Title: Memo on Partnership Agreement-Outstanding Items for Discussion in Advance of Feb 11, 1998 Work Group Meeting at West Coast
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Permanent Link: http://ufdc.ufl.edu/WL00004054/00001
 Material Information
Title: Memo on Partnership Agreement-Outstanding Items for Discussion in Advance of Feb 11, 1998 Work Group Meeting at West Coast
Physical Description: Book
Language: English
Spatial Coverage: North America -- United States of America -- Florida
Abstract: Jake Varn Collection - Memo on Partnership Agreement-Outstanding Items for Discussion in Advance of Feb 11, 1998 Work Group Meeting at West Coast (JDV Box 108)
General Note: Box 16, Folder 14 ( Trust Agreement - 1998 ), Item 4
Funding: Digitized by the Legal Technology Institute in the Levin College of Law at the University of Florida.
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Bibliographic ID: WL00004054
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


February 10, 1998


To: Sonny Vergara ,-"'., rt ..:
Ed Helvenston
Gene Heath
John Heuer
Jake Varn

From: Frank Hearne
Jim Robinson
Dominick Graziano

Subject: Partnership Agreement-Outstanding Items for Discussion in Advance of
February 11, 1998 Work Group Meeting at West Coast

In our memorandum of February 2, 1998, we listed a number of unresolved issues. Based
on our discussions with you, the most current draft of the Partnership Agreement (dated
2/10/98) incorporates the District's position on each issue. Nonetheless, for our meeting
tomorrow, we need to be prepared to address and resolve any objections voiced by the
other parties. The manner in which the District's latest draft of the Agreement resolves or
addresses each of these issues is presented in bold underneath each issue statement.

1. Unresolved: West Coast has backed away form the submission of Phase I and
Phase II Plans. The timing of the submittals of proposals by the Authority was left
unresolved. They proposed submittal of first projects in December 98 and much later for
others. The "Phases would be dropped. Somehow, however, the projects need to be tied
to the 38 and 47 mgd reductions.

Recommendation: Allow for one Plan to be submitted by July 1, 1998, and require
that it demonstrate how the reductions will be accomplished in
a timely fashion.

STATUS: We now have one plan, but the reduction goals and time
tables remain.

MOM, but this has not been addressed in the Agreement.

a 6 2. Unresolved: Binding the Basin Boards to funding. There was discussion of a
S,)V5 need for assuring the commitment of the Basin Boards for their part of the $183 million.
0o It is unclear whether Basin Board commitment to the $90 million in conservation funds is
6WIj;tib at issue.

Messrs. Vergara, Helvenston, Heath, Heuer and Varn
February 10,1998
Page 2

Recommendation: The Trust should provide a
Consider deleting subpa

STATUS: The present draft of the
Agreements are subject t
as is funding of the Trust
The draft further defines F


mple security for the $183 million.
ragraphs 6A and B regarding

Agreement states that Funding
o Basin Board funding approval,
t. See paragraphs 3.D. and 3.F.
partiess to exclude Basin Boards.

3. Unresolved: The Authority would like to provide standards for the District's
review and approval or disapproval of the Operations Plan and Funding Requests.

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Add language requiring consistency with the Agreement, the
Consolidated Permit and applicable law. The drafts of the
Agreement and Consolidated Permit should be revised based
on standards and objectives worked up by the technical
committee reviewing the Operations Plan. As for Funding
Requests, we should develop language reflecting a standard
by which the District will review and approve Funding
Requests. "Funding Request" should be a defined term.

No standards have been proposed by the Authority or any
other party. The draft provides for District sole discretion
in granting or withholding approval. A closely related but
very important issue is whether the other parties
understand the diversity of projects the District is
expecting to be presented as part of the Plan.

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4. Unresolved: Timing of funding. The Authority wants to have Trust funded by
about September, 1998 at the same time that funding Agreements would be entered. This
would be before permits are obtained. The Trust would contain less cash. The Funding
Agreements would have to allow for revisions to the project and funding resulting from
permitting decisions. This is closely related to the issue of when the Partnership Agreement
would become effective. See below. We also need to provide language in the Trust
allowing for amendments to reflect modifications in project plans as provided for in the
Partnership Agreement.

Messrs. Vergara, Helvenston, Heath, Heuer and Varn
February 10,1998
Page 3


iI\ ft'G IW S TU


We need to determine the earliest date when the Authority
truly needs to have a funded trust in place, and then the
District must decide whether or not it is agreeable to have the
Trust in place at that time. Distinguish having the Trust "in
place and funded" from the circumstances under which the
Authority would be entitled to draw against the Trust.
Appropriate language changes to be made once these
decisions are made.

Timing is addressed in paragraph 3.B., but we still need to
fill in blanks concerning dates and amounts.

5. Unresolved: Trust operation after breach by District. The parties discussed the
circumstance where the District "wrongfully" fails to enter Funding Agreements. In such a
case, the Authority expects to have access to the Trust corpus of $100 million and to
require the Trustee to enter Funding Agreements to provide such funding to specific
projects. Is the District agreeable to this or is the Trust only to insure payment on Funding



Determine whether the District is willing to surrender control
under such circumstance. The real issue is to determine when
there is a need for commitment of funding that cannot be
reversed by the District.

These provisions have been refined, but are still under
review by financial counsel. Since our last memorandum
on this issue, we have become aware that the District will
need to decide whether it will back up the obligations of
the Basin Boards to the surety. If not, this may complicate
obtaining a surety.

We must clarify whether it is foreseen that there could be
a circumstance where the trustee would be required to
enter Funding Agreements, and whether this would be

6. Unresolved: Mandatory reductions. Certain parties' representatives argued that
the Agreement should clearly state that the reductions do not apply if the capacity is not
in place. Pinellas wants language eliminating the possibility that water could be cut off.


- .- no /nT /'n

Messrs. Vergara, Helvenston, Heath, Heuer and Varn
February 10,1998
Page 4

The District view is that reductions are absolute. The District's regulatory authority would
be available to take whatever action is warranted. Ed de la Parte asked to coordinate
extension of time provisions in the Agreement with Section 21 F of the Master Water Supply

Recommendation: We can add language stating that the District will not enforce
the Agreement in such a way as to endanger public health,
safety and welfare. As for Mr. De la Parte's request, we will
review the contracts to determine whether this is acceptable.


7. Unresolved: Termination Issues. Several issues were raised on termination
including whether the Agreement will terminate and what will happen if the District does
not approve the proposed project plan (whatever it may be called ) or the Operations Plan.

Recommendation: These issues need further internal discussion.

STATUS: We have narrowed the events of termination. See para. 21.
Further, under para. 3.A., the 11
M- it's paid out in the event of a default by the
Authority by failure to achieve the requisite reductions in
a timely fashion. A k b '

8. Resolved but needs language: Reimbursement for permit costs. Clarify what
will be reimbursed for permitting cost and preliminary design costs. The proposal is that
District money could be used for permitting costs except those having to do with permits
issued by the District.

Recommendation: If acceptable, this concept will be incorporated into the

U0 Reimbursement is to be addressed by the
Funding Agreement and shall be for "Eligible" PROJECT
COSTS as that term is defined in the Funding Agreement.

9. Clarify: That the Authority must ask for funding of suitable projects for the entire
$183 million, and, if so, that the District must fund the full $183 million.


- ~ ~ ,s/Tl n

Messrs. Vergara, Helvenston, Heath, Heuer and Varn
February 10,1998
Page 5

Recommendation: That this clarification be made throughout the Agreement.


See paras. 3.E. and 21.

10.Clarify: Project funding percentages. The District could agree to state that it will
fund 90% of desal projects and make amendments to evidence this commitment. Based
on later discussion with staff, the Authority stated that it has another, non-desal project for
which it seeks 60% funding.

Recommendation: Consider funding at whatever levels are necessary to bring as
much water on line as quickly as possible.


11. Unresolved:



The language of Exhibit 3 was modified to remove a
minimum funding percentage. I
and specifically 90* of desal.
We've not agreed to this in the current draft.

When permit applications will be submitted. No date was

This needs to be resolved, but the District should require that
they be submitted as early as possible allowing sufficient time
for processing and approval to achieve the reductions in a
timely fashion.

This remains unresolved, except that we require permit
applications for the 38 mgd projects to be submitted not
later than 60 days after we approve the PLAN.

12. Unresolved: How funding would be used in the case of purchases from a
private entity. Whether money can be provided in the case of a desal built by a private
company selling water to the Authority.

Recommendation: This matter needs to be discussed internally and may require
a legal opinion.


We are awaiting language from financial counsel who has
developed an approach to accomplish this situation.

-.- --I- e n riT rn tT O /nT/70

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Messrs. Vergara, Helvenston, Heath, Heuer and Varn
February 10,1998
Page 6

13. Unresolved: Conservation. Pinellas wanted to remove references to 10 and
17 mgd. There were other issues on the inclusion of WUCA requirements here or in permit.

Recommendation: Consider removing these references along with the $90 million

W '

The current draft contains language clarification, but does
not effect any substantive change to these provisions.
The member governments remain responsible for meeting
the WUCA requirements. The Authority's role is one of
reporting. See para. 7.C.

14. Clarify: List waivers and rule changes needed and attach an exhibit showing
petition to be filed.



Once de la Parte's petition for waiver/variance is received and
reviewed, determine what is required to be waived or varied
and what may be better accomplished by rulemaking.

-- but it has not been
incorporated into the draft. We should receive de la
Parte's draft petition for waiverlvariance before giving out
our own. Ed has stated that he will be filing a petition.

15. Unresolved: Whether the Authority will have 121 and 90 in permitted amount
or agree to limt production to these numbers but have some additional capacity under
permit. This issue is based on the Authority's need for water to meet projected demand
in the interim periods and some percentage (5%) for variability. In discussions after the
meeting on Friday, it appears that the Authority merely needs to have a funding level of
60% on one project in order to maintain the uniform rate structure contemplated by the
Interlocal Agreement. This amount of funding would allow the Authority to move this
project forward in time and enable the Authority to remain at or below the 121 mgd limit
during the period 2002 to 2007.


Consider language giving assurances that the District will
provide a sufficient level of funding to enable the Authority to
meet its obligation under the Partnership Agreement. We
need to discuss and resolve this issue.

--e o VVJ oc:IT Mn.T. 96/0T/Z0


Messrs. Vergara, Helvenston. Heath, Hpuer and Varn
February 10,1998
Page 7

STATUS: We are awaiting supporting information from Dr. Polmann
before committing to an interim number. The draft leaves
this number blank, As it stands, we are retaining a
reduction t a permitted amount of 121 after 12131102 and
90 after 12131107. 'I
16. Unresolved: Whether the District can agree to include in the Agreement a
provision for allocating percentages of reductions among the wellfields in the Pasco.
Hillsborough and Pinellas Counties.

Recommendation: Technical staff will look at this issue. If the District's
environmental concerns will be met, and provided that
inclusion ofi;this allocation provision would not render the
Operations -Plan arbitrary and capricious, the District should
consider agreeing to this proposal.

*II We have included these numbers in the draft. It
is not clear whether the Governing Board will want to
include these numbers.

17. Unresolved: Clarify how the Consolidated Permit issuance will encompass
those wellfields which are net in houseiat the District.

Recommendation: Consider letter or formal modifications and time extensions to
accomplish this purpose.
Pi^J ,
.P/ STATUS: As to existing wellfields, those permits will be
incorporated in the Consolidated Permit upon their
renewal. As to new water supply permits, the District is
>{ : left with the choice,, at its discretion, to either incorporate
such permits Into the Consolidated Permit or issue them
as separate permits. The draft Agreement requires the
permitteesito submit modifications to extend the 120 clock
as necessary. See paras. 5.C. and 5.H.

18. Unresolved: Withdrawal Quantities:,The Partnership Agreement will need to
reflect the numbers to be allowed in the interim prior to the approval of the Operations
Plan and prior to the issuance of the Consolidated Permit. Also, it will need to set forth how




Messrs. Vergara, Helvenston, Heath, ieuer and iarn
February 10,1998
Page 8 'I

the changes under the Plan and Permit will become effective. Will the District set
withdrawal limits on the individual wetllfields or approve a total withdrawal limit in the
Agreement and/ or Permit? '
:.i l ,I '
Recommendation: Discuss andiresolve.; Gene Heath is working with John Heuer
on this issue.


19. Unresolved:



and that the
Agreement and Consolidated Permit reflect them. The
numbers have not yet been derived.

When the Partnership Aqreement would become effective.
I i ; I
Develop a tine line of the Governance implementation and
coordinate the events contemplated by the Partnership
Agreement.1 Then we can determine what an appropriate
effective datb would be.

The draft Agreement states that it is -.ui .
I. This is important to enforce

interim leves, for e xmple.

20. Resolved but needs language: Definitions. Add definitions for Funding
Request, Funded Projects, Unfunded iProjects. iTrust Agreement and Interconnected

Recommendation: We will prepare this language.

STATUS: We have added certain definitions.

21. Unresolved: Should the Member Governments be allowed to participate in
mediation under the Partnership Agreement? A:bigger question raised by the Authority is
whether the Member Governments should at some point (upon full implementation of
Governance) no longer be parties to te Partnership Agreement?


This needs to be discussed. If the Member Governments can
litigate an issue under the Agreement, why should they not be


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I n *. 1

Messrs. Vergara, Helvenston, Heath, Heuer and Varn
February 10,1998
Page 9 |

encouraged to mediate that same issue before and as a
condition precedent t, litigation?

STATUS: The draft excludes member governments from
participate n in mediation.

cc: Wayne Alfieri
Ken Weber
Karen Lloyd
Steve Pankau



9 '

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