Title: Board Meeting Draft Of The Amended and Restated Interlocal Agreement
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Title: Board Meeting Draft Of The Amended and Restated Interlocal Agreement
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Language: English
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Spatial Coverage: North America -- United States of America -- Florida
 Notes
Abstract: Jake Varn Collection - Board Meeting Draft Of The Amended and Restated Interlocal Agreement
General Note: Box 16, Folder 8 ( WCRWSA - 1998-1999 ), Item 8
Funding: Digitized by the Legal Technology Institute in the Levin College of Law at the University of Florida.
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Bibliographic ID: WL00003994
Volume ID: VID00001
Source Institution: Levin College of Law, University of Florida
Holding Location: Levin College of Law, University of Florida
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Full Text




BOARD MEETING DRAFT
MARCH i3 30 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. .....................................
INTERPRETATION. ................................
FINDINGS ..................................... .
REPRESENTATIONS OF THE MEMBER GOVERNMENTS.


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. ....................... .. 3534
EXCLUSIVITY. ..................................... 3534
OBLIGATION TO MEET WATER NEEDS. .............. 49 39
UNIFORM RATE. .................................. 42 41
MASTER WATER SUPPLY CONTRACT. ............... 4443
ISOLATED WATER SUPPLY FACILITIES. ................ 44
WALSINGHAM FACILITY. ............................. 47
SURFACE WATER SOURCES ....................... 4948
RECLAIMED WATER............................ 5554
CLEARWATER FACILITIES. ........................... 55
SERVICE DISRUPTIONS. ............................. 57
PERMITS AND LICENSES ............................ 57


S. 3
4817
4817
. 19


.... 2221
.... -2322
.... 2726
.... 2827
.... 2928
.... 3029
.... 23029
.... 3231
.... .332
... 34 33









SECTION 3.13. SWFWMB PRIMARY ENVIRONMENTAL PERMIT DISPUTES. 61
SECTION 3.14. AGENCY PERMIT DISPUTES. 6 OTHER PERMIT DISPUTES. 64
SECTION 3.15. I IST MEMBER GOVERNMENT PERMIT DISPUTES. 67
SECTION 3.16 SECTION 3.15. RESOLUTION OF RECLAIMED WATER USE ISSUES.
...... ........ ........................................ .......... 7 64
SECTION 347 3.16. ARBITRATION PROCEDURE. ................... 7367
SECTION 3-4 3.17. LOCAL LAND USE DECISIONS ................... 7670
SECTION -49 3.18. TAXES, FEES, AND SPECIAL ASSESSMENTS. .... 7670
SECTION 329 3.19. PRODUCTION FAILURE ....................... 7670
SECTION 3-- 3.20. REDUCTION OF ENVIRONMENTAL STRESS ...... 88 73
SECTION 3-22 3.21. IMPACT FEES FOR AUTHORITY FACILITIES ...... 8478


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. ........................... 8579
TERMS OF THE OBLIGATIONS. .................. ... 8579
TEMPORARY OBLIGATIONS. ........................ 8579
ANTICIPATION NOTES. ........................... 8680
TAXING POWER NOT PLEDGED. .................... 8680
TRUST FUNDS. ................................ 87 81
REMEDIES OF HOLDERS .......................... 87 81
REFUNDING OBLIGATIONS. ........................ 87 81
CONDUIT TRANSACTIONS. ................. .... 88 82
MEMBER GOVERNMENT COOPERATION ............. 8882


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 51- 5.1C
SECTION 542 5.11


TRANSFER OF ST. PETERSBURG FACILITIES.
TRANSFER OF PINELLAS FACILITIES. ......
TRANSFER OF TAMPA FACILITY ...........
TRANSFER OF PASCO FACILITY. ..........
TRANSFER OF HILLSBOROUGH FACILITIES.
TRANSFER OF NEW PORT RICHEY FACILITY.
PERMITS FOR TRANSFERRED ASSETS. ....


........ 99 84
......... 9-85
......... 92 86
......... 9286
......... 93 87
........ 94 88
......... 95 89


OPTION TO REPURCHASE TRANSFERRED ASSETS. ... 9589
TRANSFER OF AUTHORITY FACILITIES. ............. 9690
S JOINT USE OF AUTHORITY EASEMENTS. ....... 98 91
FORM OF PAYMENT FOR TRANSFERRED ASSETS. 98 91










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 ........................................... 00 92
TERM OF AGREEMENT ........................... 40 92
TRANSITION PROVISIONS ........................ 40092
TERMINATION. ................ .......... ....... 0799
SCIENTIFIC PEER REVIEW ................. ...... + 4103
DISPUTE RESOLUTION........................... -2104
WAIVER OF CLAIMS. ........................... 4-3105
ACKNOWLEDGMENT OF EPC AGREEMENT........... +4 106
INDEMNIFICATION ............................... 4 106
SOVEREIGN IMMUNITY ........................... -5107
NOTICE ........................................ 46108
ENTIRE AGREEMENT ............................ 7 109
AMENDMENTS AND WAIVERS .................... .+8110
BINDING EFFECT .............................. 8 110
SEVERABILITY ................................. +8110
EXECUTION IN COUNTERPARTS .................. +49111
APPLICABLE LAW ............................. 49111












TABLE OF APPENDICES


APPENDIX A

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

LEGISLATION

ARBITRATION DISCOVERY RULES










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) "Aquifer Storage and Recovery" means the process of injecting,

8 storing and recovering Water from aquifer systems.

9 (B) "Actual Direct Cost" means (1) with respect to the acquisition of

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

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

12 total capital and operating cost of providing such treatment, excluding any indirect cost.

13 "Ageny Permits" means all Environmental Permits other tha SWFWM Peits and

14 Host Member Government Permits. "Agency Permits" include but are not limited to

15 Environmental Permits issued by the United States Army Corp of Engineers, the Florida

16 Department of Environmental Protection and the Hillsborough County Environmental

17 Protection Comrnission.(D)

18 (C) "Agreement" means this Amended and Restated Interlocal

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

20 accordance with the terms hereof.

21 fE-(_ "Allocated Overhead" means, as to any Water Supply Facility, that

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









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

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

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

4 Authority, and (2) multiplying the result by-the Overhead. :

5 (F-() "Authority" means the West Coast RegionaLWater Supply Authority,

6 an interlocal governmental agency created and existing pursuant to Sections 373.1962

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

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

9 and restated pursuant to this Agreement.

10 (G6)F) "Authority/Hillsborough Transfer Agreement" means the

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

12 treatment and transmission facilities to Hillsborough.

13 (fH-). "Authority/Pasco Transfer Agreement" means the agreement

14 attached hereto as Appendix J, pursuant to which the Authority will convey transmission

15 facilities to Pasco.

16 (f0IH) "Authority/Tampa Transfer Agreement" means the agreement

17 attached hereto as Appendix K, pursuant to which the Authority will convey transmission

18 facilities to Tampa.

19 f() .l "Board" means the Authority's Board of Directors, appointed pursuant

20 to Section 2.03 hereof.









1 WK} "Consolidated Permit" means a single SWFWMD Primary

2 Environmental Permit that includes multiple Water Supply Facilities that are located within

3 the jurisdiction of different Member Governments. : -

4 fL-}K). "Contributing Area" means the area surrounding a ground Water

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

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

7 withdrawal is made.

8 (Mf)L) "Desalination Facilities" means facilities designed to treat Water

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

10 (N)(M "Director" means an individual appointed to the Board by a Member

11 Government pursuant to Section 2.03 hereof.

12 (f)(N) "Disinfection Credit" means the stipulated treatment credit amount

13 payable to each Member Government conveying Transferred Assets to the Authority;

14 which represents either (1) as to Member Governments that do not currently have facilities

15 to disinfect Quality Water delivered at a specific Point of Connectin, an amount equal to

16 the estimated cost of constructing disinfection facilities that will be required when the

17 Authority discontinues chlrination pursuant t this Agreement, or (2) as to Member

18 Governments that currently have facilities to disinfect Quality Water delivered at a specific

19 nt of nneti, an a nt represetig their cst to onstrut sh f te

20 (P) "Dispute Range" means, with respect to the I lost Member Government dispute

21 resoltion process, the range between the Authoity's proposed quantity of withdrawal and

22 the quantity of withdraw specified by a I lost Member pursuant to Section 3.13(A) herself.








1 fQ) pursuant to Sections 5.01. 5.02. 5.03. 5.04. 5.05 and 5.06 hereof.

2 () "Economic Impact Facilities" means Water Supply Facilities owned

3 by the Authorityand notsubject to.ad valorem taxation that have e~sig:ifient an adverse

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

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

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

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

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

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

10 (fR) "Environmental Permit" means all permits, licenses, or other third-

11 party approvals necessary for the acquisition, construction or operation of an Authority

12 Water Supply Facility, including but not limited to Primary Environmental Permits.-

13 (S(LQ "EPC" means the Hillsborough County Environmental Protection

14 Commission, a dependent governmental agency created by special district act of the State

15 of Florida Legislature.

16 (R)-(f "EPC Agreement" means the agreement attached hereto as

17 Appendix L.

18 (U) ailre ge" with repeat to the t Member Government dipte

19 resolution process, (1) as to the Authority, a quantity lower than the twenty-fifth percentile

20 of the DiOspute Range, and (2) as to any I lost Member Government, a quantity greater than

21 the seventy-fifth perentile of the Dispute Range.








1 "Existing Regional System" means the Authority's Cypress Creek

2 Wellfield. Cypress Creek Pump Station. Cross Bar Ranch Wellfield (production capacity

3 only). Cypress Bridge .Wellfield. Northwest Hillsborough Regional Wellfield, 84"

4 transmission main and 66" transmission main.

5 (MV-{) T "Financing Documents" means any resolution or resolutions of the

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

7 to the issuance or security of the Obligations.

8 (W)U_)J "Fiscal Year" means the period commencing on October 1 of each

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

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

11 W(-X}V "Full Implementation Date" means October 1, 1998; provided

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

13 approving this Agreement and administrative hearings or appellate proceedings therefrom

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

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

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

17 (Z-)XL "General Manager" means the chief executive staff officer of the

18 Authority.

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

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

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

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








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

2 of such state) meeting the following criteria:

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

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

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

6 has received irrevocable instructions concerning their calling and redemption;

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

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

9 of such municipal obligations;

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

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

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

13 if any, of the municipal obligations;

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

15 obligations must be held by an escrow agent or a trustee; and

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

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

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

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

20 the flow required by environmental regulations.

21 (fG)AA "Hillsborough" means Hillsborough County, a political subdivision

22 of the State.









1 (ff XBBB "Hillsborough Bay Resource Exchange Project" means the

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

3 and the surface watertreatment plant required to treat the purified water anddeliver it to

4 the Member Governments.

5 (EE-)X(; "Hillsborough River Reservoir" means the run of the Hillsborough

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

7 FFF-(DD) "Hillsborough Transfer Agreement" means the agreement attached

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

9 the Authority.

10 f GG)LEE "Host Member Government" means any Member Government in

11 whose jurisdiction the Authority seeks issuance, modification or renewal of an a Primary

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

13 includes Tampa (1) with respect to SWFWMD Primary Environmental Permits for Cone

14 Ranch and Dispersed Wells, Cypress Bridge Wellfield, Hillsborough River High Water and

15 the Tampa Bypass Canal, and (2) under the circumstances described in Section 3.08

16 hereof. If SWFWMD issues a Consolidated Permit, any Member Government shall qualify

17 as a "Host Member Government" for the limited purpose of raising environmental issues

18 affecting property located within its own jurisdiction; provided however, that if a

19 Consolidated Permit is approved by an agreement to which all Member Governments are

20 parties, no Member Government shall qualify as a "I ost Member Govermment" for its initial

21 issuanee..


__









1 (I II ) "I lost Member Government Permits" means Environmental Permits issued by

2 a Host Member Government.

3 (II)k11 E "Master Water Plan": means the Authority's plan for expansion,

4 conservation; diversification and preservation of the tri- cunty region's Water supply

5 Water supply for the- Water Service Areas (as defined in the Master Water Supply

6 Contract), as the same may be amended or superseded from time to time.

7 (fJ)d(GG "Master Water Supply Contract" means the agreement attached

8 hereto as Appendix B between the Authority and each Member Government, pursuant to

9 which the Member Government purchases Quality Water from the Authority.

10 fKK-HHll} "Member Governments" means Hillsborough, Pasco, Pinellas, New

11 Port Richey, St. Petersburg and Tampa.

12 (L) "Middle Range" means, with respect to the ost Member Gvement di

13 resolution process, that portion of the Dispute Range between the Success Range and the

14 Failure Range.

15 ---(MM)( II "New Port Richey" means the City of New Port Richey, a municipal

16 corporation of the State.

17 fNN*)JJ_ "New Port Richey Transfer Agreement" means the agreement

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

19 Transferred Assets to the Authority.

20 (fGG-e K) "Net Utility Revenue" means the net revenue of each Member

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

22 have been combined for financing purposes, the net revenue of the combined water and

10








1 wastewater system remaining after payment of operating expenses and debt service due

2 on obligations secured by such revenue.

3 fPPI)LLU "Obligations" means a series of bonds or other evidence of

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

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

6 f(e)(MMM "Overhead" means the administrative and general expenses of the

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

8 Supply Facility, as established in the approved annual budget.

9 (RRff)NN UN "Partnership Plan Wellfields" means Cross Bar Ranch Wellfield,

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

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

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

13 (&SS)LQQ "Pasco" means Pasco County, a political subdivision of the State.

14 (TTfFPP) "Pasco Transfer Agreement" means the agreement attached hereto

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

16 f-IQ)LQQ "Pinellas" means Pinellas County, a political subdivision of the State.

17 (VVffRRl "Pinellas Transfer Agreement" means the agreement attached

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

19 Authority.

20 (WW~SS) "Pledged Funds" means (1) the revenues, fees, charges and other

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

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

11









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

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

3 Financing Documents.

4 f(XX)(I "Points of Connection" means the points identified pursuant to-the

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

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

7 Authority's system.

8 UU) "Primary Environmental Permit" means the issuance, modification

9 or renewal of a consumptive use permit, an environmental resource permit, or a national

10 pollutant discharge elimination system permit for any seawater desalination facility, for

11 which the Authority applies as sole permitted or as co-permittee. The term "Primary

12 Environmental Permit also includes SWFWMD approval of a Wellfield Operations Plan

13 when included as a consumptive use permit condition: provided however, that the term

14 "Primary Environmental Permit" includes only those modifications to the Wellfield

15 Operations Plan that affect the methods, variables or parameters of the Wellfield

16 Operations Plan and materially change the quantity or Replacement Capacity and

17 Rotational Capacity applied to reduce the withdrawal of Water from various Authority

18 wellfields.

19 (WVVf_) "Production Failure" means (1) the occurrence of a Shortfall,

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

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

22 2002, the actual delivery by the Authority to the Member Governments during any twelve-








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

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

3 provided however, that if the Authority has received a SWFWMD Primary Environmental

4 Permit for additional production facilities and the Authority has entered into a contract for

5 final design and construction of the facilities, the additional production quantity specified

6 in the SWFWMD Primary Environmental Permit shall be added to the actual production

7 capacity for purposes of determining if a "Production Failure" has occurred.

8 fZZ-(WWl "Project Cost" means all expenses associated with the acquisition,

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

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

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

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

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

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

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

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

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

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

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

20 expenses that are properly attributable thereto under generally accepted accounting

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

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








1 fAAA) _.X "Quality Water" means Water which meets (1) State and federal

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

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

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

5 waters, but excluding regulations pertaining to disinfection and corrosivity, and (2) any all;

6 additional standards required by the Master Water Supply Contract, including but not

7 limited to the requirement that "Quality Water" not cause a particular Member Government

8 utility to adopt new treatment techniques beyond modified chemical dosages and/or

9 optimization of existing unit processes to meet a moderately altered source of Water. For

10 purposes other than entitlement to the rate reductions set forth in Section 3.04(A)(1)

11 hereof, the term "Quality Water" also includes Water delivered to the Points of Connection

12 identified in Section 3.03(D) hereof or to Points of Connection at which a Member

13 Government agrees, at its sole option, to accept Water not meeting the standards for

14 Quality Water pursuant to Section 3.03(E) hereof.

15 (BBB)~YY} "Reclaimed Water" means, except as specifically provided in

16 applicable State statutes or rules, Water that has received at least secondary treatment

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

18 facility.

19 (C-CG)ZZ} "Reclaimed Water Resource Project" means (1) the direct use of

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

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

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








1 (EBB-9) 1 l "Recovery Plan" means the proposed phased recovery strategy to

2 achieve the minimum flows and levels, to be adopted by SWFWMD for the Northern

3 Tampa.Bay Area under Section 373.042, Florida. Statutes, pursuant to which (1') by

4 December 31, 2002, the Authority will reduce the combined production permitted

5 withdrawal quantity from the Partnership Plan Wellfields to 121 mgd, on an average

6 annual basis (to be measured from December 31, 2002 to December 31, 2003), and

7 maintain production thereafter at or below 121 mgd, on an average annual basis; and (2)

8 by December 31, 2007, the Authority will reduce the combined production permitted

9 withdrawal quantity from the Partnership Plan Wellfields to 90 mgd, on an average annual

10 basis (to be measured from December 31, 2007 to December 31, 2008), and maintain

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

12 (EEE)LBBB) "Replacement Capacity" means production capacity from Water

13 Supply Facilities other than the Partnership Plan Wellfields that is (1) not available on the

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

15 Partnership Plan Wellfields.

16 (FFF()LCC "Rotational Capacity" means the production rate of Quality Water

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

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

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

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

21 Capacity.








1 (GGG)D_DDD"Shortfall" means a situation in which the Authority fails to deliver the

2 quantity of Quality Water required by a Member Government.

3 (HHHlEl{EE.) "Shortfall Amount" means~-in the event of a Shortfall, the amount

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

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

6 Government.

7 (fFFFLF) "St. Petersburg" means the City of St. Petersburg, a municipal

8 corporation of the State.

9 f(Jd3)GGG "St. Petersburg Transfer Agreement" means the agreement

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

11 Assets to the Authority.

12 (KKK-)(Hft HH "State" means the State of Florida.

13 (LLL) "Success Range" means, with respect to the I lest Member Government

14 dispute resolution press, (1) as to the Authority, a quantity greater than the seventy-fifth

15 R -t ......... ..
15 percentile of the Dispute Range, and (2) as to any I lost Member Government, a quantity

16 wer than the tenty-fifth percentile f the Dispute Range.

17 --- (M-MMIal "SWFWMD" means the Southwest Florida Water Management

18 District.

19 (NNN) "SWFWMD Permits" means Environmental Permits issued by SWFWMD for

20 the use ... transmission of Water.

21 ---(Oe )e)JJJ "Tampa" means the City of Tampa, a municipal corporation of the

22 State.








1 (PPP)fKKK) "Tampa Transfer Agreement" means the agreement attached hereto

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

3 (QQ~ G LLLL "Termination FundingShare" means, for each Member Government,

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

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

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

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

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

9 Canal that is not attributable to Authority augmentation projects such as the Hillsborough

10 Bay Resource Exchange Project.

11 (RRR) MMM)"Termination Option Share" means, for each Member Government,

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

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

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

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

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

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

18 by Tampa from the Tampa Bypass Canal that is not attributable to Authority augmentation

19 projects such as the Hillsborough Bay Resource Exchange Project.

20 (fSS)(NNNJ "Transferred Assets" means the Water Supply Facilities (including

21 real property, tangible personal property and intangible personal property) conveyed to the

22 Authority pursuant to Sections 5.01, 5.02, 5.03, 5.04, 5.05 and 5.06 hereof: provided








1 however, that any equity interest of the Member Governments in the Existing Region

2 System that is relinquished pursuant to Sections 5.01. 5.02. 5.03. 5.04. 5.05 and 5.06

3 hereof shall not constitute a "Transferred Asset."-

4 (-FFF)(.QQ0 "'TWRRP" mean's the Tampa Water Resource Recovery Project,

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

6 at Tampa's Howard F. Curren Advanced Wastewafer Treatment Plant, and the pipeline

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

8 (UU PPt*JPP "Water" means Quality Water and any other water to be used by a

9 Member Government in its public water supply system.

10 (VVVQQQ "Water Supply Facilities" means Water production, treatment and

11 and/er transmission facilities. The term 'Water Supply Facilities" does not include facilities

12 for local distribution.

13 (RRR)}WWW"Wellfield Operations Plan" means a plan for operating the

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

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

16 environmental stress in the area of each of its wellfields, (2) apply its Replacement

17 Capacity and Rotational Capacity to reduce the quantity of Water withdrawn from wellfields

18 located in areas with the highest levels of environmental stress, and (3) bring all of its

19 wellfields into compliance with the Recovery Plan.

20 (-Y(XXXSSSS) "Wheel" or "Wheeling" means the process of utilizing any unused

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

22 (1) purchased from a supplier other than the Authority pursuant to Section 3.20(A) 3.19(A)









1 hereof, or (2) produced from a Member Government's Water Supply Facility acquired or

2 constructed pursuant to Section 3.20() 3.19(B) hereof, to a Member Government's Point

3 of Connection during a Shortfall.; ..

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

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

6 hereoff," "hereby," "herein," "hereto," "hereulnder" and similar terms refer to this

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

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

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

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

11 by the Member Governments that:

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

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

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

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

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

17 concentrated areas.

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

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

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

21 customers served by the Member Governments.








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

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

3 Quality Water (other than Water delivered to Tampa from the Tampa Bypass Canal that

4 is not attributable to Authority augmentation projects such as the Hiltsborough Bay

5 Resource Exchange Project, which has been excluded from the uniform rate provision),

6 adjusted forspecial treatment requirements in the manner set forth herein.

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

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

9 wholesale customers.

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

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

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

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

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

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

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

17 Water Supply Facilities necessary to serve the Member Governments.

18 SECTION 1.04. REPRESENTATIONS OF THE MEMBER GOVERNMENTS.

19 Upon satisfaction of the conditions set forth in Sections 6.03(A) and (D) hereof and in

20 reliance upon the legislation attached hereto as Appendix M, the Member Governments

21 each make the following representations as it relates to itself (no representation is made

22 by a Member Government for any other Member Government):









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

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

3 satisfy their responsibilities pursuant to this Agreement.

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

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

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

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

8 Pinellas and by the Mayor and City Council in the case of New Port Richey- and Tampa.

9 and the City Council in the case of St. Petersburg end -Tmpa; (2) does not require any

10 consent or referendum of the electors; and (3) does not constitute a default under, or result

11 in the creation of any lien, charge, encumbrance or security interest upon, the assets of

12 the Member Governments under any agreement or instrument to which any of the Member

13 Governments is a party or by which any of the Member Governments and their assets may

14 be bound or affected, except as otherwise provided herein.

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

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

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

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

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

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

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









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

2 accordance with general principles of equity.

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

4 court or governmental authority, pending-against any, of the Member Governments,

5 wherein any unfavorable decision, ruling or finding would materially and adversely affect

6- the performance by any of the Member Governments of their obligations hereunder or the

7 other transactions contemplated hereby, or which, in any way, would adversely affect the

8 validity or enforceability of this Agreement, the Master Water Supply Contract, the St.

9 Petersburg Transfer Agreement, the Pinellas Transfer Agreement, the Tampa Transfer

10 Agreement, the Pasco Transfer Agreement, the Hillsborough Transfer Agreement, the New

11 Port Richey Transfer Agreement, the Authority/Hillsborough Transfer Agreement, the

12 Authority/Pasco Transfer Agreement, the Authority/Tampa Transfer Agreement, the EPC

13 Agreement, or any other agreement or instrument entered into by the Authority in

14 connection with the 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 1.89,-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 terminated, superseded or modified as

10 specified in this Agreement and the Master Water Supply Contract. Any proceedings

11 heretofore begun by the Authority for the receipt of Environmental Permits, construction

12 of any improvements, works or facilities; for the assessment of benefits and damages or

13 for the borrowing of money shall not be impaired or voided by the reorganization of the

14 Authority and may be 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,. t&or from any person, firm, corporation,

4 association or body, public or private, facilities or property ofrany 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 contract with one or more other public corporations for the purpose

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

10 public 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 anypart 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 orauthority, 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 the extent allowed by law and to the extent required to effectuate

19 the purposes hereof, to exercise all privileges, immunities and exemptions accorded

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

21 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 orderto 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) Section 163.01(7)(g), Florida Statutes, shall not apply to the Authority.

15 SECTION 2.03. BOARD OF DIRECTORS.

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

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

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

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

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

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

22 the Member Governments as follows:








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

2 Commissioners;

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

4 Commissioners;

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

6 Commissioners;

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

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

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

10 Mayor).

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

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

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

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

15 continuous representation of the Member Governments.

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

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

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

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

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

21 286.011, Florida Statutes, telephonic regular or special meetings by conference call or








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

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

3 SECTION 2.05. x QUORUM AND VOTING.-

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

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

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

7 time and date specified in such action.

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

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

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

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

12 six Directors:

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

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

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

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

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

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

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

20 Governments; and

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

22 thereof.









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

2 preductien facilities Supply Facilities for the purpose of reducing the combined produetion

3 permitted withdrawal quantity from the Partnership Plan Wellfields, on an average annual

4 basis, to a quantity less than 90 mgd shall require an affirmative vote of all nine Directors.

5 SECTION 2.06. OFFICERS OF THE BOARD.,:

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

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

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

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

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

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

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

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

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

15 duties as are authorized by the Board.

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

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

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

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

20 chairman pro-tem for that meeting.

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

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








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

2 and to call and hold special meetings.

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

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

5 373.1962 and 163.01, Florida Statutes, or this Agreement, necessary for the governance

6 and management of the affairs of the Authority, for the executionrof the powers vested in

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

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

9 location of all offices and departments maintained thereunder.

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

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

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

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

14 protection of the funds and property of the Authority.

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

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

17 directed by the Board.

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

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

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

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









1 SECTION 2.08. ANNUAL BUDGET.

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

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

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

5 identify (1) the rate at which Quality Water will be sold to Member Governments during

6 such Fiscal Year, and (2) the rate to be charged to Tampa for Water provided through the

7 Tampa Bypass Canal pumping facility during such Fiscal Year.

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

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

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

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

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

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

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

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

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

17 set by the Board for the hearing on the proposed budget and rates.

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

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

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

21 budget and rates 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 more than every five years

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

17 or 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 thenext 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 or management consulting

12 firm to conduct the performance audit and management study.








1
2 ARTICLE III

3 WATER SUPPLY PROVISIONS

4
5 SECTION3.01. 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 and in

8 such a manner as will give priority to reducing adverse environmental effects of excessive

9 or improper withdrawals of water from concentrated areas. The Member Governments

10 shall 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. Except as provided in Section 3.02(1) hereof,

13 it is expressly understood and agreed that the Authority shall be the sole and exclusive

14 supplier of Water to the Member Governments and that the Member Governments shall

15 not own or operate Water Supply Facilities.

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

17 shall be entitled to acquire any Water production facilities Supply Facilities owned by the

18 private utility. If the Authority elects to exercise its option, the Water production facilities

19 Supply Facilities shall be appraised by two independent appraisers acceptable to the

20 Authority and the Member Government in their reasonable judgment and-the. The

21 Authority will purchase the Water production facilities property Supply Facilities upon

22 payment of an amount equal to the average of the two appraised values and, if applicable.

23 any debt. fines, or other obligations assumed by the Member Government and any cost









1 expended by the Member Government to bring the Water Supply Facilities into regulatory

2 compliance.

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

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

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

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

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

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

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

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

11 (directly or through a Member Government) as its exclusive supplier of Water to be

12 delivered to customers located within the geographic territory of the Authority to the same

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

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

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

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

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

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

19 than Tampa) hereunder.

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

21 or any portion of their Water utility systems systems' distribution facilities without requiring

22 the purchaser or lessee to use the Authority (directly or through a Member Government)








1 intends to supply Water to the franchisee (directly or through a Member Government) to

2 serve customers located within the geographic territory of the Authority.

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

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

5 utility agrees to use the Authority (directly or through a Member Government) as its

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

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

8 than Tampa) hereunder.

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

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

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

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

13 parties to use the Authority (directly or through a Member Government) as their exclusive

14 supplier of Water to be delivered to customers located within the geographic territory of

15 the Authority to the same extent as required by the Member Governments (other than

16 Tampa) hereunder.

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

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

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

20 requirements of this Section 3.02.

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

22 to the following exceptions.








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

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

3 through 3.10, inclusive. .

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

5 construct Water Supply Facilities and Wheel Quality Water upon the occurrence

6 of a Production Failure, as set forth in Section 3-2e 3.19 hereof.

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

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

9 to adequately supply the Oaks Utility service area.

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

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

12 to adequately supply the Eldred Subdivision.

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

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

15 to adequately supply the Florida Trailer Estates.

16 (6) Member Governments may acquire abandoned Water Supply

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

18 Authority at the earliest practical date, upon payment by the Authority of an amount

19 equal to the Member Government's Actual Direct Cost, retaining ownership of any

20 treatment and distribution facilities.

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

22 Governments from temporarily exchanging or purchasing Water, either among








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

2 purposes in the ordinary course of business.

3 (8) The Member Governments may continue town and-operate the welts

4 listed in Appendix A. Preduceton from these wells may ntbe increased above the

5 specified permitted quantities; provided however, that the prduction from individual

6 wells with an average annual quantity less than 50,000 gallons per day may be

7 increased by twenty percent if the increase in production is required t adequately

8 serve the geographic area presently served by Water produced frm such wells.

9 Except as otherwise provided herein, the Member Governments shall not withdraw

10 Water from any wells not listed in Appendix A. The Authority is hereby granted an

11 option to purchase la) any Water Supply Facility owned by a Member Government

12 on the date of this Agreement that is not listed in Appendix A. and (b) any Water

13 Supply Facility listed in Appendix A for which the permitted quantity specified in

14 Appendix A is increased by more than twenty percent. If the Authority elects to

15 exercise its option, the purchase price shall be equal to the Member Government's

16 Actual Direct Cost to acquire and construct the Water Supply Facility.

17 (9) The Member Governments may create or allow creating of a special

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

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

20 othe provision of general or special law o by rdinane or ntt, if (a)

21 special district is established principally to acquire existing private utility systems

22 from a provider serving customers located in more than one county, (b) no reta


41









1 customers will be lost to a Member Government, (c) the acquisitions will not reduce

2 the quantity of Quality Water being delivered by the Authority, and (d) the Member

3 Government determines that the acquisition of utility systems by the special district

4 enhances the public health, safety and welfare of the affected customers.

5 SECTION 3.03. -OBLIGATION TO MEET WATER NEEDS.

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

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

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

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

10 of the Authority.

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

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

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

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

15 Replacement Capacity has been placed in service.

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

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

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

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

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

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

22 report to the Board and recommend that the Authority initiate preparation of








1 SWFWMD Primary Environmental Permit applications necessary to ensure an

2 adequate supply. The Authority shall initiate any such applications expeditiously.

3 (2) If the actual delivery of Quality Waterby 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 SWFWMD Primary

7 Environmental Permit applications to ensure an adequate supply. The Authority

8 shall file any such applications expeditiously.

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

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

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

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

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

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

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

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

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

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

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

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

21 than Water delivered to Tampa from the Tampa Bypass Canal that is not attributable to

22 Authority augmentation projects such as the Hillsborough Bay Resource Exchange Project,








1 which has been excluded from Section 3.04 pursuant to Section 3.08(D) hereof) will be

2 entitled to a credit against the uniform rate, as set forth in Section 3.04(A)(1) hereof.

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

4 meeting the standards for Quality Water at any other Pointtof Connection. In such event,

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

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

7 SECTION 3.04. UNIFORM RATE.

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

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

10 3.04(A); provided however, that this Section 3.04 shall not apply to Quality Water delivered

11 to Tampa from the Tampa Bypass Canal that is not attributable to Authority augmentation

12 projects such as the Hillsborough Bay Resource Exchange Project, for which the rate is

13 established in Section 3.08(D) hereof.

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

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

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

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

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

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

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

21 additional treatment shall be consistent with generally accepted engineering

22 guidelines.








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

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

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

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

5 Direct Cost to provide such additional treatment.

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

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

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

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

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

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

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

13 by Obligations issued by the Authority to refund refinance its outstanding Capital

14 Improvement Revenue Bonds, Series 1979, Refunding Revenue Bonds Series

15 1985, Refunding Revenue Bonds, Series 1989A, Capital Improvement Revenue

16 Bonds, Series 1989B, Refunding Revenue Bonds, Series 1992, Refunding

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

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

19 Revenue Notes.

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

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

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









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

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

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

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

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

6 its adoption.

7 SECTION 3.05. MASTER WATER SUPPLY CONTRACT. Simultaneously with

8 the execution of this Agreement, the Authority and each Member Government shall enter

9 into the Master Water Supply Contract, in the form attached hereto as Appendix B.

10 SECTION 3.06. ISOLATED WATER SUPPLY FACILITIES.

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

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

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

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

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

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

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

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

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

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

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

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








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

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

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

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

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

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

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

8 a SWFWMD Primary Environmental Permit (applications 20025.06 and 2011480, as

9 modified) to withdraw Water at an average annual rate of one mgd from a new Water

10 Supply Facility consisting of 4 new wells and specified existing wells located near the

11 Cypress Creek and Cypress Bridge Wellfields. Within thirty days of the date on which the

12 conditions described in Sections 6.03(A) and (D) hereof have been satisfied, Pasco may

13 modify its permit application to eliminate the new Water Supply Facility. If the permit

14 application is not modified, as described above, within the thirty-day period, the Authority

15 shall have a sixty-day period to either determine that the proposed Water Supply Facilities

16 are not required to meet the Member Governments' needs, or elect to assume

17 responsibility for construction, ownership and operation of the Water Supply Facility. If no

18 determination or election is made within the sixty-day period, Pasco may proceed with

19 construction and shall own and operate the Water Supply Facility, subject to the

20 Authority's purchase option described in Section 3.06(B)(3) hereof.

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

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








1 withdraw its SWFWMD Primary Environmental Permit application or modify its

2 SWFWMD Primary Environmental Permit, if issued, to eliminate the four new wells.

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

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

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

6 as follows:

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

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

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

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

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

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

13 subcontractors and material suppliers for the Water Supply Facility,

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

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

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

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

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

19 of any Environmental Permits.

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

21 shall be appraised by two independent appraisers acceptable to the

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








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

2 the two appraised values.

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

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

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

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

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

8 Pasco's Actual Direct Cost to acquire and construct such Water Supply Facility.

9 SECTION 3.07. WALSINGHAM FACILITY. The Member Governments

10 acknowledge and agree that Pinellas shall be permitted to contract with Permasep, L.L.C.

11 to acquire the Water produced at Permasep, L.L.C.'s proposed Walsingham reverse

12 osmosis Water treatment plant, which will have a proposed average annual production

13 capacity up to 10 mgd. It is understood and agreed that the location of the project may be

14 subject to change.

15 (A) Pinellas hereby grants an option to the Authority for purchase of all Water

16 available to Pinellas from the Walsingham facility. Pinellas shall provide notice to the

17 Authority not less than ninety days prior to the date on which the Walsingham facility will

18 be placed in service. The notice will include (1) the date on which the Walsingham facility

19 will begin to produce Water, (2) all available information regarding the quality of Water to

20 be produced, and (3) the cost (or method of determining the cost) at which Pinellas has

21 agreed to purchase the Water. On or prior to the initial production date specified in the









1 notice, the Authority may exercise its option to purchase the Water. This option shall

2 expire if not exercised by the Authority within sixty days of the notice.

3 (B) Upon timely exercise of the option, the Authority shall purchase Water

4 produced at the Walsingham facility from Pinellas at the same price at which Pinellas

5 purchases the Water from Permasep, L.L.C. If permitted under the terms of Pinellas's

6 agreement with Permasep, L.L.C. and upon agreement among Pinellas, Permasep, L.L.C.

7 and the Authority, the right to purchase Water directly from the Walsingham facility may

8 be assigned by Pinellas to the Authority.

9 (C) It is understood and agreed that any Water purchased by the Authority from

10 the Walsingham facility will be delivered directly to Pinellas under the Master Water

11 Supply Contract and that the rate payable by Pinellas to the Authority pursuant to Section

12 3.04 hereof may be more or less than the rate at which the Authority purchases the Water

13 from Pinellas or Permasep, L.L.C.

14 SECTION 3.08. SURFACE WATER SOURCES.

15 (A) The parties acknowledge that Tampa's historical use of surface Water

16 sources constitutes a special circumstance justifying an exception to the exclusivity

17 requirements of Section 3.02 hereof. In recognition of this special circumstance, the

18 parties agree to

19 (1) reserve Tampa's existing permitted capacity for withdrawals from the

20 Hillsborough River (82 mgd average annual day, 92 mgd peak month and 104 mgd

21 maximum day). Withdrawals from Sulphur Springs (5 mgd average annual day, 10

22 mgd peak month and 20 mgd maximum day) and the Tampa Bypass Canal (20 mgd








1 average annual day and 40 mgd maximum day) have also been permitted as

2 augmentation quantities for the Hillsborough River in order to facilitate Tampa's

3 withdrawals from the Hillsborough River at the permitted 82 mgd average:annual'

4 day, 92 mgd peak month and 104 mgd maximum day rates; .

5 (2) protect Tampa's priority access to the Tampa Bypass Canal as

6 described in Section 3.08(D) hereof; and

7 (3) permit the Authority, on behalf of the region, to access Hillsborough

8 River and Tampa Bypass Canal surface Water sources during High Flow Periods,

9 as described in Section 3.08(D) hereof; provided however, that

10 (4) after the Authority has satisfied its need for Water from the

11 Hillsborough River during High Flow Periods, Tampa may increase its rates of

12 withdrawal up to 142 mgd peak month and 142 mgd maximum day, pursuant to

13 3.08(C) hereof, when such quantities are available and permitted for Tampa's use.

14 It is understood and agreed that Tampa's exception to the exclusivity requirements of

15 Section 3.02 hereof is limited to the quantities described in Sections 3.08(A)(1) and

16 3.08(A)(4) and the use of Reclaimed Water, as set forth in Section 3.09 hereof.

17 (B) Tampa shall continue meeting a portion of its Water needs from surface

18 Water sources, in the manner provided herein. Notwithstanding any other provisions of

19 this Agreement to the contrary, the Authority's obligation to meet Tampa's Water needs

20 shall be reduced by the amount of Water that can be derived from Tampa's use of such

21 surface Water sources. It is understood and agreed that the Authority's current Water

22 Supply Facilities and Master Water Plan do not contemplate the need to permanently








1 replace the quantity of Water that Tampa is currently permitted to withdraw from surface

2 Water sources, as set forth in Section 3.08(A)(1) hereof. However, upon the occurrence

3 of an environmental or physical catastrophe that impairs Tampa's use of the Hillsborough

4 River Reservoir, the Tampa Bypass Canal or Sulphur Springs (it being understood that an

5 environmental or physical catastrophe excludes regulatory actions unrelated to specific

6 events), Tampa shall request and the Authority shall assist Tampa with its unanticipated

7 need for additional Quality Water as follows:

8 (1) the Authority agrees to seek an emergency increase in all

9 interconnected regional system permits during such an emergency period;

10 (2) subject only to the physical limitations of the Authority's conveyance

11 system and Tampa's receiving facilities, all Quality Water not required to meet the

12 other Member Governments' needs will be delivered to Tampa; and

13 (3) the Authority will use its best efforts to increase its supply of Quality

14 Water to meet Tampa's Quality Water needs.

15 It is understood and agreed that the foregoing measures may not compensate for the

16 entire shortfall.

17 (C) Tampa will continue to hold its existing permit to withdraw Water from the

18 Hillsborough River and Sulphur Springs at the quantities set forth in Section 3.08(A)(1)

19 hereof. After the Authority has received a SWFWMD Primary Environmental Permit or

20 permits Primary Environmental Permits to access Hillsborough River and Tampa Bypass

21 Canal surface Water sources during High Flow Periods for regional purposes, Tampa may

22 seek an increase in its rates of withdrawal up to 142 mgd peak month and 142 mgd









1 maximum day; provided however, that the proposed increase by Tampa shall not reduce

2 the quantities available to the Authority for the region under the aforementioned regional

3 SWFWMD Primary Environmental Permit or SWFWMB Primary Environmental Permits.

4 If for any reason the Authority is not granted the aforementioned permit or permits by

5 December 31, 2010, Tampa may apply for an increase in its rates of withdrawal from the

6 Hillsborough River Reservoir. Additionally, after the Authority's permitted withdrawals for

7 regional use have been met, Tampa may seek an increase in the annual average

8 withdrawal from the Hillsborough River Reservoir to satisfy environmental regulatory

9 needs. The Authority agrees to support renewal for at least a 20 year period, pursuant to

10 existing statutory guidelines, of Tampa's existing permit for the withdrawal of such

11 quantities and the other Member Governments agree not to oppose the renewal of said

12 permit. Tampa has the right to manage and use the Hillsborough River and the Tampa

13 Bypass Canal as an integrated system as its primary sources of supply in preference to

14 the Quality Water supplied by the Authority. Management of the Hillsborough River

15 Reservoir and the Tampa Bypass Canal will be consistent with the current operations as

16 identified in subsections (1), (2) and (3) of Section 3.08(D) hereof or as otherwise modified

17 in the comprehensive management plans provided for in Section 3.08(G) hereof.

18 (D) The Authority will maintain ownership of the Tampa Bypass Canal pumping

19 facility and will be sole permitted on SWFWMD Primary Environmental Permits for the

20 Tampa Bypass Canal. Tampa agrees to support the Authority's application to become sole

21 permitted provided the City's current operating procedures are not modified or restricted.

22 Tampa is granted priority for delivery of Water from the Tampa Bypass Canal to augment









1 the Hillsborough River Reservoir up to 20 mgd on an average annual basis and up to 40

2 mgd on a maximum daily basis, as set forth in subsections (1) and (2) of this Section

3 3.08(D). It is mutually understood that the Tampa Bypass Canal may be incapable of

4 sustaining withdrawal-rates up to 40 mgd under certain naturally occurring hydrologic

5 conditions. As such the 40 mgd maximum day quantity represents a quantity that will be

6 delivered for augmentation of the Hillsborough Reservoir only as available from the middle

7 pool of the Tampa Bypass Canal. Notwithstanding the provisions of Section 3.04 hereof,

8 the rate charged to Tampa for Water provided through the Tampa Bypass Canal pumping

9 facility will be equal to the Authority's direct cost and Allocated Overhead. In the event that

10 Authority withdrawals have precluded Tampa from obtaining its needed share from the

11 Tampa Bypass Canal, (up to 20 mgd annual average daily and 40 mgd maximum day) the

12 Authority shall supply Water to Tampa to compensate for any shortfall at the same rate

13 Tampa would have paid for Water delivered from the Tampa Bypass Canal to the

14 Hillsborough River Reservoir.

15 (1) The Authority's Harney Pumping Station on the Tampa Bypass Canal

16 shall augment the Hillsborough River Reservoir within the permitted quantity range

17 specified in Section 3.08(C) hereof when the draft from Tampa's Hillsborough River

18 Treatment Plant exceeds the flow in the Hillsborough River as measured at the

19 Morris Bridge Hillsborough River Flow gauge and the Hillsborough River Reservoir

20 stage is below 22.5 feet MSL as measured at the Hillsborough River Reservoir dam.

21 (2) The Authority may pump the lower pool of the Tampa Bypass Canal

22 at any time. Authority withdrawals from the middle pool of the Tampa Bypass Canal








1 for regional use shall not be made when augmentation of the Hillsborough

2 Reservoir from the Tampa Bypass Canal is ongoing. In addition, Authority

3 withdrawals from the middlerpoo for regional use shall be in conformance with the

4 comprehensive management plan provided for in Section 3.08(G) hereof, which

5 may include the Tampa Water Resource Recovery Project.

6 (3) The Authority may divert withdrawals from the Hillsborough River to

7 either or both of the Tampa Bypass Canal or the Hillsborough River Water

8 Treatment Facility for use by the region during High Flow Periods.

9 (E) The Authority shall not apply for SWFWMD Primary Environmental Permits

10 to withdraw Water from the Hillsborough River that are in conflict with Tampa's use of the

11 Hillsborough River as set forth in Section 3.08(A) hereof. Tampa may exercise Host

12 Member Government rights pursuant to Section 3.13 hereof to contest any such

13 SWFWMD Primary Environmental Permit application. The Authority may apply for either

14 a modification of the existing SWFWME Primary Environmental Permit or an additional

15 SWFWMD Primary Environmental Permit to allow its withdrawal of Water from the Tampa

16 Bypass Canal to serve all of the Member Governments; provided, however, that any such

17 application shall not modify or restrict Tampa's priority for delivery of Water from the

18 Tampa Bypass Canal, as described in Section 3.08(D) hereof. Tampa may exercise Host

19 Member Government rights pursuant to Section 3.13 hereof to contest any such permit

20 application.

21 (F) The Morris Bridge Wellfield will be conveyed to the Authority, as required by

22 Section 5.03 hereof. Tampa agrees to support transfer of the existing SWFWMD Primary









1 Environmental Permit to the Authority and the renewal of such permit at the current

2 permitted quantities of withdrawal (15.5 mgd average day, 27 mgd peak month and 30 mgd

3 maximum day); provided however, that Tampa may exercise Host Member Government

4 rights pursuant to Section 3.13 hereof to contest any such permit application subsequent-

5 application for a Primary Environmental Permit renewal or modification for the Morris

-6 Bridge Wellfield.

7 (G) The Authority and Tampa will work in cooperation with SWFWMD to develop

8 a unanimously agreed upon comprehensive management plan for the Hillsborough River,

9 the Tampa Bypass Canal, Sulphur Springs and the Morris Bridge Wellfield.

10 (H) Tampa shall have the right to continue its ongoing studies and

11 implementation of Aquifer Storage and Recovery. It will remain Tampa's option as to

12 whether or not to continue its Aquifer Storage and Recovery programs at such time as the

13 Authority can provide additional surface water to the region and Tampa.

14 (I) Tampa and the Authority agree to amend the Agreement for New Water

15 Source Funding between the West Coast Regional Water Supply Authority and the City

16 of Tampa for the TWRRP. The Authority shall pay Tampa's local share of the TWRRP.

17 Tampa will administer the federal funding for the TWRRP as well as its design,

18 construction and operations. If this project is selected by the Authority, the Authority and

19 Tampa shall enter into an operations agreement whereby Tampa is paid for operating the

20 project. The Authority will administer SWFWMD funding for the Hillsborough Bay

21 Resource Exchange Project. The SWFWMD funding will be apportioned between three

22 main elements of the project proportionate to their design and construction costs. The









1 Authority will administer the design, construction and operations of the surface water

2 treatment plant.

3 SECTION 3.09. RECLAIMED WATER. Except as provided in Section 3.08(1),

4 the Member Governments shall retain the exclusive right to develop, own, and/or operate

5 all facilities for Reclaimed Water. However, in connection with the TWWRP, (A) all

6 applicable permits required for the construction of the TWWRP must be issued to the

7 Authority on or before December 31. 2008. and (B) the Authority must commence

8 operation of the TWWRP on or before December 31. 2012. If the Authority fails to meet

9 either one of the foregoing conditions, then all provisions of this Agreement pertaining to

10 the TWWRP shall be deemed null and void and of no further force and effect. In such

11 event, the Authority shall have no right, title or interest of any kind whatsoever in any of

12 the tertiary treated wastewater produced by Tampa's Howard F. Curren Wastewater

13 Treatment Plant and Tampa will retain the rights to develop, own and/or operate facilities

14 for Reclaimed Water.

15 SECTION 3.10. CLEARWATER FACILITIES. Pinellas may construct Water

16 Supply Facilities using reverse osmosis or other technology to replace facilities currently

17 operated by the City of Clearwater upon compliance with all of the following requirements:

18 (A) The plans, specifications and permits for construction of the Water Supply

19 Facility and an estimated operating cost projection shall be provided to the Authority.

20 Within ninety days of its receipt thereof, the Authority may elect to assume responsibility

21 for construction, ownership and operation of the Water Supply Facility. If no election is

22 made within the ninety day period, Pinellas may proceed with construction and shall own









1 and operate the Water Supply Facility, subject to the Authority's purchase option described

2 in Section 3.10(C) hereof.

3 (B) If the Authority elects to construct, own and operate the Water- Supply

4 Facility, the plans, permits and specifications for construction, andthe land upon which the

5 Water Supply Facility is to be located, will be transferred to the Authority as follows:

6 (1) Pinellas will transfer its rights to the plans and specifications to the

7 Authority upon reimbursement by the Authority of Pinellas' Actual Direct Cost

8 therefore. From time to time and upon receipt of a written request from the Authority,

9 Pinellas shall assign in writing to the Authority all rights which Pinellas may then

10 possess against (A) any parties who prepared the plans and specifications for the

11 Water Supply Facility and (B) all contractors, subcontractors and material suppliers

12 for the Water Supply Facility, reserving to Pinellas the right to subsequently

13 prosecute any claims against said parties that may arise as a result of any claims,

14 action, loss or damage sustained by Pinellas arising out of any of the plans and

15 specifications for the Water Supply Facility or construction of the Water Supply

16 Facility.

17 (2) The Authority and Pinellas will make joint application for transfer of

18 the Environmental Permits.

19 (3) The land upon which the Water Supply Facility is to be located shall

20 be appraised by two independent appraisers acceptable to the Authority and

21 Pinellas in their reasonable judgment, and the Authority will purchase the property

22 upon payment of an amount equal to the average of the two appraised values.








1 (C) If the Authority declines to construct, own and operate the Water Supply

2 Facility, the Authority shall have the option at any time to acquire such Water Supply

3 Facility from Pinellas.. If the Authority electslto exercise its option, the purchase price shall

4 be equal to Pinellas' Actual Direct Cost to acquire and construct such Water Supply

5 Facility.

6 SECTION 3.11. SERVICE DISRUPTIONS. The Authority shall provide notice

7 to the Member Governments not less than five days prior to closing any Water Supply

8 Facility for scheduled maintenance or repair. Furthermore, the Authority shall provide, as

9 necessary, alternative means for providing Quality Water supply services. Upon the

10 occurrence of any unforseen mechanical, equipment or other failure of a Water Supply

11 Facility, the Authority shall provide notice to the Member Governments that is reasonable

12 under the circumstances. Any service disruption that results from mechanical equipment

13 or other failure shall be remedied as quickly as technically feasible.

14 SECTION 3.12. PERMITS AND LICENSES.

15 (A) The Authority shall make timely application for all Primary Environmental

16 Permits required to meet the Quality Water needs of the Member Governments in such a

17 manner as will give priority to reducing adverse environmental effects of excessive or

18 improper withdrawals of water from concentrated areas. The Authority shall provide the
ttree C") ea4
19 Member Governments with'notice of all preapplication meetings with the permitting

20 agencies for SWFWMD Permits or Agency Primary Environmental Permits and shall also

21 provide the Member Governments, upon request, with copies of all applications, including

22 modification or renewal applications, supplemental or clarifying information requested by









1 the permitting agency, and the technical data and basis for such applications and filings.

2 All applications and amendments to SWFWMD Permit oAgeny Primary Environmental

3 Permit applications shall be approved by the Board before filing with the permitting
A \ I14 w-I Ilt;4 %lIvkldpd ill i clvde
4 agencyA
5 er itc itiof ns. '

6 (B) It is hereby stipulated and agreed that only a Host Member Government, in

7 its individual capacity, has a substantial interest in any application made by the Authority

8 for the i:suance, modificatin ,r renewal of a, a Primary Environmental Permit. All

9 disputes between a Host Member Government and the Authority related to the issuance,

10 modifcation or renewal of an a Primary Environmental Permit shall be resolved pursuant

11 to Sections 3.13, 3.14 a-end35 hereof. All other Member Governments hereby waive their

12 individual right to participate directly in disputes related to any application made by the

13 Authority for the issua-ne, modification or renewal of an a Primary Environmental Permit,

14 and agree to participate solely through actions taken by the Authority.

15 (C) The Authority shall operate its Water Supply Facilities in compliance with the

16 terms and conditions of all Primary Environmental Permits. If a Member Government

17 asserts that the Authority is not in compliance with the terms and conditions of an a

18 Primary Environmental Permit, the Member Government shall initiate the dispute resolution

19 procedure set forth in Section 6.06 hereof. If the issue remains unresolved following

20 completion of the dispute resolution procedure, the Member Government may initiate a

21 circuit court action against regulatory agencies and/or the Authority pursuant to Section

22 403.412(2), Florida Statutes. Except as provided in this Section 3.12(C), all Member









1 Governments, including Host Member Governments, hereby waive their individual right to

2 participate directly in any enforcement action related to Primary Environmental Permits and

3 agree to participate solely through actions takerrby the Authority; provided however, that

4 a Member Government shall have the right to defend itself in any enforcement action

5 brought against the Member Government by a regulatory agency, the Authority, another

6 Member Government or any other party.

7 (D) Notwithstanding this Section 3.12 or any other provision of this Agreement

8 to the contrary, the Member Governments shall continue to have full standing with regard

9 to Department of Administrative Hearings Case Nos. 95-1520 through 95-1-29. including

10 but not limited to the current permit renewal administrative proceedings and any

11 subsequent appeal thereof, whether judicial, administrative or quasi-judicial in nature.

12 (E) The parties acknowledge that on the date the conditions described in Section

13 6.03(A) hereof are satisfied, one or more Member Governments may be contesting the

14 iuane, edification or renewal of SWFWMD or opposing Primary Environmental

15 Permits sought by the Authority. The Except as provided in Section 3.12(D) hereof, the

16 provisions of this Section 3.12(D) 3.12(E) shall control the resolution of all issues related

17 to such contests.

18 (1) Upon satisfaction of the conditions set forth in Section 6.03(A)hereof, '

19 any Member Government qualifying as a Host Member Government in connection

20 with a SWFWMB Primary Environmental Permit may initiate the dispute resolution

21 procedure set forth in Section 3.13 hereof. Host Member Governments initiating the

22 dispute resolution procedure may continue to contest the SWFWMD Primary









1 Environmental Permit until the arbitrators' decision has been issued. In addition,

2 if the contested SWFWMD Primary Environmental Permit relates to a Transferred

3 Asset, the Member Government-required to: convey the Transferred Asset may

4 continue to contest the SWFWMD Primary Environmental Permit until (a) the

5 arbitrators' decision has been issued or (b) the conditions described in Section

6 6.03(D) hereof have been satisfied, whichever shall occur first. All other Member

7 Governments shall dismiss or otherwise withdraw from such proceedings.

8 (2) Upon satisfaction of the conditions described in Section 6.03(D)

9 hereof, the Authority shall be substituted in such proceedings for the Member

10 Government that has conveyed the Transferred Asset; provided however, that to

11 the extent, if any, that such substitution is not possible or does not provide the

12 Authority with the same rights in such proceedings as the Member Government

13 would otherwise have, then such substitution shall not occur.

14 (3) If the arbitrators' decision is issued prior to the date on which

15 SWFWD i dies or renews the SAWFWMD Permit the Primary

16 Environmental Permit is issued, modified or renewed, the Authority shall amend or

17 withdraw its SWFWMD Primary Environmental Permit application to conform with

18 the arbitrators' decision. In such event, the Host Member Government shall dismiss

19 or otherwise withdraw from such proceedings.

20 (4) If SWWMD iues, difies or renews the G.FWrVD Permit the

21 Primary Environmental Permit is issued, modified or renewed prior to the date on

22 which the arbitrators' decision is issued, the Authority shall file and diligently pursue









1 an application with SWFWMD the permitting agency to modify the SWFWMD

2 Primary Environmental Permit to conform with the arbitrators' decision. In such

3 event, there shall be no additional Host Member Government arbitration with

4 respect to the application to modify the SWFWMB Primary Environmental Permit.

5 fLE)El It is expressly agreed that no Member Government shall fund the

6 participation of any third-party in an administrative or judicial challenge to the matters

7 described in this Section 3.12; provided however, that this Section 3.-2(E) 3.12(F) shall

8 not apply to EPC.

9 fF)GJ} If SWFWMD issues a Consolidated Permit and a condition of the

10 Consolidated Permit requires the Authority to file reports on conservation, per capital Water

11 use, reuse or similar matters requiring information from the Member Governments, the

12 Member Governments agree to supply the Authority with data, reports and other

13 information that will enable the Authority to comply with its reporting requirements on a

14 timely basis.

15 SECTION 3.13. SWFWMD PRIMARY ENVIRONMENTAL PERMIT DISPUTES.

16 (A) If any Host Member Government opposes an Authority application for the

17 isune, mdificatin o-r renewal f a SWFWMD a Primary Environmental Permit, such

18 Host Member Government shall notify the Authority in writing within thirty days of the date

19 on which the Board approves the application. A I lost Member Government may oppose

20 either the quantity of withdrawal or the permit conditi"ns- If a Host Member Government

21 opposes eony the quantity of withdrawal, the notice shall specify the quantity acceptable

22 to the Host Member Government. Following the receipt of "ay such notice, a binding









arbitratio- n shal be con..ducted in a rdace wi-th this Setion 3.13. If the SWFWMD If the

Primary Environmental Permit is a Consolidated Permit, any Host Member Government

may raise environmental issues affecting property located within its own jurisdiction, If

more than one Host Member Government has raised environmental issues affecting

property located within its own jurisdiction, a separate arbitration shall be held for each

Host Member Government. The Authority will defer filing its application for a period of

ninety days following approval by the Board; provided however, that if a notice of

opposition is not filed within thirty days of the date on which the Board approves the

application, the Authority may file its application at any time thereafter.

(B) Following the receipt of any such notice, a binding arbitration shall be

conducted to determine if there is reasonable assurance that the Authority's Primary

Environmental Permit application meets all applicable agency rules, policy and statutes.

The If the lost Member Government opposes the permit conditions, the arbitrators shall

proceed to determine (1) if the permit conditions included in the application comply with

the applicable statutes, rules, and orders governing SWFWMD Permits, and (2) if the

permit conditions are not in compliance with the applicable statutes, rules, and orders

governing SWFWMD P ermits, what modifications are required to achieve compliance. If

the H lost Member Government opposes only the quantity of withdrawal, the arbitratoressha

proceed to determine the highest quantity of withdrawal that can be permitted in

compliance with the applicable statutes, rules, and orders governing the issuanee of

SWFWMD Permits. (C) The fees, charges and expenses of the arbitrators, any experts

engaged by the arbitrators, the respective counsel engaged by the parties, and any
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1 witnessess called by the parties shall be paid as follows:(1) If one or more H lost Member

2 Governments oppose the permit conditions, the Authority and each Host Member

3 Government shall pay the fees, charges and-expenses of its own-counsel and witnesses.

4 In addition, the Authority and each Host Member Government shall pay or reimburse equal

5 shares of the fees, charges and expenses of the arbitrators and any experts engaged by

6 the arbitrators.

7 (2) If a single I lost Member Government opposes only the quantity of withdrawal

8 and the quantity established by the arbitrators is within the Success Range of the Authority

9 and the Failure Range of the I lost Member Government, the I lost Member Government

10 shall pay or reimburse (a) the fees, charges and expenses of its own counsel and

11 witnesses; (b) the fees, charges and expenses of the arbitrators and any experts engaged

12 by the arbitrators; and (c) the fees, charges and expenses of the Authority's counsel and

13 any witnesses called by the Authority.(3) If a single I lst Member GovernLment opposes

14 only the quantity of withdrawal and the quantity established by the arbitrators is within the

15 Success Range of the Host Member Government and the Failure Range of the Authority,

16 the Authority shall pay or reimburse (a) the fees, charges and expenses of its own counsel

17 and witnesses; (b) the fees, charges and expenses of the arbitrators and any experts

18 engaged by the arbitrators; and (c) the fees, charges and expenses of the Host Member

19 Government's counsel and any witnesses called by the I lost Member Government.

20 (4) If a single I lost Member Government opposes ony the quantity of withdrawal and the

21 quantity established by the arbitrators is within the Middle Range of the Authority and the

22 I lo st Member Governmet, the Authority and the I lost Member Government shall each pay
11 I ; 1 II~O ~ ~ll V l I11I ,/,/ ,,', ~ iYII !,J L~ tVIIIid*J i l I,

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1 the fees, charges and expenses of its own counsel and witnesses. In addition, the

2 Authority and the I lost Member Government shall pay or reimburse onehalf of the fees,

3 charges and expenses of the arbitrators and any experts engaged by the arbitrators.

4 (5) If more than one i lost Member Government opposes only the quantity of withdrawal,

5 the amount to-be paid or reIimbursd by each party shall be determined as foIllows

6 (a) equal shares of (i) the fees, charges and expenses of the arbitrators and any experts

7 engaged by the arbitrators, and (ii) the fees, charges and expenses of the Authority's

8 counsel and any witnesses called by the Authority, shall be attributed to hypothetical

9 separate arbitrations between the Authority and eah I lost Member Government; and

10 (b) the provisions for payment set forth in Sections 3.13(D)(2) through 3.13(B)(4) hereof

11 shall be applied to each hypothetical separate arbitration.

12 fB Except as provided in this Section 3.13(D) 3.13(0), the Authority will amend

13 or withdraw its SWFWMD Primary Environmental Permit application (or if the SWFWMD

14 Primary Environmental Permit has been issued, apply for modification of the SWFWMD,

15 Primary Environmental Permit) to conform with the arbitrators' decision.

16 (1) If amendment or withdrawal of the SWFWMDv Primary Environmental
oM041;iCdtWI dV WIme4ol
17 Permiotpplication (or modification of the S"WFWME Primary Environmental Permit,

18 if already issuedj)would result in a Production Failure, the Authority shall not be

19 required to amend or withdraw the SWFWMD Primary Environmental Permit (or if

20 the SWFWMD, Primary Environmental Permit has been issued, apply for

21 modification of the SWFWMD Primary Environmental Permit) until additional Water

22 production facilities have been placed in service to supply a quantity of additional









1 Quality Water that will permit compliance with the arbitrators' decision without

2 creating a Production Failure. The Authority shall immediately initiate or accelerate

3 its preparation of SWFWME- -Pe ert pemit applications, final design and

4 construction of such additional Water production facilities. If the SWFWM,

5 Primary Environmental Permit is a Consolidated Permit with two or more separate

6 Host Member Government arbitrations, an additional consolidated arbitration shall

7 be conducted for the purpose of determining the extent to which the production from

8 individual Water Supply Facilities will be reduced, without resulting in a Production

9 Failure, prior to the date on which the additional Water production facilities are

10 placed in service. Notwithstanding the consolidated arbitration, the Authority shall

11 immediately reduce the production of the individual Water Supply Facilities to a

12 level which, in the Authority's best judgment, constitutes the least amount of

13 production possible without resulting in a Production Failure. The Authority and

14 each Host Member Government shall each pay the fees, charges and expenses of

15 its own counsel and witnesses for the consolidated arbitration. In addition, the

16 Authority and each Host Member Government shall pay or reimburse equal shares

17 of the fees, charges and expenses of the arbitrators and any experts engaged by

18 the arbitrators for the consolidated arbitration.

19 (2) If amendment or withdrawal of the SWFWMD Primary Environmental

20 Permit application would reduce the combined production from the Partnership Plan

21 Wellfields, on an average annual basis, to a quantity less than 90 mgd prior to

22 December 31, 2008, the Authority shall not be required to amend or withdraw the









1 SWFWMD Primary Environmental Permit (or if the SWFWMD Primary

2 Environmental Permit has been issued, apply for modification of the SWFWMD

3 Primary Environmental Permit) unless the acquisitionror construction of additional

4 Water production facilities is approved by-allr nine Directors. If the SWFWMD

5 Primary Environmental Permit is a Consolidated Permit with two or more separate

6 Host Member Government arbitrations, an additional consolidated arbitration shall

7 be conducted for the purpose of determining the extent to which the production from

8 individual Water Supply Facilities will be reduced, without reducing the combined

9 production from the Partnership Plan Wellfields, on an average annual basis, to a

10 quantity less than 90 mgd. The Authority and the Host Member Governments shall

11 each pay the fees, charges and expenses of its own counsel and witnesses for the

12 consolidated arbitration. In addition, the Authority and the Host Member

13 Government shall pay or reimburse equal shares of the fees, charges and expenses

14 of the arbitrators and any experts engaged by the arbitrators for the consolidated

15 arbitration.

16 (E) The Member Governments have established binding arbitration, as described

17 in this Section 3.13, as the sole and exclusive method of resolving all disputes between

18 the Authority and a Host Member Government relating to the issuance, modification or



20 I .,t Member Go..vernmet opposes an Authority application for the issuance modification

21 or renewal of an Agency Permit, such I lost Member Government shall notify the Authrity

22 in writing within thirty days of the date on which the Board approves the application.
20a
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1 Following the receipt of any such notice, a binding arbitration shall be conducited in

2 accordancewith this Section 313. The Authority will defer filing its application for a period

3 of ninety days following approval by the Board; provided however, that if-a notice o

4 opposition is not filed whin thirty days of the date on which the Board approves the

5 application, the Authority may file its application at any tim, e thereafter. I lost Membe

6 Governments may initiate arbitration pursuant to this Section 3.14 only if they would have

7 standing to contest issuance of the permit under applicable agency rules. In addition, any

8 ost Member Government shall be limited to the issues it .could have raised under

9 applicable agency rules. No issue that was or could have been resolved in an arbitration

10 proceeding pursuant to Section 3.13 hereof may be raised in any arbitration initiated

11 pIursuIant to this Section 3.1 4.(B) The arbitrators shall proceed to determine (1) if the permit

12 conditions included in the application comply with the applicable statutes, laws, rules, and

13 orders governing the Ageny Permit, and (2) if the permit conditions are not in compliance

14 with the applicable statutes, rules, and orders governing the Agency Permit, what.

15 modifications are required to achieve compliance. () If one or more lost Member

16 Governments oppose issuanme of the Agency Permit, the AuIthority and each I lost Member

17 Governmen.., t shall pay the fees, charges and expenses of its own counsel ad witnesses.

18 In addition, the Authority and each lost Member Government shall pay or reimburse equal

19 shares of the fees, charges and expenses of the arbitrators and any experts engaged by

20 the arbitrators.(D) The Member Governments have established binding arbitration, as

21 described in this Section 3.13, as the sole and exclusive method of resolving all disputes

22 between the Authority and a I lost Member Government relating to the issuance,


69
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modification or renewal of any Agency Permit.SEGCTION 3.15. HOST MEMBER

GOVERNMENT PERMIT DISUT.(A) if any lost ember Goverment denies the

Authority's application for a I ost Member Government Permit, declines to issue a H ost

Member Governmt ermt mit in a timely manner, or issues a I lost Member Government

Permit with conditions; that are not acceptable to the Authority, the Authority may notify the

I lost Member Government that it is initiating binding arbitration pursuant to this Section

3.15. The notice shall specifically identify any unacceptable permit conditions. If the Water

Supply Faceility for which a I lost Member Government Permit application is sought has

been the subject of arbitration pursuant to Section 3.13 hereof or Section 3.14 hereof, the

issues resolved in the prior arbitration may not be raised in any arbitration initiated

pursuant to this Section 3.15.(D) If the lost Member Government denies the Authority's

application for a Host Member Government Permit or declines to issue a Host Member

Government Permit in a timely manner, the arbitrators shall proceed to determine if the

application complies with the applicable statutes, rules, and orders governing. the lost

Member Government Permit. If the I lost Member Government Permit has been issued with

conditions that are not acceptable to the Authority, the arbitrators shall proceed to

determine if the conditions are consistent with the applicable statutes, rules, and orders

.governing the I lost Member Government Permit. (C) The fees, charges and expenses of

the arbitrators, any experts engaged by the arbitrators, the respective counsel engaged

by the parties, and any witnesses called by the parties shall be paid as follows:(1) If the

Sost Member Government denied the Authority's application for a I lost Member

Government Permit or declined to issue a I lost Member Government Permit in a timely









1 manner and the arbitrators determine that the application complies with the applicable

2 statutes, rules, and orders governing the application, the I lost Member Government sha

3 pay or reimburse (a) the fees, ages and expenses of its own counsel ad witnesses

4 (b) the fees, 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 any

6 witnesses called by the Authority.(2) If the Host Member Government denied the

7 Athrity's application for a ost Member Government Permt o declined to issue a I l....ost

8 Member Government Permit in a timely manner and the arbitrators determine that the

9 application does not comply with the applicable statutes, rules, and orders governing the

10 application, the Authority shall pay or reimburse (a) the fees, charges and expenses of its

11 own counsel and witnesses; (b) the fees, charges and expenses of the arbitrators and any

12 experts engaged by the arbitrators; and (c) the fees, charges and expenses of the I lost

13 Member Government's counsel and any witnesses called by the I lost Member

14 Government. (3) If the I lost Member Government issued the o lest Member Government

15 Permit that were unacceptable to the Authority and the arbitrators determine that the

16 conditions specified in the Authority's notice are not consistent with the applicable statutes,

17 rules, and orders governing the I lst Meber Government Permit, the I lost Member

18 Government shall pay or reimburse (a) the fees, charges and expenses of its own counsel

19 and witnesses; (b) the fees, charges and expenses of the arbitrators and any experts

20 engaged by the arbitrators; and (c) the fees, charges and expenses of the Authority's

21 counsel and any witnesses called by the Athority.(4) If the I lost Member Govenment

22 issued the H lost Member Government Permit that were unacceptable to the Authority and








the arbitrators determine that the conditions specified in the Authority's notice are

consistent with the applicable statutes, rules, and orders governing the I lost Member

Government Permit, the Authority shall pay or reimburse (a) the fees, charges and

expenses of its own counsel and witnesses; (b) the fees, charges and expenses of the

arbitrators and any experts engaged by the arbitrators; and (c) the fees, charges and

expenses of the lost Member Government's counsel ad n any witnesses called by the I lost

Member Govemrnent.(D) The I lost Member Government and the Authority will be bound

by the arbitrators' decision.(E) The Member Governments have established binding

arbitration, as described in this Section 3.13, as the sole and exclusive method of res olvmg

all disputes betw:ee the Authority and a I ost Member Government relating to te

suance, mrodification or renewal of any dost Member Government Permit.

aSETI'N 3.16 Primary Environmental Permits.

SECTION 3.14. OTHER PERMIT DISPUTES. The Member Governments

hereby retain their individual right to participate directly in disputes related to the issuance.

modification, renewal or enforcement of any Environmental Permit that is not a Primary

Environmental Permit. Notwithstanding the foregoing, all Member Governments shall be

bound by the findings of fact and conclusions of law included in any arbitrators' decision

issued pursuant to Section 3.13 hereof and waive any issue that could have been resolved

in an arbitration proceeding pursuant to Section 3.13 hereof. Upon request of the

Authority or any Member Government, the Authority and all Member Governments agree

to execute a written stipulation to any findings of fact and conclusions of law included in

any arbitrators' decision issued pursuant to Section 3.13 hereof, in a form sufficient for








1 filing with the appropriate administrative or judicial officer in any subsequent dispute

2 related to the issuance, modification, renewal or enforcement of any Environmental Permit.

3 SECTION 3.15. RESOLUTION OF RECLAIMED WATER USE ISSUES.

4 (A) If any Member Government determines that a proposed Authority Reclaimed

5 Water Resource Project will have an adverse effect upon the public health and safety of

6 its retail and wholesale customers, such Member Government shall notify the Authority in

7 writing within thirty days of the date on which the Board approves the Reclaimed Water

8 Resource Project; provided however, that any notice in connection with the TWRRP shall

9 be provided within thirty days of the date on which the Board accepts the ecosystem team

10 permit or within thirty days of the date on which the conditions described in Sections

11 6.03(A) and (D) hereof have been satisfied, whichever occurs later. Following the receipt

12 of any such notice, a binding arbitration shall be conducted in accordance with this Section

13 3-46 3.15. Any and all issues related to the Authority's ownership and operation of the

14 proposed Reclaimed Water Resource Project shall be raised and resolved in a single

15 proceeding. If the Host Member Government has challenged any Authority Reclaimed

16 Water Resource Project pursuant to Section 3.13 hereof, the arbitration authorized by this

17 Section 346 3.15 shall be consolidated with the arbitration conducted pursuant to Section

18 3.13 hereof. The Authority will defer filing any Primary Environmental Permit application

19 for a period of ninety days following approval by the Board; provided however, that if a

20 notice of opposition is not filed within thirty days of the date on which the Board approves

21 the Reclaimed Water Resource Project, the Authority may file the Primary Environmental

22 Permit applications at any time thereafter. The Authority will amend or withdraw all








1 Primary Environmental Permit applications or Primary Environmental Permits to conform

2 with the arbitrators' decision.

3 (B) The arbitrators shall proceed to determine if the proposed Reclaimed Water

4 Resource Project threatens the public health and safety of the Member Governments' retail

5 and wholesale customers. The arbitrators may, at their discretion, and shall, upon written

6 request of the Member Government or the Authority, engage experts to provide peer

7 review of any scientific and technical studies introduced by the parties.

8 (C) The fees, charges and expenses of the arbitrators, any experts engaged by

9 the arbitrators, the respective counsel engaged by the parties, and any witnesses called

10 by the parties shall be paid as follows:

11 (1) If a single Member Government opposes the Reclaimed Water

12 Resource Project and the arbitrators determine that Reclaimed Water Resource

13 Project does not threaten the public health and safety of the Member Governments'

14 retail and wholesale customers, the Member Government shall pay or reimburse (a)

15 the fees, charges and expenses of its own counsel and witnesses; (b) the fees,

16 charges and expenses of the arbitrators and any experts engaged by the

17 arbitrators; and (c) the fees, charges and expenses of the Authority's counsel and

18 any witnesses called by the Authority.

19 (2) If a single Member Government opposes the Reclaimed Water

20 Resource Project and the arbitrators determine that Reclaimed Water Resource

21 Project does threaten the public health and safety of the Member Governments'

22 retail and wholesale customers, the Authority shall pay or reimburse (a) the fees,








1 charges and expenses of its own counsel and witnesses; (b) the fees, charges and

2 expenses of the arbitrators and any experts engaged by the arbitrators; and (c) the

3 fees, charges and expenses of the Member Government's counsel and any

4 witnesses called by the Member Government.

5 (3) If more than one Member Government opposes the Reclaimed Water

6 Resource Project and the arbitrators determine that Reclaimed Water Resource

7 Project does not threaten the public health and safety of the Member Governments'

8 retail and wholesale customers, each Member Government shall pay the fees,

9 charges and expenses of its own counsel and witnesses. In addition, each Member

10 Government shall pay or reimburse an equal share of (a) the fees, charges and

11 expenses of the arbitrators and any experts engaged by the arbitrators; and (b) the

12 fees, charges and expenses of the Authority's counsel and any witnesses called by

13 the Authority.

14 (4) If more than one Member Government opposes the Reclaimed Water

15 Resource Project and the arbitrators determine that Reclaimed Water Resource

16 Project does (threaten the public health and safety of the Member Governments'

17 retail and wholesale customers, the Authority shall pay or reimburse (a) the fees,

18 charges 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 Member Governments' counsel and any

21 witnesses called by the Member Governments.








1 (D) The Member Governments have established binding arbitration, as described

2 in this Section -346 3.15, as the sole and exclusive method of resolving all disputes

3 between the Authority and a Member Government relating to the quality of Water provided

4 from a Reclaimed Water Resource Project.

5 SECTION 347 3.16. ARBITRATION PROCEDURE. All binding arbitrations

6 to be conducted pursuant to Sections 3.13,-34-, and 3.15 andB 316 hereof shall be

7 conducted in accordance with the procedure set forth in this Section 3-.7 3.16.

8 (A) Arbitrators shall be appointed as follows:

9 (1) If there is a single Member Government, the Authority and the

10 Member Government each shall appoint a person as arbitrator within sixty days of

11 the date on which the Board approves the application(or if the arbitration has been

12 initiated under Section 3.15 hereof, within thirty days f the date on which the

13 Authority notifies the Host Member Government of its intent to initiate arbitration).

14 Each appointment shall be signified in writing to the counter-party and the

15 arbitrators so appointed, within ten days of their appointment, shall appoint a third

16 arbitrator, who shall chair the panel. If the arbitrators appointed by the parties are

17 unable to agree upon a third arbitrator, the same shall be appointed by the

18 American Arbitration Association from its qualified panel of arbitrators. If the

19 Authority or the Member Government fails to appoint an arbitrator within sixty days

20 of the date on which the Board approves the applications i-f-the arbitration has

21 been initiated under Section 3.15 hereof, within thirty days of the date en which the

22 Authcrity notifies the Member Gove.rnent of its intent to initiate arbitration), then








1 the arbitrator that has been appointed shall appoint a second arbitrator and the two

2 so appointed shall appoint a third arbitrator to chair the panel. None of the

3 arbitrators shall have a business or other pecuniary relationship with either party,

4 except for payment of the arbitrators' fees and expenses.

5 (2) If there is more than one Member Government opposed to the

6 application, the Authority, individually, and the Member Governments, collectively,

7 shall each appoint a person as arbitrator within sixty days of the date on which the

8 Board approves the applications if the arbitration has been initiated under Section

9 3.15 hereof, within thirty days of the date en which the Authority notifies the

10 Member Government of its intent to initiate arbitration). Each appointment shall be

11 signified in writing to the other parties and the arbitrators so appointed, within ten

12 days of their appointment, shall appoint a third arbitrator, who shall chair the panel.

13 If the arbitrators appointed by the parties are unable to agree upon a third

14 arbitrator, the same shall be appointed by the American Arbitration Association from

15 its qualified panel of arbitrators. If the Authority, individually, or the Member

16 Governments, collectively, fail to appoint an arbitrator within sixty days of the date

17 on which the Board approves the application(or if the arbitration has been initiate

18 under Section 3.15 hereof, within thirty days of the date on which the Authority

19 notifies the ost Member Government of its intent to initiate arbitration), then the

20 arbitrator that has been appointed shall appoint a second arbitrator and the two so

21 appointed shall appoint a third arbitrator to chair the panel. None of the arbitrators








1 shall have a business or other pecuniary relationship with any party, except for

2 payment of the arbitrators' fees and expenses.

3 (B) The three arbitrators shall be sworn to perform their duties with impartiality

4 and fidelity. The arbitrators may, at their discretion, .and shall,-upon written request of a

5 participating Member Government or the Authority, engage experts to provide peer review

6 of any scientific and technical studies introduced by the parties. The arbitration hearing

7 shall convene not earlier than 90 days and not later than 120 days of the appointment of

8 the chair by the two arbitrators chosen by the parties unless the Member Government and

9 the Authority agree to an earlier date. The arbitrators shall render a decision within sixty

10 days of the date on which the arbitration hearing convenes, and such decision shall be in

11 writing and in duplicate, one counterpart thereof to be delivered simultaneously to each

12 of the parties. The decision shall contain findings of fact and conclusions of law and shall

13 be final and binding upon the Authority and all participating Member Governments.

14 (C) Except to the extent inconsistent with this Section 3-1-7 3.16, the American

15 Arbitration Association standards shall apply to any arbitration proceedings conducted

16 under the provisions of Sections 3.13, 3.14, 3.15 and 3.16 heref. Limited discovery Shall

17 be allowed in any such arbitration proceeding of up to 25 interrogatories per party

18 all subparts), up to ten depositions per party (with a limitation of eight hours per

19 deposition), the exchange of witness and exhibit lists in accordance with a schedule

20 approved by the arbitrators, and any other discovery prc edures agreed to by the parties

21 appved by the arbtrators provided however, that requests for admission sh not

22 be allowed in any arbitrate breeding and 3.15 hereof. Discovery shall be conducted








1 pursuant to the rules set forth in Appendix N hereto unless all parties to the proceeding

2 agree to modify such rules. The venue for any such action shall be the county in which

3 the Authority maintains its principal office.

4 SECTION .48 3.17. LOCAL LAND USE DECISIONS. In carrying out their

5 statutorily conferred zoning, land use and comprehensive planning powers and

6 responsibilities, the Member Governments shall not restrict or prohibit the use of land for

7 Authority Water supply purposes, including ground Water supply and the facilities of third-

8 parties supplying Water to the Authority.

9 SECTION 3.18.. SECTION 3.19. TAXES, FEES, AND SPECIAL ASSESSMENTS.

10 The Member Governments shall not impose any taxes, fees, or special assessments on

11 Quality Water produced by the Authority for delivery to the Member Governments. This

12 Section 349 3.18 shall not be construed to prohibit any taxes, fees, or special

13 assessments imposed by the Member Governments in connection with the sale of Quality

14 Water to customers of the Member Governments.

15 SECTION 3-.0 3.19. PRODUCTION FAILURE. Upon the occurrence of a

16 Production Failure, each affected Member Government shall have the additional rights set

17 forth in this Section 3-20 3.19.

18 (A) At its option, each Member Government may enter into standby agreements

19 to purchase Water from suppliers other than the Authority. Member Governments shall

20 accept all Quality Water delivered by the Authority and shall exercise their right to

21 purchase Water from suppliers other than the Authority only in the event of a Shortfall and

22 to the extent of a Shortfall Amount.








1 (1) If less than all of the Member Governments experience a Shortfall and

2 any purchase agreement entered into in good faith by a Member Government

3 requires payment of a purchase price that exceeds the uniform rate established

4 pursuant to Section 3.04 hereof, the Member Government shall invoice the

5 Authority for amounts actually paid in excess of the uniform rate and the Authority

6 shall reimburse the Member Government for such amounts within 30 days of its

7 receipt of such invoice.

8 (2) Any Member Government experiencing a Shortfall may Wheel Quality

9 Water acquired by the Member Government from suppliers other than the Authority

10 to the Member Government's Point of Connection.

11 (B) Each Member Government may elect, individually or in combination with

12 other Member Governments, to acquire and construct Water Supply Facilities with a

13 capacity necessary to protect itself against a Shortfall.

14 (1) If a Member Government acquires or constructs a Water Supply

15 Facility pursuant to this Section 3-26(D) 3.19(B) and a Shortfall occurs with respect

16 to such Member Government, the Authority shall purchase the Water Supply

17 Facility upon demand of such Member Government. The purchase price shall be

18 equal to the Member Government's Actual Direct Cost to acquire and construct

19 such Water Supply Facilities. Upon receipt of any such demand, the Authority shall

20 use all reasonable efforts to issue Obligations at the earliest practical date in an

21 amount sufficient to fund the purchase price and shall purchase the Water Supply

22 Facility immediately upon issuance of such Obligations.








1 (2) If a Member Government acquiring or constructing a Water Supply

2 Facility pursuant to this Section 3.20() 3.19(B) elects not to demand its purchase

3 by the Authority upon the occurrence of a Shortfall or if the Authority is unable, after

4 applying all reasonable efforts, to issue Obligations sufficient to purchase the Water

5 Supply Facility, the Authority shall purchase the Quality Water produced at the

6 Water Supply Facility. The Authority and the Member Government shall enter into

7 a water supply agreement including, among others, the following terms:

8 (a) The rate in effect for each Fiscal Year shall be sufficient to pay

9 the Member Government's estimate of its Actual Direct Cost for construction

10 and treatment.

11 (b) All Quality Water produced at the Water Supply Facility shall

12 be delivered to and purchased by the Authority; provided however, that if

13 use of the Quality Water directly by the Member Government would avert a

14 Shortfall in respect of such Member Government, the Member Government

15 shall be entitled to use such Quality Water and Authority's right of purchase

16 shall be reduced by such amount.

17 (c) The Member Government shall maintain accounts and records

18 of its Actual Direct Cost. On or before each March 31, the Member

19 Government shall complete an audit of those accounts and provide a copy

20 to the Authority for review and comment. At its sole expense, the Authority

21 may perform its own audit of the appropriate accounts to support the Quality








1 Water charge. The Authority will notify the Member Government if it

2 chooses to pay for a separate audit.

3 (d) Following the end of each Fiscal Year, an annual adjustment

4 in the rate in effect during that Fiscal Year shall be computed on the basis

5 of the specific Actual Direct Cost incurred by the Member Government in

6 connection with the Quality Water delivered to the Authority during the Fiscal

7 Year then ended.

8 (e) If the audit determines that an overpayment has been made by

9 the Authority, the full amount of the overpayment shall be paid by the

10 Member Government to the Authority in three equal monthly installments, the

11 first of which shall be paid within thirty days of the date on which the Member

12 Government receives the audit. If the audit determines that an

13 underpayment has been made by the Authority, the full amount of the

14 underpayment shall be paid by the Authority to the Member Government in

15 three equal monthly installments, the first of which shall be paid within thirty

16 days of the date on which the Authority receives the audit.

17 (3) Any Member Government experiencing a Shortfall may Wheel Quality

18 Water produced by a Member Government's own Water Supply Facilities to the

19 Member Government's Point of Connection.

20 SECTION 3-24 3.20. REDUCTION OF ENVIRONMENTAL STRESS.

21 (A) On December 15, 1997, the Authority approved an agreement with Tampa

22 that will allow an increase in the quantity of Water that can be purchased by the Authority








1 from Tampa. Upon completion of the Tampa/Hillsborough Interconnect Project, the

2 Authority shall purchase the maximum quantity of Water available from Tampa. Due to

3 Tampa's reliance on surface Water sources, it is understood that Water will only be

4 available from Tampa on a seasonal or otherwise interruptible basis; Subject-to the

5 limitations of the Authority's Water delivery system, 65 percent of all Rotational Capacity

6 created by the purchase of Water from Tampa shall be applied immediately, on an

7 average annual basis, to reduce the quantity of Water withdrawn from the Cross Bar

8 Ranch Wellfield and Cypress Creek Wellfield and 35 percent of all Rotational Capacity

9 created by the purchase of Water from Tampa shall be applied immediately, on an

10 average annual basis, to reduce the quantity of Water withdrawn from wellfields located

11 in Hillsborough County. Pasco and Hillsborough acknowledge that this Section 3.21(A)

12 3.20(A) creates an interim preferential reduction in the quantity of Water withdrawn from

13 the Cross Bar Ranch Wellfield, the Cypress Creek Wellfield and wellfields located in

14 Hillsborough County that will be superseded, on a gallon-for-gallon basis, to the extent the

15 quantity of Water withdrawn is actually reduced by the Rotational Capacity and

16 Replacement Capacity created by implementation of the Master Water Plan, as described

17 in Section 3.21(E) 3.20(E) hereof.

18 (B) The parties acknowledge that the Master Water Plan has multiple purposes,

19 including: (1) development of a Quality Water supply that is sufficient to meet the current

20 and future needs of the Member Governments, (2) development of Replacement Capacity

21 to permanently reduce the permanent combined production from the Partnership Plan

22 Wellfields, and (3) development of Rotational Capacity that can be used to periodically


,83








1 reduce the withdrawal of Water from Authority wellfields located in environmentally

2 stressed areas. Recognizing the importance of developing Replacement Capacity and

3 Rotational Capacity, the parties agree that the Authority shall make all reasonable efforts

4 to implement a Master Water Plan prior to December 31, 2007, that produces42.5 mgd

5 of Replacement Capacity, on an average annual basis, and a total of at least 85 mgd of

6 Quality Water, on an average annual basis, that is not available on the date hereof.

7 (C) If the Authority fails to develop 42.5 mgd of Replacement Capacity prior to

8 December 31, 2007, any Member Government may acquire and construct Water Supply
or les IavO
9 Facilities with a production capacity, on an average annual basis, equal to the difference

10 between 42.5 mgd and the Replacement Capacity theretofore created by the Authority.

11 The Water Supply Facilities acquired or constructed pursuant to this Section 3.21(C)

12 3.20(C) shall be sold to and purchased by the Authority at a purchase price equal to the

13 Member Government's Actual Direct Cost to acquire and construct such Water Supply

14 Facilities. Upon purchase, such Water Supply Facilities shall be used by the Authority,

15 to the extent necessary, to meet its Replacement Capacity obligation.

16 (D) The Authority and the Member Governments are currently negotiating a

17 partnership agreement with SWFWMD, pursuant to which SWFWMD is expected to

18 provide up to $183,000,000 to be used by the Authority for the development of new

19 alternative Water Supply Facilities and regionally significant transmission pipelines. If the

20 partnership agreement becomes effective and the Authority receives the anticipated

21 funding:








1 (1) by December 31, 2002, the Authority shall reduce the combined

2 production and permitted quantity from the Partnership Plan Wellfields to 121 mgd,

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

4 31, 2003), and maintain production thereafter at or below 121 mgd, on an average

5 annual basis; and

6 (2) by December 31, 2007, the Authority shall reduce the combined

7 production and permitted quantity from the Partnership Plan Wellfields to 90 mgd,

8 on an average annual basis (to be measured from December 31, 2007 to December

9 31, 2008), and maintain production thereafter at or below 90 mgd, on an average

10 annual basis.

11 If the partnership agreement with SWFWMD imposes the same production limitations and

12 includes provisions for extending the time required to comply with such production

13 limitations, the time for compliance with this Section 3.21 (D) 3.20(D) shall be subject to

14 extension in the same manner as the production limitations imposed by the partnership

15 agreement.

16 (E) Replacement Capacity and Rotational Capacity created by Master Water

17 Plan projectswill be used to reduce the quantity of Water withdrawn from wellfields in

18 areas of environmental stress, in accordance with the priorities established in this Section

19 3-241E) 3.20(E).

20 (1) The Authority shall develop a Wellfield Operations Plan, which shall

21 comply with all applicable requirements of this Agreement. Subject to the

22 provisions of Section 3.21E)(2) 3.20(E)(2) hereof, all Replacement Capacity and








1 Rotational Capacity shall be applied in accordance with the wellfield operations

2 plan approved by the Authority.

3 (2) Notwithstanding the provisions of Section 3. (1) 3.20(E)(1)

4 hereof, prior to the date on which the Authority reduces the combined production

5 from the Partnership Plan Wellfields.to 121 mgd, on an average annual basis: (a)

6 not less than forty percent of the Rotetional Replacement Capacity shall be applied,

7 on an average annual basis, to reduce the quantity of Water withdrawn from

8 wellfields located in Pasco County; (b) not less than twenty percent of the

9 Retational Replacement Capacity shall be applied, on an average annual basis, to

10 reduce the quantity of Water withdrawn from wellfields located in Hillsborough

11 County; and (c) not less than ten percent of the Rotational Replacement Capacity

12 shall be applied, on an average annual basis, to reduce the quantity of Water

13 withdrawn from wellfields located in Pinellas County. The remaining thirty percent

14 of the Rotationea Replacement Capacity shall be applied, on an average annual

15 basis, in accordance with the Wellfield Operations Plan.

16 (F) It is expressly acknowledged and agreed by the parties that Rotational

17 Capacity will not be available to reduce the quantity of Water withdrawn from existing

18 wellfields unless the Quality Water needs of the Member Governments have been fully

19 satisfied.

20 (G) The parties acknowledge that the Authority's ability to implement the

21 provisions of this Section 3-2+ 3.20 is subject in all respects to the regulatory power of

22 SWFWMD and other State and federal agencies having jurisdiction over the Authority.








1 SECTION -22 3.21. IMPACT FEES FOR AUTHORITY FACILITIES. The

2 parties acknowledge that Economic Impact Facilities will have a significant economic

3 impact on the Member Government in which they are located and agree that the Authority

4 should compensate such Member Governments for the financial loss in accordance with

5 this Section -2 3.21. Prior to April 1 of each year, starting with April 1, 1999, the

6 Authority shall make an economic impact payment for each Economic Impact Facility,

7 which shall be computed by multiplying (1) the sum of (a) the actual initial construction cost

8 of the Economic Impact Facility, and (b) the assessed value of the property on which the

9 Economic Impact Facility is located for the last year in which such property was subject to

10 ad valorem taxation, by (2) a factor of .0005; provided however, that the amount payable

11 for any Economic Impact Facility shall not exceed $500,000. If the Economic Impact

12 Facility is located in an unincorporated area or within the corporate limits of a municipality

13 that is not a Member Government, the full payment shall be made to the Member

14 Government county in which the Economic Impact Facility is located. If the Economic

15 Impact Facility is located within the corporate limits of a Member Government municipality,

16 the economic impact payment shall be divided equally between the Member Government

17 county and the Member Government municipality in which the Economic Impact Facility

18 is located.








1
2 ARTICLE IV

3 OBLIGATIONS

4
5 SECTION 4.01. GENERAL AUTHORITY. The Board shall havethe 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; and (F) provide and pay for reasonably requested








1 certificates and/or opinions of counsel as to the validity of its actions taken in respect to

2 and the binding effect of this Agreement and the Master Water Supply Contract, title to its

3 Water supply system, pending litigation which could materially affect its performance

4 hereunder.








1
2 ARTICLE V

3 TRANSFER OF ASSETS

4
5 SECTION 5.01. TRANSFER OF ST. PETERSBURG FACILITIES. St.

6 Petersburg agrees to convey its interest in the following Transferred -Asets- t the

7 Authority at the purchase price indicated below: Capacity Land AreaTransferred Asset

8 (mgd) (Aeres) Purchase PriceSouth Pasco Wellfield (16.90 mgd of production capacity and

9 32 acres of wellhead sites). +69-0 32 $34,226,973-7 Section 21 Wellfield (12.00 mgd of

10 production capacity and 24 acres of wellhead sites). 12.00 224,305,760.25 Cosme

11 Odessa Wellfield (12.00 mgd of production capacity), and 12.0" 92 24"443,217.97 42"

12 Transmission Main at a purchase price of $100.684.856. NA""^ 11,320" ,48.02TFtal

13 $94,296,000.00 The conveyance of each wellfield will include the production capacity

14 shown in the foregoing table (priced at $2.00 per gallon) and the amount of property shown

15 in the foregoig table (four acres surrounding each wellhead priced at $2,000 per acr)

16 and property shown above. In addition, easements for transmission facilities, easements

17 for monitoring wells, access easements and restrictions on the any remaining wellfield

18 property will be conveyed without additional consideration. The total purchase price for

19 these Transferred Assets also includes a $1,000,000 $2.000.000 Disinfection Credit. The

20 parties acknowledge and agree that the Disinfection Credit was negotiated as an integral

21 part of the purchase price for the foregoing Transferred Assets. A specific description of

22 the Transferred Assets to be conveyed and the terms and conditions of sale are set forth

23 in the St. Petersburg Transfer Agreement attached as Appendix C. St. Petersburg and the








1 Authority shall be bound by the terms and provisions of the St. Petersburg Transfer

2 Agreement. It is understood and agreed that the purchase price set forth above includes

3 consideration for any equity interest St. Petersburg may have in the Existing Regional

4 System (other than its interest in the Cypress Creek Wellfield. Cypress Creek Pump

5 Station. 84" transmission main and 66" transmission main pursuant to one or more of the

6 agreements listed in Section 6.03(A)(7) hereof), which shall be relinquished without further

7 action of St. Petersburg upon satisfaction of the conditions described in Section 6.03(D)

8 hereof.

9 SECTION 5.02. TRANSFER OF PINELLAS FACILITIES. Pinellas agrees to

10 convey its interest in the flowing Transferred Assets t the Authrity at the purchase

11 price indicted bel apaity Land AeaTransfered Asset (mgd) (Acres) Purchase ri

12 Eldridge-Wilde Wellfield (35.24 mgd of production capacity and 200 acres of wellhead

13 sites), and 35.24- 20 $72,876,169.88 Cross Bar Ranch Wellfield (68 acres of wellhead

14 sites) at a purchase price of $112.632.730. NfA 68 139,830.12Total $73,016,000.00 The

15 conveyance of each wellfield will include the production capacity shown in the foregoing

16 table (priced at $2.00 per gallon) and the amount Of property shown in the freging table

17 (f ur acres surrounding each wellhead priced at $2,000 per acre) and property shown

18 above. In addition, easements for transmission facilities, easements for monitoring wells,

19 access easements and restrictions on the any remaining wellfield property will be

20 conveyed without additional consideration. The total purchase price for these Transferred

21 Assets also includes a $2,000,000 Disinfection Credit. The parties acknowledge and

22 agree that the Disinfection Credit was negotiated as an integral part of the purchase price








1 for the foregoing Transferred Assets. A specific description of the Transferred Assets to

2 be conveyed and the terms and conditions of sale are set forth in the Pinellas Transfer

3 Agreement attached as Appendix D. Pinellas and the Authority shall be bound by the,

4 terms and provisions of the Pinellas Transfer Agreement. It is understood and agreed that

5 the purchase price set forth above includes consideration for any equity interest-Pinellas

6 may have in the Existing Regional System (other than its interest in the Cypress Creek

7 Wellfield. Cypress Creek Pump Station. 84" transmission main and 66" transmission main

8 pursuant to one or more of the agreements listed in Section 6.03(A)(7) hereof), which shall

9 be relinquished without further action of Pinellas upon satisfaction of the conditions

10 described in Section 6.03(D) hereof.

11 SECTION 5.03. TRANSFER OF TAMPA FACILITY. Tampa agrees to convey

12 its interest in the fllwig T feed Asset the Athity at the purchase pice

13 :indicted belw: Capacity Land AreaTransferred Asset (mgd) (Acres) Purchase PrcMorris

14 Bridge Wellfield (15.50 mad of production capacity) at a purchase price of $35.430.365.

15 15.50 N/A $32,G000,00 The conveyance of eaeh such wellfield will include the production

16 capacity shown in the foregoing table (priced at $2.00 per gallon) and the amount o

17 property shown in the foregoing table (four acres surrounding each wellhead priced at

18 $2,00 per acre) above. In addition, easements for transmission facilities, easements for

19 monitoring wells, access easements and restrictions on the any remaining wellfield

20 property will be conveyed without additional consideration. The total purchase price for

21 these Transferred Assets also includes a $1,000,000 Disinfection Credit. The parties

22 acknowledge and agree that the Disinfection Credit was negotiated as an integral part of








1 the purchase price for the foregoing Transferred Assets. A specific description of the

2 Transferred Asset to be conveyed and the terms and conditions of sale are set forth in the

3 Tampa Transfer Agreement attached as Appendix E. Tampa and the Authority shall:be

4 bound by the terms and provisions of the Tampa Transfer Agreement. It is understood and
f
5 agreed that the purchase price set forth above includes consideration for any equity

6 interest Tampa may have in the Existing Regional System, which shall be relinquished

7 without further action of Tampa upon satisfaction of the conditions described in Section

8 6.03(D) hereof.

9 SECTION 5.04. TRANSFER OF PASCO FACILITY. Pasco agrees to convey

10 its interest in the following Transferred Asset to the Authority at the purchase price

11 indicated belw: Capaity Land AreaTransferred Asset (rgd) (Acres) Purchase PriceNorth

12 Pasco Wellfield (6.60 mgd of production capacity and 24 acres of wellhead sites) at a

13 purchase price of $31,688.678. The conveyance of such 6.60 24 $16,248,OThe

14 eenveyanee -f eaeh wellfield will include the production capacity shown in the foregoing

15 table (pried at $2.00 per gal) ad the amount of property shown in the foreging table

16 (f ur acres surrounding each wellhead priced at $2,000 per acre) and property shown

17 above. In addition, easements for transmission facilities, easements for monitoring wells,

18 access easements and restrictions on the any remaining wellfield property will be

19 conveyed without additional consideration. The total purchase price for these Transferred

20 Assets also includes a $3,000,000 Disinfection Credit. The parties acknowledge and

21 agree that the Disinfection Credit was negotiated as an integral part of the purchase price

22 for the foregoing Transferred Assets. A specific description of the Transferred Assets to




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