSFERRED ASSETS. ..... 94










ARTICLE VI
GENERAL PROVISIONS


SECTION 6.01.
SECTION 6.02.
SECTION 6.03.
SECTION 6.04.
SECTION 6.05.
SECTION 6.06.
SECTION 6.07.
SECTION 6.08.
SECTION 6.09.
SECTION 6.10.
SECTION 6.11.
SECTION 6.12.
SECTION 6.13.
SECTION 6.14.
SECTION 6.15.
SECTION 6.16.
SECTION 6.17.


FILING ...........................................
TERM OF AGREEMENT .............................
TRANSITION PROVISIONS. ..........................
TERMINATION. ....................................
SCIENTIFIC PEER REVIEW. ..........................
DISPUTE RESOLUTION..............................
WAIVER OF CLAIMS. .............................
ACKNOWLEDGMENT OF EPC AGREEMENT. ....;.......
INDEMNIFICATION ..................................
SOVEREIGN IMMUNITY. .............................
NOTICE. ..........................................
ENTIRE AGREEMENT ...............................
AMENDMENTS AND WAIVERS .......................
BINDING EFFECT ..................................
SEVERABILITY ....................................
EXECUTION IN COUNTERPARTS ....................
APPLICABLE LAW ..................................


. 96
. 96
. 96
103
107
108
109
109
110
110
111
112
113
113
113
114
114













TABLE OF APPENDICES


APPENDIXIA

APPENDIX B

APPENDIX C

APPENDIX D

APPENDIX E

APPENDIX F

APPENDIX G

APPENDIX H

APPENDIX I

APPENDIX J

APPENDIX K

APPENDIX L

APPENDIX M

APPENDIX N


WELLS RETAINED BY MEMBER GOVERNMENTS

FORM OF MASTER WATER SUPPLY CONTRACT

ST. PETERSBURG TRANSFER AGREEMENT

PINELLAS TRANSFER AGREEMENT

TAMPA TRANSFER AGREEMENT

PASCO TRANSFER AGREEMENT

HILLSBOROUGH TRANSFER AGREEMENT

NEW PORT RICHEY TRANSFER AGREEMENT

AUTHORITY/HILLSBOROUGH TRANSFER AGREEMENT

AUTHORITY/PASCO TRANSFER AGREEMENT

AUTHORITY/TAMPA TRANSFER AGREEMENT

EPC AGREEMENT

REQUIRED LEGISLATION

LEGISLATION AUTHORIZING CONDUIT TRANSACTIONS










1 AMENDED AND RESTATED INTERLOCAL AGREEMENT
2
3
4 THIS AMENDED AND RESTATED INTERLOCAL AGREEMENT is made and

5 entered into as of April 1, 1998, by and among Hillsborough County, a political subdivision

6 of the State of Florida; Pasco County, a political subdivision of the State of Florida;

7 Pinellas County, a political subdivision of the State of Florida; the City of St. Petersburg,

8 a municipal corporation of the State of Florida; the City of Tampa, a municipal corporation

9 of the State of Florida; and the City of New Port Richey, a municipal corporation of the

10 State of Florida.

11
12 WITNESSETH:

13
14 WHEREAS, the West Coast Regional Water Supply Authority (the "Authority") was

15 created pursuant to an Interlocal Agreement among Hillsborough County, Pasco County,

16 Pinellas County, the City of St. Petersburg, and the City of Tampa dated October 24, 1974,

17 for the purpose of developing, recovering, storing and supplying water for county and

18 municipal purposes in such a manner as will give priority to reducing adverse

19 environmental effects of excessive or improper withdrawals of water from concentrated

20 areas; and

21 WHEREAS, the Authority is presently operating under an "entitlement" or

22 "subscription" approach to funding its operations, producing water from existing water

23 supply facilities and developing new water supply facilities, resulting in rate differentials,

24 varying entitlements and other divergent interests among the parties; and










1 WHEREAS, pursuant to the provisions of Sections 373.1962 and 163.01, Florida

2 Statutes, the parties desire to establish the terms under which the Authority will be

3 reorganized to eliminate rate differentials, varying entitlements and other divergent

4 interests, thus more effectively enabling the Authority to accomplish its goals and

5 purposes, as set forth in Sections 373.1962 and 163.01, Florida Statutes; and

6 WHEREAS, the Authority will be reorganized pursuant to this Amended and

7 Restated Interlocal Agreement, which will become effective upon satisfaction of certain

8 specific conditions set forth herein;

9 NOW THEREFORE, in consideration of the premises set forth above and the

10 covenants, obligations, duties and benefits herein set forth, and other valuable

11 consideration, the receipt and sufficiency of which are hereby conclusively acknowledged,

12 the parties hereto agree as follows:










1

2 ARTICLE I

3 INTRODUCTION

4
5 SECTION 1.01. DEFINITIONS. When used in this Agreement, the following

6 terms shall have the following meanings, unless the context clearly requires otherwise:

7 (A) "Actual Direct Cost" means (1) with respect to the acquisition of

8 Water Supply Facilities, the total capital cost of acquiring and constructing such Water

9 Supply Facilities, excluding any indirect cost; and (2) with respect to Water treatment, the

10 total capital and operating cost of providing such treatment, excluding any indirect cost;

11 and (3) with respect to Wheeling, any increase in operating cost resulting from such

12 activity.

13 (B) "Agreement" means this Amended and Restated Interlocal

14 Agreement, including any amendments or supplements hereto executed and delivered in

15 accordance with the terms hereof.

16 (C) "Allocated Overhead" means, as to any Water Supply Facility, that

17 portion of the Overhead that is allocated to the Water Supply Facility by (1) dividing (a) the

18 estimated quantity of Quality Water to be pumped or produced during the Fiscal Year at

19 the Water Supply Facility by (b) the total estimated quantity of Quality Water to be pumped

20 or produced during the Fiscal Year at all Water Supply Facilities owned or operated by the

21 Authority, and (2) multiplying the result by the Overhead.










(D) "Authority" means the West Coast Regional Water Supply Authority,

an interlocal governmental agency created and existing pursuant to Sections 373.1962

and 163.01, Florida Statutes, and an Interlocal Agreement among Hillsborough, Pasco,

Pinellas, St. Petersburg and Tampa dated October 25, 1974, as amended, supplemented

and restated pursuant to this Agreement.

(E) "Authority/Hillsborough Transfer Agreement" means the

agreement attached hereto as Appendix I, pursuant to which the Authority will convey

treatment and transmission facilities to Hillsborough.

(F) "Authority/Pasco Transfer Agreement" means the agreement

attached hereto as Appendix J, pursuant to which the Authority will convey Water Supply

Facilities to Pasco.

(G) "Authority/Tampa Transfer Agreement" means the agreement

attached hereto as Appendix K, pursuant to which the Authority will convey Water Supply

Facilities to Tampa.

(H) "Board" means the Authority's Board of Directors, appointed pursuant

to Section 2.03 hereof.

(I) "Consolidated Permit" means a consolidated Water use permit

issued by SWFWMD that includes multiple Water Supply Facilities that are located within

the jurisdiction of different Member Governments.

(J) "Contributing Area" means the area surrounding a ground Water

withdrawal facility from which Water is contributed to that facility under typical operation










1 by means of infiltration from the land surface to the ground Water system from which such

2 withdrawal is made.

3 (K) "Desalination Facilities" means facilities designed to treat Water

4 with total dissolved solids exceeding 10,000 milligrams per liter.

5 (L) "Director" means an individual appointed to the Board by a Member

6 Government pursuant to Section 2.03 hereof.

7 (M) "Disinfection Credit" means the amount payable to each Member

8 Government conveying Transferred Assets to the Authority, which represents either (1) as

9 to Member Governments that do not currently have facilities to disinfect Quality Water

10 delivered at a specific Point of Connection, an amount equal to the estimated cost of

11 constructing disinfection facilities that will be required when the Authority discontinues

12 chlorination pursuant to this Agreement, or (2) as to Member Governments that currently

13 have facilities to disinfect Quality Water delivered at a specific Point of Connection, an

14 amount representing their cost to construct such facilities.

15 (N) "Dispute Range" means, with respect to the Host Member

16 Government dispute resolution process, the range between the Authority's proposed

17 quantity of withdrawal and the quantity of withdrawal specified by a Host Member pursuant

18 to Section 3.13(A) hereof.

19 (0) "Economic Impact Facilities" means Water Supply Facilities owned

20 by the Authority and not subject to ad valorem taxation that have a significant adverse

21 economic impact on the Member Government in whose jurisdiction they are located by (A)

22 removing property suitable for industrial use from the ad valorem tax roll or (B) requiring










1 significant annual expenditures of public funds by the Member Government. The term

2 "Economic Impact Facilities" includes Desalination Facilities, but excludes wellfields,

3 reservoirs, Water treatment facilities comparable to those heretofore operated by the

4 Authority or the Member Governments, and Water transmission facilities.

5 (P) "Environmental Permit" means all permits, licenses, or other third-

6 party approvals necessary or convenient to the acquisition, construction or operation of

7 an Authority Water Supply Facility.

8 (Q) "EPC" means the Hillsborough County Environmental Protection

9 Commission, a dependent special district of the State of Florida.

10 (R) "EPC Agreement" means the agreement attached hereto as

11 Appendix L.

12 (S) "Failure Range" means, with respect to the Host Member

13 Government dispute resolution process, (1) as to the Authority, a quantity lower than the

14 twenty-fifth percentile of the Dispute Range, and (2) as to any Host Member Government,

15 a quantity greater than the seventy-fifth percentile of the Dispute Range.

16 (T) "Financing Documents" means any resolution or resolutions of the

17 Authority, as well as any indenture of trust, trust agreement or similar document relating

18 to the issuance or security of the Obligations.

19 (U) "Fiscal Year" means the period commencing on October 1 of each

20 year and continuing through the next succeeding September 30, or such other period as

21 may be prescribed by law as the fiscal year for the Authority.










(V) "Full Implementation Date" means October 1, 1998; provided

however, that if the Department of Environmental Protection has entered a final order

approving this Agreement and administrative hearings or appellate proceedings therefrom

have been commenced, the "Full Implementation Date" shall be deferred to the date ninety

days following the conclusion of all such administrative hearings or appellate proceedings.

(W) "General Counsel" means the chief legal officer of the Authority.

(X) "General Manager" means the chief executive staff officer of the

Authority.

(Y) "Governmental Obligations" means (1) direct and general obli-

gations of the United States of America, or those which are unconditionally guaranteed as

to principal and interest by the United States of America (the "Defeasance Obligations"),

and (2) pre-refunded municipal obligations (obligations of any state of the United States

of America or of any agency, instrumentality, political subdivision or local government unit

of such state) meeting the following criteria:

(a) the municipal obligations must be rated "AAA" by Standard and Poor's

Corporation and "Aaa" by Moody's Investors Service, Inc. and may not be callable

prior to maturity or, alternatively, the trustee or escrow agent for such obligations

has received irrevocable instructions concerning their calling and redemption;

(b) the municipal obligations are secured by cash and/or Defeasance

Obligations which may be applied only to principal, interest and premium payments

of such municipal obligations;










1 (c) the principal and interest of the Defeasance Obligations (plus any

2 cash in the fund) has been verified by a nationally recognized firm of independent

3 certified public accountants as sufficient to pay the principal, interest and premium,

4 if any, of the municipal obligations;

5 (d) the Defeasance Obligations serving as security for the municipal

6 obligations must be held by an escrow agent or a trustee: and

7 (e) the Defeasance Obligations are not available to satisfy any other

8 claims, including those of the trustee or escrow agent.

9 (Z) "High Flow Periods" means those periods during which the flow in

10 the Hillsborough River, as measured at the Hillsborough River Reservoir dam, exceeds

11 the flow required by environmental regulations.

12 (AA) "Hillsborough" means Hillsborough County, a political subdivision

13 of the State.

14 (BB) "Hillsborough Bay Resource Exchange Project" means the

15 TWRRP and the Authority's proposed withdrawal facilities on the Tampa Bypass Canal

16 and the surface water treatment plant required to treat the purified water and deliver it to

17 the Member Governments.

18 (CC) "Hillsborough River Reservoir" means the run of the Hillsborough

19 River between Fletcher Avenue and the Hillsborough River Reservoir dam.

20 (DD) "Hillsborough Transfer Agreement" means the agreement attached

21 hereto as Appendix G, pursuant to which Hillsborough will convey Transferred Assets to

22 the Authority.










1 (EE) "Host Member Government" means any Member Government in

2 whose jurisdiction the Authority seeks issuance, modification or renewal of an

3 Environmental Permit; provided however, that the term "Host Member Government" also

4 includes Tampa (1) with respect to Water use permits for Cone Ranch and Dispersed

5 Wells, Cypress Bridge Wellfield, Hillsborough River High Water and the Tampa Bypass

6 Canal, and (2) under the circumstances described in Section 3.08 hereof. If SWFWMD

7 issues a Consolidated Permit, any Member Government shall qualify as a "Host Member

8 Government" for the limited purpose of raising environmental issues affecting property

9 located within its own jurisdiction; provided however, that if a Consolidated Permit is

10 approved by an agreement to which all Member Governments are parties, no Member

11 Government shall qualify as a "Host Member Government" for its initial issuance.

12 (FF) "Master Water Plan" means the Authority's plan for expansion,

13 conservation, diversification and preservation of the tri-county region's Water supply, as

14 the same may be amended or superseded from time to time.

15 (GG) "Master Water Supply Contract" means the agreement between the

16 Authority and each Member Government, pursuant to which the Member Government

17 purchases Quality Water from the Authority.

18 (HH) "Member Governments" means Hillsborough, Pasco, Pinellas, New

19 Port Richey, St. Petersburg and Tampa.

20 (II) "Middle Range" means, with respect to the Host Member Government

21 dispute resolution process, that portion of the Dispute Range between the Success Range

22 and the Failure Range.










1 (JJ) "New Port Richey" means the City of New Port Richey, a municipal

2 corporation of the State.

3 (KK) "New Port Richey Transfer Agreement" means the agreement

4 attached hereto as Appendix H, pursuant to which New Port Richey will convey

5 Transferred Assets to the Authority.

6 (LL) "Net Utility Revenue" means the net revenue of each Member

7 Government's water system or, if a Member Government's water and wastewater systems

8 have been combined for financing purposes, the net revenues of the combined water and

9 wastewater system.

10 (MM) "Obligations" means a series of bonds or other evidence of

11 indebtedness including but not limited to, notes, commercial paper, capital leases or any

12 other obligations of the Authority heretofore or hereafter issued or incurred.

13 (NN) "Overhead" means the administrative and general expenses of the

14 Authority that are not directly attributable to ownership and operation of any specific Water

15 Supply Facility.

16 (00) "Partnership Plan Wellfields" means Cross Bar Ranch Wellfield,

17 Cypress Creek Wellfield, Starkey Wellfield, North Pasco Wellfield, South Pasco Wellfield,

18 Eldridge-Wilde Wellfield, Cypress Bridge Wellfield, Cosme-Odessa Wellfield, Section 21

19 Wellfield, Northwest Hillsborough Regional Wellfield, and Morris Bridge Wellfield.

20 (PP) "Pasco" means Pasco County, a political subdivision of the State.

21 (QQ) "Pasco Transfer Agreement" means the agreement attached hereto

22 as Appendix F, pursuant to which Pasco will convey Transferred Assets to the Authority.

10










1 (RR) "Pinellas" means Pinellas County, a political subdivision of the State.

2 (SS) "Pinellas Transfer Agreement" means the agreement attached

3 hereto as Appendix B, pursuant to which Pinellas will convey Transferred Assets to the

4 Authority.

5 (TT) "Pledged Funds" means (1) the revenues, fees, charges and other

6 moneys received by the Authority relating to the ownership or operation of its Water

7 Supply Facilities, and (2) until applied in accordance with the terms of the Financing

8 Documents, all moneys in the funds and accounts established thereby, including

9 investments therein; in each case to the extent provided by the Board pursuant to the

10 Financing Documents.

11 (UU) "Points of Connection" means the points identified pursuant to the

12 Master Water Supply Contract, as revised by the Authority and the Member Governments

13 from time to time, at which the Member Governments' water utility systems connect to the

14 Authority's system.

15 (W) "Production Failure" means (1) the occurrence of a Shortfall,

16 provided however, that a Shortfall that results from a mechanical, equipment or other

17 facility failure shall not constitute a "Production Failure," and (2) following December 31,

18 2002, the actual delivery by the Authority to the Member Governments during any twelve-

19 month period of a quantity of Quality Water that exceeds 90 percent of the aggregate

20 permitted capacity of the Authority's production facilities on an average annual basis,

21 provided however, that if the Authority has received a Water use permit for additional

22 production facilities and the Authority has entered into a contract for final design and










1 construction of the facilities, the additional production quantity specified in the Water use

2 permit shall be added to the actual production capacity for purposes of determining if a

3 "Production Failure" has occurred.

4 (WW) "Project Cost" means all expenses associated with the acquisition,

5 construction, installation, reconstruction, renewal or replacement of Water Supply

6 Facilities, including without limitation: (1) land and interests therein, property rights, and

7 easements of any nature whatsoever; (2) physical construction, reconstruction, renewal,

8 replacement or completion; (3) acquisition and installation of machinery, equipment and

9 other tangible personal property; (4) planning, architectural, engineering, surveying, legal,

10 environmental and other consultant services; (5) fees and expenses associated with the

11 issuance of Obligations, including but not limited to bond counsel, disclosure counsel,

12 financial advisor, underwriters' discount, rating agencies, bond insurance, credit or liquidity

13 facilities, and printing the Obligations and supporting documentation; (6) interest accruing

14 on the Obligations for such period of time as the Authority deems appropriate; (7) the debt

15 service reserve fund or account, if any, established for the Obligations; and (8) all other

16 expenses that are properly attributable thereto under generally accepted accounting

17 principles, including reimbursement to the Authority for any moneys advanced for such

18 purposes and interest on any interfund loan for such purposes.

19 (XX) "Quality Water" means Water which meets (1) State and federal

20 drinking water regulations and standards, as defined in Rule 62-550, Florida

21 Administrative Code, as it may be amended or superseded from time to time, including

22 regulations pertaining to surface water or groundwater under the direct influence of surface










1 waters, but excluding regulations pertaining to disinfection and corrosivity, and (2) any

2 additional standards required by the Master Water Supply Contract. The term "Quality

3 Water" also includes Water delivered to the Points of Connection identified in Section

4 3.03(D) hereof or to Points of Connection at which a Member Government agrees, at its

5 sole option, to accept Water not meeting the standards for Quality Water pursuant to

6 Section 3.03(E) hereof.

7 (YY) "Reclaimed Water" means, except as specifically provided in Chapter

8 62-610, Florida Administrative Code, water that has received at least secondary treatment

9 and basic disinfection and is reused after discharge from a domestic wastewater treatment

10 facility.

11 (ZZ) "Reclaimed Water Resource Project" means (1) the direct use of

12 Reclaimed Water in the Authority's Water supply, or (2) the indirect use of Reclaimed

13 Water in the Authority's Water supply through (a) surface Water augmentation or (2)

14 ground Water recharge within the Contributing Area of any Authority wellfield.

15 (AAA) "Recovery Plan" means the proposed phased recovery strategy for

16 the Northern Tampa Bay Area, pursuant to which (1) by December 31, 2002, the Authority

17 will reduce the combined production from the Partnership Plan Wellfields to 121 mgd, on

18 an average annual basis (to be measured from December 31, 2002 to December 31,

19 2003), and maintain production thereafter at or below 121 mgd, on an average annual

20 basis; and (2) by December 31, 2007, the Authority will reduce the combined production

21 from the Partnership Plan Wellfields to 90 mgd, on an average annual basis (to be









4
1 measured from December 31, 2007 to December 31, 2008), and maintain production

2 thereafter at or below 90 mgd, on an average annual basis.

3 (BBB) "Replacement Capacity" means production capacity from Water

4 Supply Facilities other than the Production Plan Wellfields that is (1) not available on the

5 date hereof, and (2) will be used to reduce the permanent combined production from the

6 Partnership Plan Wellfields.

7 (CCC) "Rotational Capacity" means the production rate of Quality Water

8 available at any time to the Authority that (1) exceeds Member Government needs, and (2)

9 subject to the physical limitations of the Authority's Water delivery system, can be used to

10 periodically reduce the withdrawal of Water from Authority wellfields located in

11 environmentally stressed areas. "Rotational Capacity" does not include Replacement

12 Capacity.

13 (DDD) "Shortfall" means a situation in which the Authority fails to deliver the

14 quantity of Quality Water required by a Member Government.

15 (EEE) "Shortfall Amount" means, in the event of a Shortfall, the amount

16 computed by deducting the quantity of Quality Water actually delivered by the Authority

17 to a Member Government from the total quantity of Quality Water required by a Member

18 Government.

19 (FFF) "St. Petersburg" means the City of St. Petersburg, a municipal

20 corporation of the State.









1 (GGG) "St. Petersburg Transfer Agreement" means the agreement

2 attached hereto as Appendix C, pursuant to which St. Petersburg will convey Transferred

3 Assets to the Authority.

4 (HHH) "State" means the State of Florida.

5 (111) "Success Range" means, with respect to the Host Member

6 Government dispute resolution process, (1) as to the Authority, a quantity greater than the

7 seventy-fifth percentile of the Dispute Range, and (2) as to any Host Member Government,

8 a quantity lower than the twenty-fifth percentile of the Dispute Range.

9 (JJJ) "SWFWMD" means the Southwest Florida Water Management

10 District.

11 (KKK) "Tampa" means the City of Tampa, a municipal corporation of the

12 State.

13 (LLL) "Tampa Transfer Agreement" means the agreement attached hereto

14 as Appendix E, pursuant to which Tampa will convey Transferred Assets to the Authority.

15 (MMM) "Termination Funding Share" means, for each Member Government,

16 the percentage computed by dividing (1) the quantity of Quality Water purchased from the

17 Authority during the last five Fiscal Years by such Member Government, excluding Quality

18 Water purchased by Tampa from the Tampa Bypass Canal, by (2) the total quantity of

19 Quality Water purchased from the Authority during the last five Fiscal Years by all Member

20 Governments, excluding Quality Water purchased by Tampa from the Tampa Bypass

21 Canal.










1 (NNN) "Termination Option Share" means, for each Member Government,

2 the percentage computed by dividing (1) the quantity of Quality Water purchased from the

3 Authority during the last five Fiscal Years by such Member Government, excluding Quality

4 Water purchased by Tampa from the Tampa Bypass Canal, by (2) the total quantity of

5 Quality Water purchased from the Authority during the last five Fiscal Years by all Member

6 Governments electing to exercise an option to purchase a Water Supply Facility or other

7 asset of the Authority pursuant to Section 6.04 hereof, excluding Quality Water purchased

8 by Tampa from the Tampa Bypass Canal.

9 (000) "Transferred Assets" means the Water Supply Facilities conveyed

10 to the Authority pursuant to Article V hereof.

11 (PPP) "TWRRP" means the Tampa Water Resource Recovery Project,

12 which includes the proposed supplemental treatment plant to be sited on Hookers Point

13 at Tampa's Howard F. Curren Advanced Wastewater Treatment Plant, and the pipeline

14 that delivers the purified water to the Tampa Bypass Canal.

15 (QQQ) "Water" means Quality Water and any other water to be used by a

16 Member Government in its public water supply system.

17 (RRR) "Water Supply Facilities" means production, treatment and

18 transmission facilities required to deliver Quality Water to the Points of Connection.

19 (SSS) "Wellfield Operations Plan" means a plan for operating the

20 Partnership Plan Wellfields, which may include other Water Supply Facilities of the

21 Authority, that is based upon a scientific methodology to (1) evaluate the relative level of

22 environmental stress in the area of each of its wellfields, (2) apply its Rotational Capacity

16










1 to reduce the quantity of Water withdrawn from wellfields located in areas with the highest

2 levels of environmental stress, and (3) bring all of its wellfields into compliance with the

3 Recovery Plan.

4 (TTT) "Wheel" or "Wheeling" means the process of utilizing any unused

5 transmission capacity in the Authority's Water delivery system to transport Water

6 purchased from a supplier other than the Authority to a Member Government's Point of

7 Connection during a Production Failure.

8 SECTION 1.02. INTERPRETATION. Unless the context indicates otherwise,

9 words importing the singular number include the plural number and vice versa; the terms

10 hereoff," "hereby," "herein," "hereto," hereunderr" and similar terms refer to this

11 Agreement; and the term "hereafter" means after, and the term "heretofore" means before,

12 the effective date of this Agreement. Words of any gender include the correlative words

13 of the other gender, unless the sense indicates otherwise.

14 SECTION 1.03. FINDINGS. It is hereby ascertained, determined and declared

15 by the Member Governments that:

16 (A) The Water needs and environmental concerns of their citizens can best be

17 balanced by vesting Water supply functions in a reorganized West Coast Regional Water

18 Supply Authority for the purpose of developing, recovering, storing and supplying Water

19 for county and municipal purposes in such a manner as will give priority to reducing

20 adverse environmental effects of excessive or improper withdrawals of Water from

21 concentrated areas.










1 (B) The Member Governments desire that the Authority design, acquire,

2 construct, operate and maintain Water Supply Facilities in the locations and at the times

3 necessary to insure that an adequate supply of Quality Water will be available for all

4 customers served by the Member Governments.

5 (C) The cost of the Quality Water and all services to be provided by the Authority

6 shall be paid for by the Member Governments, based on a uniform rate for the sale of

7 Quality Water (other than Water delivered to Tampa from the Tampa Bypass Canal, which

8 has been excluded from the uniform rate provision), adjusted for special treatment

9 requirements in the manner set forth herein.

10 (D) The Member Governments shall be responsible for any additional treatment

11 they may individually elect, and for distribution to the Member Governments' retail and

12 wholesale customers.

13 (E) The execution and delivery of this Agreement serves the individual and

14 collective best interest of the Member Governments and serves a valid public purpose by

15 (1) preserving a means by which the Host Member Governments can represent the

16 interests of their constituents regarding environmental impacts of Water withdrawals from

17 Water Supply Facilities located within their political jurisdictions;(2) enabling the Member

18 Governments to reduce future costs for litigation concerning Water supply issues; and (3)

19 enhancing the Authority's ability to implement its Master Water Plan by developing the

20 Water Supply Facilities necessary to serve the Member Governments.

21 SECTION 1.04. REPRESENTATIONS OF THE MEMBER GOVERNMENTS.

22 As of the date hereof and in reliance upon the legislation attached hereto as Appendix M,










1 the Member Governments each make the following representations as it relates to itself

2 (no representation is made by a Member Government for any other Member Government):

3 (A) The Member Governments are each duly organized, validly existing and in

4 good standing under the laws of the State and are each duly qualified and authorized to

5 satisfy their responsibilities pursuant to this Agreement.

6 (B) The Member Governments each have the power, authority and legal right to

7 enter into and perform the obligations set forth in this Agreement, and the execution,

8 delivery and performance hereof by the Member Governments: (1) has been duly

9 authorized by the Board of County Commissioners in the case of Hillsborough, Pasco and

10 Pinellas and by the Mayor and City Council in the case of New Port Richey, St. Petersburg

11 and Tampa; (2) does not require any other approvals by any other governmental officer

12 or body; (3) does not require any consent or referendum of the electors; and (4) does not

13 constitute a default under, or result in the creation of any lien, charge, encumbrance or

14 security interest upon, the assets of the Member Governments under any agreement or

15 instrument to which any of the Member Governments is a party or by which any of the

16 Member Governments and their assets may be bound or affected, except as otherwise

17 provided herein.

18 (C) This Agreement has been duly entered into and delivered by the Board of

19 County Commissioners in the case of Pasco, Hillsborough and Pinellas, by the City

20 Council and Mayor in the case of New Port Richey, St. Petersburg and Tampa and, upon

21 satisfaction of the conditions set forth in Sections 6.03(A) and (D) hereof, constitutes a

22 legal, valid and binding obligation of the Member Governments, fully enforceable in










1 accordance with its terms, except to the extent that the enforceability of this Agreement

2 may be limited by any applicable bankruptcy, moratorium, reorganization or other similar

3 laws affecting creditor's rights generally, or by the exercise of judicial discretion in

4 accordance with general principles of equity.

5 (D) There is no action, suit or proceeding, at law or in equity, before or by any

6 court or governmental authority, pending, or to the best of the Member Governments'

7 knowledge, threatened against any of the Member Governments, wherein any unfavorable

8 decision, ruling or finding would materially and adversely affect the performance by any

9 of the Member Governments of their obligations hereunder or the other transactions

10 contemplated hereby, or.which, in any way, would adversely affect the validity or

11 enforceability of this Agreement, the Master Water Supply Contract, the St. Petersburg

12 Transfer Agreement, the Pinellas Transfer Agreement, the Tampa Transfer Agreement,

13 the Pasco Transfer Agreement, the Hillsborough Transfer Agreement, the New Port Richey

14 Transfer Agreement, the Authority/Hillsborough Transfer Agreement, the Authority/Pasco

15 Transfer Agreement, the Authority/Tampa Transfer Agreement, the EPC Agreement, or any

16 other agreement or instrument entered into by the Authority in connection with the

17 transactions contemplated hereby.










1
2 ARTICLE II

3 CREATION AND GOVERNANCE

4
5 SECTION 2.01. WATER SUPPLY AUTHORITY.

6 (A) The Member Governments hereby reorganize the West Coast Water Supply

7 Authority heretofore created pursuant to Sections 373.1962 and 163.01, Florida Statutes,

8 and other applicable law, for the purpose of developing, recovering, storing and supplying

9 Quality Water for county and municipal purposes in such a manner as will give priority to

10 reducing adverse environmental effects of excessive or improper withdrawals of Water

11 from concentrated areas. The geographic territory of the Authority consists of Hillsborough

12 County, Pasco County and Pinellas County.

13 (B) The creation and reorganization of the Authority and the fulfillment of its

14 purposes are in all respects for the benefit of the people of this State and the people of

15 Hillsborough County, Pasco County and Pinellas County. The Authority is performing an

16 essential governmental function. All property of the Authority is and shall in all respects

17 be considered to be public property, and the title to such property shall be held by the

18 Authority for the benefit of the public. The use of such property shall be considered a

19 public purpose, until disposed of upon such terms as the Authority may deem appropriate.

20 All Obligations and interest or income thereon and all the property, facilities, services and

21 activities of the Authority are declared to be nontaxable for any and all purposes by the

22 State or federal government or any unit of the State or federal government to the same

23 extent as if owned or issued by on behalf of the Member Governments.










1 (C) It is the intent of the Member Governments that the creation and

2 reorganization of the Authority meets any applicable requirements for independent special

3 districts provided for in Chapter 189, Florida Statutes.

4 (D) All claims, causes of action, defenses, lawful debts, Obligations, contracts,

5 franchises, promissory notes, audits, actions, minutes, resolutions, and other undertakings

6 of the Authority in existence on the date of this Agreement and upon satisfaction of the

7 conditions described in Sections 6.03(A) and (D) hereof are hereby validated and shall

8 continue to be valid and binding on the Authority in accordance with their respective terms,

9 conditions and covenants, unless expressly superceded or modified as specified in this

10 Agreement and the Master Water Supply Contract. Any proceedings heretofore begun by

11 the Authority for the receipt of Environmental Permits, construction of any improvements,

12 works or facilities; for the assessment of benefits and damages or for the borrowing of

13 money shall not be impaired or voided by the reorganization of the Authority and may be

14 continued and completed in the name of the Authority.

15 SECTION 2.02. POWERS AND DUTIES OF THE AUTHORITY.

16 (A) The Authority shall have the following powers in addition to and

17 supplementing any other privileges, benefits and powers granted by Sections 373.1962

18 and 163.01, Florida Statutes:

19 (1) To acquire Water and Water rights; develop, store, and transport

20 Water; and sell Water in the manner provided herein.

21 (2) To sue and be sued in its own name.










1 (3) To acquire, by purchase, gift, devise or otherwise, and to dispose of,

2 real or personal property, or any estate therein.

3 (4) To lease, as lessor or lessee, to or from any person, firm, corporation,

4 association or body, public or private, facilities or property of any nature for the use

5 of the Authority to carry out any of the purposes authorized by this Agreement.

6 (5) To make and execute contracts or other instruments necessary or

7 convenient to the exercise of its powers.

8 (6) To join with one or more other public corporations for the purpose of

9 carrying out any of its powers and for that purpose to contract with such other public

10 corporation or corporations for the purpose of financing such acquisitions,

11 construction, and operations. Such contracts may provide for contributions to be

12 made by each party thereto, for the division and apportionment of the expenses of

13 such acquisitions and operations, and for the division and apportionment of the

14 benefits, services, and products therefrom. Such contracts may contain such other

15 and further covenants and agreements as may be necessary and convenient to

16 accomplish the purposes hereof.

17 (7) To contract for the service of engineers, accountants, attorneys, rate

18 consultants and other experts or consultants, and such other agents and employees

19 as the Board may require or deem appropriate.

20 (8) To contract with private or public entities or persons to develop,

21 purchase or sell Water, subject to the preferential right of each Member

22 Government to purchase Quality Water from the Authority for use by such Member










1 Government; provided however, that the Authority shall not sell Water to any

2 customer of a Member Government.

3 (9) To contract with a Member Government or any private or public entity

4 or person for the operation or management of Water Supply Facilities.

5 (10) To accomplish construction directly or by advertising for construction

6 bids and letting contracts for all or any part of the construction of improvements to

7 the Water Supply Facilities to the lowest responsible and responsive bidder or

8 rejecting any and all bids at its discretion; provided however, that the competitive

9 bid requirement may be waived if (a) the Board determines that emergency

10 circumstances are present or (b) after consideration of all available alternative

11 materials and systems, the Board determines that the specification of a sole

12 material or system is justifiable based upon its design, cost, interchangeability or

13 any other relevant factor.

14 (11) To exercise the power of eminent domain in the manner provided by

15 law for the condemnation of private property for public use, to acquire title to such

16 interest in real property as is necessary to the exercise of the powers herein

17 granted, except Water and Water rights already devoted to reasonable and

18 beneficial use or any water production or transmission facilities owned by any

19 county or municipality.

20 (12) To issue Obligations in the manner provided in (a) Article IV hereof,

21 (b) the Revenue Bond Act of 1953, as amended, part I, chapter 159, Florida

22 Statutes, or (c) Part II, Chapter 159, Florida Statutes, and Section 4.09 hereof;










1 provided however, that such Obligations shall not constitute a debt or obligation of

2 the Member Governments except to the extent that Member Governments are

3 required to comply with the terms hereof and of the Master Water Supply Contract.

4 (13) To assume ownership (in fee, easement, license or other legal

5 interest), operation and/or control of any Water Supply Facility owned by a

6 municipality, county, district or authority, including the assumption of the financial

7 liabilities associated with such Water Supply Facilities.

8 (14) Subject to such provisions and restrictions as may be set forth herein

9 and in any instrument authorizing the issuance of Obligations, to sell or otherwise

10 dispose of its Water Supply Facilities, or any portion thereof, upon such terms as

11 the Board deems appropriate; provided however, that the Authority shall not

12 dispose of its Water Supply Facilities, or any portion thereof, if the disposition

13 would cause a Production Failure.

14 (15) To apply for and accept grants, loans, and subsidies from any

15 governmental entity for the construction, operation and maintenance of its Water

16 Supply Facilities, and to comply with all requirements and conditions imposed in

17 connection therewith.

18 (16) To exercise all privileges, immunities and exemptions accorded

19 municipalities and counties of the State under the provisions of the constitution and

20 laws of the State.










1 (17) To appoint advisory, administrative or operation boards or committees

2 to assist the Authority in the exercise and performance of the powers and duties

3 provided for under this Agreement.

4 (18) To apply for, obtain and comply with Environmental Permits.

5 (19) To do all acts and things necessary or convenient for the conduct of

6 its business in order to carry out the powers and duties provided in this Agreement.

7 (B) Notwithstanding the geographic territory established in Section 2.01(A)

8 hereof, the Authority may exercise any of its rights, powers, privileges and authorities

9 granted herein in any and all portions of any county, municipality, special district or other

10 political subdivision of the State, heretofore or hereafter created or organized.

11 (C) Notwithstanding the provisions of Section 373.1962(2)(a), Florida Statutes,

12 the Authority shall not impose ad valorem taxes.

13 (D) The Authority shall not engage in local distribution.

14 (E) The parties have determined that Section 163.01(7)(g), Florida Statutes,

15 does not apply to the Authority.

16 SECTION 2.03. BOARD OF DIRECTORS.

17 (A) All powers, privileges and duties vested in or imposed upon the Authority

18 shall be exercised and performed by and through a Board of Directors; provided however,

19 that the exercise of any and all executive, administrative and ministerial powers may be

20 delegated by the Board of Directors to the General Manager or the General Counsel.










1 (B) The Board shall be comprised of nine Directors, all of whom shall be elected

2 officials, with each Director being entitled to one vote. The Directors shall be appointed by

3 the Member Governments as follows:

4 (1) two Directors appointed by the Hillsborough Board of County

5 Commissioners;

6 (2) two Directors appointed by the Pasco Board of County

7 Commissioners;

8 (3) two Directors appointed by the Pinellas Board of County

9 Commissioners;

10 (4) one Director appointed by the New Port Richey City Council;

11 (5) one Director appointed by the St. Petersburg City Council; and

12 (6) one Director appointed by the Mayor of Tampa (who may be the

13 Mayor).

14 (C) Not later than ten days following the date on which the conditions described

15 in Section 6.03(A) have been satisfied, each Member Government shall appoint its

16 Director or Directors to serve in such capacity for a period deemed appropriate by the

17 Member Government. Reappointments shall be made when necessary to ensure

18 continuous representation of the Member Governments.

19 SECTION 2.04. BOARD MEETINGS. The Board shall meet on a regular basis

20 at such times and at such places as determined by the Board; provided however, that

21 special meetings may be called by the chairman and in his or her absence by the vice-

22 chairman. Special meetings shall be called upon receipt by the General Manager of










1 written requests from a majority of the Directors. To the extent permitted by Section

2 286.011, Florida Statutes, telephonic regular or special meetings by conference call or

3 other method of electronic voice transmission which permits each participant to hear every

4 other participant and join in the discussion are specifically authorized.

5 SECTION 2.05. QUORUM AND VOTING.

6 (A) A quorum for the transaction of business at any regular or special meeting

7 of the Board shall consist of a majority of the Directors. Notwithstanding the foregoing, a

8 majority of the Directors present at any meeting may act to continue the meeting to any

9 time and date specified in such action.

10 (B) Each Director shall be entitled to one vote. No vote by proxy shall be

11 permitted. Except as otherwise provided in Section 2.05(C) hereof, Board action shall

12 require an affirmative vote of not less than five Directors.

13 (C) The following Board actions shall require an affirmative vote of not less than

14 six Directors:

15 (1) contracts with private or public entities to purchase or sell Water;

16 (2) contracts with a Member Government or any private or public entity

17 or person for the operation or management of the Transferred Assets and the Water

18 Supply Facilities owned or operated by the Authority on the date hereof;

19 (3) assumption of ownership, operation and/or control of any Water

20 Supply Facilities owned by a municipality, county, district or authority, if such

21 acquisition is projected to have a material adverse rate impact on the Member

22 Governments; and










1 (4) sale or other disposition of its Water Supply Facilities, or any portion

2 thereof.

3 (D) Prior to December 31, 2008, any action to acquire or construct Water

4 production facilities for the purpose of reducing the combined production from the

5 Partnership Plan Wellfields, on an average annual basis, to a quantity less than 90 mgd

6 shall require an affirmative vote of all nine Directors.

7 SECTION 2.06. OFFICERS OF THE BOARD.

8 (A) The Board shall elect a chairman from their number, who shall serve for a

9 period of one year, or until a successor shall have been duly elected and qualified,

10 whichever is later. No Director shall serve as chairman for more than two consecutive full

11 terms. The chairman shall preside at all meetings of the Board.

12 (B) The Board shall elect a vice-chairman from their number, who shall serve for

13 a period of one year, or until a successor shall have been duly elected and qualified,

14 whichever is later. No Director shall serve as vice-chairman for more than two consecutive

15 full terms. In case of the absence or disability of the chairman, the chairman's duties shall

16 be performed by the vice-chairman. The vice-chairman shall perform such additional

17 duties as are authorized by the Board.

18 (C) If a vacancy occurs in the office of chairman or vice-chairman, the Board

19 shall elect a replacement to serve the balance of the unexpired term.

20 (D) If neither the chairman nor vice-chairman attends a meeting at which a

21 quorum is present, the Directors present may elect one of their number to serve as

22 chairman pro-tem for that meeting.










1 SECTION 2.07. POWERS AND DUTIES OF THE BOARD. The Board shall act

2 as the governing body of the Authority and shall have the following powers and duties:

3 (A) To fix the time and place or places at which its regular meeting shall be held,

4 and to call and hold special meetings.

5 (B) To make and pass rules, regulations, resolutions and orders not inconsistent

6 with the Constitution of the United States or of the State, or to the provisions of Sections

7 373.1962 and 163.01, Florida Statutes, or this Agreement, necessary for the governance

8 and management of the affairs of the Authority, for the execution of the powers vested in

9 the Authority, and for carrying into effect the provisions of this Agreement.

10 (C) To fix the location of the principal place of business of the Authority and the

11 location of all offices and departments maintained thereunder.

12 (D) To prescribe a system of business administration and to create any and all

13 necessary offices in addition to chairman and vice chairman, which may include the offices

14 of secretary and treasurer; to establish the powers, duties and compensation of all

15 employees; and to require and fix the amount of all official bonds necessary for the

16 protection of the funds and property of the Authority.

17 (E) To appoint a General Manager, who shall administer the affairs and manage

18 the staff of the Authority with Board approval, and perform other administrative duties as

19 directed by the Board.

20 (F) To appoint a General Counsel to act as the chief legal officer of the Authority,

21 manage the Authority's legal representation and employ necessary legal staff with Board










approval, provide legal advice and support to the Board, General Manager and Authority

staff, and perform such other duties as directed by the Board.

SECTION 2.08. ANNUAL BUDGET.

(A) Prior to July 1 of each year, the General Manager shall prepare and deliver

to the Board a balanced tentative budget for the Authority covering its proposed operating

and other financial requirements for the ensuing Fiscal Year. The tentative budget shall

identify the rate at which Quality Water will be sold to Member Governments during such

Fiscal Year.

(B) The Board shall publish a notice of its intention to adopt the budget and shall

provide copies of the notice and tentative budget to each Member Government on or

before the first publication date. The notice shall include a summary of the tentative

budget, specify the rate at which Quality Water will be sold to the Member Governments

and identify the time, date and place at which the public may appear before the Board and

state their objections to or support of the budget and rate. The notice shall be published

once a week for two consecutive weeks within thirty days of the public hearing, in any

newspaper qualified to accept legal advertisements in each county in the jurisdiction of the

Authority, the last insertion of which shall appear not less than one week prior to the date

set by the Board for the hearing on the proposed budget and rate.

(C) At the time, date and place specified in the notice, the Board shall conduct

a public hearing and thereafter may consider adoption of the budget and rate with any

amendments it deems advisable. Unless otherwise authorized by the Board, the final

budget and rate shall be adopted by August 1.










1 (D) The adopted budget shall be the operating and fiscal guide for the Authority

2 for the ensuing Fiscal Year. The Board may from time to time amend the budget at any

3 regular or special meeting; provided however, that prior to approving any budget

4 amendment that increases the total budget for any Fiscal Year (other than a budget

5 amendment appropriating grant funds or the proceeds of Obligations), the Board shall

6 provide notice and conduct an additional public hearing in the manner described in this

7 Section 2.08.

8 SECTION 2.09. MASTER WATER PLAN.

9 (A) The Master Water Plan approved by the Authority on December 18, 1995,

10 as updated on February 16, 1998, is hereby ratified and confirmed as a planning

11 document. The Authority shall periodically review and update the Master Water Plan and

12 pursue implementation of identified projects in a timely manner to meet its obligation to

13 deliver Quality Water to the Member Governments.

14 (B) Within five years following the date on which the conditions described in

15 Sections 6.03(A) and (D) have been satisfied, and not less than every five years thereafter,

16 the Board shall revise the Master Water Plan. To the extent deemed necessary or

17 advisable by the Board, the revised Master Water Plan shall identify current customers,

18 projects, and future customers; review and generally inventory all existing Authority Water

19 Supply Facilities; identify a capital improvement program for the Authority; review all

20 current Authority Environmental Permits, existing regulations and projected regulations;

21 identify all proposed new Water Supply Facilities; evaluate Authority staffing; provide for

22 hydraulic analysis of the Authority's Water Supply Facilities, both existing and proposed;









1 evaluate present and future sources of Water and treatment requirements for those

2 sources in terms of capacity, reliability and economy; and, update the list of proposed

3 Water Supply Facilities required to meet the anticipated Quality Water needs of the

4 Member Governments for the next twenty years.

5 SECTION 2.10. PERFORMANCE AUDIT AND MANAGEMENT STUDY. The

6 Authority shall conduct a performance audit and management study immediately following

7 the end of the first full Fiscal Year after satisfaction of the conditions described in Sections

8 6.03(A) and (D) hereof, and at five-year intervals thereafter, to review program results and

9 make recommendations regarding its governance structure and the proper, efficient, and

10 economical operation and maintenance of the Authority's Water Supply Facilities. The

11 Authority shall retain a nationally recognized accounting firm to conduct the performance

12 audit and management study.










1
2 ARTICLE III

3 WATER SUPPLY PROVISIONS

4
5 SECTION 3.01. REGIONAL COOPERATION. The Member Governments

6 agree that cooperative efforts are necessary in order to meet their respective needs for

7 Quality Water in a manner which will provide adequate and dependable supplies, in such

8 a manner as will give priority to reducing adverse environmental effects upon the areas

9 from which Water is withdrawn or otherwise produced. The Member Governments shall

10 continue their cooperative efforts to develop and implement effective conservation

11 programs in order to reduce per capital demand for Water.

12 SECTION 3.02. EXCLUSIVITY. It is expressly understood and agreed that the

13 Authority shall be the sole and exclusive supplier of Water to the Member Governments

14 and shall own and operate all of the Water Supply Facilities serving the Member

15 Governments.

16 (A) If any Member Government acquires a private utility company, the Authority

17 shall be entitled to acquire any Water production facilities owned by the private utility. If

18 the Authority elects to exercise its option, the Water production facilities shall be appraised

19 by two independent appraisers acceptable to the Authority and the Member Government

20 in their reasonable judgment, and the Authority will purchase the Water production

21 facilities property upon payment of an amount equal to the average of the two appraised

22 values.









1 (B) The Member Governments shall neither create nor, to the extent permitted

2 by law, allow creation of any special district or other governmental authority located wholly

3 or partially within the geographic territory of the Authority pursuant to Chapter 189, Florida

4 Statutes, Section 163.01, Florida Statutes, Section 373.1962, Florida Statutes, or any

5 other provision of general or special law or by ordinance or contract, if the special district

6 or other governmental authority is authorized to produce Water for use within the

7 geographic territory of the Authority. This Section 3.02(B) shall not apply to the creation

8 of any special district or other governmental authority that is required to use the Authority

9 as its exclusive supplier of Water to be delivered to customers located within the

10 geographic territory of the Authority to the same extent as required by the Member

11 Governments (other than Tampa) hereunder.

12 (C) The Member Governments shall not privatize all or any portion of their Water

13 utility systems without including in the contract with the private entity a provision

14 acceptable to the Authority, which obligates the private entity to use the Authority as its

15 exclusive supplier of Water to be delivered to customers located within the geographic

16 territory of the Authority to the same extent as required by the Member Governments (other

17 than Tampa) hereunder.

18 (D) The Member Governments shall not sell, lease or otherwise dispose of all

19 or any portion of their Water utility systems without requiring the purchaser or lessee to

20 use the Authority as its exclusive supplier of Water to be delivered to customers located

21 within the geographic territory of the Authority to the same extent as required by the

22 Member Governments (other than Tampa) hereunder. To the extent permitted by law, the









1 obligation to use the Authority as the exclusive supplier of Water to be delivered to

2 customers located within the geographic territory of the Authority shall be imposed as a

3 restrictive covenant against any real property conveyed by the Member Government.

4 (E) To the extent permitted by law, the Member Governments shall not franchise

5 private water utilities following the date hereof unless the franchisee agrees to use the

6 Authority as its exclusive supplier of Water to be delivered to customers located within the

7 geographic territory of the Authority to the same extent as required by the Member

8 Governments (other than Tampa) hereunder.

9 (F) The Member Governments shall not assist or encourage the creation or

10 expansion of a private utility by the Florida Public Service Commission unless the private

11 utility agrees to use the Authority as its exclusive supplier of Water to be delivered to

12 customers located within the geographic territory of the Authority to the same extent as

13 required by the Member Governments (other than Tampa) hereunder.

14 (G) The Member Governments shall not merge or consolidate their water utility

15 systems with water utility systems owned and/or operated by other Member Governments,

16 other local governments, units of federal or State government, special districts,

17 governmental authorities, persons, corporations or other entities without requiring all other

18 parties to use the Authority as their exclusive supplier of Water to be delivered to

19 customers located within the geographic territory of the Authority to the same extent as

20 required by the Member Governments (other than Tampa) hereunder.

21 (H) The Member Governments shall not work in concert with any person,

22 corporation, local government, unit of federal or State government, special district,









1 governmental authority or other entity for the purpose of avoiding or evading the exclusivity

2 requirements of this Section 3.02.

3 (I) The exclusivity requirements set forth in this Section 3.02 are subject only

4 to the following exceptions.

5 (1) The Member Governments shall have the right to construct, operate

6 and maintain the specific Water Supply Facilities authorized by Sections 3.06

7 through 3.10, inclusive.

8 (2) The Member Governments shall have the right to acquire Water,

9 construct Water Supply Facilities and Wheel Water upon the occurrence of a

10 Production Failure, as set forth in Section 3.17 hereof.

11 (3) Hillsborough may continue its practice of purchasing Water from Plant

12 City at the current quantity of approximately 0.2 mgd, plus any increases necessary

13 to adequately supply the Oaks Utility service area.

14 (4) Pasco may continue its practice of purchasing Water from Dade City

15 at the current quantity of approximately 0.009 mgd, plus any increases necessary

16 to adequately supply Florida Trailer Estates.

17 (5) Pasco may continue its practice of purchasing Water from Zephyrhills

18 at the current quantity of approximately 0.020 mgd, plus any increases necessary

19 to adequately supply the Eldred Subdivision.

20 (6) Member Governments may acquire abandoned Water Supply

21 Facilities when required by law, but shall convey such Water Supply Facilities to the

22 Authority at the earliest practical date, upon payment of an amount equal to the









1 Member Government's Actual Direct Cost, retaining ownership of any treatment and

2 distribution facilities.

3 (7) Nothing in this Agreement shall be construed to prohibit the Member

4 Governments from temporarily exchanging or purchasing Water, either among

5 themselves or with other public or private utilities, for emergency and maintenance

6 purposes in the ordinary course of business.

7 (8) The Member Governments may continue to own and operate the wells

8 listed in Appendix A at the permitted quantities set forth therein; provided however,

9 that the production from individual wells with an average annual quantity less than

10 50,000 gallons per day may be increased by twenty percent if the increase in

11 production is required to adequately serve the geographic area presently served

12 by Water produced from such wells. The Member Governments shall not withdraw

13 Water from any wells not listed in Appendix A and the Authority is hereby granted

14 an option to purchase any Water Supply Facility owned by a Member Government

15 on the date of this Agreement that is not listed in Appendix A. If the Authority elects

16 to exercise its option, the purchase price shall be equal to the Member

17 Government's Actual Direct Cost to acquire and construct the Water Supply Facility.

18 (9) The Member Governments may create or allow creation of a special

19 district located wholly or partially within the geographic territory of the Authority

20 pursuant to Chapter 189, Florida Statutes, Section 163.01, Florida Statutes, or any

21 other provision of general or special law or by ordinance or contract, if (a) the

22 special district is limited to acquiring existing private utility systems from a provider










1 serving customers located in more than one county, (b) no retail customers will be

2 lost to a Member Government, (c) the acquisitions will not reduce the quantity of

3 Quality Water being delivered by the Authority, and (d) the Member Government

4 determines that the acquisition of utility systems by the special district enhances the

5 public health, safety and welfare of the affected customers.

6 SECTION 3.03. OBLIGATION TO MEET WATER NEEDS.

7 (A) Except as otherwise expressly provided herein or in the Master Water Supply

8 Contract, the Authority shall have the absolute and unequivocal obligation to meet the

9 Quality Water needs of the Member Governments. Quality Water needs of the Member

10 Governments shall be satisfied before Quality Water is delivered to any other customer

11 of the Authority.

12 (B) The Authority shall oppose any permit, order, rule or other regulatory effort

13 to reduce or limit the permitted capacity of its Water Supply Facilities, unless (1) the

14 reduction or limitation results from an agreement to which all Member Governments are

15 parties, or (2) the reduction or limitation will not become effective until adequate

16 replacement capacity has been placed in service.

17 (C) The General Manager shall actively monitor the relationship between the

18 quantity of Quality Water actually delivered by the Authority to the Member Governments

19 and the aggregate permitted capacity of the Authority's production facilities.

20 (1) If the actual delivery of Quality Water by the Authority to the Member

21 Governments during any twelve-month period exceeds 75 percent of the aggregate

22 permitted capacity of the Authority's production facilities, the General Manager shall









1 report to the Board and recommend that the Authority initiate preparation of Water

2 use permit applications necessary to ensure an adequate supply.

3 (2) If the actual delivery of Quality Water by the Authority to the Member

4 Governments during any twelve-month period exceeds 85 percent of the aggregate

5 permitted capacity of the Authority's production facilities, the General Manager shall

6 report to the Board and recommend that the Authority file Water use permit

7 applications to ensure an adequate supply.

8 (D) It is acknowledged and agreed that the Water delivered by the Authority (1)

9 from the South Central Hillsborough Wellfield to the Lithia Water Treatment Plant, (2) from

10 the Starkey and North Pasco Wellfields to the Maytum Water Treatment Plant, (3) from the

11 Starkey and North Pasco Wellfields to the Little Road Water Treatment Plant, (4) from the

12 Eldridge-Wilde Wellfield to the Keller Water Treatment Plant, (5) from the Cosme-Odessa

13 Wellfield to the Cosme Water Treatment Plant, (6) from the Morris Bridge Wellfield to the

14 Morris Bridge Water Treatment Plant, and (7) from the Tampa Bypass Canal to the

15 Hillsborough River Reservoir, will not meet the standards for Quality Water at the Point of

16 Connection due to excessive concentrations of hydrogen sulfide currently being removed

17 by Member Governments at their own treatment facilities. In order to continue meeting

18 Quality Water standards and maintain price equity upon implementation of the uniform rate

19 pursuant to Section 3.04 hereof, the Member Governments receiving such Water (other

20 than Water delivered to Tampa from the Tampa Bypass Canal, which has been excluded

21 from Section 3.04 pursuant to Section 3.08(D) hereof) will be entitled to a credit against

22 the uniform rate, as set forth in Section 3.04(A)(1) hereof.










1 (E) Member Governments may agree, at their sole option, to accept Water not

2 meeting the standards for Quality Water at any other Point of Connection. In such event,

3 the Member Government shall also be entitled to a credit against the uniform rate, as set

4 forth in Section 3.04(A)(1) hereof.

5 SECTION 3.04. UNIFORM RATE.

6 (A) The Authority shall establish a single uniform rate for the sale of Quality

7 Water to Member Governments, subject only to the adjustments set forth in this Section

8 3.04(A); provided however, that this Section 3.04 shall not apply to Quality Water delivered

9 to Tampa from the Tampa Bypass Canal, for which the rate is established in Section

10 3.08(D) hereof.

11 (1) If the Authority delivers Water that does not meet the standards for

12 Quality Water either (a) to the Points of Connection at the facilities described in

13 Section 3.03(D) hereof, or (b) at other Points of Connection with the express

14 acknowledgment and consent of the receiving Member Government, the rate

15 charged for such Water shall be reduced to reflect the Member Government's

16 Actual Direct Cost to perform the additional treatment required to meet the

17 standards for Quality Water. Any facilities and processes required to perform the

18 additional treatment shall be consistent with generally accepted engineering

19 guidelines.

20 (2) If a Member Government requests the Authority to provide any other

21 treatment beyond that necessary to meet Quality Water standards and the Authority

22 agrees to provide such additional treatment, in its sole discretion, the rate charged










1 to such Member Government shall be increased to reflect the Authority's Actual

2 Direct Cost to provide such additional treatment.

3 (3) Credits received by a Member Government in consideration of its

4 conveyance of Transferred Assets will be applied to reduce the cost of purchasing

5 Quality Water in equal monthly installments over a thirty-year period, assuming that

6 such credits bear interest, compounded semiannually, at the rate borne by any

7 Obligations issued by the Authority to finance a cash acquisition of Transferred

8 Assets. If no Obligations are issued to finance a cash acquisition of Transferred

9 Assets, credits shall accrue interest, compounded semiannually, at the rate borne

10 by Obligations issued by the Authority to refund its outstanding Capital

11 Improvement Revenue Bonds, Series 1979, Refunding Revenue Bonds Series

12 1985, Refunding Revenue Bonds, Series 1989A, Capital Improvement Revenue

13 Bonds, Series 19898, Refunding Revenue Bonds, Series 1992, Refunding

14 Revenue Bonds, Series 1995, Revenue Note, Series 1997, Cypress Creek Capital

15 Lease Obligation, Starkey Wellfield Capital Lease Obligation, and Series 1991

16 Revenue Notes.

17 (B) The rate for the sale of Quality Water to Member Governments shall be

18 established for each Fiscal Year in the Authority's annual budget. Except as provided in

19 Section 3.04(C) hereof, the rate shall not be increased during the Fiscal Year.

20 (C) If the Authority is required to increase the rate by the terms of the Financing

21 Documents, notice shall be provided by registered mail to each Member Government. The

22 notice shall include the proposed new rate and identify the time, date and place at which










1 the Board intends to approve the increase. Any increase to the rate shall take effect on

2 the date specified by the Board, which shall not be earlier than the sixtieth day following

3 its adoption.

4 SECTION 3.05. MASTER WATER SUPPLY CONTRACT. Upon execution of

5 this Agreement, the Authority and each Member Government shall enter into the Master

6 Water Supply Contract, in the form attached hereto as Appendix B, which shall become

7 effective upon satisfaction of the conditions described in Sections 6.03(A) and (D) hereof.

8 SECTION 3.06. ISOLATED WATER SUPPLY FACILITIES.

9 (A) If a new development within the jurisdiction of a Member Government cannot

10 be served on an economically feasible basis with Quality Water supplied by the Authority

11 because of the distance between the development and the Member Government's closest

12 transmission facility, the Member Government may acquire or construct a Water Supply

13 Facility consisting of one or more withdrawal points with a total capacity sufficient to serve

14 the development, but in no event more than 1 mgd (on an annual average basis) for such

15 purpose, upon compliance with the requirements set forth in this Section 3.06.

16 (1) The Member Government shall provide information demonstrating that

17 the area in question cannot be served with Quality Water supplied by the Authority

18 on an economically feasible basis. Within ninety days of its receipt of the

19 information, the Authority may elect to acquire or construct Water Supply Facilities

20 in a location that will provide service on an economically feasible basis.

21 (2) If no election is made within the ninety day period, the Member

22 Government may proceed with acquisition or construction and shall own and










1 operate the Water Supply Facility, subject to the Authority's option at any time to

2 acquire such Water Supply Facility from the Member Government. If the Authority

3 elects to exercise its option, the purchase price shall be equal to the Member

4 Government's Actual Direct Cost to acquire and construct the Water Supply Facility.

5 (B) The parties acknowledge that Pasco applied to SWFWMD in April 1996 for

6 a Water use permit (applications 20025.06 and 2011480) to withdraw Water at an average

7 annual rate of 8 mgd from a new Water Supply Facility consisting of 4 new wells and

8 specified existing wells located near the Cypress Creek and Cypress Bridge Wellfields.

9 Within thirty days of the date on which the conditions described in Sections 6.03(A) and

10 (D) hereof have been satisfied, Pasco may modify its permit application to eliminate the

11 new Water Supply Facility. If the permit application is not modified within the thirty-day

12 period, the Authority shall have a sixty-day period to either determine that the proposed

13 Water Supply Facilities are not required to meet the Member Governments' needs, or elect

14 to assume responsibility for construction, ownership and operation of the Water Supply

15 Facility. If no determination or election is made within the sixty-day period, Pasco may

16 proceed with construction and shall own and operate the Water Supply Facility, subject

17 to the Authority's purchase option described in Section 3.06(B)(3) hereof.

18 (1) If the Authority determines that the proposed Water Supply Facilities

19 are not required to meet the Member Governments' needs, Pasco agrees to

20 withdraw its Water use permit application.

21 (2) If the Authority elects to construct, own and operate the Water Supply

22 Facility, any plans, permits and specifications for construction, and the land upon










1 which the Water Supply Facility is to be located, will be transferred to the Authority

2 as follows:

3 (a) Pasco will transfer its rights to any plans and specifications to

4 the Authority upon reimbursement by the Authority of Pasco's Actual Direct

5 Cost therefore. From time to time and upon receipt of a written request from

6 the Authority, Pasco shall assign in writing to the Authority all rights which

7 Pasco may then possess against (A) any parties who prepared the plans and

8 specifications for the Water Supply Facility and (B) all contractors,

9 subcontractors and material suppliers for the Water Supply Facility,

10 reserving to Pasco the right to subsequently prosecute any claims against

11 said parties that may arise as a result of any claims, action, loss or damage

12 sustained by Pasco arising out of any of the plans and specifications for the

13 Water Supply Facility or construction of the Water Supply Facility.

14 (b) Pasco and the Authority will make joint application for transfer

15 of any Environmental Permits.

16 (c) The land upon which the Water Supply Facility is to be located

17 shall be appraised by two independent appraisers acceptable to the

18 Authority and Pasco in their reasonable judgment, and the Authority will

19 purchase the property upon payment of an amount equal to the average of

20 the two appraised values.

21 (3) If the Authority fails to determine that the proposed Water Supply

22 Facilities are not required to meet the Member Governments' needs and does not










1 elect to construct, own and operate the Water Supply Facility, the Authority shall

2 have the option at any time to acquire such Water Supply Facility from Pasco. If

3 the Authority elects to exercise its option, the purchase price shall be equal to

4 Pasco's Actual Direct Cost to acquire and construct such Water Supply Facility.

5 SECTION 3.07. WALSINGHAM FACILITY. The Member Governments

6 acknowledge and agree that Pinellas shall be permitted to contract with Permasep, L.L.C.

7 to acquire the Water produced at Permasep, LL.C.'s proposed Walsingham reverse

8 osmosis Water treatment plant, which will have a proposed average annual production

9 capacity up to 10 mgd. It is understood and agreed that the location of the project may be

10 subject to change.

11 (A) Pinellas hereby grants an option to the Authority for purchase of all Water

12 available to Pinellas from the Walsingham facility. Pinellas shall provide notice to the

13 Authority not less than ninety days prior to the date on which the Walsingham facility will

14 be placed in service. The notice will include (1) the date on which the Walsingham facility

15 will begin to produce Water, (2) all available information regarding the quality of Water to

16 be produced, and (3) the cost (or method of determining the cost) at which Pinellas has

17 agreed to purchase the Water. On or prior to the initial production date specified in the

18 notice, the Authority may exercise its option to purchase the Water. This option shall

19 expire if not exercised by the Authority within sixty days of the notice.

20 (B) Upon timely exercise of the option, the Authority shall purchase Water

21 produced at the Walsingham facility from Pinellas at the same price at which Pinellas

22 purchases the Water from Permasep, L.L.C. If permitted under the terms of Pinellas's










1 agreement with Permasep, L.L.C. and upon agreement among Pinellas, Permasep, L.L.C.

2 and the Authority, the right to purchase Water directly from the Walsingham facility may

3 be assigned by Pinellas to the Authority.

4 (C) It is understood and agreed that any Water purchased by the Authority from

5 the Walsingham facility will be delivered directly to Pinellas under the Master Water

6 Supply Contract and that the rate payable by Pinellas to the Authority pursuant to Section

7 3.04 hereof may be more or less than the rate at which the Authority purchases the Water

8 from Pinellas or Permasep, L.L.C.

9 SECTION 3.08. SURFACE WATER SOURCES.

10 (A) The parties acknowledge that Tampa's historical use of surface Water

11 sources constitutes a special circumstance justifying an exception to the exclusivity

12 requirements of Section 3.02 hereof. In recognition of this special circumstance, the

13 parties agree to

14 (1) reserve Tampa's existing permitted capacity for withdrawals from the

15 Hillsborough River (82 mgd average day, 92 mgd peak month and 104 mgd

16 maximum day). Withdrawals from Sulphur Springs (5 mgd average day, 10 mgd

17 peak month and 20 mgd maximum day) and the Tampa Bypass Canal (20 mgd

18 average day and 40 mgd maximum day) have also been permitted as augmentation

19 quantities for the Hillsborough River in order to facilitate Tampa's withdrawals from

20 the Hillsborough River at the permitted 82 mgd average day, 92 mgd peak month

21 and 104 mgd maximum day rates;










1 (2) protect Tampa's priority access to the Tampa Bypass Canal as

2 described in Section 3.08(D) hereof; and

3 (3) permit the Authority, on behalf of the region, to access Hillsborough

4 River and Tampa Bypass Canal surface Water sources during High Flow Periods,

5 as described in Section 3.08(D) hereof; provided however, that

6 (4) after the Authority has satisfied its need for Water from the

7 Hillsborough River during High Flow Periods, Tampa may increase its rates of

8 withdrawal up to 142 mgd peak month and 142 mgd maximum day, pursuant to

9 3.08(C) hereof, when such quantities are available and permitted for Tampa's use.

10 It is understood and agreed that Tampa's exception to the exclusivity requirements of

11 Section 3.02 hereof is limited to the quantities described in Sections 3.08(A)(1) and

12 3.08(A)(4) and the use of Reclaimed Water, as set forth in Section 3.09 hereof.

13 (B) Tampa shall continue meeting a portion of its Water needs from surface

14 Water sources, in the manner provided herein. Notwithstanding any other provisions of

15 this Agreement to the contrary, the Authority's obligation to meet Tampa's Water needs

16 shall be reduced by the amount of Water that can be derived from Tampa's use of such

17 surface Water sources. It is understood and agreed that the Authority's current Water

18 Supply Facilities and Master Water Plan do not contemplate the need to permanently

19 replace the quantity of Water that Tampa is currently permitted to withdraw from surface

20 Water sources, as set forth in Section 3.08(A)(1) hereof. However, upon the occurrence

21 of an environmental or physical catastrophe that impairs Tampa's use of the Hillsborough

22 River Reservoir, the Tampa Bypass Canal or Sulphur Springs (it being understood that an









4
1 environmental or physical catastrophe excludes regulatory actions unrelated to specific

2 events), Tampa shall request and the Authority shall assist Tampa with its unanticipated

3 need for additional Quality Water as follows:

4 (1) the Authority agrees to seek an emergency increase in all

5 interconnected regional system permits during such an emergency period;

6 (2) subject only to the physical limitations of the Authority's conveyance

7 system and Tampa's receiving facilities, all Quality Water not required to meet the

8 other Member Governments' needs will be delivered to Tampa; and

9 (3) the Authority will use its best efforts to increase its supply of Quality

10 Water to meet Tampa's Quality Water needs.

11 It is understood and agreed that the foregoing measures may not compensate for the

12 entire shortfall.

13 (C) Tampa will continue to hold its existing permit to withdraw Water from the

14 Hillsborough River and Sulphur Springs at the quantities set forth in Section 3.08(A)(1)

15 hereof. After the Authority has received a water use permit or permits to access

16 Hillsborough River and Tampa Bypass Canal surface Water sources during High Flow

17 Periods for regional purposes, Tampa may seek an increase in its rates of withdrawal up

18 to 142 mgd peak month and 142 mgd maximum day; provided however, that the proposed

19 increase by Tampa shall not reduce the quantities available to the Authority for the region

20 under the aforementioned regional water use permit or permits. If for any reason the

21 Authority is not granted the aforementioned permit or permits by December 31, 2010,

22 Tampa may apply for an increase in its rates of withdrawal from the Hillsborough River










1 Reservoir. Additionally, after the Authority's permitted withdrawals for regional use have

2 been met, Tampa may seek an increase in the annual average withdrawal from the

3 Hillsborough River Reservoir to satisfy environmental regulatory needs. The Authority

4 agrees to support renewal for at least a 20 year period, pursuant to existing statutory

5 guidelines, of Tampa's existing permit for the withdrawal of such quantities and the other

6 Member Governments agree not to oppose the renewal of said permit. Tampa has the

7 right to manage and use the Hillsborough River and the Tampa Bypass Canal as an

8 integrated system as its primary sources of supply in preference to the Quality Water

9 supplied by the Authority. Management of the Hillsborough River Reservoir and the

10 Tampa Bypass Canal will be consistent with the current operations as identified in

11 subsections (1), (2) and (3) of Section 3.08(D) hereof or as otherwise modified in the

12 comprehensive management plans provided for in Section 3.08(G) hereof.

13 (D) The Authority will maintain ownership of the Tampa Bypass Canal pumping

14 facility and will be sole permitted on Water use permits for the Tampa Bypass Canal.

15 Tampa agrees to support the Authority's application to become sole permitted provided the

16 City's current operating procedures are not modified or restricted. Tampa is granted

17 priority for delivery of Water from the Tampa Bypass Canal to augment the Hillsborough

18 River Reservoir up to 20 mgd on an average annual basis and up to 40 mgd on a

19 maximum daily basis, as set forth in subsections (1) and (2) of this Section 3.08(D). It is

20 mutually understood that the Tampa Bypass Canal may be incapable of sustaining

21 withdrawal rates up to 40 mgd under certain naturally occurring hydrologic conditions. As

22 such the 40 mgd maximum day quantity represents a quantity that will be delivered for










1 augmentation of the Hillsborough Reservoir only as available from the middle pool of the

2 Tampa Bypass Canal. Notwithstanding the provisions of Section 3.04 hereof, the rate

3 charged to Tampa for Water provided through the Tampa Bypass Canal pumping facility

4 will be equal to the Authority's direct cost and Allocated Overhead. In the event that

5 Authority withdrawals have precluded Tampa from obtaining its needed share from the

6 Tampa Bypass Canal, (up to 20 mgd annual average daily and 40 mgd maximum day) the

7 Authority shall supply Water to Tampa to compensate for any shortfall at the same rate

8 Tampa would have paid for Water delivered from the Tampa Bypass Canal to the

9 Hillsborough River Reservoir.

10 (1) The Authority's Hamey Pumping Station on the Tampa Bypass Canal

11 shall augment the Hillsborough River Reservoir within the permitted quantity range

12 specified in Section 3.08(C) hereof when the draft from Tampa's Hillsborough River

13 Treatment Plant exceeds the flow in the Hillsborough River as measured at the

14 Morris Bridge Hillsborough River Flow gauge and the Hillsborough River Reservoir

15 stage is below 22.5 feet MSL as measured at the Hillsborough River Reservoir dam.

16 (2) The Authority may pump the lower pool of the Tampa Bypass Canal

17 at any time. Authority withdrawals from the middle pool of the Tampa Bypass Canal

18 for regional use shall not be made when augmentation of the Hillsborough

19 Reservoir from the Tampa Bypass Canal is ongoing. In addition, Authority

20 withdrawals from the middle pool for regional use shall be in conformance with the

21 comprehensive management plan provided for in Section 3.08(G) hereof, which

22 may include the Tampa Water Resource Recovery Project.










1 (3) The Authority may divert withdrawals from the Hillsborough River to

2 either or both of the Tampa Bypass Canal or the Hillsborough River Water

3 Treatment Facility for use by the region during High Flow Periods.

4 (E) The Authority shall not apply for permits to withdraw Water from the

5 Hillsborough River that are in conflict with Tampa's use of the Hillsborough River as set

6 forth in Section 3.08(A) hereof. Tampa may exercise Host Member Government rights

7 pursuant to Section 3.13 hereof to contest any such permit application. The Authority may

8 apply for either a modification of the existing water use permit or an additional water use

9 permit to allow its withdrawal of Water from the Tampa Bypass Canal to serve all of the

10 Member Governments; provided, however, that any such application shall not modify or

11 restrict Tampa's priority for delivery of Water from the Tampa Bypass Canal, as described

12 in Section 3.08(D) hereof. Tampa may exercise Host Member Government rights pursuant

13 to Section 3.13 hereof to contest any such permit application.

14 (F) The Morris Bridge Wellfield will be conveyed to the Authority, as required by

15 Section 5.03 hereof. Tampa agrees to support transfer of the existing water use permit to

16 the Authority and the renewal of such permit at the current permitted quantities of

17 withdrawal (15.5 mgd average day, 27 mgd peak month and 30 mgd maximum day);

18 provided however, that Tampa may exercise Host Member Government rights pursuant to

19 Section 3.13 hereof to contest any such permit application.

20 (G) The Authority and Tampa will work in cooperation with SWFWMD to develop

21 a unanimously agreed upon comprehensive management plan for the Hillsborough River,

22 the Tampa Bypass Canal, Sulphur Springs and the Morris Bridge Wellfield.










1 (H) Tampa shall have the right to continue its ongoing studies and

2 implementation of aquifer storage and recovery. It will remain Tampa's option as to

3 whether or not to continue its aquifer storage and recovery programs at such time as the

4 Authority can provide additional surface water to the region and Tampa.

5 (I) Tampa and the Authority agree to amend the Agreement for New Water

6 Source Funding between the West Coast Regional Water Supply Authority and the City

7 of Tampa for the TWRRP. The Authority shall pay Tampa's local share of the TWRRP.

8 Tampa will administer the federal funding for the TWRRP as well as its design,

9 construction and operations. If this project is selected by the Authority, the Authority and

10 Tampa shall enter into an operations agreement whereby Tampa is paid for operating the

11 project. The Authority will administer SWFWMD funding for the Hillsborough Bay

12 Resource Exchange Project. The SWFWMD funding will be apportioned between three

13 main elements of the project proportionate to their design and construction costs. The

14 Authority will administer the design, construction and operations of the surface water

15 treatment plant.

16 SECTION 3.09. RECLAIMED WATER. Except as provided in Section 3.08(1),

17 the Member Governments shall retain the right to develop, own, and/or operate facilities

18 for Reclaimed Water.

19 SECTION 3.10. CLEARWATER FACILITIES. Pinellas may construct Water

20 Supply Facilities using reverse osmosis or other technology to replace facilities currently

21 operated by the City of Clearwater upon compliance with all of the following requirements:










1 (A) The plans, specifications and permits for construction of the Water Supply

2 Facility and an estimated operating cost projection shall be provided to the Authority.

3 Within ninety days of its receipt thereof, the Authority may elect to assume responsibility

4 for construction, ownership and operation of the Water Supply Facility. If no election is

5 made within the ninety day period, Pinellas may proceed with construction and shall own

6 and operate the Water Supply Facility, subject to the Authority's purchase option described

7 in Section 3.10(C) hereof.

8 (B) If the Authority elects to construct, own and operate the Water Supply

9 Facility, the plans, permits and specifications for construction, and the land upon which the

10 Water Supply Facility is to be located, will be transferred to the Authority as follows:

11 (1) Pinellas will transfer its rights to the plans and specifications to the

12 Authority upon reimbursement by the Authority of Pinellas' Actual Direct Cost

13 therefore. From time to time and upon receipt of a written request from the Authority,

14 Pinellas shall assign in writing to the Authority all rights which Pinellas may then

15 possess against (A) any parties who prepared the plans and specifications for the

16 Water Supply Facility and (B) all contractors, subcontractors and material suppliers

17 for the Water Supply Facility, reserving to Pinellas the right to subsequently

18 prosecute any claims against said parties that may arise as a result of any claims,

19 action, loss or damage sustained by Pinellas arising out of any of the plans and

20 specifications for the Water Supply Facility or construction of the Water Supply

21 Facility.










1 (2) The Authority and Pinellas will make joint application for transfer of

2 the Environmental Permits.

3 (3) The land upon which the Water Supply Facility is to be located shall

4 be appraised by two independent appraisers acceptable to the Authority and

5 Pinellas in their reasonable judgment, and the Authority will purchase the property

6 upon payment of an amount equal to the average of the two appraised values.

7 (C) If the Authority declines to construct, own and operate the Water Supply

8 Facility, the Authority shall have the option at any time to acquire such Water Supply

9 Facility from Pinellas. If the Authority elects to exercise its option, the purchase price shall

10 be equal to Pinellas' Actual Direct Cost to acquire and construct such Water Supply

11 Facility.

12 SECTION 3.11. NOTICE OF SERVICE DISRUPTIONS. The Authority shall

13 provide notice to the Member Governments not less than forty-eight hours prior to closing

14 any Water Supply Facility for scheduled maintenance or repair. Upon the occurrence of

15 any unforseen mechanical, equipment or other failure of a Water Supply Facility, the

16 Authority shall provide notice to the Member Governments that is reasonable under the

17 circumstances.

18 SECTION 3.12. PERMITS AND LICENSES.

19 (A) The Authority shall make timely application for all Environmental Permits

20 required to meet the Quality Water needs of the Member Governments in such a manner

21 as will give priority to reducing adverse environmental effects upon the areas from which

22 Water is withdrawn, supplied or otherwise produced. The Authority shall provide the









1 Member Governments with notice of all preapplication meetings with SWFWMD or other

2 regulatory agencies and shall also provide the Member Governments, upon request, with

3 copies of all applications, including modification or renewal applications, supplemental or

4 clarifying information requested by SWFWMD or other regulatory agencies, and the

5 technical data and basis for such applications and filings. All applications and

6 amendments to applications shall be approved by the Board before filing with SWFWMD

7 or other regulatory agencies.

8 (B) It is hereby stipulated and agreed that only a Host Member Government, in

9 its individual capacity, has a substantial interest in any application made by the Authority

10 for the issuance, modification or renewal of an Environmental Permit necessary or

11 convenient to the acquisition, construction or operation of a Water Supply Facility. All

12 disputes between a Host Member Government and the Authority related to any Water

13 Supply Facility shall be resolved in a single arbitration proceeding initiated pursuant to

14 Section 3.13 hereof. All other Member Governments hereby waive their individual right

15 to participate directly in disputes related to any application made by the Authority for the

16 issuance, modification or renewal of an Environmental Permit necessary or convenient to

17 the acquisition, construction or operation of a Water Supply Facility, and agree to

18 participate solely through actions taken by the Authority.

19 (C) The Authority shall operate its Water Supply Facilities in compliance with the

20 terms and conditions of all Environmental Permits. If a Member Government asserts that

21 the Authority is not in compliance with the terms and conditions of an Environmental Permit

22 and the issue remains unresolved following completion of the dispute resolution procedure










1 set forth in Section 6.06 hereof, the Member Government may initiate a circuit court action

2 against regulatory agencies or the Authority pursuant to Section 403.412(2), Florida

3 Statutes. Except as provided in this Section 3.12(C), all Member Governments, including

4 Host Member Governments, hereby waive their individual right to participate directly in any

5 enforcement action related to Environmental Permits necessary or convenient to the

6 acquisition, construction or operation of the Authority's Water Supply Facilities and agree

7 to participate solely through actions taken by the Authority.

8 (D) Notwithstanding this Section 3.12 or any other provision of this Agreement

9 to the contrary, the Member Governments shall continue to have full standing in and to all

10 proceedings relating in any way to its Transferred Assets or to any Authority Water Supply

11 Facility to which it is currently a permitted and/or permit applicant, including but not limited

12 to (1) current permit renewal administrative proceedings and any subsequent appeal

13 thereof, whether judicial, administrative or quasi-judicial in nature, and (2) any proceedings

14 arising out of or related to such permit renewal proceedings; provided however, that upon

15 satisfaction of the conditions described in Sections 6.03(A) and (D) hereof, the Authority

16 shall be substituted in such proceedings for the Member Governments and all other

17 Member Governments shall dismiss or otherwise withdraw from such proceedings;

18 provided however, that to the extent, if any, that such substitution is not possible or does

19 not provide the Authority with the same rights in such proceedings as the Member

20 Governments would otherwise have, then such substitution shall not occur. In addition,

21 Section 3.13 hereof, relating to Host Member Government dispute resolution, shall not be

22 applicable to proceedings described in this Section 3.12(D).










1 (E) It is expressly agreed that no Member Government shall fund the

2 participation of any third-party in an administrative or judicial challenge to the matters

3 described in this Section 3.12; provided however, that this Section 3.12(E) shall not apply

4 to EPC unless EPC violates the terms of the EPC Agreement.

5 (F) If SWFWMD issues a Consolidated Permit and a condition of the

6 Consolidated Permit requires the Authority to file reports on conservation, per capital Water

7 use, reuse or similar matters requiring information from the Member Governments, the

8 Member Governments agree to supply the Authority with data, reports and other

9 information that will enable the Authority to comply with its reporting requirements on a

10 timely basis.

11 SECTION 3.13. HOST MEMBER GOVERNMENT DISPUTE RESOLUTION.

12 (A) If any Host Member Government opposes an Authority application for the

13 issuance, modification or renewal of any Environmental Permit necessary or convenient

14 to the acquisition, construction or operation of a Water Supply Facility, such Host Member

15 Government shall notify the Authority in writing within thirty days of the date on which the

16 Board approves the application. A Host Member Government may oppose the quantity of

17 withdrawal or may oppose the application on a basis other than the quantity of withdrawal.

18 If a Host Member Government opposes only the quantity of withdrawal, the notice shall

19 specify the quantity acceptable to the Host Member Government. Following the receipt

20 of any such notice, a binding arbitration shall be conducted in accordance with this Section

21 3.13. Any and all issues related to issuance of the Environmental Permit shall be raised

22 and resolved in a single proceeding; provided however, that if the Environmental Permit










1 is a Consolidated Permit and more than one Host Member Government has raised

2 environmental issues affecting property located within its own jurisdiction, a separate

3 arbitration shall be held for each Host Member Government. The Authority will defer filing

4 its application for a period of ninety days following approval by the Board; provided

5 however, that if a notice of opposition is not filed within thirty days of the date on which the

6 Board approves the application, the Authority may file its application at any time thereafter.

7 (1) Arbitrators shall be appointed as follows:

8 (a) If there is a single Host Member Government, the Authority and

9 the Host Member Government each shall appoint a person as arbitrator

10 within sixty days of the date on which the Board approves the application.

11 Each appointment shall be signified in writing to the counter-party and the

12 arbitrators so appointed, within ten days of their appointment, shall appoint

13 a third arbitrator, who shall chair the panel. If the arbitrators appointed by

14 the parties are unable to agree upon a third arbitrator, the same shall be

15 appointed by the American Arbitration Association from its qualified panel of

16 arbitrators. If the Authority or the Host Member Government fails to appoint

17 an arbitrator within sixty days of the date on which the Board approves the

18 application, then the arbitrator that has been appointed shall appoint a

19 second arbitrator and the two so appointed shall appoint a third arbitrator to

20 chair the panel. None of the arbitrators shall have a business or other

21 pecuniary relationship with either party, except for payment of the arbitrators'

22 fees and expenses.










1 (b) If there is more than one Host Member Government opposed

2 to the application, the Authority, individually, and the Host Member

3 Governments, collectively, shall each appoint a person as arbitrator within

4 sixty days of the date on which the Board approves the application. Each

5 appointment shall be signified in writing to the other parties and the

6 arbitrators so appointed, within ten days of their appointment, shall appoint

7 a third arbitrator, who shall chair the panel. If the arbitrators appointed by

8 the parties are unable to agree upon a third arbitrator, the same shall be

9 appointed by the American Arbitration Association from its qualified panel of

10 arbitrators. If the Authority, individually, or the Host Member Governments,

11 collectively, fail to appoint an arbitrator within sixty days of the date on which

12 the Board approves the application, then the arbitrator that has been

13 appointed shall appoint a second arbitrator and the two so appointed shall

14 appoint a third arbitrator to chair the panel. None of the arbitrators shall

15 have a business or other pecuniary relationship with any party, except for

16 payment of the arbitrators' fees and expenses.

17 (2) The three arbitrators shall be sworn to perform their duties with

18 impartiality and fidelity. If the Host Member Government opposes the application

19 in its entirety, the arbitrators shall proceed to determine if the application complies

20 with the applicable statutes, rules, and orders governing the application. If the Host

21 Member Government opposes only the quantity of withdrawal, the arbitrators shall

22 proceed to determine the highest quantity of withdrawal that can be permitted in










1 compliance with the applicable statutes, rules, and orders governing the issuance

2 of Water use permit applications. The arbitrators may, at their discretion, and shall,

3 upon written request of a participating Host Member Government or the Authority,

4 engage experts to provide peer review of any scientific and technical studies

5 introduced by the parties. The arbitration hearing shall convene not earlier than 90

6 days and not later than 120 days of the appointment of the chair by the two

7 arbitrators chosen by the parties unless the Host Member Government and the

8 Authority agree to an earlier date. The arbitrators shall render a decision within

9 sixty days of the date on which the arbitration hearing convenes, and such decision

10 shall be in writing and in duplicate, one counterpart thereof to be delivered

11 simultaneously to each of the parties. The decision shall contain findings of fact

12 and conclusions of law and shall be final and binding upon the Authority and all

13 participating Host Member Governments.

14 (3) Except to the extent inconsistent with this Section 3.13(A), the

15 American Arbitration Association standards shall apply to any arbitration

16 proceedings conducted under the provisions of this Section 3.13. Limited discovery

17 shall be allowed in any such arbitration proceeding of up to 25 interrogatories per

18 party (including all subparts), up to ten depositions per party (with a limitation of

19 eight hours per deposition), the exchange of witness and exhibit lists in accordance

20 with a schedule approved by the arbitrators, and any other discovery procedures

21 agreed to by the parties and approved by the arbitrators; provided however, that

22 requests for admission shall not be allowed in any arbitration proceeding. The










1 venue for any such action shall be the county in which the Authority maintains its

2 principal office.

3 (B) The fees, charges and expenses of the arbitrators, any experts engaged by

4 the arbitrators, the respective counsel engaged by the parties, and any witnesses called

5 by the parties shall be paid as follows:

6 (1) If a single Host Member Government opposes the application on a

7 basis other than the quantity of withdrawal and the arbitrators determine that the

8 application complies with the applicable statutes, rules, and orders governing the

9 application, the Host Member Government shall pay or reimburse (a) the fees,

10 charges and expenses of its own counsel and witnesses; (b) the fees, charges and

11 expenses of the arbitrators and any experts engaged by the arbitrators; and (c) the

12 fees, charges and expenses of the Authority's counsel and any witnesses called by

13 the Authority.

14 (2) If a single Host Member Government opposes the application on a

15 basis other than the quantity of withdrawal and the arbitrators determine that the

16 application does not comply with the applicable statutes, rules, and orders

17 governing the application, the Authority shall pay or reimburse (a) the fees, charges

18 and expenses of its own counsel and witnesses; (b) the fees, charges and

19 expenses of the arbitrators and any experts engaged by the arbitrators; and (c) the

20 fees, charges and expenses of the Host Member Government's counsel and any

21 witnesses called by the Host Member Government.










1 (3) If more than one Host Member Government opposes the application

2 on a basis other than the quantity of withdrawal and the arbitrators determine that

3 the application complies with the applicable statutes, rules, and orders governing

4 the application, each Host Member Government shall pay the fees, charges and

5 expenses of its own counsel and witnesses. In addition, each Host Member

6 Government shall pay or reimburse an equal share of (a) the fees, charges and

7 expenses of the arbitrators and any experts engaged by the arbitrators; and (b) the

8 fees, charges and expenses of the Authority's counsel and any witnesses called by

9 the Authority.

10 (4) If more than one Host Member Government opposes the application

11 on a basis other than the quantity of withdrawal and the arbitrators determine that

12 the application does not comply with the applicable statutes, rules, and orders

13 governing the application, the Authority shall pay or reimburse (a) the fees, charges

14 and expenses of its own counsel and witnesses; (b) the fees, charges and

15 expenses of the arbitrators and any experts engaged by the arbitrators; and (c) the

16 fees, charges and expenses of the Host Member Governments' counsel and any

17 witnesses called by the Host Member Governments.

18 (5) If a single Host Member Government opposes only the quantity of

19 withdrawal and the quantity established by the arbitrators is within the Success

20 Range of the Authority and the Failure Range of the Host Member Government, the

21 Host Member Government shall pay or reimburse (a) the fees, charges and

22 expenses of its own counsel and witnesses; (b) the fees, charges and expenses of










1 the arbitrators and any experts engaged by the arbitrators; and (c) the fees,

2 charges and expenses of the Authority's counsel and any witnesses called by the

3 Authority.

4 (6) If a single Host Member Government opposes only the quantity of

5 withdrawal and the quantity established by the arbitrators is within the Success

6 Range of the Host Member Government and the Failure Range of the Authority, the

7 Authority shall pay or reimburse (a) the fees, charges and expenses of its own

8 counsel and witnesses; (b) the fees, charges and expenses of the arbitrators and

9 any experts engaged by the arbitrators; and (c) the fees, charges and expenses of

10 the Host Member Government's counsel and any witnesses called by the Host

11 Member Government.

12 (7) If a single Host Member Government opposes only the quantity of

13 withdrawal and the quantity established by the arbitrators is within the Middle

14 Range of the Authority and the Host Member Government, the Authority and the

15 Host Member Government shall each pay the fees, charges and expenses of its

16 own counsel and witnesses. In addition, the Authority and the Host Member

17 Government shall pay or reimburse one-half of the fees, charges and expenses of

18 the arbitrators and any experts engaged by the arbitrators.

19 (8) If more than one Host Member Government opposes only the quantity

20 of withdrawal, the amount to be paid or reimbursed by each party shall be

21 determined as follows:










(a) equal shares of (i) the fees, charges and expenses of the

arbitrators and any experts engaged by the arbitrators, and (ii) the fees,

charges and expenses of the Authority's counsel and any witnesses called

by the Authority, shall be attributed to hypothetical separate arbitrations

between the Authority and each Host Member Government; and

(b) the provisions for payment set forth in Sections 3.13(B)(5)

through 3.13(B)(7) hereof shall be applied to each hypothetical separate

arbitration.

(C) Except as provided in this Section 3.13(C), the Authority will amend or

withdraw its Environmental Permit application to conform with the arbitrators' decision.

(1) If amendment or withdrawal of the Environmental Permit application

would result in a Production Failure, the Authority shall not be required to amend

or withdraw the Environmental Permit until additional Water production facilities

have been placed in service to supply a quantity of additional Quality Water that will

permit compliance with the arbitrators' decision without creating a Production

Failure. The Authority shall immediately initiate or accelerate its preparation of

Water use permit applications, final design and construction of such additional

Water production facilities. If the Environmental Permit is a Consolidated Permit

with two or more separate Host Member Government arbitrations, an additional

consolidated arbitration shall be conducted for the purpose of determining the

extent to which the production from individual Water Supply Facilities will be

reduced, without resulting in a Production Failure, prior to the date on which the










1 additional Water production facilities are placed in service. The Authority and the

2 Host Member Government shall each pay the fees, charges and expenses of its

3 own counsel and witnesses for the consolidated arbitration. In addition, the

4 Authority and the Host Member Government shall pay or reimburse one-half of the

5 fees, charges and expenses of the arbitrators and any experts engaged by the

6 arbitrators for the consolidated arbitration.

7 (2) If amendment or withdrawal of the Environmental Permit application

8 would reduce the combined production from the Partnership Plan Wellfields, on an

9 average annual basis, to a quantity less than 90 mgd prior to December 31, 2008,

10 the Authority shall not be required to amend or withdraw the Environmental Permit

11 unless the acquisition or construction of additional Water production facilities is

12 approved by all nine Directors. If the Environmental Permit is a Consolidated

13 Permit with two or more separate Host Member Government arbitrations, an

14 additional consolidated arbitration shall be conducted for the purpose of

15 determining the extent to which the production from individual Water Supply

16 Facilities will be reduced, without reducing the combined production from the

17 Partnership Plan Wellfields, on an average annual basis, to a quantity less than 90

18 mgd. The Authority and the Host Member Government shall each pay the fees,

19 charges and expenses of its own counsel and witnesses for the consolidated

20 arbitration. In addition, the Authority and the Host Member Government shall pay

21 or reimburse one-half of the fees, charges and expenses of the arbitrators and any

22 experts engaged by the arbitrators for the consolidated arbitration.










1 (D) The Member Governments have established binding arbitration, as described

2 in this Section 3.13, as the sole and exclusive method of resolving all disputes between

3 the Authority and a Host Member Government relating to the issuance, modification or

4 renewal of any Environmental Permit necessary or convenient to the acquisition,

5 construction or operation of a Water Supply Facility.

6 SECTION 3.14. RESOLUTION OF RECLAIMED WATER USE ISSUES.

7 (A) If any Member Government determines that a proposed Reclaimed Water

8 Resource Project will have an adverse effect upon the public health and safety of its retail

9 and wholesale customers, such Member Government shall notify the Authority in writing

10 within thirty days of the date on which the Board approves the Reclaimed Water Resource

11 Project; provided however, that any notice in connection with the TWRRP shall be

12 provided within thirty days of the date on which the Board accepts the ecosystem team

13 permit or within thirty days of the date on which the conditions described in Sections

14 6.03(A) and (D) hereof have been satisfied, whichever occurs later. Following the receipt

15 of any such notice, a binding arbitration shall be conducted in accordance with this Section

16 3.14. Any and all issues related to the Authority's ownership and operation of the

17 proposed Reclaimed Water Resource Project shall be raised and resolved in a single

18 proceeding. If the Host Member Government has challenged any Reclaimed Water

19 Resource Project pursuant to Section 3.13 hereof, the arbitration authorized by this

20 Section 3.14 shall be consolidated with the arbitration conducted pursuant to Section 3.13

21 hereof. The Authority will defer filing its application for a period of ninety days following

22 approval by the Board; provided however, that if a notice of opposition is not filed within










1 thirty days of the date on which the Board approves the application, the Authority may file

2 its application at any time thereafter. The Authority will amend or withdraw its application

3 to conform with the arbitrators' decision.

4 (1) Arbitrators shall be appointed as follows:

5 (a) If there is a single Member Government, the Authority and the

6 Member Government each shall appoint a person as arbitrator within sixty

7 days of the date on which the Board approves the Reclaimed Water

8 Resource Project. Each appointment shall be signified in writing to the

9 counter-party and the arbitrators so appointed, within ten days of their

10 appointment, shall appoint a third arbitrator, who shall chair the panel. If the

11 arbitrators appointed by the parties are unable to agree upon a third

12 arbitrator, the same shall be appointed by the American Arbitration

13 Association from its qualified panel of arbitrators. If the Authority or the

14 Member Government fails to appoint an arbitrator within sixty days of the

15 date on which the Board approves the application, then the arbitrator that

16 has been appointed shall appoint a second arbitrator and the two so

17 appointed shall appoint a third arbitrator to chair the panel. None of the

18 arbitrators shall have a business or other pecuniary relationship with either

19 party, except for payment of the arbitrators' fees and expenses.

20 (b) If there is more than one Member Government opposed to the

21 Reclaimed Water Resource Project, the Authority, individually, and the

22 Member Governments, collectively, shall each appoint a person as arbitrator










1 within sixty days of the date on which the Board approves the application.

2 Each appointment shall be signified in writing to the other parties and the

3 arbitrators so appointed, within ten days of their appointment, shall appoint

4 a third arbitrator, who shall chair the panel. If the arbitrators appointed by

5 the parties are unable to agree upon a third arbitrator, the same shall be

6 appointed by the American Arbitration Association from its qualified panel of

7 arbitrators. If the Authority, individually, or the Member Governments,

8 collectively, fail to appoint an arbitrator within sixty days of the date on which

9 the Board approves the application, then the arbitrator that has been

10 appointed shall appoint a second arbitrator and the two so appointed shall

11 appoint a third arbitrator to chair the panel. None of the arbitrators shall

12 have a business or other pecuniary relationship with any party, except for

13 payment of the arbitrators' fees and expenses.

14 (2) The three arbitrators shall be sworn to perform their duties with

15 impartiality and fidelity. The arbitrators shall proceed to determine if the proposed

16 Reclaimed Water Resource Project threatens the public health and safety of the

17 Member Governments' retail and wholesale customers. The arbitrators may, at

18 their discretion, and shall, upon written request of the Member Government or the

19 Authority, engage experts to provide peer review of any scientific and technical

20 studies introduced by the parties. The arbitration hearing shall convene not earlier

21 than 90 days and not later than 120 days of the appointment of the chair by the two

22 arbitrators chosen by the parties unless the Member Government and the Authority










1 agree to an earlier date. The arbitrators shall render a decision within sixty days

2 of the date on which the arbitration hearing convenes, and such decision shall be

3 in writing and in duplicate, one counterpart thereof to be delivered simultaneously

4 to each of the parties. The decision shall contain findings of fact and conclusions

5 of law and-shall be final and binding upon the Authority and the Member

6 Government.

7 (3) Except to the extent inconsistent with this Section 3.14(A), the

8 American Arbitration Association standards shall apply to any arbitration

9 proceedings conducted under the provisions of this Section 3.14. Limited discovery

10 shall be allowed in any such arbitration proceeding of up to 25 interrogatories per

11 party (including all subparts), up to ten depositions per party (with a limitation of

12 eight hours per deposition), the exchange of witness and exhibit lists in accordance

13 with a schedule approved by the arbitrators, and any other discovery procedures

14 agreed to by the parties and approved by the arbitrators; provided however, that

15 requests for admission shall not be allowed in any arbitration proceeding. The

16 venue for any such action shall be the county in which the Authority maintains its

17 principal office.

18 (B) The fees, charges and expenses of the arbitrators, any experts engaged by

19 the arbitrators, the respective counsel engaged by the parties, and any witnesses called

20 by the parties shall be paid as follows:

21 (1) If a single Member Government opposes the Reclaimed Water

22 Resource Project and the arbitrators determine that Reclaimed Water Resource










1 Project does not threaten the public health and safety of the Member Governments'

2 retail and wholesale customers, the Member Government shall pay or reimburse (a)

3 the fees, charges and expenses of its own counsel and witnesses; (b) the fees,

4 charges and expenses of the arbitrators and any experts engaged by the

5 arbitrators; and (c) the fees, charges and expenses of the Authority's counsel and

6 any witnesses called by the Authority.

7 (2) If a single Member Government opposes the Reclaimed Water

8 Resource Project and the arbitrators determine that Reclaimed Water Resource

9 Project does threaten the public health and safety of the Member Governments'

10 retail and wholesale customers, the Authority shall pay or reimburse (a) the fees,

11 charges and expenses of its own counsel and witnesses; (b) the fees, charges and

12 expenses of the arbitrators and any experts engaged by the arbitrators; and (c) the

13 fees, charges and expenses of the Member Government's counsel and any

14 witnesses called by the Member Government.

15 (3) If more than one Member Government opposes the Reclaimed Water

16 Resource Project and the arbitrators determine that Reclaimed Water Resource

17 Project does not threaten the public health and safety of the Member Governments'

18 retail and wholesale customers, each Member Government shall pay the fees,

19 charges and expenses of its own counsel and witnesses. In addition, each Member

20 Government shall pay or reimburse an equal share of (a) the fees, charges and

21 expenses of the arbitrators and any experts engaged by the arbitrators; and (b) the










1 fees, charges and expenses of the Authority's counsel and any witnesses called by

2 the Authority.

3 (4) If more than one Member Government opposes the Reclaimed Water

4 Resource Project and the arbitrators determine that Reclaimed Water Resource

5 Project does not threaten the public health and safety of the Member Governments'

6 retail and wholesale customers, the Authority shall pay or reimburse (a) the fees,

7 charges and expenses of its own counsel and witnesses; (b) the fees, charges and

8 expenses of the arbitrators and any experts engaged by the arbitrators; and (c) the

9 fees, charges and expenses of the Member Governments' counsel and any

10 witnesses called by the Member Governments.

11 (C) The Member Governments have established binding arbitration, as described

12 in this Section 3.14, as the sole and exclusive method of resolving all disputes between

13 the Authority and a Member Government relating to the quality of Water provided from a

14 Reclaimed Water Resource Project.

15 SECTION 3.15. LOCAL LAND USE DECISIONS. In carrying out their

16 statutorily conferred zoning, land use and comprehensive planning powers and

17 responsibilities, the Member Governments shall not restrict or prohibit the use of land for

18 Water supply purposes, including ground Water supply.

19 SECTION 3.16. TAXES, FEES, AND SPECIAL ASSESSMENTS. The Member

20 Governments shall not impose any taxes, fees, or special assessments on Quality Water

21 produced by the Authority for delivery to the Member Governments. This Section 3.16









1 shall not be construed to prohibit any taxes, fees, or special assessments imposed by the

2 Member Governments in connection with the sale of Quality Water to retail customers.

3 SECTION 3.17. PRODUCTION FAILURE. Upon the occurrence of a

4 Production Failure, each affected Member Government shall have the additional rights set

5 forth in this Section 3.17.

6 (A) At its option, each Member Government may enter into standby agreements

7 to purchase Water from suppliers other than the Authority. Member Governments shall

8 accept all Quality Water delivered by the Authority and shall exercise their right to

9 purchase Water from suppliers other than the Authority only in the event of a Shortfall and

10 to the extent of a Shortfall Amount. The term of any such agreement may be extended by

11 the Member Governments until the Authority can demonstrate the ability to supply the

12 Member Government's Quality Water requirement without a Shortfall.

13 (1) If less than all of the Member Governments experience a Shortfall and

14 any purchase agreement entered into in good faith by a Member Government

15 requires payment of a purchase price that exceeds the uniform rate established

16 pursuant to Section 3.04 hereof, the Member Government shall invoice the

17 Authority for amounts actually paid in excess of the uniform rate and the Authority

18 shall reimburse the Member Government for such amounts within 30 days of its

19 receipt of such invoice.

20 (2) Any Member Government experiencing a Shortfall may Wheel Water

21 acquired by the Member Government from suppliers other than the Authority. The










1 Authority may charge a fee in connection with such activity; provided however, that

2 the fee shall not exceed the Authority's Actual Direct Cost.

3 (B) Each Member Government may elect, individually or in combination with

4 other Member Governments, to acquire and construct Water Supply Facilities with a

5 capacity necessary to protect itself against a Shortfall.

6 (1) If a Member Government acquires or constructs a Water Supply

7 Facility pursuant to this Section 3.17(B) and a Shortfall occurs with respect to such

8 Member Government, the Authority shall purchase the Water Supply Facility upon

9 demand of such Member Government. The purchase price shall be equal to the

10 Member Government's Actual Direct Cost to acquire and construct such Water

11 Supply Facilities. Upon receipt of any such demand, the Authority shall use all

12 reasonable efforts to issue Obligations at the earliest practical date in an amount

13 sufficient to fund the purchase price and shall purchase the Water Supply Facility

14 immediately upon issuance of such Obligations.

15 (2) If a Member Government acquiring or constructing a Water Supply

16 Facility pursuant to this Section 3.17(B) elects not to demand its purchase by the

17 Authority upon the occurrence of a Shortfall or if the Authority is unable, after

18 applying all reasonable efforts, to issue Obligations sufficient to purchase the Water

19 Supply Facility, the Authority shall purchase the Quality Water produced at the

20 Water Supply Facility. The Authority and the Member Government shall enter into

21 a water supply agreement including, among others, the following terms:










1 (a) The rate in effect for each Fiscal Year shall be sufficient to pay

2 the Member Government's estimate of its Actual Direct Cost for construction

3 and treatment.

4 (b) All Quality Water produced at the Water Supply Facility shall

5 be delivered to and purchased by the Authority; provided however, that if

6 use of the Quality Water directly by the Member Government would avert a

7 Shortfall in respect of such Member Government, the Member Government

8 shall be entitled to use such Quality Water and Authority's right of purchase

9 shall be reduced by such amount.

10 (c) The Member Government shall maintain accounts and records

11 of its Actual Direct Cost. On or before each January 31, the Member

12 Government shall complete an audit of those accounts and provide a copy

13 to the Authority for review and comment. At its sole expense, the Authority

14 may perform its own audit of the appropriate accounts to support the Quality

15 Water charge. The Authority will notify the Member Government if it

16 chooses to pay for a separate audit.

17 (d) Following the end of each Fiscal Year, an annual adjustment

18 in the rate in effect during that Fiscal Year shall be computed on the basis

19 of the specific Actual Direct Cost incurred by the Member Government in

20 connection with the Quality Water delivered to the Authority during the Fiscal

21 Year then ended.










1 (e) If the audit determines that an overpayment has been made by

2 the Authority, the full amount of the overpayment shall be paid by the

3 Member Government to the Authority in three equal monthly installments, the

4 first of which shall be paid within thirty days of the date on which the Member

5 Government receives the audit. If the audit determines that an

6 underpayment has been made by the Authority, the full amount of the

7 underpayment shall be paid by the Authority to the Member Government in

8 three equal monthly installments, the first of which shall be paid within thirty

9 days of the date on which the Authority receives the audit.

10 SECTION 3.18. REDUCTION OF ENVIRONMENTAL STRESS.

11 (A) On December 15, 1997, the Authority approved an agreement with Tampa

12 that will allow an increase in the quantity of Water that can be purchased by the Authority

13 from Tampa. Upon completion of the Tampa/Hillsborough Interconnect Project, the

14 Authority shall purchase the maximum quantity of Water available from Tampa. Due to

15 Tampa's reliance on surface Water sources, it is understood that Water will only be

16 available from Tampa on a seasonal or otherwise interruptible basis. Subject to the

17 limitations of the Authority's Water delivery system, 65 percent of all Rotational Capacity

18 created by the purchase of Water from Tampa shall be applied immediately, on an

19 average annual basis, to reduce the quantity of Water withdrawn from the Cross Bar

20 Ranch Wellfield and Cypress Creek Wellfield and 35 percent of all Rotational Capacity

21 created by the purchase of Water from Tampa shall be applied immediately, on an

22 average annual basis, to reduce the quantity of Water withdrawn from wellfields located










1 in Hillsborough County. Pasco and Hillsborough acknowledge that this Section 3.18(A)

2 creates an interim preferential reduction in the quantity of Water withdrawn from the Cross

3 Bar Ranch Wellfield, the Cypress Creek Wellfield and wellfields located in Hillsborough

4 County that will be superseded, on a gallon-for-gallon basis, by reductions resulting from

5 the Rotational Capacity and Replacement Capacity created by implementation of the

6 Master Water Plan, as described in Section 3.18(E) hereof.

7 (B) The parties acknowledge that the Master Water Plan has multiple purposes,

8 including: (1) development of a Quality Water supply that is sufficient to meet the current

9 and future needs of the Member Governments, (2) development of Replacement Capacity

10 to reduce the permanent combined production from the Partnership Plan Wellfields, and

11 (3) development of Rotational Capacity that can be used to periodically reduce the

12 withdrawal of Water from Authority wellfields located in environmentally stressed areas.

13 Recognizing the importance of developing Replacement Capacity and Rotational Capacity,

14 the parties agree that the Authority shall make all reasonable efforts to implement a Master

15 Water Plan prior to December 31, 2007, that produces 42.5 mgd of Replacement Capacity,

16 on an average annual basis, and a total of at least 85 mgd of Quality Water, on an average

17 annual basis, that is not available on the date hereof.

18 (C) If the Authority fails to develop 42.5 mgd of Replacement Capacity prior to

19 December 31, 2007, any Member Government may acquire and construct Water Supply

20 Facilities with a production capacity, on an average annual basis, equal to the difference

21 between 42.5 mgd and the Replacement Capacity theretofore created by the Authority.

22 The Water Supply Facilities acquired or constructed pursuant to this Section 3.18(C) shall









4
1 be sold to and purchased by the Authority at a purchase price equal to the Member

2 Government's Actual Direct Cost to acquire and construct such Water Supply Facilities.

3 Upon purchase, such Water Supply Facilities shall be used by the Authority, to the extent

4 necessary, to meet its Replacement Capacity obligation.

5 (D) The Authority and the Member Governments are currently negotiating a

6 partnership agreement with SWFWMD, pursuant to which SWFWMD is expected to

7 provide up to $183,000,000 to be used by the Authority for the development of new

8 alternative Water Supply Facilities and regionally significant transmission pipelines. Upon

9 execution of the partnership agreement and the Authority's receipt of the anticipated

10 funding:

11 (1) by December 31, 2002, the Authority shall reduce the combined

12 production from the Partnership Plan Wellfields to 121 mgd, on an average annual

13 basis (to be measured from December 31, 2002 to December 31, 2003), and

14 maintain production thereafter at or below 121 mgd, on an average annual basis;

15 and

16 (2) by December 31, 2007, the Authority shall reduce the combined

17 production from the Partnership Plan Wellfields to 90 mgd, on an average annual

18 basis (to be measured from December 31, 2007 to December 31, 2008), and

19 maintain production thereafter at or below 90 mgd, on an average annual basis.

'20 If the partnership agreement with SWFWMD imposes the same production limitations and

21 includes provisions for extending the time required to comply with such production









4
1 limitations, the time for compliance with this Section 3.18(D) shall be subject to extension

2 in the same manner as the production limitations imposed by the partnership agreement.

3 (E) Rotational Capacity created by Master Water Plan projects will be used to

4 reduce the quantity of Water withdrawn from wellfields in areas of environmental stress,

5 in accordance with the priorities established in this Section 3.18(E).

6 (1) The Authority shall develop a Wellfield Operations Plan. Subject to

7 the provisions of Section 3.18(E)(2) hereof,. all Rotational Capacity shall be applied

8 in accordance with the wellfield operations plan approved by the Authority.

9 (2) Notwithstanding the provisions of Section 3.18(E)(1) hereof, prior to

10 the date on which the Authority reduces the combined production from the

11 Partnership Plan Wellfields to 121 mgd, on an average annual basis: (a) not less

12 than forty percent of the Rotational Capacity shall be applied, on an average annual

13 basis, to reduce the quantity of Water withdrawn from wellfields located in Pasco

14 County; (b) not less than twenty percent of the Rotational Capacity shall be applied,

15 on an average annual basis, to reduce the quantity of Water withdrawn from

16 wellfields located in Hillsborough County; and (c) not less than ten percent of the

17 Rotational Capacity shall be applied, on an average annual basis, to reduce the

18 quantity of Water withdrawn from wellfields located in Pinellas County. The

19 remaining thirty percent of the Rotational Capacity shall be applied, on an average

20 annual basis, in accordance with the Wellfield Operations Plan.

21 (F) It is expressly acknowledged and agreed by the parties that Rotational

22 Capacity will not be available to reduce the quantity of Water withdrawn from existing










1 wellfields unless the Quality Water needs of the Member Governments have been fully

2 satisfied.

3 (G) The parties acknowledge that the Authority's ability to implement the

4 provisions of this Section 3.18 is subject in all respects to the regulatory power of

5 SWFWMD and other State and federal agencies having jurisdiction over the Authority.

6 SECTION 3.19. IMPACT FEES FOR AUTHORITY FACILITIES. The parties

7 acknowledge that Economic Impact Facilities will have a significant economic impact on

8 the Member Government in which they are. located and agree that the Authority should

9 compensate such Member Governments for the financial loss in accordance with this

10 Section 3.19. Prior to April 1 of each year, the Authority shall make an economic impact

11 payment for each Economic Impact Facility, which shall be computed by multiplying (1) the

12 sum of (a) the actual initial construction cost of the Economic Impact Facility, and (b) the

13 assessed value of the property on which the Economic Impact Facility is located for the

14 last year in which such property was subject to ad valorem taxation, by (2) a factor of

15 .0005; provided however, that the amount payable for any Economic Impact Facility shall

16 not exceed $500,000. If the Economic Impact Facility is located in an unincorporated area

17 or within the corporate limits of a municipality that is not a Member Government, the full

18 payment shall be made to the Member Government county in which the Economic Impact

19 Facility is located. If the Economic Impact Facility is located within the corporate limits of

20 a Member Government municipality, the economic impact payment shall be divided equally

21 between the Member Government county and the Member Government municipality in

22 which the Economic Impact Facility is located.










1
2 ARTICLE IV

3 OBLIGATIONS

4
5 SECTION 4.01. GENERAL AUTHORITY. The Board shall have the power and

6 is hereby authorized to provide, at one time or from time to time in series, for the issuance

7 of Obligations of the Authority to fund the Project Cost of Water Supply Facilities. Other

8 than Obligations described in Section 4.09 hereof, the principal of and interest on each

9 series of Obligations shall be payable from Pledged Funds.

10 SECTION 4.02. TERMS OF THE OBLIGATIONS. The Obligations shall be

11 dated, shall bear interest at such rate or rates, shall mature at such times as may be

12 determined by the Board, and may be made redeemable before maturity, at the option of

13 the Authority, at such price or prices and under such terms and conditions as may be fixed

14 by the Board. Said Obligations shall mature not later than 30 years after their issuance

15 and may, at the option of the Board, bear interest at a variable rate. The Board shall

16 determine the form of the Obligations, the manner of executing such Obligations, and shall

17 fix the denominations of such Obligations, the place or places of payment of the principal

18 and interest, which may be at any bank or trust company within or outside of the State, and

19 such other terms and provisions of the Obligations as it deems appropriate. The

20 Obligations may be sold at public or private sale for such price or prices as the Board shall

21 determine.

22 SECTION 4.03. TEMPORARY OBLIGATIONS. Prior to the preparation of

23 definitive Obligations of any series, the Board may, under like restrictions, issue interim










1 receipts, interim certificates, or temporary Obligations, exchangeable for definitive

2 Obligations when such Obligations have been executed and are available for delivery.

3 The Board may also provide for the replacement of any Obligations which shall become

4 mutilated, destroyed or lost. Obligations may be issued without any other proceedings or

5 the happening of any other conditions or things than those proceedings, conditions or

6 things which are specifically required by this Agreement.

7 SECTION 4.04. ANTICIPATION NOTES. In anticipation of the sale of

8 Obligations, the Board may issue notes and may renew the same from time to time. Such

9 notes may be paid from the proceeds of the Obligations, the Pledged Funds, the proceeds

10 of the notes and such other legally available moneys as the Board deems appropriate.

11 Said notes shall mature within five years of their issuance and shall bear interest at a rate

12 not exceeding the maximum rate provided by law. The Board may issue Obligations or

13 renewal notes to repay the notes. The notes shall be issued in the same manner as the

14 Obligations.

15 SECTION 4.05. TAXING POWER NOT PLEDGED. Obligations issued under

16 the provisions of this Agreement shall not be deemed to constitute a pledge of the faith

17 and credit of the Authority or any Member Government, but such Obligations shall be

18 payable only from Pledged Funds in the manner provided herein and by the Financing

19 Documents. The issuance of Obligations under the provisions of this Agreement shall not

20 directly or indirectly obligate any Member Government to levy or to pledge any form of ad

21 valorem taxation whatever therefore. No holder of any such Obligations shall ever have the

22 right to compel any exercise of the ad valorem taxing power on the part of any Member










1 Government to pay any such Obligations or the interest thereon or to enforce payment of

2 such Obligations or the interest thereon against any property of the Authority, nor shall

3 such Obligations constitute a charge, lien or encumbrance, legal or equitable, upon any

4 property of the Authority, except the Pledged Funds.

5 SECTION 4.06. TRUST FUNDS. Upon issuance of any series of Obligations,

6 the Pledged Funds shall be deemed to be trust funds, to be held and applied solely as

7 provided in the Financing Documents. The Pledged Funds may be invested by the

8 Authority, or its designee, in the manner provided by the Financing Documents. The

9 Pledged Funds upon receipt thereof by the Authority shall be subject to the lien and pledge

10 of the holders of any Obligations or any entity other than the Authority providing credit

11 enhancement on the Obligations.

12 SECTION 4.07. REMEDIES OF HOLDERS. Any holder of Obligations, except

13 to the extent the rights herein given may be restricted by the Financing Documents, may,

14 whether at law or in equity, by suit, action, mandamus or other proceedings, protect and

15 enforce any and all rights under the laws of the State or granted hereunder or under the

16 Financing Documents, and may enforce and compel the performance of all duties required

17 hereunder or under the Financing Documents, to be performed by the Authority.

18 SECTION 4.08. REFUNDING OBLIGATIONS. The Authority may issue

19 Obligations to refund any Obligations then outstanding and provide for the rights of the

20 holders hereof. Such refunding Obligations may be issued in an amount sufficient to

21 provide for the payment of the principal of, redemption premium, if any, and interest on the

22 outstanding Obligations to be refunded.










1 SECTION 4.09. CONDUIT TRANSACTIONS. In addition to the powers granted

2 to the Authority hereunder, including the power to issue Obligations pursuant to this Article

3 IV for the purpose of funding Project Costs of Water Supply Facilities, the Authority may

4 issue Obligations for the principal purpose of loaning the proceeds thereof to a public or

5 private entity, which shall finance or refinance the acquisition and construction of water

6 treatment, production or transmission facilities, including, but not limited to, a desalination

7 facility. Water from such facilities shall be purchased in whole or in part by the Authority

8 for purposes of supplying Quality Water to the Member Governments. Such Obligations

9 shall be secured in such manner as determined by the Board. Such security may include

10 moneys received pursuant to a loan agreement between the Authority and such public or

11 private entity. Such Obligations shall have the terms provided in Section 4.02 hereof.

12 SECTION 4.10. MEMBER GOVERNMENT COOPERATION. Each Member

13 Government shall cooperate with the Authority when the Authority issues Obligations. In

14 such connection, each Member Government and the Authority shall comply with

15 reasonable requests of each other and will, upon request of the Authority: (A) make

16 available general and financial information about itself; (B) consent to publication and

17 distribution of its financial information; (C) certify that its general and financial information

18 is accurate, does not contain any untrue statements of a material fact and does not omit

19 to state a material fact necessary to make the statements in the information, in light of

20 circumstances under which they were made, not misleading; (D) make available certified

21 copies of official proceedings; (E) provide reasonable certifications to be used in a

22 transcript of closing documents; (F) provide and pay for reasonably requested certificates










1 and/or opinions of counsel as to the validity of its actions taken in respect to and the

2 binding effect of this Agreement and the Master Water Supply Contract, title to its Water

3 supply system, pending or threatened litigation which could materially affect its

4 performance hereunder; and (G) assist the Authority in compliance with any continuing

5 disclosure responsibilities associated with the Obligations.











ARTICLE V

TRANSFER OF ASSETS


SECTION 5.01. TRANSFER OF ST. PETERSBURG FACILITIES. St.

Petersburg agrees to convey its interest in the following Transferred Assets to the

Authority at the purchase price indicated below:

Capacity Land Area
Transferred Asset (mad) (Acres) Purchase Price

South Pasco Wellfield 16.90 32 $34,226,973.76
Section 21 Wellfield 12.00 24 24,305,760.25
Cosme Odessa Wellfield 12.00 92 24,443,217.97
42" Transmission Main N/A N/A 11.320.048.02

Total $94,296,000.00

The conveyance of each wellfield will include the production capacity shown in the

foregoing table (priced at $2.00 per gallon) and the amount of property shown in the

foregoing table (four acres surrounding each wellhead priced at $2,000 per acre). In

addition, easements for transmission facilities, easements for monitoring wells, access

easements and restrictions on the remaining wellfield property will be conveyed without

additional consideration. The total purchase price for these Transferred Assets also

includes a $1,000,000 Disinfection Credit. The parties acknowledge and agree that the

Disinfection Credit was negotiated as an integral part of the purchase price for the

foregoing Transferred Assets. A specific description of the Transferred Assets to be

conveyed and the terms and conditions of sale are set forth in the St. Petersburg Transfer










1 Agreement attached as Appendix C. St. Petersburg and the Authority shall be bound by

2 the terms and provisions of the St. Petersburg Transfer Agreement.

3 SECTION 5.02. TRANSFER OF PINELLAS FACILITIES. Pinellas agrees to

4 convey its interest in the following Transferred Assets to the Authority at the purchase

5 price indicated below:

6 Capacity Land Area
7 Transferred Asset (mad) (Acres) Purchase Price
8
9 Eldridge-Wilde Wellfield 35.24 200 $72,876,169.88
10 Cross Bar Ranch Wellfield N/A 68 139.830.12
11
12 Total $73,016,000.00

13 The conveyance of each wellfield will include the production capacity shown in the

14 foregoing table (priced at $2.00 per gallon) and the amount of property shown in the

15 foregoing table (four acres surrounding each wellhead priced at $2,000 per acre). In

16 addition, easements for transmission facilities, easements for monitoring wells, access

17 easements and restrictions on the remaining wellfield property will be conveyed without

18 additional consideration. The total purchase price for these Transferred Assets also

19 includes a $2,000,000 Disinfection Credit. The parties acknowledge and agree that the

20 Disinfection Credit was negotiated as an integral part of the purchase price for the

21 foregoing Transferred Assets. A specific description of the Transferred Assets to be

22 conveyed and the terms and conditions of sale are set forth in the Pinellas Transfer

23 Agreement attached as Appendix D. Pinellas and the Authority shall be bound by the

24 terms and provisions of the Pinellas Transfer Agreement.










1 SECTION 5.03. TRANSFER OF TAMPA FACILITY. Tampa agrees to convey

2 its interest in the following Transferred Asset to the Authority at the purchase price

3 indicated below:

4 Capacity Land Area
5 Transferred Asset (mod) (Acres) Purchase Price
6
7 Morris Bridge Wellfield 15.50 N/A $32,000,000
8
9 The conveyance of each wellfield will include the production capacity shown in the

10 foregoing table (priced at $2.00 per gallon) and the amount of property shown in the

11 foregoing table (four acres surrounding each wellhead priced at $2,000 per acre). In

12 addition, easements for transmission facilities, easements for monitoring wells, access

13 easements and restrictions on the remaining wellfield property will be conveyed without

14 additional consideration. The total purchase price for these Transferred Assets also

15 includes a $1,000,000 Disinfection Credit. The parties acknowledge and agree that the

16 Disinfection Credit was negotiated as an integral part of the purchase price for the

17 foregoing Transferred Assets. A specific description of the Transferred Asset to be

18 conveyed and the terms and conditions of sale are set forth in the Tampa Transfer

19 Agreement attached as Appendix E. Tampa and the Authority shall be bound by the terms

20 and provisions of the Tampa Transfer Agreement.

21 SECTION 5.04. TRANSFER OF PASCO FACILITY. Pasco agrees to convey

22 its interest in the following Transferred Asset to the Authority at the purchase price

23 indicated below:










1 Capacity Land Area
2 Transferred Asset (mad) (Acres) Purchase Price
3
4 North Pasco Wellfield 6.60 24 $16,248,000
5
6 The conveyance of each wellfield will include the production capacity shown in the

7 foregoing table (priced at $2.00 per gallon) and the amount of property shown in the

8 foregoing table (four acres surrounding each wellhead priced at $2,000 per acre). In

9 addition, easements for transmission facilities, easements for monitoring wells, access

10 easements and restrictions on the remaining wellfield property will be conveyed without

11 additional consideration. The total purchase price for these Transferred Assets also

12 includes a $3,000,000 Disinfection Credit. The parties acknowledge and agree that the

13 Disinfection Credit was negotiated as an integral part of the purchase price for the

14 foregoing Transferred Assets. A specific description of the Transferred Assets to be

15 conveyed and the terms and conditions of sale are set forth in the Pasco Transfer

16 Agreement attached as Appendix F. Pasco and the Authority shall be bound by the terms

17 and provisions of the Pasco Transfer Agreement.

18 SECTION 5.05. TRANSFER OF HILLSBOROUGH FACILITIES. Hillsborough

19 agrees to convey its interest in the following Transferred Assets to the Authority at the

20 purchase price indicated below:

21 Capacity Land Area
22 Transferred Asset (mag (Acres) Purchase Price
23
24 Northeast Brandon Wellfield 1.100 26 $4,403,592.36
25 South Central Subdivision Wells 0.218 4 868,203.82
26 Northwest Subdivision Wells 0.214 8 68.203.82
27
28 Total $6,140,000.00
29










1 The conveyance of each wellfield will include the production capacity shown in the

2 foregoing table (priced at $2.00 per gallon) and the amount of property shown in the

3 foregoing table (four acres surrounding each wellhead priced at $2,000 per acre). In

4 addition, easements for transmission facilities, easements for monitoring wells, access

5 easements and restrictions on the remaining wellfield property will be conveyed without

6 additional consideration. The total purchase price for these Transferred Assets also

7 includes a $3,000,000 Disinfection Credit. A specific description of the Transferred Assets

8 to be conveyed and the terms and conditions of sale are set forth in the Hillsborough

9 Transfer Agreement attached as Appendix G. Hillsborough and the Authority shall be

10 bound by the terms and provisions of the Hillsborough Transfer Agreement.

11 SECTION 5.06. TRANSFER OF NEW PORT RICHEY FACILITY. New Port

12 Richey agrees to convey its interest in the following Transferred Asset to the Authority at

13 the purchase price indicated below:

14 Capacity Land Area
15 Transferred Asset (mgd) (Acres) Purchase Price
16
17 North Pasco Wellfield 1.4 N/A $3,300,000.00
18
19 The conveyance of each wellfield will include the production capacity shown in the

20 foregoing table (priced at $2.00 per gallon) and the amount of property shown in the

21 foregoing table (four acres surrounding each wellhead priced at $2,000 per acre). In

22 addition, easements for transmission facilities, easements for monitoring wells, access

23 easements and restrictions on the remaining wellfield property will be conveyed without

24 additional consideration. The total purchase price for these Transferred Assets also

25 includes a $500,000 Disinfection Credit. A specific description of the Transferred Assets

90










1 to be conveyed and the terms and conditions of sale are set forth in the New Port Richey

2 Transfer Agreement attached as Appendix H. New Port Richey and the Authority shall be

3 bound by the terms and provisions of the New Port Richey Transfer Agreement.

4 SECTION 5.07. PERMITS FOR TRANSFERRED ASSETS. The Member

5 Governments acknowledge that this Agreement will be terminated if the Transferred Assets

6 are not conveyed to the Authority on or prior to the Full Implementation Date. In order to

7 facilitate the completion of these conveyances, the Member Governments agree to support

8 all Environmental Permits necessary to complete the conveyances.

9 SECTION 5.08. OPTION TO REPURCHASE TRANSFERRED ASSETS. The

10 Authority shall not sell a Transferred Asset unless it is no longer used to supply Water.

11 In such event, the Transferred Asset shall be appraised by two independent appraisers

12 and, not less than ninety days prior to the date on which the Authority intends to offer the

13 Transferred Asset for sale, the Authority shall provide notice (including copies of the

14 appraisal reports) to the Member Government that conveyed the Transferred Asset to the

15 Authority The Member Government that conveyed the Transferred Asset to the Authority

16 shall have an option to repurchase the Transferred Asset upon payment of an amount

17 equal to the lower of (A) the average of the two appraised values, and (B) the price paid

18 by the Authority, after deducting that portion of the purchase price attributable to the

19 Disinfection Credit. On or prior to the date on which the Authority intends to offer the

20 Transferred Asset for sale, as specified in the notice, the Member Government may

21 exercise its repurchase option. This option shall expire if not exercised by the Member

22 Government in a timely manner.










1 SECTION 5.09. TRANSFER OF AUTHORITY FACILITIES.

2 (A) Upon payment of the amount described in Section 5.10 hereof, the Authority

3 agrees to convey to Hillsborough its interest in the South Central Hillsborough

4 Transmission Main, the South Central Hillsborough Pump Station, the Cargill Interconnect,

5 and that portion of the Tampa/Hillsborough Interconnect lying on the Hillsborough side of

6 the pump station. A specific description of the foregoing Water Supply Facilities and the

7 terms and conditions of transfer not included in this Section 5.09(A) are set forth in the

8 Authority/Hillsborough Transfer Agreement attached as Appendix I. The Authority and

9 Hillsborough shall be bound by the terms and provisions of the Authority/Hillsborough

10 Transfer Agreement.

11 (B) The Authority agrees to convey to Pasco, without consideration, its interest

12 in the West Pasco Transmission Main. A specific description of the West Pasco

13 Transmission Main and the terms and conditions of transfer are set forth in the

14 Authority/Pasco Transfer Agreement attached as Appendix J. The Authority and Pasco

15 shall be bound by the terms and provisions of the Authority/Pasco Transfer Agreement.

16 (C) The Authority agrees to convey to Tampa, without consideration, its interest

17 in that portion of the Tampa/Hillsborough Interconnect lying on the Tampa side of the

18 pump station. A specific description of that portion of the Tampa/Hillsborough Interconnect

19 lying on the Tampa side of the pump station and the terms and conditions of transfer are

20 set forth in the Authority/Tampa Transfer Agreement attached as Appendix K. The

21 Authority and Tampa shall be bound by the terms and provisions of the Authority/Tampa

22 Transfer Agreement.










1 SECTION 5.10. DEFEASANCE OF HILLSBOROUGH BONDS.

2 (A) The parties acknowledge that (1) 43.5 percent of the proceeds of the

3 Authority's Capital Improvement Revenue Bonds (Hillsborough County Project), Series

4 1984, were used to finance the South Central Hillsborough Transmission Main and South

5 Central Hillsborough Pump Station; (2) the Authority's Capital Improvement Revenue

6 Bonds (Hillsborough County Project), Series 1984, were fully refunded by the Authority's

7 Refunding Revenue Bonds, Series 1985; and (3) the Authority's Refunding Revenue

8 Bonds, Series 1985, were partially refunded by the Authority's Refunding Revenue Bonds,

9 Series 1989A.

10 (B) Based upon the findings set forth in Section 5.10(A), the parties agree that

11 Hillsborough is responsible for payment of 43.5 percent of the principal and interest of the

12 Authority's Revenue Bonds, Series 1985, and the Authority's Refunding Revenue Bonds,

13 Series 1989A (such percentage of the outstanding principal being referred to in this

14 Section 5.10 as the "Hillsborough Bonds"), prior to conveyance of the South Central

15 Hillsborough Transmission Main and South Central Hillsborough Pump Station.

16 (C) The parties further acknowledge that Hillsborough's obligation for the

17 payment of principal and interest on the Hillsborough Bonds due on October 1, 1998, is

18 currently being discharged by the amounts paid for the Water purchased by Hillsborough

19 from the Authority. Accordingly, the parties agree that the Hillsborough Bonds shall be

20 deemed to be paid when payment of the principal of the Hillsborough Bonds that will

21 remain outstanding after the payment due on October 1, 1998, plus the premium thereon,

22 either (i) shall have been made or caused to be made in accordance with the terms of the










1 Authority's resolution authorizing issuance of the Hillsborough Bonds, or (ii) shall have

2 been provided for by irrevocably depositing in trust and irrevocably setting aside

3 exclusively for such payment (x) moneys sufficient to make such payment and/or (y)

4 Governmental Obligations authorized for defeasance under the Authority's resolution

5 authorizing issuance of the Hillsborough Bonds, maturing as to principal and interest in

6 such amounts and at such time as will provide for the availability of sufficient moneys to

7 make such payment.

8 SECTION 5.11. JOINT USE OF AUTHORITY EASEMENTS. The Authority

9 shall not unreasonably withhold joint use of an easement requested by a Member

10 Government if the joint use is not in conflict with the Authority's existing and anticipated

11 future use.

12 SECTION 5.12. FORM OF PAYMENT FOR TRANSFERRED ASSETS. It is

13 understood and agreed that unless a Member Government has notified the Authority prior

14 to May 1, 1998 or seven days following date on which it approves execution of this

15 Agreement, whichever is later, of its election to be compensated in cash for the

16 conveyance of Transferred Assets to the Authority, payment shall be made in the form of

17 credits applied to reduce the cost or purchasing Quality Water from the Authority, as set

18 forth in Section 3.04(A)(3) hereof. Member Governments may elect to be paid in cash for

19 any specific Transferred Asset or for that portion of the purchase price that represents

20 such Member Government's Disinfection Credit. If any Member Government conveying

21 Transferred Assets to the Authority elects to be compensated in cash, the purchase price

22 for such Transferred Assets shall be reduced by a prorata share of the actual cost incurred










1 by the Authority in connection with the issuance of Obligations to finance a cash

2 acquisition of Transferred Assets.




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