Title: Memo Re: Governance/Water Agreement, Dated March 27, 1998
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Permanent Link: http://ufdc.ufl.edu/WL00004049/00001
 Material Information
Title: Memo Re: Governance/Water Agreement, Dated March 27, 1998
Physical Description: Book
Language: English
Spatial Coverage: North America -- United States of America -- Florida
Abstract: Jake Varn Collection - Memo Re: Governance/Water Agreement, Dated March 27, 1998 (JDV Box 108)
General Note: Box 16, Folder 13 ( Master Water Plan Project, Partnership Agreement, Governance/Water Agreement ), Item 18
Funding: Digitized by the Legal Technology Institute in the Levin College of Law at the University of Florida.
 Record Information
Bibliographic ID: WL00004049
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

APR. -03' 98(FRI) 17:21 HOLLAND&KNIGHTSTPETE TEL:813 823 7566 P. 002

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TO: Steve Scibert, Vico-Chairman
Fred E. Marquis, County Administrator
Pick ['alley, Director, Utilities
Edward dc la Parte, Attorney, de la Parte,
Gilbert, & Bales

FROMV: Barbara Sheen Todd, Chairman

.DATE: March 27, 1998

SUBJECT: Governance/Water Agreement

On March 25, 1998, I had an opportunity to get a real eye-opener, I attended that session of the
Legislature during which the discussions took place in the Florida House of Representatives
regarding water and the Local Sources First legislation. Additionally, I met with several members
of our delegation who have been working on this water issue. As a result of this and all the
discussions that have taken place building up to this juncture in time, I have developed an even
greater respect and appreciation for the many challenges with which you are dealing as our team in
the Governance discussion.

The actions of the House of Representatives in the Florida Legislature this week, particularly as it
relates to the Local Sources First bill cause great concern to me, and I am sure to all of us. Should
their actions stand, it would effectively polarize all of the initiatives and effort that have gone into
the development of the Tampa Bay Governance Agreement and would certainly fractionalize the.
efforts that are being made by the Tampa Bay region to come up with a long-term solution for water

This morning. I finished reviewing the latest draft of the Governance Agreement which was
developed in last Monday's session. As a result of that review, I have some concerns. Some of
these concerns we have discussed in previous County Commission meetings and workshops. Since
you will be discussing the "Final Draft" of the Agreement prior to the submission to the County
Commission, I would appreciate your review of these concerns, consideration and handling of them
as appropriate before you finalize your review and discussion of the Governance documents.

There is no way that any of us could possibly appreciate the many hours of work and the deep level
of commitment that each of you has put into this effort. It is my hope that the questions I have raised
in this document will be of some help to you, In any event, I appreciate your consideration of these
issues and your diligence and leadership in looking out for Pinellas County's Best interests.

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March 27, 1998
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ISSUE: Quality Water

Is the West Coast Authority going to have any joint responsibility to assure the water for the
citizens of Pinellas County meets all standards including those that are aesthetically
acceptable? This is a concern given the fact that we will not control all the sources of water
in future should this Governance agreement go into effect.

ISSUE: Future Lgislation

Given the recent actions of the State Iouse of Representatives, ( have very little faith in the
Legislature's advocating for thu concerns of Pinellas County; therefore, we need to protect
ourselves against any future legislative initiatives that might negatively impact us. Is it
conceivable that a future Legislature could provide one of the other entities in the agreement
the opportunity to opt out or to include another water supply authority, i.e., from the private
sector? Are there other actions that future Legislatures could take that would essentially gut
the governance commitments by all parties involved?

ISSUE: Fxelusivity Provision

It is conceivable that two governmental entities within the same county could decide that
they either wanted to opt out or to contract with private enterprise, especially if the final
water rates based on alternative water supplies are very expensive. It is my understanding
that the exclusivity provision and the references relating to the issuance of franchises to
private utility enterprises which could be competition to the regional water authority were
struck from the governance contract. It is my opinion that we must include this protective
language to prohibit member governments from evading the exclusivity provisions by
issuing, franchising, or opting out to other water providers. No loopholes I

Once Pinellas County turns over its Eldridge Wilde well field, there are no other
groundwater options for Pinellas County. If the Legislature's Local Sources First provision
stands, all we would have would be expensive desal options if the Governance Agreement
does not succeed. The other counties outside of Pinellas County have other sources of water
supply related to groundwater. If Hillsborough County truly wants this Governance
Agreement to go forth, it is important that reference to exclusivity be reinforced with this
protective language and that it be included as originally anticipated in the Agreement.

ISSUE: Tfillhaoriugh County's v PC

It is my understanding that currently there is Legislation which would provide the
Hillsborough County EPC with the regulatory authority over wetlands. Hopefully, that
proviso will be eliminated from Legislative consideration before the end of the session.
However, should this Legislation be implemented, it would effectively kill the basic tenets
of Governance as to currently accepted.

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March 27, 1998
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It was also my understanding that there were three basic areas in which the BPC issues would
be addressed, Tn reviewing the documents that resulted from Monday's discussions, I saw
no clear reference to those three provisions. I would strongly encourage that they.be
included in the final documents, Those areas include (1) the EPC will not be able to regulate
withdrawal of water or environmental effect of water withdrawal. (2) the EPC will not he
able to challenge any of the major permits the Authority needs, and (3) the EPC will have
an opportunity to' arbitrate instead of IIillsborough County, but not in addition to
Hillaborough County,

ISSUE: Production Failure

't is my understanding that Pasco County still advocates the dracorman minimum flows and
levels originally approved by SWFWMD, The production failure provision indicates that
member governments could develop their own facilities if permitted capacity drops below
90 percent. Upholding those sanm minimum flow levels could have a severe detrimental and
negative impact on the Authority in the production of failure concerns. Is there any
protection we can include in this section to assure that no member government or two from
the same area could then opt out and proceed to develop their own water resources, leaving
the other partners holding the bag?

Reverter clause consideration to discourage actions that would be contrary to the benefit of
all in the authority could be considered as a disincentive. I recognize this concept has been
thrown out on several previous occasions, but this concept has been included in older
documents and contracts for a reason. Can we not include this or similar disincentives to
discourage any adverse impacts on our Governance agreement by the actions of any
individual governmental entity? Pinellas County is at a certain disadvantage in light of the
fact that once we give up Eldridge Wilde, we have no other local groundwater resources
which we might utilize. Pasco and Hillsborough Counties both .have the ability to
independently develop additional wells within their county should the production failure
clause become a reality. Again, those concerns are also related to the "Local Sources"
mentality in Legislation.

ISSUE: SWFWM" PartnerJip Agreement

In all of the discussions that have been presented to the Pinellas County Commission, wo
have been told and assured that the SWFWMD Partnership Agreement would be part and
parcel of the Governance Agreement. In reviewing the Govcmance Agreement, I see no
specific reference to these facts. We were assured that these protections would be in place
concurrent with, and as a part of the Governance Agreement, Those assurances that must be
in place are extremely critical to Pinellas County's interest. Specifically, the Partnership
Agreement provides $ 184 million for the development of alternative water supplies. Given
the fact that the draconian cutbacks in our groundwater supplies would require the
development of additional resources, it is vital that the assurances in the Partnership
Agreement be included in the Governance contract. Those protections which must be in
place include the following; (1) The Partnership Agreement assures that the withdrawal

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APR. -03' 98(FRI) 17:22 HOLLAND&KNIGHTSTPETE TEL:813 825 756b v. ui

March 27, 1998
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levels will be frozen to no less than ninety million gallons a day for a period of twelve years.
(2) The Partnership Agreement also assures that SWFWMD will not force compliance with
their permit criteria. (3) As previously referenced, the SWFWMD Partnership Agreement
provides for S184 million for new water resource development projects in the new Water
Supply Authority. I agreed with Steve's strong position that there is no Governance without
the partnership. It can't be a "consensus" item, but must be included in the Governance

ISSUE: Financial Issues

There are several financial issues associated with this Agreement that are now becoming
more apparent and a concern to Pinellas County. Those issues include:

1. Eldridge Wilda transfer i .u (a) Should the transfer of Eldridge Wilde take place,
please make certain that any agreements would not require future payback. There are no
similar caveats to my understanding being placed on any of the other participating
governmental entities. (b) Should Eldridge Wilde be included in the transfer, we need to get
cash from this deal. If we get credit and the Authority bellies up, we would be at a definite
disadvantage. It would be my thought that we would invest any funds that we would receive
from any of these transfers of our interests and that those funds would be invested in a
designated enterprise investment trust that would be used only for the development of future
facilities or for other related water needs for the citizens of Pinellas County.

If too many caveats are placed on the Eldridge Wilde deal, just don't sell it, Perhaps it could
just be excluded from the issue, particularly given the fact that this "Local Sources" mode
is continuing and being supported by some of the persons who are participating in the
discussions of the Governance Agreement.

2. LInifrm rate. It is my understanding that the equity model has now changed the entire
rate. What is the anticipated rate structure, what is the cost of the anticipated rate? It is my
understanding that currently we are paying approximately 55 cents per thousand gallons and
that projected estimates range fiom 90 cents to four dollars per thousand gallons .. quite
a range!

3. Independent apprainla The Board of County Commissioners can only make a reasoned
judgenent after we receive our final figures and other requested data from our independent
financial appraisal. Is the independent appraisal we are receiving going to value the
Authority's well fields as well to determine whether Pincllas County's equity interest is
being addressed and assigned to us by West Coast in their evaluation of rate structures?

4. Cost center credit In reviewing the current documents referencing cost centers, it would
appear that cost centers were created to address Pasco and Hillsborough Counties, and that
Pinellas County's "cost center" was included under a category called Regional System
Center. Further review of the figures in the current Governance document would indicate
that credit are being distributed to the other governmental entities based upon their

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contribution as they are more easily determined under the independent cost center centers.
The Regional System Center, however, has not been broken down so that Pinellas County
can retrieve the financial credit due it. I understand that Pinellas County has contributed
more than sixty percent of tho monies in that category, I would encourage the further
breakdown of that analysis so that Pinellas County is not left with the short end of the
credit/reimbursement distribution system.

In regard to cost center credits, it is not fair nor just that all fund balances have been credited
and distributed back to member-governments with the exclusion of Pinellas County. It
would appear the only cost center not being analyzed and considered in the cost center issue
is that regional cost center in which Pinellas County has an interest. Ian't it fair and just that
we receive the same consideration as our other Governance partners? Frankly, this reflects
my concern that Pinellas County and the other participants in the Governance contract do not
have a weighted vote for financial issues only. This concept exists in other regional water
models. By not having a weighted vote, we apparently have not been given credit for our
financial contribution and burden in this area,

5. Bonds and debt service. One of the issues that the Commission raised in the very
beginning of the Governance discussion was the impact of any Governance Agreement upon
our ability to bond for future infrastructure projects. Does the current agreement address that
concern? In my review of the document, I did not see our position reflected. It appears to
me that the bond issue as outlined in the current Governance agreement would supersede
Pinellas County's payment of debt service. Debt service payments for the Water Supply
Authority should be on a par with our own. If that does not take place, this entire Agreement
will have a significant adverse impact on Pinellas County's ability to borrow money in the
future. It is important that we have a final independent analysis of this issue from our
independent bond counsel and independent bond advisors. I remain to be persuaded that
such supersedence is in Pinellas County's interest.

Thank you for your hard work and leadership in resolving the many issues associated with
Governance. I am hopeful that we will reach a positive solution to this major challenge,

Distribution: Members, Board of County Commissioners

315 COURT STRE E CLEARWATA, FL 33756 W $13.484-3305 W FA; 513.464.3624
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