Title: Situation Analysis
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Permanent Link: http://ufdc.ufl.edu/WL00004723/00001
 Material Information
Title: Situation Analysis
Physical Description: Book
Language: English
Publisher: West Coast Regional Water Supply Authority
 Subjects
Spatial Coverage: North America -- United States of America -- Florida
 Notes
Abstract: Jake Varn Collection - Situation Analysis
General Note: Box 28, Folder 14 ( Governance Study for the Florida Legislature - September 10, 1996 ), Item 3
Funding: Digitized by the Legal Technology Institute in the Levin College of Law at the University of Florida.
 Record Information
Bibliographic ID: WL00004723
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.

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2. SITUATION ANALYSIS

History

The West Coast Regional Water Supply Authority ( the Authority) was the first such entity
organized under the provisions of Section 163.02 and Chapter 373 of the Florida Statutes.
Each of the five original members -- the counties of Hillsborough, Pasco, and Pinellas, and the
cities of Tampa and St. Petersburg serves as members of the Authority's governing board.
The city of New Port Richey also serves on the Authority's governing board as a non-voting
member.

The Authority developed plans to meet the water supply needs of the region and published a
comprehensive master plan in 1978. That plan has been periodically updated beginning in
1982 with the last update published in 1986. The Authority's initial water supply operations
began in 1977 when the city of St. Petersburg and Pinellas and Pasco counties entered into
contracts with the Authority and transferred ownership and control of the Cypress Creek
Pump Station and Wellfield facilities and the 84 inch and 66 inch diameter transmission
mains to the Authority. The next major element of water supply was the development of the
Cross Bar Ranch wellfield facilities, which were placed into service in 1980.

Hillsborough County and the Authority entered into contracts in 1981 which governed the
development, construction and operation of the Northwest Hillsborough Regional Wellfield
and the South-Central Hillsborough Regional Wellfield. Both projects were constructed and
have been operating since 1984 and 1988, respectively.

The Authority assisted the city of Tampa in 1981 with the first test program of pumping water
from the Harney Cut of the Tampa Bypass Canal into the Hillsborough River Reservoir. In
1985 the City and the Authority entered into an agreement for the Authority to develop the
Bypass Canal as a water supply source on behalf of the City. A permanent facility was
constructed and placed in operation in 1991. In 1981, the Authority entered into a water
supply transfer and management agreement with the City of New Port Richey and Pasco
County to transfer the ownership and operation of the Starkey Wellfield to the Authority.
Phase I of the North Pasco Wellfield was constructed as the expansion of the Starkey
Wellfield in 1991. These facilities provide water supplies for the West Pasco Service Area
and the City of New Port Richey.

On July 24, 1991, the Authority and its members entered into an innovative water supply
contract, which provides for a regional approach to the development, implementation and
operation of water supplies to serve the entire membership. Previously, the Authority had
constructed and operated all projects to serve an individual member. The new Regional
System is composed of the Cross Bar Ranch Wellfield, Cypress Bridge Wellfield, Cypress
Creek Wellfield, Northwest Hillsborough Regional Wellfield, appurtenant transmission main
and pump station facilities and planned expansions thereto. The Regional System will also
include a new network of transmission mains between facilities in order to create the "Loop


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System," which will allow for increased movement of water within the system and greater
options for facility pumping and hence, operational flexibility.

The Authority provides potable water to its six member governments at cost. These
governments in turn serve 1.8 million residents of the Tampa Bay region. Total water year 95
(October 1, 1994 September 30, 1995) production from Authority managed facilities
(including Section 21 and Cosme/Odessa wellfields) was approximately 42.2 billion gallons,
an average of approximately 115.7 million gallons per day. The water supplied by the
Authority and its members averaged 220 million gallons per day for water year 95.

Governing

The Authority is a special district under the laws of Florida and as such constitutes a separate
and independent governmental entity. The Authority has six members -- Hillsborough, Pasco,
Pinellas, Tampa, St. Petersburg and non-voting member New Port Richey. Its regional
responsibility includes all of Hillsborough, Pasco, and Pinellas counties.

The six member board operates with majority ruling in most instances. The Board of
Directors consists of one representative from each of the member jurisdictions. The
governing body of each member designates a representative to serve on the board of directors.
The representative serves at the pleasure of his or her respective governing body. The
members of the board elect a chair and vice-chair to serve for one year or until a successor is
elected.

Each representative is entitled to one vote on questions coming before the board. A simple
majority of those present is needed to carry a question except in the case of emergency
contracting which requires a two-thirds majority for approval.

Jurisdictional Agreements

The jurisdictional agreements among members of the Authority, and on occasion SWFWMD,
reflect the cooperative nature of the Authority. Traditionally, the Authority enters into
separate agreements with members to assist them in meeting their particular water needs. For
example, the Authority signed a supply contract with Hillsborough County in 1981 specifying
the level of water entitlement and the cost per 1,000 gallons. It also contracted in 1990 with
New Port Richey and Pasco County to develop the North Pasco wellfield for the exclusive use
of Pasco County and New Port Richey. The Authority is responsible for paying the debt
service on the bonds used to finance the construction of the North Pasco wellfield through
revenues collected from Pasco and New Port Richey. These separate agreements implement
the "subscription" approach to developing new water supply sources. This approach
maintains differential rates as well as varying entitlements among members for wholesale
water.

Through agreements with all five voting members in 1991, the Authority embarked on a
regional approach to managing and developing water supplies. The Authority members


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agreed that the Authority would operate the Cypress Creek, Cross Bar Ranch, Northwest
Hillsborough, and Cypress Bridge wellfields and two major transmission lines for the
common use and benefit of all members. The five voting members shared costs of
constructing a regional looped transmission line and all five members purchase water at a
common water charge use rate and a separate base rate for capacity entitlements of each
jurisdiction. City of New Port Richey is not a part of the Regional System.

Responsibilities of Authority vs. Jurisdiction
Each of the members jurisdictions provide retail water to their utility customers. In addition,
several of the members have developed or are planning to develop wholesale water sources of
their own. Tampa, for example, obtains all of its water from the Hillsborough River. Pasco
County and New Port Richey have their own water sources. The member jurisdictions of the
Authority, except for Hillsborough County, are not only customers but competitors as well.
Hillsborough County contractually does not have the right to produce their own water supply.

Major Issues
The Authority does not have the legal power to enforce the decisions of its Board. In this
respect it functions more like a cooperative than an authority. Historically, bond issues are
individually guaranteed by Authority members, any member can effectively veto a bonded
capital program by declaring its unwillingness to raise or secure its portion of the revenue.
Although the Board may vote three to two to proceed with its Master Water Plan to develop
additional sources of water supply, legal counsel for any member with a significant financial
commitment can refuse to endorse the Authority's bond offering thereby making it difficult or
impossible for the financing to go forward. The Authority has capability to issue its own
bonds, however, has not issued debt obligation due to cost consideration.

The timing and urgency of individual governments in making major long-term decisions, such
as those involving water supply are often inconsistent or unsynchronized. This fragmented
atmosphere may lead to poor decisions from an overall regional perspective. Pursuit of water
supplies either independently, or even under the subscription method, is symptomatic of
fragmented decision-making potentially to the detriment of the region and its economy.

The Legislature has at its disposal, several parameters for affecting the governance structure
of the Authority. These include the number of members, voting privileges, and taxing
authority, but changes to these factors will not improve the fundamental disconnect between
the equality of voting privileges with the inequality of users, and financial capabilities of
Authority members.

Summary of Board Workshops
Board members, the City and County Administrators, and the member government utility
directors met monthly for five workshops, beginning in March, 1996. These workshops were
conducted as an open forum for participants to discuss issues, goals, planning, and problems
with the Authority. Objectives for the workshops included:


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* Reach consensus on a funding allocation formula for the engineering / permitting phase of
the Master Water Plan
* Identify strengths, weaknesses, threats and opportunities facing the Authority
* Develop a vision for the Authority
* Define and assess the regional utility concept
* Reach agreements on entitlements

These issues were addressed in the workshops and participants came to consensus on many of
the issues pertinent to these different areas. The funding formula agreed on was to evenly
split the initial $7.5 million cost of the preliminary design and permitting phase of the Master
Water Plan among the five voting member governments. For the vision of the Authority,
discussed earlier in this study, participants agreed on three objectives:

* The Authority is responsive and responsible (environmentally and technically) by
providing an adequate water supply to members without a negative impact on the
environment
* The Authority operates as a regional system supplying water in an efficient manner at
equitable prices
* The Authority is a stable institution with a clear mission

The following elements were common among participants in their discussion of the definition
of a regional utility:

* Mandatory membership
* Majority vote binds the Authority to take action
* Clear definition of roles between the Authority and South West Florida Water
Management District (SWFWMD)
* Wholesale stabilized water
* Control of water supply all existing and future facilities owned and operated by the
Authority
* Authority able to purchase and develop water outside and inside of regional authority from
and for others

Workshop participants were asked to identify opportunities, threats, strengths, and
weaknesses. Exhibit 2-1 presents some of the results of this workshop.


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Exhibit 2-1
Summary of Authority's Opportunities, Threats,
Strengths, and Weaknesses As Discussed in Workshops

Strengths Weaknesses Opportunities Threats


Inadequate communication SWFWMD mandates
between members SWFWMD grants Reduction of permitted
capacity without opportunity
Uncertain funding for Legislation providing new to mitigate environmental
major projects funding opportunities impacts
Professional staff
Professional staff Lack of authority Secure adequate supply with Unfunded state mandates
Utility expertise Unable to move projects political support Over-regulation
Ability to interact on forward by simple majority Consensus development
a regional basis nconsitencies in contracts based on peer review of Lack of cohesiveness
technical differences
Benefits via with members Potential member pull-out
economies of scale Undefined mission Cooperation of
membership Disparate views about
Authority
Lack of consensus on Have equal standingAuthority
tecnic T causes ofHave equal standing
technical causes of to SWFWMD Disparate cost basis in
environmental impacts utility systems of
around wellfields member governments



A future workshop has been tentatively set for September in which issues relating to
entitlements are to be discussed. More detailed information regarding the workshops can be
found in Appendix A.

Regional Authority Concept

The Authority is unique from the other wholesale water authorities reviewed in Section 3 in
its reliance on groundwater sources (vs. surface water) and in its diverse source supplies
planned for the future. The Authority is also unique in having a myriad of interlocal
agreements creating a patchwork of facilities owned and controlled by the Authority and its
member jurisdictions throughout the three county area.

Establishment of a regional authority with enhanced responsibilities and capabilities was
discussed by several people interviewed by KPMG. The communicated features of such an
authority ranged widely and included such items as:

* Operates more like a private utility and business with less political influence
* Addresses the long-term water resource sustainability with an environmental conscience
* Has elected board; has non-elected board; has larger board
* Achieves cooperation and partnership among jurisdictions
* Acts on behalf of region and not individual jurisdictions
* Is fair and equitable in the cost of water


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* Has uniform or blended rates; has separate rates for existing and future users as well as for
rotational water supplies
* Controls all pumping schedules and levels, operating as a single, flexible system
* Can develop projects with a majority vote (and not vetoed by funding withdrawal of one
party)
* Can provide adequate supplies of water with the same quality as that currently received
* Has a greater role in local water conservation programs
* Is overseen to ensure protection of environment and compliance with statute
* Does not sell to or get supply from outside jurisdictions; can import water from wherever
its available

Other desired features for changes included:

* accountability and amends for past practices
* reduction in the use of litigation to resolve issues
* reduction in pumpage in a concentrated area
* aggressive pursuit of alternative sources


Ownership & Management of the Authority and Member Facilities

Summary of Contracts and Responsibilities
The Authority is embodied by the numerous interlocal agreements designed to govern the
financing, ownership, management, and use of water supplies developed.

Hillsborough County, Pasco County, Pinellas County, City of St. Petersburg and the City of
Tampa signed the first Interlocal agreement, October 25, 1974, to form the Authority. The
intent of this agreement was to provide a structure for the design, construction, and operation
and maintenance of water production facilities. No specific facilities were mentioned in this
agreement. Additionally, the Interlocal agreement created a Board, comprised of one
appointed member from each member government. On July 19, 1982, per Resolution No. 17-
82, City of New Port Richey was given the opportunity to appoint a non-voting representative
to the Board.

Since its formation, the Authority has entered into several contracts with its member
governments for ownership and/or operation of the facilities. The key contracts are
summarized in Exhibit 2-2.


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Exhibit 2.2
Contract Summary
Issue Regional South Central Tampa Bypass Cosme-Odessa I Starkey I North South Pasco
System Hillsborough Canal Section 21 Pasco
Contract Date 6/24/91 10/10/81 1/17/85 9/17/80 North Pasco: 3/4/87
1123/90
Starkey: 12/15/81
Ownership By member 14 wells owned by Facility and Owned by St. North Pasco St. Petersburg
governments and Authority; Pump Station Petersburg owned by Pasco. owns the facility
SWFWMD; see 3 wells and the owned by the Starkey owned by
contract for more Lithia Pump Authority SWFWMD, wells by
information Station owned by the Authority
Hillsborough
Operations I The Authority 14 wells operated Tampa operates Co-managed by the The Authority The Authority
Management operates all by Authority; 3 the pump station Authority and City operates and operates and
facilities wells + pump of St. Petersburg manages both manages the facility
station operated Starkey and North
by Hillsborough Pasco
Term
Primary 35 years, with an 100 years, no 30 years, 8 5 years, with an 28 years, with an Permanent
(Renewal) option to renew renewal stated months, no option to renew by option to renew for
for additional 35 renewal stated mutual agreement 35 years


Secondary Most contracts Most contracts for Most contracts for All supporting The supporting
(Range) for indefinite indefinite periods. **There were no indefinite period of contracts are for 35 contracts have one
periods. The The shortest secondary time. The O&M years, or are year, continually
longest definitive definitive contract contracts contract for 15 perpetual renewable terms.
contract period period was 70 years, Water agreements.
was 70 years. years Exchange contract
for 35 year,
renewable term.
Dissolution Contract can not Hillsborough Tampa would The Authority to North Pasco facility St. Pete can
Provision for be terminated would take take ownership of return all rights for will revert back to terminate
Primary prior to possession of facilities, A/R and existing facilities. NPR and Pasco. contracts if the
Contract execution. The facilities and property and New facilities All debt for both Authority fails to
sole remedy is operate them as operate as City continue to be facilities must be perform their
specific County facilities, facilities. Tampa controlled by the paid by NPR and duties. If the
performance Hillsborough must must pay Authority with Pasco. facility is no longer
pay outstanding outstanding debt compensation in use, the
debt given to St. Pete. easement is no
Longer in force.


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The Regional System contract was executed on July 24, 1991. This contract combined many
smaller contracts already in effect, between individual member governments or between a
member government and the Authority. These facilities were brought together to be used for
the common benefit of all member governments. Additionally, the Regional contract
explicitly stated the intention of the Authority to expand these facilities to meet the member
governments' growing needs. The Authority's member governments were assigned an
entitlement of water (average day permitted capacity for member's facilities) as indicated
below in Exhibit 2-3.

Exhibit 2-3
Member Government Water Entitlement/Permitted Capacity by Water System
Member Governments Actual Water Use % Water Supplied % Water Supplied % Water Supplied %
(mgd) 1995 by the Regional by the by member
System (mgd) Authority's other facility (mgd)
managed System
(mgd)
Hillsborough County 31.4 14% 13.3 22% 18.1 27% 0.02 0%
City of Tampa 66.6 30% 0.0 0% 2.7 4% 63.9 70%
Pasco County 13.9 6% 1.9 3% 10.5 15% 1.5 2%
City of New Port Richey 4.27 2% 0.0 0% 3.6 5% 0.6 1%
Pinellas County 67.0 31% 42.1 71% 0.0 0% 24.9 27%
City of St. Petersburg 35.4 16% 2.3 4% 33.1 49% 0.0 0%
TOTAL WATER DEMAND 218.7 100% 59.6 100% 68.1 100% 91.0 100%
Notes:
[1] Water from Tampa Bypass Canal is pumped into the Hillsborough River Reservoir
[2] Total Hillsborough River Reservoir = 2.70 + 63.90 = 66.60 mgd

For the Regional System, the "Water Base Rate" is based upon entitlements listed above, and
a common "Use Rate" is charged based upon the variable cost of actual water delivered under
the Regional System.

Contracts petaining to the other facilities managed by the Authority vary in many aspects.
The Authority owns most facilities it operates, except for Cosme-Odessa, Section 21 and
South Pasco wellfields. These facilities are owned by the City of St. Petersburg. For facilities
which are jointly managed by the Authority and member government, operations and
maintenance, and management responsibilities vary between the Authority and member
government. Hillsborough County operates 3 wells and its pump station; City of Tampa
operates its pump station; City of St. Petersburg co-manages the Cosme-Odessa / Section 21
and South Pasco facilities. Another difference among the contracts is the primary term, which
ranges from 5 years for Cosme-Odessa and Section 21 wellfields to a permanent contract for
the South Pasco wellfield.

Information pertinent to the contracts, default and dissolution implications can be found in
Appendix B.


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Exhibit 2-4
Major Water Supply Facilities


A Water Treatment Plant


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Authority and Member Governments' Water Source Facilities
The Authority and its member governments serve approximately 85% of the population in the
tri-county area. In addition to the member governments water source facilities, there are
several other municipal water supply systems including the cities of Belleair, Clearwater,
Dade and Zephyrhills. The remaining residents of the tri-county area are served through
private utilities or by domestic wells. A map displaying wellfields and water treatment
facilities in this tri-county area is shown in Exhibit 2-4. The water supply facilities within the
three county area can be categorized as follows:

* Authority's Regional System (under 1991 interlocal agreement)
* Other facilities managed by the Authority
* Member government owned and operated facilities

The Authority owns or manages facilities that contribute approximately 57% of the member
governments' total water demand. The Regional System is a key portion of the Authority's
water supply and network. As indicated in Exhibit 2-5 below, the Authority's Regional
System includes Cypress Creek, Cross Bar, Cypress Bridge, and Northwest Hillsborough
wellfields. The Regional System has a combined average day permitted capacity of 76.80
million gallons. Other Authority managed system include Starkey, North Pasco, and South-
Central Hillsborough wellfields, and Tampa Bypass Canal with a total average day permitted
capacity of 67.10 million gallons. Water from the Tampa Bypass Canal facility is delivered
to the City of Tampa's Hillsborough River Reservoir. Section 21, Cosme Odessa, and South
Pasco wellfields (owned by St. Pete) are jointly managed by the Authority and the City of St.
Petersburg.

Exhibit 2-5
The Authority's Water Supply Facilities
Water Supply Facilities Water Use 1995 Actual 1995 Annual Water
Permit (mgd) Water Use Usage (million
(mgd) gallons)
Regional System
Cypress Creek Wellfield 30.0 25.4 9224
Cross Bar Wellfield 30.0 23.9 8686
Cypress Bridge Wellfield 8.0 1.5 552
Northwest Hillsborough Wellfield 8.8 8.7 3175
Regional System Total 76.8 59.6 21637
Other Authority Facilities
Starkey Wellfield 15.0 11.9 3029
North Pasco Wellfield 8.0 2.2 800
South-Central Hillsborough Regional Wellfield 24.1 18.1 6616
Tampa Bypass Canal* 20.0 2.7 793
Co-managed Facilities
Cosme-Odessa 12.0 11.1 4048
Section 21 12.0 9.1 3329
South Pasco 16.9 12.9 4721
Total 184.8 187.2 44973
Note: Permitted capacity of Tampa Bypass Canal is included in Hillsborough River.
Source: WCRWSA


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Member government facilities, which are not owned/operated by the Authority, include
Northeast Brandon wellfield and Northeast Subdivision wells owned and operated by
Hillsborough County, Hillsborough River Reservoir, Sulphur Spring and Morris Bridge
wellfields owned and operated by City of Tampa, and Eldridge-Wilde wellfield owned and
operated by Pinellas County. Both Pasco County and City of New Port Richey own and
operate small wells.


Exhibit 2-6
Member Governments' Facilities
Water Supply Facilities Water Use 1995 Actual 1995 Annual Water
Permit (mgd) Water Use Usage (million
(mgd) gallons)
Hillsborough County
Northeast Brandon Wellfield 1.0 0.013 5
Northwest Subdivision Wells 0.1 0.01 4
City of Tampa
Hillsborough River* 88.1 66.6 24301
Sulphur Spring* 5.0* 0.0* 0.0*
Morris Bridge Wellfield* 15.5* 3.45* 1247*
Pasco County
Zephyrhills Bulk Water N/A 0.3 112
County Wells 1.5 1.2 582
City of New Port Richey
City Wells 1.0 0.6 233
Pinellas County
Eldridge-Wilde 35.2 24.9 9104

Total 126.9 93.7 34340
Note: Permitted capacities of Sulphur Spring and Morris Bridge are included in Hillsborough River.
Source: WCRWSA


The total average day permitted capacity of facilities operated by the Authority and its
member governments is approximately 291.0 million gallons. In Water Year 95 (October 1,
1994 September 30, 1995), member governments used approximately 218.0 million gallons
of water per day. Exhibit 2-7 below, indicates permitted capacity and water usage by
facilities.
Exhibit 2-7
Sources and Usage of Water by Facilities


Wawr Use PerIM (id) Aw. Day


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Debt and operating cost allocations
This section summarizes KPMG's allocation of the expenditures of facilities under the
Authority's jurisdiction. The expenditures for 1995 are made up of both debt, and operating
and maintenance costs. Please note that due to the different levels of detailed accounting
methods and availability of information obtained from the Authority and member
governments, actual results will vary from those calculated by KPMG as stated in this report.

Exhibit 2-8 presents a summary of the current balance of debt outstanding as of FY 1995.

Exhibit 2-8
Authority's Debt Summary (end of FY 1995)

Hillsborough City of St.
Facilities County City of Tampa Pasco County Pinellas County Petersburg Total
Regional System $ 11,829,891 $ 1,246,788 $ 1,672,114 $ 23,205,267 $ 3,744,534 $ 41,698,593

NE Brandon
Wellfield 23,833,330 23,833,330
South-Central
Hillsborough
Wellfield 37,511,040 37,511,040
Tampa Bypass
Canal 136,871 136,867
Starkey Wellfield -- 8,916,716 -- 8,916,716
North Pasco
Wellfield- 1,364,342- 1,364,342
Total $ 73,174,261 $ 1.383,659 $ 11,953,172 $ 23,205,267 $ 3,744,534 $113,460,892
*City of New Port Richey's portion of debt(Starkey and North Pasco) is included in Pasco County.
As the table indicates, the total Authority debt allocated to member governments amounted to
$113,460,892. Debt for the Regional System (including debt prior to the signing of the
Regional System contract), which accounts for approximately 37% of the total, is comprised
of debt for the following three facilities:

* Cross Bar Ranch: Capital Improvement Revenue Bonds, 1979
* Cypress Creek, Wellfield Obligation, 1979
* Northwest Hillsborough: Refunding Revenue Bonds, 1985 and 1989
* The Regional System debt shown in the table was allocated to member jurisdiction by
capacity entitlements from the Regional Contract Agreement

The Authority's other facilities debt accounts for approximately 63% of the total debt among
the member governments. Almost 85% of this debt belongs to South Central Hillsborough
and Northeast Brandon facilities. The total current balance for South Central Hillsborough
and Northeast Brandon facilities are $37.5 and $23.8 million dollars respectively, with the FY
1995 debt service cost being approximately $3.6 for South Central and $3.2 million for
Northeast Brandon.


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Annual debt service payments for 1995 totaled over $12.95 million for all of the Authority
managed facilities. A detailed summary of the long term bond issuance and debt service
payments is available in Appendix C.

* On April 18, 1994, the five voting member governments signed an agreement to finance
the cost of preliminary design and construction of the expansion to the Regional System
(the Project)
* The Authority estimated that it would cost $84,696,000 over the period of design,
acquisition of property and construction of the Project
* All five voting members desired to make contributions to the Authority for their portion of
the $84,694,000 based on their water cost allocation (set forth in the Regional System
Contract) in lieu of the Authority issuing bonds or otherwise financing payment of the
member government's share of the Project costs

Exhibit 2-9 below, summarizes operations and maintenance (O&M) costs for the facilities of
the Authority. The O&M costs were derived from actual expenditures minus the debt
obligations of each member.

Exhibit 2-9
Summary of Operations and Maintenance Costs (FY 1995)
Member Hillsborough City of New Pinellas City of St
Government County City of Tampa Pasco County Port Richey County Petersburg Total
Regional System $ 3,016,620 $ 228,960 $ 427,118 $ $ 6,936,685 S 815,955 11,425,338
South-Central
Hillsborough
Wellfield 5,476.356 5,476,356
Tampa Bypass
Canal 401.146 -- 401,146
Starkey Wellfield 349,662 S 723,190 1,072,852
rth Pasco
Welifield 237.441 237,441
Total $ 8.492.976 S 630.106 $ 1.014.221 S 723.190 $ 6,936.685 $ 815,955 S 18.613.133
Note: City of New Port Richey's portion of O&M cost for Starkey includes debt portion.

As the table shows, total operating costs for facilities under the Authority total $18,613,133
for the water year 1995. The operating costs for the Regional System facilities account for
approximately 61% of this total. Operating and Maintenance costs for the Authority's other
facilities range from $237,441 for North Pasco to over $5.4 million for the South Central
Hillsborough wellfield.

Pricing based on individual projects has been used by the Authority in all of its contracts.
Additionally, most member governments have developed water supplies independently to
varying degrees. As a result, the cost of wholesale water supplies varies among the members,
as shown in Exhibit 2-10 below. A more detailed evaluation of unit costs is provided in
Section 5.


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Exhibit 2-10
Costs of Existing Wholesale Water Supplies
Member $ / 1,000 gal.
Hillsborough County 1.19
City of Tampa 0.51
Pasco County 0.61
City of New Port Richey 0.40
Pinellas County 0.55
City of St. Petersburg 0.24
Average 0.58


Member Government Facilities Debt and Operating Cost Allocation
This section summarizes operating expenses and debt information, where available, for
member government facilities.

Exhibit 2-11 presents a summary of the current balance of debt outstanding as of FY 1995 for
member government facilities. For the majority of members, a review of financial
information did not reveal total outstanding debt associated with their water production
facilities, as financial information was consolidated to reflect total outstanding debt for water
production sources, water treatment plant and water distribution system. Therefore, the costs
in Exhibit 2-11 are not complete.

Exhibit 2-11
Debt and O & M costs for member government facilities
Water Supply Facilities Total Outstanding Annual Debt Annual O&M Costs
Debt as of 1995 Service 1995 FY 1995

Hillsborough County
Northeast Subdivision Wells NA NA NA
City of Tampa
Hillsborough River* NA $ 48,825 $ 643,194
Sulphur Spring* NA NA $ 1,842
Morris Bridge Wellfield* NA S 339,750 $ 169,121
Psco County
County Wells $ S NA
City of New Port Richey
City Wells $ $ $ 55,000
inellas County
Eldridge-Wilde NA $ $ 4,234,966

total $ $ 388,575 $ 5,104,123
Note: N A= Not Available


Historical water usage
Water usage for the period 1990 to 1995 is presented in Exhibit 2-12. This water usage data is
based on information provided by the Authority and its member governments. As the
information illustrates, the total demand for water during this period has moderately declined,


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considering an increase in permanent population in the tri-county region from 1.97 million in
1990 to 2.1 million in 1995.

Exhibit 2-12
Historic Water Usage (mgd) by Member Governments
Member Government 1990 1991 1992 1993 1994 1995
Hillsborough County 32.1 30.0 33.3 32.8 32.7 31.4
City of Tampa 71.5 67.3 70.3 67.5 67.3 66.6
Pasco County 12.3 11.2 12.5 12.9 13.3 13.6
City of New Port Richey 4.5 4.4 4.8 4.7 4.7 4.2
Pinellas County 74.8 67.2 71.9 69.9 69.0 67.0
City of St. Petersburg 40.6 39.4 37.4 37.5 35.4 35.4
Total 235.8 219.5 230.2 225.3 222.4 218.2
Source: WCRWSA

This decline in water usage in the tri-county area is attributed to an extensive water
conservation effort by the member governments, the Authority and SWFWMD. Hillsborough
and Pasco Counties are major donors of water, whereas, Pinellas County and St. Petersburg
are major importers of water.

Retail Water Services Summary By Member Govemments
Currently, member governments serve over 438,000 accounts, over 90% of which are single
family residential accounts (3/4" or 5/8" meters). Exhibit 2-13, below, summarizes the retail
water services. As the table indicates, single family dwellings consume an average of 6,300
gallons per month. Overall, all customers of the member governments combined consume
900 million gallons of water per month. This is an average of approximately 15,000 gallons
per account per month, for all customer classifications.

Exhibit 2-13
Retail Water Services Summary
Avg. Gallons
(000) per Single
# of Single Family
Family Residential Avg. MG Sold
Residential Account per Per Month for Al
Jurisdiction Accounts month" Customers Total Accounts
City of Tampa 111,016 6.39 1,865.45 121,428
Hillsborough County 70,066 8.93 892.43 72,471
City of St. Petersburg 83,148 5.19 867.63 88,099
Pinellas County 95,867 7.14 1,398.84 102,896
City of New Port Richey 9,925 4.38 90.93 10,432
Pasco County 41.802 5.84 321.24 42.895
Total I Average 411,824 6.31 906.09 438,221
Note: The number of residential accounts is based upon the total of 58" and 3/4" meters.

Water flows through an often complex network of wholesale and retail systems before
reaching the retail customer as shown in the example below.


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Example: Chain of Authority Customers


Exhibit 2-14, below, summarizes the monthly retail user costs for water customers within the
various jurisdictions in the member governments. These costs are calculated using the
jurisdictions' rates, based on an average monthly consumption per user of 6,300 gallons, as
presented in Exhibit 2-13. Exhibit 2-14 shows the monthly retail cost of water among the
member government's customers, ranging from $7.56 inside the city limits of Tampa, to
$23.69 for Pinellas Park outside of the city.


Exhibit 2-14
Retail Cost Summary
Avg. User (6,300
gallons) per
Member Month
City of Tampa
Inside City Limits $7.56
Outside City Limits $9.41
Hillsborough County
All Customers $16.10
City of St. Petersburg
All Customers $11.61
Pinellas County
Belleair $9.90
Clearwater $14.30
Dunedin $10.08
Oldsmar Inside City $13.23
Oldsmar Outside City $19.85
Pinellas Park Inside City $18.96
Pinellas Park Outside City $23.69
Safety Harbor $14.75
Tarpon Springs $15.94
Pinellas County Other $13.20
City of New Port Richey
Inside City Limits $10.27
Outside City Limits $12.80
Pasco County
All Users $16.23


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Major Issues
The existing ownership and management of water supply facilities in the three county area has
contributed the following issues:

* Substantial variances in the wholesale costs of water (wide variances in retail costs also
are found because of the number of retail purveyors)
* Large number of complex, inter-local contracts governing the operations and financing of
water facilities
* Disparity in the amounts of water donated and used among the members
* Independent operational control of several facilities resulting in concentrated use of
selected wellfields and an increase in required peaking capacity (when compared to
consolidated or system-wide operations)

Master Water Plan
The Authority developed plans to meet the water supply needs of the region and published its
first comprehensive master plan in 1978. This plan has been periodically updated beginning
in 1982 with the last update published in 1986.

During 1994, the Authority developed a Resource Development Plan as a comprehensive
planning document to reflect water demand projections and traditional and alternative water
supply sources. This plan establishes a schedule, based on existing and projected conditions,
to ensure efficient allocation of resources for development of future water supply sources.
The planning horizon is comprised of four phases: Phase 0 Capital Improvement Plan 1994-
1996, Phase 1 and 2 Master Water Plan 1996-2005, and Phase 3 Long Range Plan.

The Master Water Plan is a framework for accomplishing systems management and rotational
flexibility in the Tampa Bay area. Through the construction of key interconnects and the
development of additional diversified sources of water supply, the Master Water Plan will
enable the Authority to continue to meet its obligations to member governments by
developing, operating, and maintaining public water supplies while minimizing adverse
environmental impacts for the next 20 years. The Master Water Plan includes potential long-
term costs for well and environmental mitigation in conjunction with supply project costs.

Projected Water Demands of Jurisdictions
The Authority's Resource Development Plan included four distinct projected water demand
scenarios as follows:

Scenario 1 assumes that the existing population will consume water at its historical
per capital rate and that the future population will also use water at the same rate.
Scenario 2 reflects the member governments "best estimate" of future water
demands and includes their current water use reduction programs.


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Scenario 3 assumes that all member governments will meet existing or planned
SWFWMD per capital conservation goals.
Scenario 4 is based on all member governments meeting a theoretical per capital
conservation goal for adjusted gross per capital use of 110 gallons per day.


For the purpose of this study, KPMG has used an average of four scenarios, as described
above, to determine the projected water demand by member governments. As indicated in
Exhibit 2-15, future water demand is estimated to grow at the annual compounded rate of 1.3
percent per year for the next 35 years.
Exhibit 2-15
Projected Water Demand
Actual
Demand Projected Average Day Water Demand (MGD)
Member Governments 1995 2000 2005 2010 2015 2020 2025 2030
Hilsborough County 31.42 42.73 47.76 52.63 57.38 63.91 69.51 75.20
City of Tampa 66.60 71.88 74.13 76.18 78.68 80.70 82.90 85.18
Pasco County 13.58 18.95 22.83 26.86 30.73 34.65 38.58 42.53
City of New Port Richey 4.63 5.23 5.23 5.23 5.23 5.23 5.23 5.23
Pinellas County 66.99 82.45 85.23 87.33 88.98 90.13 90.85 91.15
City of St. Petersburg 35.44 39.90 41.03 41.90 43.00 43.90 44.45 44.95
TOTAL WATER DEMAND (MGD) 218.66 261.14 276.21 290.13 304.00 318.52 331.52 344.24
Projected Water aemand includes 0.26 mgd supply to City of Dunedin and the total demand for cities of Clearwater and Tarpon Springs.
Projected Water Demand includes the City of Oldsmar.
Source: Resource Development Plan Projected demand is based on the average of Scenarios I through 4


Exhibit 2-16 presents water supply and projected water demand information by member
government. The first bar represents total permitted capacity and entitlement for each
member government. Actual water usage is presented in the second bar, while last three bars
represents project water demand.



Exhibit 2-16
Water Supply/Demand Projections


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Projected Capacities and Costs by Project
On July 17, 1995, the Authority's Board adopted five objectives for the recommended Master
Water Plan within the Authority's Water Resource Development Plan. These five objectives
are:
Aggressive conservation and reserve/rotational capacity
Diversified supply sources
Limited additional groundwater beyond built and exchanged capacity
Increased drought-resistant components
Least cost consistent with previous objectives

Growing out of Alternative Plan 4 of the Water Resource Development Plan, the Board has
approved a Master Water Plan to include 10 major projects totaling $297 million and 93
million gallons per day (mgd) of additional capacity. The planning horizon of the plan
consists of three phases as outlined in Exhibit 2-17. The plan includes six new water supply
elements and three pipeline interties and creates an expanded interconnected system between
facilities in Pasco, Pinellas and Hillsborough counties.

Exhibit 2-17
Master Water Plan 1996 2005
Phases Supply Elements Projected Funding Needs Phase
Capacity ($1995) Capacity
(mgd) (mgd)

Phase 0 Tampa/Hillsborough Interconnect 8.0 1,700,000
1995-1997 8.0

Phase I Cypress Bridge Permit Increase 4.0 $1,400,000
1995 -2000 Tampa Bypass Canal Linear 10.0 $17,578,842
Wellfield
North-Central Hillsborough Intertie N/A $22,885,632
Industrial/Agricultural Exchange 12.0 $36,588,854
South-Central Hillsborough Intertie N/A $18,880,646
Brandon Urban Wellfield 12.0 $23,886,341 38.0

Phase II Cone Ranch & Dispersed Wells 12.0 $40,405,302
2000 -2005 Hillsborough Bay Resource 35.0 $108,175,013
Exchange
Loop 72" Transmission Phase A N/A $25,563,251 47.0

Developmental Brackish Water Desalination 4.0 20.0 N/A
Alternatives Hillsborough River High Water 15.0 -25.0 N/A
Seawater Desalination 20.0 50.0 N/A N/A

Total $297,063,881 93.0

As illustrated above, the plan proposes to bring an additional 46 million gallons per day of
new water on line in the first six years and another 47 million gallons per day in the last four
years. A major component of the Master Water Plan is aggressive demand management that


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is expected to reduce per capital use by 10 million gallons per day by the year 2000 and 17
million gallons per day by 2005. The plan also contains alternative water supply initiatives
such as brackish and seawater desalination and capturing excess high water flows in the
Hillsborough River.

Overall, the Authority's Master Water Plan is expected to significantly improve systems
management that is responsive to concerns for environmental stress through developing an
abundance of water supply capacity in excess of consumer demand. It ensures a sustainable
supply of high-quality water to meet the Tampa Bay region's current and future demand at the
lowest cost to the Authority's member governments and, in turn, their customers. For
information regarding proposed SWFWMD and USEPA funding, financing costs, interest
rates, and costs $/1000 gallons capacity, please refer to Appendix D.

Major issues
The Authority and its member governments have not yet reached an agreement on how the
costs of construction will be shared. Although discussed in the Resource Development Plan,
the Master Water Plan is silent on potential problems regarding the mixing of ground and
surface water and does not address potential cutbacks of existing facilities by SWFWMD.

The Authority has several options available to finance the Master Water Plan projects,
including Basin and Governing boards funding, Legislative taxing authority, Federal funding,
and debt. Additional information regarding financing options are found under "Financing
Options" in Section 4.

Environmental and Legal Issues

Environmental Issues
This section presents a discussion of environmental issues related to water supplies based on
reports and articles of SWFWMD and the member jurisdictions. The most densely populated
areas in Florida are concentrated along the coastal areas and these coastal areas are short of
groundwater. Most of west Central Florida, including Pinellas County, depend on the
Floridan aquifer for their fresh water supply. The porous limestone that provides the
framework for the Floridan varies from hundreds to more than 2,000 feet, and is thickest in
the Central part of the state. Rainfall serves to recharge or resupply water in the aquifer.

The amount of water stored in the aquifer has been estimated at a quadrillion gallons. Human
consumption has been estimated to account for .01% of water in the Floridan aquifer.
SWFWMD's positions are that the water in certain portions of the aquifer has been dropping
in the past two decades and that some water supplies in the region have been contaminated by
saltwater intrusion. SWFWMD contends that historical groundwater pumping has reduced
levels of lakes, wetlands and private wells and has caused environmental damages.
SWFWMD has instituted emergency pumping cutbacks and has proposed to deny renewal of
permits for four wellfields which are currently under administrative appeal.


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At issue are the health of isolated lakes and wetlands around the wellfields in Pasco and
northwest Hillsborough County and the causes of environmental damage. In order to ease the
impact of pumping, a number of lakes in Pasco and Hillsborough County are being refilled by
the Authority's augmentation program, and other private and public refill projects.

In 1995, the Ranch Operators Assistance Program was created by WCRWSA to mitigate the
effects ofwellfield operations on livestock ranching operations. The program is limited to the
installation, or reimbursement for, livestock watering systems generally comprised of 4-inch
diameter wells, submersible pumps, appurtenant pipes, control devices, and water troughs.
An example project under the program provided for the construction of five new wells, the
purchases of six solar pump mechanisms, one electric site, and thirteen concrete block water
troughs for one ranch in Pinellas County.

Northern Tampa Bay Water Resources Assessment Project
In response to concerns over the impact of groundwater withdrawals on water levels, the
Governing Board of SWFWMD directed District staff to conduct a Water Resource
Assessment Project (WRAP) in the Northern Tampa Bay area. The purpose of this study,
initiated in 1987, was to provide SWFWMD's Governing Board with the technical basis to
establish safe yield and long-term water resource solutions for this area. Safe yield, as
addressed in this project, is the quantity of water available for use without causing
unacceptable adverse impacts to the water resources, associated natural systems, and existing
legal uses of water.

The primary focus of the WRAP was to assess the relationship, if any, between groundwater
withdrawals, upper Floridan and surficial aquifer water level declines, and deteriorating
wetland and lake environmental quality. The occurrence of saltwater intrusion was also
assessed. Based on District staff evaluations, this project reported the following:

* There have been long-term sustained declines in the upper Floridan aquifer potentiometric
surfaces in some locations in some locations in the area.
Water levels in the surficial aquifer have declined in some areas.
Water levels in several lakes have decreased, with the greatest decreases generally located
near wellfields.
Streamflow in the vicinity of several groundwater withdrawal centers have shown
declining trends.

The study also acquired field information on the health of representative isolated cypress
wetlands. The study reported the District's position that wetland health is declining in some
areas of the Northern Tampa Bay WRAP area, although a wide range of wetland conditions
was observed. The report said that healthy wetlands are rarely found in older wellfields.

Despite these issues, the project identified future water supplies that may be available in
portions of the Northern Tampa Bay WRAP area that currently have low levels of
groundwater withdrawals. The District's study also concluded that mitigation of the impacts


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experienced in the Northern Tampa Bay WRAP will require a restoration of the natural water
balance of the water resources system. It recommended doing so by a combination of
groundwater withdrawal reductions and methods of returning or replacing the quantities of
water removed from the water resource system.

Authority Response to the Northern Tampa Bay WRAP
Whether the SWFWMD, through this project, was able to meet its stated purpose of
determining safe yield and providing long-term water resource solutions for the Northern
Tampa Bay area is a matter of ongoing public and inter-agency debate. According to the
Authority, questions regarding safe yield and regional water resource management are not
explicitly answered in the SWFWMD report to a level of detail that would provide clear
direction for those currently utilizing groundwater resources. Although the SWFWMD raised
concerns regarding environmental impacts from groundwater withdrawals, and attempted to
address those concerns through the WRAP, various experts working on such topics in the
Tampa Bay area offer differing opinions as to the magnitude and extent of such impacts and
whether other factors (such as substantial rainfall deficits and landform alterations due to
development and drainage projects) are more or less significant as contributors to observed
wetland and lake conditions across the region. The Authority is concerned over the natural
cycles of climate and rainfall over the years, as well as trends in development and
urbanization in Northern Tampa Bay that have occurred on the same time scale as the
implementation of regional wellfields, as masking one's ability to assign responsibility for
environmental changes. Debates over appropriate management techniques and the sufficiency
of data and analyses continues, as water resource regulators and water users both expand their
efforts toward a more complete understanding of environmental and hydrologic conditions
and changes in Northern Tampa Bay.

Current Issues in Administrative Hearing Process
Costs and efforts related to outstanding administrative hearings and other legal actions have
been a major issue affecting the governance of the Authority, and the cooperation among
members and SWFWMD. The following Water Use Permits are currently under
administrative hearing process:

* Section 21 Water Use Permit No. 200003.02
Petitioners- the Authority; City of St. Petersburg; Interveners- Pinellas County, Pasco
County and Hillsborough County

Cosme-Odessa Water Use Permit No. 200004.02
Petitioners- the Authority; City of St. Petersburg; Intervener- Pinellas County, Pasco
County and Hillsborough County

South Pasco Water Use Permit No. 203647.02
Petitioners- City of St. Petersburg; Intervener- Pinellas County, Pasco County and
Hillsborough County


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* NW Hillsborough Water Use Permit No. 206676.03
Petitioners- the Authority; City of St. Petersburg; Intervener-Pinellas County, Pasco
County and Hillsborough County

* South Central Hillsborough Water Use Permit No. 2004352.02
Petitioner-the Authority

The renewal process for these permits has created a contentious situation among SWFWMD,
the Authority, and its member governments. The Authority has not initiated litigation but is
participating in requesting administrative hearings supporting its positions and to respond to a
number of changes in position by the District. When SWFWMD originally issued one year
Water Use permits for the first four facilities listed above, challenges were filed by the
Authority and its member governments) against these one year permits which were
inconsistent with permit applications and prior action of SWFWMD. SWFWMD then
proposed ten year permits with reductions in pumpage and environmental protection
standards. The Authority continued its hearing request since the ten year permits would have
resulted in a substantial reduction of pumpage from the wellfields. On July 15, 1996,
SWFWMD proposed to deny these first four permits. The Authority's position has been to
support renewal applications in order to meet contractual obligations to members. The
Authority contends that the Northwest Hillsborough wellfield permit was not issued within
the time allowed and seeks to have the permits issued to reflect the previous permit quantities
and conditions.

Other administrative issues with SWFWMD and the Authority's members are as follows:

* Petition to Adopt Minimum Flows and Levels
Petitioner: Pinellas County
Status: All five water management Districts are required by Florida Statute and Florida
Administrative Code to establish minimum flows and levels.
Discussion: Pinellas contends that since minimum flows and levels have not been set for
every water body, SWFWMD is failing its statutory responsibility. Pinellas County seeks
to preclude SWFWMD from issuing new permit conditions or exercising its regulatory
authority until minimum flows and levels are established district-wide by rule.

* 40D-2, Basis of Review Rule Challenge
Petitioner: Pinellas County
Status: Consolidated with Southern Water Use Caution Area hearing.
Discussion: Challenges legal authority for rules by which SWFWMD issues water use
permits.

* Petition for Declaratory Relief
Petitioner: Pinellas County
Status: Petition filed with Circuit Court for Pinellas County 1-17-96


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Discussion: Pinellas County filed a petition for Declaratory Relief against SWFWMD, the
Coalition of Lakes Associations, and other people to determine whether the County can be
sued by outside private parties for environmental damage caused by overpumping.

Request for Public Records
Petitioner: SWFWMD
Status: Complaint filed 2-16-96 with the 13th Judicial Court
Discussion: At dispute is SWFWMD's assertion that outside attorney's technical and
scientific documents held by his firm on behalf of the Authority and Pinellas County are
not subject to Florida Public Record laws.


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