Title: Tapping Into The Future - Executive Summary
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 Material Information
Title: Tapping Into The Future - Executive Summary
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 - Tapping Into The Future - Executive Summary
General Note: Box 28, Folder 20 ( Water...The Tie That Binds - 1995 ), Item 2
Funding: Digitized by the Legal Technology Institute in the Levin College of Law at the University of Florida.
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Bibliographic ID: WL00004743
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





WEST COAST REGIONAL
WATER SUPPLY AUTHORITY


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WEST COAST REGIONAL
WATER SUPPLY AUTHORITY

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JANUARY 1997















he residents of southwest Florida expect to get safe drinking water when they turn
on the faucet... Businesses want a reliable potable water supply to fuel economic
development... Farmers need the abundant water required to feed the state and
the nation... And future generations depend on today's leaders to protect the state's
precious water resources.
These demands, no matter how reasonable, can be in conflict and can place tremendous
pressures on the area's water supply. The fact is, water is a limited resource in Florida as it is
elsewhere and the southwest coast has become increasingly reliant upon groundwater
withdrawal. If this region is to build the public trust, it must make the best possible use of
existing water resources and it must develop new sources. And it must start now.
Recognizing this need, the Florida State Legislature directed the West Coast Regional Water
Supply Authority to evaluate its current operation and make recommendations for improve-
ments by February 1, 1997. Specifically, the legislation required the Authority to consider:

SAuthority membership and voting
Funding options and implementation, including membership responsibility
apportionment
A water supply development plan based on a 20-year
planning horizon
Facilities ownership and management
Governance board membership, terms, responsibilities
and officers
Utilization of 0.10 mills of Basin Board ad valorem
taxing authority, if granted

The West Coast Regional Water Supply Authority was already
deeply involved in examining its future, and in June 1996, the
Authority asked KPMG Peat Marwick LLP to conduct an inde-
pendent analysis and present alternatives for moving forward
given the mandate. Over the last eight months, KPMG profes-
sionals have studied the Authority's policies and procedures,
analyzed possible options and implications, helped the
Authority Water Group public elected officials, public
managers and utility directors reach consensus, informed
stakeholders, and compiled a detailed technical report
outlining our findings and conclusions.
This document is a summary of our results, designed to be
accessible and understandable to the many constituents who
have a stake in the region's water supply. We see it as an
important first step in helping the region tap into the future. What happens from here is up
to you the state legislators, community leaders, business leaders, environmental advocates,
and citizens of Hillsborough, Pasco, and Pinellas Counties.


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after supply is not a new issue in southwest Florida. In fact, decades ago, cities and
counties with little water of their own bought property in nearby jurisdictions and
built pipelines to transport the water. Since then, increasing pressures have been
placed on the water supply pressures which have created inherent tensions in the region.
The first and most obvious tension is the tug between the region's economic well-being and
its environmental health. With the increasing demand for water have come consequences
predicted during permitting but little understood. Demand, population growth and expand-
ing development must be balanced against the region's varying climate, or suffer the conse-
quences: the drying up of wetlands and lakes and saltwater intrusion. Regulatory agencies
and environmentalists have sought legal remedies, demanding cutbacks on permitted water
use, while business and community leaders claim that access to water is critical to economic
development, local prosperity and continued public health.
Another tension arises between the interests of the region represented by the Authority and
the interests of the individual member communities. Historically, each jurisdiction has
planned and acquired its own water capacity. Each now has water rights through the
Authority, individually, or both.
The contracting of water entitlements has
created a fragmented approach that serves
the short-term interest of each jurisdiction,
rather than the long-term future of the
region. The conflicts are exacerbated by
differences among the jurisdictions, includ-
ing variations in population, future growth,
water supply and water usage.
Unfortunately, the Authority's governance
and financing structure contributes to such
divisions, rather than overcoming them.
Historically, the organization functions more
m *as a collective, where each member can
,I veto action by withholding its support,
m mmmI rather than as a true partnership. As a result,
H the Authority has been stalled in its
attempts to move forward and develop new
water sources.
While this arrangement may have been manageable in the past, a more regional approach is
critical to Tampa Bay's future. Projections, based on four different scenarios for the future,
indicate that water demand will continue to grow from an existing water demand of 220
million gallons per day (mgd) to over 330 mgd by the year 2030.
Today, certain water use permits issued by the Southwest Florida Water Management District
(SWFWMD) are threatened, and could be reduced significantly. The region will not only need
to find ways to potentially replace these water sources, but to provide for growth as well.
KPMG's independent analysis is one key part of the solution. But if the Authority is to fulfill
its mission, it must develop the new and alternative sources of water in its Master Water
Plan.


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"7 e iest Coast Regional Water Supply Authority is an independent governmental
Entity made up of six members: Hillsborough County, Pasco County, Pinellas County,
'' the City of Tampa, the City of St. Petersburg, and non-voting member the City of New
Port Richey. Its mission is to provide members with adequate and reliable supplies of high
quality water to meet present and future needs in an environmentally and economically
sound manner.

Toward this end, the Authority provides potable water to its six member governments at cost;
in turn, members supply water to 1.8 million residents. In fiscal year 1995 (October 1, 1994-
September 30, 1995), actual usage amounted to an average of roughly 216 million gallons
per day. Total capacity for production over the course of a year averages 289.1 million
gallons per day, based on the following entitlements.


Through the many interlocal agreements that
establish water rights, the Authority implements a
"subscription" approach to developing new water
supply sources. This approach maintains different
rates as well as varying entitlements among
members for wholesale water supply. As a result,
the retail cost of water ranges from $7.56 per
month inside the city limits of Tampa to $16.23
per month for Pasco County for the same quantity
of water.






Water Supply
Member Governments Entitlement
(million gallons
per day)
Hillsborough County 46.9
City of Tampa 90.4
Pasco County 18.8
City of New Port Richey 7.3
Pinellas County 77.9
City of St. Petersburg 47.8
Total 289.1


SCross Bar Ranch
Wellfield


North Pasco
Wellfield
A Little Rood WTP

New Port Starkey
Richey WTP Wellfield
South F
Eldridge Wilde Wellfiel,
Wellfield
S.K. Keller A Hillsb
WTP Cosme-Odessa ,ect


Wellfield Well
A Lake Park
Cosme WTP WTP


Cypress Creek WTP
*F Cpress Creek
SWllfield



'asco
d Cypress Bridge
SWellfield
rough County
ion 21
field A Morris Bridge
Morris Wellfield
Bridge
WTP


Pinellas NW Hillsborough
County WTP A NW Hillsborough
Regional Wellfield
Hillsborough
River WTP South Central
Hillsborough
Wellfield



Lithia WTP


SMember Owned Facilities
SAuthority Owned Facilities
A Water Treatment Plant


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Wholesale Water Wholesale Water Retail Water
Member Governments Costs $/1,000 Costs (6,300 Costs (6,300
gallons gallons/month/ gallons/month/
(FY 1995) residence) residence)
Hillsborough County $1.19 $7.50 $16.10
City of Tampa $0.53 $3.34 $ 7.56
Pasco County $0.59 $3.72 $16.23
City of New Port Richey $0.57 $3.59 $10.27
Pinellas County $0.55 $3.47 $13.20
City of St. Petersburg $0.24 $1.51 $13.20


This patchwork approach to water supplies is unique to the Authority, according to a KPMG
benchmarking study of selected wholesale water suppliers. Although the Board deserves
credit for taking steps to operate more cooperatively, a number of obstacles remain:
The Authority is part of an interconnected governance structure with local govern-
ments, SWFWMD Basin and Governing Boards and state government, which makes it
difficult to act in a cohesive, proactive way
Individual member governments can exercise veto power on projects by withholding
funding
The disparity in the amounts of water developed in local areas and used by various
regional members creates conflicts
The nature of Authority deliberations, including water entitlements and environmental
impacts, make compromise difficult

The Authority's long-range Master Water Plan illustrates the difficulties. As part of the plan,
the Board approved nine major projects totaling $296 million, which will bring an additional
85 million gallons per day capacity into a system of regionally dispersed and interconnected
supplies. However, the Authority and its members have not yet reached an agreement on
how the development costs for these projects will be shared.















during its 1996 session, the Florida State Legislature directed the West Coast
Regional Water Supply Authority to assess its operations and make recommenda-
tions to the Legislature by February 1, 1997. The Authority Board of Directors
asked KPMG to help by conducting an independent evaluation of the current situation and
proposing options for governance, operation, financing, and facilities ownership.
Since June 1996, KPMG has explored the workings of the Authority and the potential for
other approaches. Along the way, we have:

0 Conducted interviews with the Authority Board members and staff, legislators, lobbyist,
workshop facilitator, Southwest Florida Water Management District, city and county
administrators, local utility directors, and environmental interest groups
Reviewed the Authority's documents, budgets and plans
Reviewed member government data
Evaluated various strategic ownership options
Developed interim findings and options
Held a series of workshops to consider options
Prepared a final report outlining Authority recommendations

Three workshops, held in October, November, and December 1996, helped the Authority
Water Group reach consensus on the Authority's future. First, the 18-member committee of
Board members, city and county administrators, and utility directors articulated a vision,
which set the framework for further discussion and decision making:

The Authority will be responsive and responsible by providing an adequate water
supply to members without a negative impact on the environment
The Authority will operate as a regional system supplying water in an efficient manner
at equitable prices
The Authority will be a stable institution with a clear mission

Next, KPMG laid out options for the committee's consideration and developed detailed
criteria to assess the institutional, financial, management, and planning/systems implications
of each. The group deliberated key strategic decisions, including:

Who should own and operate the wholesale water supply facilities in the Tri-county area?
How do members or customers share the capital, operations, and maintenance costs
of the facilities and services?
Are water entitlements and rights required from members in developing future water
supplies?
SWhat is the best combination of governance and financing structures to manage
existing water resources and address the regional water supply needs of the future?

Over the course of this examination, it became clear to members that what was needed was
something very different from the approach of the past. Given the concern for limited local
supplies of water and unequal distribution within the area, they discovered, a system-wide
approach makes the most sense for the future. From this foundation, the following plan for
sharing resources, costs and risks was built.


II











6



fat constitutes a system-wide approach? The Authority Water Group envisions a
true partnership where:

SThere are no individual entitlements to water: each jurisdiction can use what it needs
as long as overall capacity exists
All jurisdictions pay the same wholesale rate for a gallon of water
The entire entity guarantees project financing, eliminating the threat of a single vote veto
A true majority vote authorizes the system to act
The Authority serves as the exclusive provider of wholesale water to the region
Jurisdictions are fairly compensated for their existing facilities acquired by the Authority
as part of the transition to a regional system

Here is the plan to make it happen.

ki?#,whm1t41 t* The Authority
Board should be expanded from five to nine
members to provide a more equitable bal-
-- ance among the three counties.

Currently, the Authority Board has five voting
members Hillsborough County, the City of
Tampa, Pinellas County, Pasco County and the
City of St. Petersburg and one non-voting
member: the City of New Port Richey. All deci-
sions are made by a simple majority, with the
exception of emergency contracting, which
requires a two-thirds majority.
Increasing the membership to nine members,
including two appointees from each county and one appointee from each city, would pro-
vide a better balance as population growth and available water supply shift in the present
and in the future. This arrangement will build a closer partnership between those portions of
the region who supply the water and those communities who need it.
The proposed nine members would include:
Two members appointed by the Pasco Board of County Commissioners
One member appointed by the City of New Port Richey
STwo members appointed by the Pinellas Board of County Commissioners
One member appointed by the City of St. Petersburg
Two members appointed by the Hillsborough Board of County Commissioners
One member appointed by the City of Tampa

The City of Tampa, the only member with a surface water reservoir that provides the majority
of its water, has expressed interest in possibly withdrawing from the Authority. If the City
withdraws, three members would be appointed by the Hillsborough Board of County
Commissioners.











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I --O#nflf2f" f Zo The Authority Board should be made up of elected
representatives to assure public accountability.
The governing body of each member jurisdiction is responsible for selecting a representative
to the Authority. While most appointees have been elected officials, there has been no formal
requirement to this effect. This requirement should be added to assure public accountability.
In other words, residents can express their satisfaction or displeasure at the voting booth.


I lmmfl~ n- The Authority should serve as the region's exclusive
provider of wholesale water, acquiring groundwater facilities from members and giving
all members uniform access to system-wide capacity.
The Authority is uncommon in the extent and complexity of interlocal agreements designed
to govern the financing, ownership, management, and use of water supplies developed. If
the region is to make the best use of its water resources, it must simplify this arrangement.
Members of the Authority Water Group considered five major options to moving forward:

Dismantling of Authority; each member develops its own future supplies
0 Existing contracts remains intact; Authority develops new supplies with subscription
service
0 Existing contracts remain intact; Authority develops new supplies with system-wide
service
Dissolution of existing contracts and expansion of Authority; Authority acquires mem-
ber facilities and operates under system-wide service for existing and future supplies
Dissolution of existing contracts and expansion of Authority; Authority acquires mem-
ber facilities and operates with system-wide service for operation and maintenance
costs and subscription service for capital costs


__ ____











6-


The consensus was that the Authority should acquire all regionally significant member gov-
ernment wholesale water supply facilities and tangible assets, and should implement a
system-wide service with a uniform rate structure
(Option 4). However, due to the City of Tampa's desire
to control its own destiny and the high cost of acquisi-
tion, it was decided that the City's surface water facilities
should not be included at this time.
Under this approach, all members will have uniform
access to the Authority's system-wide capacity and no
member will have specific capacity entitlements to any
part of the system. In the near term, the Authority should
continue to provide operation and maintenance services
for existing and acquired water supply facilities. However,
privatization of alternative water supply projects is a
Viable option for the future.

/lf;ltw Z Ik 't* The Authority should
focus on implementing the Master Water Plan projects
to assure the development of diversified water sup-
plies and the creation of an integrated system.

The Authority's Master Water Plan provides a water
supply development plan based on a 20-year planning
horizon. Focusing on the projects outlined in the plan
will enable the Authority to assure diversified water sup-
plies and minimize environmental impacts within an
integrated system.
System-wide user rates and Authority financing will enable a majority vote of the Board to
authorize development of individual projects within the plan. A single vote veto of a specific
project will not be possible with nine members and system-wide financing.

IteOfnfent 4ft 5.i' Funding strategies should fairly compensate members for
the past, while moving to a uniform rate for the future.

In the past, the Authority and its members have used long-term bonds to pay for water
supply development. With the move to acquire members' water facilities and implement the
Master Water Plan, however, the Authority could face substantial financial costs.
A uniform wholesale water rate should be charged to all member governments for the con-
sumption of potable water. All capital, operation, maintenance and administrative costs for
existing facilities, acquired facilities, Master Water Plan and other future projects should be
allocated to member governments based on actual water usage. To minimize the rate
impacts to water customers, the costs related to acquisition of member government facilities
should be financed by the Authority. Member governments will be reimbursed through a
monthly credit applied to their Authority water bills where possible.















For financing land acquisition and Master Water Plan projects, the Authority should rely on the
following options:

SWFWMD Basin Board and Governing Board funding under the New Water Sources
Initiative Program (NWSI) for alternative water supply projects in the Master Water Plan
Acquisition of wellfield land parcels under SWFWMD's "Save Our Rivers" program
Long-term tax-exempt bonds issued by the Authority and secured by system-wide uniform
water rates

Use of the uniform rates will enable the Authority to secure its long-term financing with system-
wide revenues, reducing the risks and issues associated with existing subscription-based rates
and financing.


lOff-lffl 4ifJ 6: The Tri-county area's millage contributions to the New
Water Sources Initiative (NWSI) program should be directed to the Authority to develop
new water sources, in lieu of the 0.10 mill ad valorem tax considered by the Legislature.

The legislative mandate for this study
required an evaluation of the utiliza-
tion of 0.10 mills of Basin Board ad
valorem taxing authority, if the Florida
State Legislature were to make such
funding available to the Authority. This
tax, if approved, would provide the
Authority with approximately $6.4
million per year.

Instead, the Tri-county area's millage
contribution to SWFWMD's NWSI
program should be directed to the
Authority for the purpose of develop-
ing alternative water supply sources
and completing the Master Water
Plan. Out of the Tri-county area's $48
million contribution to the SWFWMD
Governing and Basin Boards in 1997,
approximately $14 million is allocated to the NWSI program, which was established specifically
to develop alternative water supply sources within the Authority's boundaries. These funds could
be best used for the intended purpose by directing them to the Authority.


_I















he West Coast Regional Water Supply Authority-and its member governments-
deserve credit for embracing a visionary plan for the future. By adopting this
plan, the Authority has begun to establish a sound basis for making decisions
and taking action.
However, there are still a number of serious challenges ahead. For example, the Authority
must:

O Acquire its members' water supply facilities
O Implement the Master Water Plan
O Develop a good working relationship with SWFWMD
SAddress potential decreases in existing water use permits
O Promote regional economic cooperation
S Address regional concerns for existing and future environmental and hydrologic
conditions
SAchieve the appropriate balance between local flexibility and state oversight

To achieve these goals, the local jurisdictions that make up the region will have to take a
collaborative approach to the future. Only by working together can the area truly tap into
the future.















KPMG wishes to acknowledge many individuals who devoted much of their time a
on this report and the workshops conducted during the Fall of 1996.



Commissioner Ed Turanchik, Hillsborough County
Mr. Michael Salmon, City of Tampa
Commissioner Ed Collins, Pasco County
Deputy Mayor Wendy Brenner, City of New Port Richey -
Commissioner Sallie Parks, Pinellas County (October December, 1996)
Commissioner Steve Seibert, Pinellas County
Mayor David Fischer, City of St. Petersburg



Mr. Dan Kleman, Hillsborough County
Mr. Samuel Halter, City of Tampa
Mr. John Gallagher, Pasco County
Mr. Jerry Seeber, City of New Port Richey
Mr. Fred Marquis, Pinellas County
Mr. Rick Dodge, City of St. Petersburg

iMitwi 'aifary CammcwM //fn(m~wAMi
Mr. Michael McWeeny, Hillsborough County
Mr. David Tippin, City of Tampa '-s -1'''
Mr. Doug Bramlett, Pasco County
Mr. Tom O'Neill, City of New Port Richey
Mr. Pick Talley, Pinellas County
Mr. William Johnson, City of St. Petersburg

Comments and suggestions provided by the Authority's management were instrumental in
preparing this report and workshop presentations. Their support and cooperation is greatly
appreciated: Mr. Jerry Maxwell, General Manager; Ms. Koni Manley, Director of Finance and
Administration; Mr. Russel Bowman, Director of Planning and Development; Mr. Jonathan
Kennedy, Director of Operations Dr. Donald Polmann, Director of Resource
Evaluation and Protection; Mr. D general Counsel; and Ms. Michelle Klase, Public
Relate
Marilyn Crotty provided invaluable facilitation of
would also like to recognize the support and
-.- la and Representative Sandy Safley.
K ,included: John DiRenzo (Engagement Principal), Chip
(Cli (Engagement Manager), Jodi Whitcomb (Audit Manager),
ela ) Aaron Estis, Larry Shaw, Stu Grifel, B.J. Jones, Stephanle




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