Title: Issues of Partnership Agreement and Consolidated Permit
Full Citation
Permanent Link: http://ufdc.ufl.edu/WL00004047/00001
 Material Information
Title: Issues of Partnership Agreement and Consolidated Permit
Physical Description: Book
Language: English
Spatial Coverage: North America -- United States of America -- Florida
Abstract: Jake Varn Collection - Issues of Partnership Agreement and Consolidated Permit (JDV Box 108)
General Note: Box 16, Folder 13 ( Master Water Plan Project, Partnership Agreement, Governance/Water Agreement ), Item 16
Funding: Digitized by the Legal Technology Institute in the Levin College of Law at the University of Florida.
 Record Information
Bibliographic ID: WL00004047
Volume ID: VID00001
Source Institution: Levin College of Law, University of Florida
Holding Location: Levin College of Law, University of Florida
Rights Management: All rights reserved by the source institution and holding location.

Full Text

WESTCOAST WATER 352 754 6874


March 16. 1998

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03/16/98 13:40

NO. 907 901

Mr. Sonny Vergara
Executive Director
Southwest Florida Water Management District
2379 Broad Street
Brooksville, FL 34609

RE: Issues for Partnership Agreement Discussion

Dear Mr.^1

My apologies for the lateness of this correspondence, however, issues affecting
governance have consumed us these last several days. Pursuant to our several telephone
discussions, we have developed the following list for our brainstorming and explanation
session on Tuesday the 17th. The following is a terse list:

4 1. Guarantee of $183 million funding commitment. How does the Authority insure
that the full $183 million funding commitment will be made against its Master
Water Plan Project submissions to the District?

2. Establishment of the Trust Fund. The Authority will begin making final design
and construction decisions in the fall and winter of 1998. Establishment of the
Trust Fund prior to those Authority actions is necessary.

.3. Added timing of Southwest Florida Water Management District review. The
proposed most recent draft Partnership Plan document has extraordinary review
times for'District review of the proposed water projects and their funding. The
Authority can not meet the new facility dates with these extended time frames.

V4. Revised funding exhibit. Revising the District funding commitment consistent
with the earlier table type drafts showing specific relationships between the
District funding and specific categories of projects is necessary in order that the
Authority Board has some assurance of a feasible plan selection.

v 5. The amount of the total interim quantity. Our analysis shows the correct number
should be 166 mgd.

'6. Individual wellfield limitations. Your comments are of concern. We require
further discussion.

WESTCOAST WATER 352 754 6874

Mr. Sonny Vergara
March 16. 1998
Page 2

The HB ter


7. The Consolidated Permit. A common understanding between the District and
the Authority with respect to the benefits and impacts of a consolidated permit is

8. The liquidated damages clause. Isn't specific performance enough?

Thank you for your Partnership Agreement summary and the accompanying flow chart.
I look forward to our discussions on Tuesday.

Since ly,

General Manager



03/16/98 13:41

NO.907 902

0904 754 6878 SWFWMD LEGAL

Southwest Florida

Water Management District
2379 Broad Street Brooksville. Florldo 34609-6899 1-800-423-1476 (Florida Only)
or (352) 796-7211 SUNCOM 628-4150 T.D.O. Number Only (Florida Only): 1-800-231-6103
Internet address: http://www.dep.state fl.us/swfwmd

Roy G. Horrell. Jr.
Chairman. St. Petersburg
Joe L Davis. Jr.
Vice Chairman. Wouchula
Curtis L Low
Secretary. Land O' Lakes
Sally Thompson
Treasurer. Tampa
James L Allen
Roman F. Campo
Rebecca M. Eger
John P. Harilee. IV
Ronald C. Johnson
Lake Wales
James E. Martin
St. Petersburg
Brenda Menendez
E. D. "Sonny" Vergora
Executive Director
Gene A. Heath
Assistant Executive Director
Edward B. Helvenslon
General Counsel

Q ,7int'

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T'rc ?.;,:= -e ;-c;;S acrcw. londo a -;1.: Ver*ce. ~aCc 24292-3524
L; ..O-` c- .; : a8 !3!;*:.--l :-I -4CC -Q7862 ct .:-' *. -' IB I 2-'O32..3O ~rt i'1Q41) 486-12!2
5UNCCM 573-2070 SUNCOM 572-6ZC SUNCOM 526-CO
March 9, 1998

Jerry Maxwell, General Manager
West Coast Regional Water Supply Authority
2535 Landmark Drive, Suite 211
Clearwater, Florida 33761


2`; -.ighway 4d West
;r.Sess. ando 34453-;C<
'!:2 37-1 0


District's List of Significant Outstanding Issues
Under Partnership Agreement

Dear Mr. Maxwell:

The following appear to us to be the most significant outstanding issues
related to the February 19 draft of the Partnership Agreement ("PA") and
Consolidated Permit ("CP"). We offer this list to you for your consideration in
advance of our meeting on Tuesday, March 17, at 1:00 p.m. at the Authority's
headquarters in Clearwater. We look forward to the receipt of the list of
issues which you and your staff have compiled. If there is any reason why
that list will not be sent to us today, please let me know.

1. Amount of total interim quantity (between signing of PA and 12/31/02).
The PA sets the limit at 158 mgd.

2. Wellfield-by-wellfield limitations (which could be imposed by the terms
of the PA until CP issues). These limitations would apply to the 158,
and some parties want them to apply to the 121 and 90 quantities as
well. These wellfield-by-wellfield limitations are contained only in the
CP. Thus, there is presently no such limitation during the interim
period before issuance of the CP.

3. Liquidated damages clause. An example has been provided to the
Governing Board and the parties, but is not presently included in the

4. Timing of funding of Trust. The PA provides for funding at the time the
first Funding Agreement (after approval of the final New Water Plan) is
entered into, i.e., when the money is needed.

5. Modification, waiver or variance of District Rules necessary to 1) enter
into and perform under PA, and 2) issue the CP (or modifications of
existing individual permits if CP doesn't issue but PA continues.)

6. Whether the Authority will in fact bring on sufficient new water in
excess of 85 mgd which it says will be needed to meet the cutbacks.

103/11/98 10:02


03/11/98 10:03 0904 754 6878

Jerry Maxwell, General Manager
West Coast Regional Water Supply Authority
March 9, 1998
Page 2

7. The Peat Marwick study we've examined indicates that the reduction goals may
not be achieved if quantities needed to reach the cutbacks are greater than the
quantities which the Authority proposes to bring on line. Also, it is questionable
whether some of the sources that are proposed for a given quantity would be
permittable by the District, i.e., traditional groundwater sources, or sources from
which the projected quantity is greater than may be allowable consistent with
District rules. Finally, the TWRP Project is not included in any of the alternatives
for the projected time frame, although the federal funding earmarked for the
TWRP Project is included in all of the alternatives.

8. Whether the 40/20/10/30 allocation will be effective past 2002.

The following issues have yet to be discussed with the Authority and Member
Governments, but are ones which need to be addressed and resolved. These issues
are not presently addressed in the PA.

1. What happens to the existing permits if PA terminates? We could provide that
existing permits remain effective (subject to reductions in Q based on PA
formula), but that District would reserve the right to propose agency action to
modify the permits if determined to be necessary at the time.

2. What happens if CP doesn't issue but PA continues in effect? We could provide
in the PA for the automatic modification of the existing permits to impose the
conditions of the CP.

We lookforward to receiving your issues list and to our meeting on March 17. Please
call should you have any question or comment.

Since ely

-B$"Sonn rVergara
Executive Director

cc: Gene Heath
Ed Helvenston
John Heuer
Jim Robinson
Ken Weber
Frank Hearne
Dominick Graziano

1 _






March 4, 1998

Board of Directors
West Coast Regional Water Supply Authority

Donald D. Conn, General Counsel ./

SUBJECT: Partnership Agreement

ISSUE: What is the status of the Partnership Agreement?

RECOMMENDATION: This item is presented for discussion.

DISCUSSION: On February 24, 1998, the District's Governing Board
approval" to the draft of the Partnership Agreement dated February 19, 1998.
February 19th draft is attached.

gave "provisional
A summary of the

During these discussions, the Governing Beard made it clear that their approval was subject to
further negotiations and input from the other parties, including the Authority and the member
governments. Specific major issues that remain for further negotiations include:

V1. Whether there will be a consolidated permit, or separate individual wellfield

vJiA 2. If there is a consolidated permit, whether the total annual average permitted
quantity for the eleven (11) wellfields will be 158 mgd or 166 mgd;

nA/ 3.

CommntS IQ T4.
FHtL -Jo

If there is to be a consolidated permit, what quantities if any will be assigned to
the individual wellfields covered by the consolidated permit;

When will the District's trust fund be established; and

5. Will there be liquidated damages or some other "incentive" provision.

A flow-schematic of Partnership Agreement events prepared by District staff, as well as a draft
liquidated damages provision presented to the Governing Board by District staff are attached for the
Board's information.









1. Basin Boards are not parties. (pg. 2, lines 19-21)

2. Consolidated Permit thru December 2010, with Authority as sole permitted (Exhibit B).
Listed individual wellfield average annual (mgd) quantities: Cosme-Odessa -10; Cross
Bar 21; Cypress Bridge 8; Cypress Creek 26; Eldridge Wilde 28; Morris Bridge -
12; Northwest Hillsborough 9; North Pasco 5; Section 21 10; Starkey 15; South
Pasco 14.

3. Combined production on an annual average basis from the 11 wellfields shall not exceed
the following quantities: 158 mgd prior to and including December 31, 2002; no more
than 121 mgd after December 31, 2002 through December 31, 2007; and no more than 90
mgd after December 31, 2007. (Sections 1A, 1B, Exhibit B)

4. Authority's New Water Plan Preliminary Plan to be submitted to the District by July 1,
1998 and the Final Plan by January 4, 1999 describing projects which shall provide an
annual average of at least 85 mgd of new supply. (Section 2)

5. District Funding of $183 million for eligible projects, which are defined to mean
alternative sources of potable supply, excluding traditional ground water, and
transmission mains to interconnect facilities. (Section 3)

6. Project Funding Agreements to be executed for each approved project and disbursements
are subject to said Funding Agreements. (Section 3B)

7. Trust Agreement of $100 million, including cash and credit, established when the initial
Project Funding Agreement is executed, the District has approved the New Water Plan,
Basin Boards have approved their funding, and governance is implemented. (Section 3D)

8. Proportional pumpage reductions if the District fails to fully fund projects, in which case
the Authority has six months to file for a modification of the consolidated permit.
(Section 3E)

9. Operation Plan is to be submitted to the District by July 1, 1998, with annual updates.
The Plan will provide that 50% of new capacity shall be used to reduce production from


the 11 wellfields, and of these reductions, a minimum of 40% shall occur in Pasco
County, a minimum of 20% in Hillsborough County, and a minimum of 10% in Pinellas
County. (Section 4B)

10. New Supply Permits will not be consolidated with the 11 wellfields, but the terms of
these new permits shall expire when the consolidated permit expires. (Section 5D)

11. Consolidated permit shall be issued upon full implementation of governance, approval by
the District of rule waivers and variances, the modification of District rules, and District
approval of the Operation Plan. (Section 5F)

12. Non-issuance of Consolidated Permit The Partnership Agreement does not terminate,
existing permits remain in effect subject to this Agreement, including the pumpage
reduction requirements. (Section 51)

13. Demand Management The Authority shall continue to plan and coordinate and Member
Governments shall develop and construct conservation and reclaimed water projects.
(Section 7)

14. Water Consortium The District and the Authority shall investigate the availability or
establishment of a scientific consensus process, and shall consider establishment of a
water consortium at USF. (Section 8A)

15. Penalty for Authority Default In addition to other remedies that may be available to the
District, the Authority shall be liable for penalties in the amount of $10,000 per day.
(Section 14C)


New 'ater Plan and
Funding Agreement
Flow Schematic Handout

)4 r. ..... .

Sa A lvlews and and WCRWSA
Approves enterfunding
request for agreement
funding 2.1.
roliews and submits
proves final request for ',
9 0 da y s hew water plan funding

S2.F. 2.1.

revl"ws and with SWFWMD submitsfinal .
reviews and modifies
proves re: final new new water planiewsad m es
preliminary water plan to SWFWMD disapproves request for
plan request for funding
ew water p 2.E .E. funding and resubmits
2.. 2 2.1. 2.1.
ith SWFWMD submits reviews and modifies
re: preliminary preliminary Id. reviews and modifies
new water plan new water plan disapproves final final new
.to SWFWMD new water plan water plan
2.C. 2
2 *.F. and resubmits
reviews and preliminary new
disapproves water plan and
preliminary resubmits
new water plan to SWFWMD



14.C. Liquidated Damages. If the AUTHORITY fails for any reason to meet
the deadlines for reduction of withdrawal quantities from the 11 wellfields as required by
subparagraph 4.A., and such failure constitutes a default under this AGREEMENT, all
parties recognize and agree that actual damages for the delay are not readily
ascertainable. In lieu thereof, the AUTHORITY shall pay to the DISTRICT as fixed,
agreed and liquidated damages the sum of $ for each gallon of the actual
annual average pumpage in excess of the reduced annual average pumpage required
by this AGREEMENT, not to exceed $ per year. So long as the default is
outstanding, such amount shall be payable on or before April 1 of each year following
the year in which the default occurred. Whatever sums may be due the DISTRICT as
liquidated damages for delay may be deducted from payments due the AUTHORITY
under this AGREEMENT or otherwise, or may be collected from the AUTHORITY. All
parties to this AGREEMENT represent and agree that this liquidated damages clause in
not intended to be a penalty clause and that it shall not be construed as one.


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, III.

v/ IV.

-t- W rWvlLV v Mmvuq-

Guarantee of the 183 million funding commitment?

Exhibit D funding details?

Establishment of the Trust Fund? When? How? CO r O RVt

Timing of SWFWMD review of Water Plan?

Liquidated Damages vs. Fines vs. Specific Performance?

Tetal Interim Quantity (Methed & Calculation)? 1u M6> v5 t64 M6P
*- 3 %l ROLLNF6 AV6&. --g
Wellfield by wellfield will there be limitations? To what quantity do
they apply? opVloN -r 1m vLPA d- pAe et. C(U~U
WIfW ttMPILl Ar M1 AiAt q0 A46D .
What happens if 15 mgd does not equal demand while producing 90
from central wellfields? MOZ t)A-

Consolidated Permit

Modifications, waivers, or variances of District rules necessary to the

What happensfexisting permitsrPA terminates?

What happens if CP doesn't issue but PA continues in effect?

Ir K.oi. LO,.*t AQ.1








I. Appvoua( bf Jeu) Ulaoev Plak.

F. R n(d q xhibh

3. C4A||ldad kvw it*

4. idividual WUIeat4

L. PlIpqe .cL LJ 1 ad 16.2/st]2aZ .

L. l,

Lt l if tZw

1 in Hillsborough County. Pasco and Hillsborough acknowledge that this Section 3.18(A)

2 creates an interim preferential reduction in the quantity of Water withdrawn from the Cross

3 Bar Ranch Wellfield, the Cypress Creek Wellfield and wellfields located in Hillsborough

4 County that will be superseded, on a gallon-for-gallon basis, by reductions resulting from

5 the Rotational Capacity and Replacement Capacity created by implementation of the

6 Master Water Plan, as described in Section 3.18(E) hereof.

7 (B) The parties acknowledge that the Master Water Plan has multiple purposes,

8 including: (1) development of a Quality Water supply that is sufficient to meet the current

9 and future needs of the Member Governments, (2) development of Replacement Capacity

10 to reduce the permanent combined production from the Partnership Plan Wellfields, and

11 (3) development of Rotational Capacity that can be used to periodically reduce the

12 withdrawal of Water from Authority wellfields located in environmentally stressed areas.

13 Recognizing the importance of developing Replacement Capacity and Rotational Capacity,

14 the parties agree that the Authority shall make all reasonable efforts to implement a Master

15 Water Plan prior to December 31, 2007, that produces 42.5 mgd of Replacement Capacity,

16 on an average annual basis, and a total of at least 85 mgd of Quality Water, on an average

17 annual basis, that is not available on the date hereof.

18 (C) If the Authority fails to develop 42.5 mgd of Replacement Capacity prior to

19 December 31, 2007, any Member Government may acquire and construct Water Supply

20 Facilities with a production capacity, on an average annual basis, equal to the difference

21 between 42.5 mgd and the Replacement Capacity theretofore created by the Authority.

22 The Water Supply Facilities acquired or constructed pursuant to this Section 3.18(C) shall



S1 be sold to and purchased by the Authority at a purchase price equal to the Member

2 Government's Actual Direct Cost to acquire and construct such Water Supply Facilities.

3 Upon purchase, such Water Supply Facilities shall be used by the Authority, to the extent

4 necessary, to meet its Replacement Capacity obligation.

5 (D) The Authority and the Member Governments are currently negotiating a

6 partnership agreement with SWFWMD, pursuant to which SWFWMD is expected to

7 provide up to $183,000,000 to be used by the Authority for the development of new

8 alternative Water Supply Facilities and regionally significant transmission pipelines. Upon

9 execution of the partnership agreement and the Authority's receipt of the anticipated

10 funding:

11 (1) by December 31, 2002, the Authority shall reduce the combined

a 12 production from the Partnership Plan Wellfields to 121 mgd, on an average annual

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

14 maintain production thereafter at or below 121 mgd, on an average annual basis;

15 and

16 (2) by December 31, 2007, the Authority shall reduce the combined

17 production from the Partnership Plan Wellfields to 90 mgd, on an average annual

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

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

20 If the partnership agreement with SWFWMD imposes the same production limitations and

21 includes provisions for extending the time required to comply with such production

04/02/98 14:01 e904 754 6878 SWFWMD LEGAL --- FOWLER WHITE ~001


SECTION 3.8 Completion Dates

Jake Yarn
Working Copy

The AUTHORITY shall commence construction on the PROJECT by and shall
substantially complete the PROJECT by "Substantially complete" shall
have the same meaning as provided in the contract between the AUTHORITY and the
CONTRACTOR, as referenced in Section 3.2 above. If the AUTHORITY does naqjJ.fgt ly
complete said work J Twithin aforementioned time frames, oq;rij@lhTg g
determig s_. tbe gJ -i~F Aw the AUTHORITY may be- required
reitmbtrse ,i. g he ~!f full amount paid to the

I W E~~A'.
wbicJ79tbjq "

to o
aboe tim fram hall xtndd ifconditiona ist bynd the cntref the AUTHORITY or



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04/01/98 : dE8 a352 754 6874 SWFWMD EXEC ---. J VARN 1001

Working CopY



1. In order to assist the AUTHORITY, in developing at least 85 mgd annual
average of new water by December 31, 2007, as provided for in this
AGREEMENT, the DISTRICT shall fund $183 million for AUTHORITY
PROJECTS, subject to the terms and conditions of the AGREEMENT and
the limitations contained in this Exhibit. z
2. DISTRICT funds shall not be used for any traditional ground water project. *

3. DISTRICT funds shall not be used under the terms of this AGREEMENT
for any project outside of Hillsborough County, Pasco County and Pinellas

4. DISTRICT funds shall be made available consistent with the TRUST
AGREEMENT described in subparagraph 3.D.

5. Subject to the limitations set forth below and in this AGREEMENT,
DISTRICT funds, up to the percentage indicated to ensure for source
diversity, may be used for the following NEW WATER PLAN projects:

A. Tampa Bypass Canal 50% '
B. Alafia River 50% '
C. Hillsborough River High Water 50%
D. Tampa Resource Exchange 40% 2
E. Brackish Water Desalination 0%
F. Seawater Desalination 900/
G. Cypress Bridge 0%
H. Brandon Urban 0%
I. Cone Ranch 0%
J. Pipelines pursuant to ss. 373.1963(l)(f) 50%

'The combined District contribution is not to exceed $85 million for the components
(including pipelines) which make up the enhanced surface water project.

'This project has already been designated for over 519 million of federal funding
which would be in addition to the District's contribution.


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