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MEMO DE LA PART, GILBERT & BALES, PA.
ATTORNEYS AT LAW
One Tampa City Center
Post Office Box 2350
Tampa, Florida 33601-2360
DATE: December 26,1995
TO: Pick Talley, Director of Utilities
FROM: Edward de la Parte, Special Counsel E-P
SUBJECT: Analysis of Senator Latvala's Proposed Legislation
Regarding the West Coast Regional Water Supply
On November 29, 1995, in a series of letters addressed to local government leaders
in the Tampa Bay Area, Senator Latvala announced his intention to sponsor
legislation to replace the West Coast Regional Water Supply Authority (hereinafter
"Water Authority") with a new water supply agency (hereinafter "Latvala Authori-
ty"). The Latvala Authority would purchase or lease the wellfields, pipelines and
water supply facilities held by the Water Authority and its member governments
with revenue generated from a combination of ad valorem taxes collected by the
Southwest Florida Water Management District (hereinafter "SWFWMD") within
Pinellas, Pasco and Hilleborough Counties and water rates from the sale of water
produced by the newly acquired member government facilities. Thereafter, the
Latvala Authority would sell water from these acquired water supply facilities and
any newly developed sources at a uniform rate, on a per capital basis, to all local
government units within the three county region. According to Senator Latvala,
since no interlocal financing agreements would be required, a majority vote of the
membership of the Latvala Authority would govern all of its decisions.
On December 7, 1995, a preliminary draft of a proposed bill (hereinafter "Latvala
Bill") creating the Latvala Authority was released to the public. I distributed a copy
of this bill to Pinellas County Staff and the Board of County Commissioners at a
December 11, 1995 workshop.
Senator Latvala has asked for Pinellas County's input concerning his proposed
legislation. You requested my assistance in providing the input sought by Senator
Latvala concerning his proposed bill. This memorandum contains a summary of the
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draft bill. It also evaluates the salient features of the bill and the legal effect of the
proposed statutory changes on Pinellas County's interests.
SUMMARY OF LATVALA BILL
The Latvala Bill would create the Latvala Authority by special law as a successor to
the Water Authority.1 See 11 & 3(1), Latvala Bill. However, the Latvala Bill would
not dissolve the Water Authority and, presumably, the Water Authority would
continue in existence for an indefinite period of time.The Latvala Authority will
have the powers and duties of a regional water supply authority, as set forth in
Sections 163.01 and 373.1962, Florida Statutes,2 but would not be created under
those provisions.3 See 110, Latvala Bill. The Latvala Authority would assume the
responsibilities and functions formerly carried out by the Water Authority, includ-
ing planning, designing, developing and constructing facilities and other public
works necessary to obtain and deliver reliable and adequate supplies of potable
water within Pinellas, Pasco and Hillsborough Counties. See 58(1) & 3(2), Latvala
Bill. In fulfilling its statutory mission, the Latvala Authority would endeavor to use
technologies and sources of water that will ensure the stability and affordability of
the potable water supply to its customers, and will avoid or minimize adverse
environmental and economic impacts of its activities and projects to the maximum
extent practicable. See 3(3), Latvala Bill.
Within 90 days of the effective date of the Latvala Bill, the Water Authority and its
member governments would be required to transfer the property and facilities
owned by the Water Authority and the property and facilities owned by the member
governments and operated by the Water Authority to the Latvala Authority.4 See
3(1) & 5, Latvala Bill The purchase price of the real property would be fair
market value and the purchase price of the facilities and tangible assets would be
replacement value. See 5(1), Latvala Bill. If the parties cannot agree to the value of
IA special law" is one relating to, or designed to operate upon particular persons or things.
or in a specifically indicated part of the state. See State v. Leaving, 599 So. 2d 1326 (Fla. lot DCA
1992). Although, the Latvala Bill does not identify itself as a special law, there can be little doubt
that it falls within this category ofleqislation. It relates to and pertains to specifle persons, the
Water Authority and the Latvala Authority, as opposed to all regional water supply authorities
2In addition to the powers enumerated in Sections 163.01 and 373.1962, Florida Statutes, the
Latval Authority shall have the powers listed in Section 10 of the Latvala Bill, including, but not
limited to, owning, acquiring, constructing, reconstructing, equipping, operating, maintaining,
extending and improving a potable water supply system for wholesale distribution of potable water
to local governments located within the three county area.
3Section 1 of the Latvala Bill states the Latvala Authority is created in accordance with and
pursuant to Chapter 189, Florida Statutes
4The Latvala Authority would have the option of acquiring a lesser interest or use right by
lease or operating agreement in the facilities and assets of the Water Authority and its member
governments. See 16(3), Latvala Bill.
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the property, facilities and assets, the purchase price would be the average of three
appraisals; one of which will be prepared by an appraiser selected by the Water
Authority and/or its member governments, one of which will be prepared by an
appraiser selected by the Latvala Authority and one of which will be prepared by an
appraiser selected by the first two appraisers. See 5(2), Latvala Bill.
The Latvala Bill requires the Latvala Authority to allocate available potable water
from its water supply facilities to the member governments based upon the popula-
tion of the member governments as determined by the most recent decennial
census.s See 7, Latvala Bill. The Latvala Authority would be authorized to charge
the member governments a uniform rate for the sale of water, with such variations
as deemed appropriate for volume purchases, water conservation, water reuse and
mitigation of adverse environmental impacts. See 6, Latvala Bill. Additionally, the
Latvala Authority would be assigned a portion of SWFWMD's tax levy collected
from Pinellas, Pasco and Hillsborough Counties to carry out its duties.S See 98,
Latvala Bill. According to Senator Latvala's press release, these tax revenues are
intended to avoid or minimize a rate increase resulting from the acquisition of
existing water supply facilities by the Latvala Authority.
The Latvala Authority is to be governed by a six member board of commissioners
composed of the Chairman of the Hillsborough County Commission, the Chairman
of the Pasco County Commission, the Chairman of the Pinellas County Commission,
the Mayor of the City of St. Petersburg, the Mayor of the City of Tampa, the Mayor
of the City of New Port Richey, or their designees. See 9, Latvala Bill. However,
only the commissioners appointed by the Counties of Pinellas, Pasco and
Hillsborough and the Cities of St. Petersburg and Tampa would be allowed to vote.
Id. Four voting members would constitute a quorum of the Latvala Authority board
of commissioners and the affirmative vote of at least four commissioners would be
needed to take any action or adopt any resolution of the board of commissioners. See
11, Latvala Bill. Also, the affirmative vote of at least four commissioners would be
necessary to adopt the Latvala Authority's annual budget. See 17, Latvala Bill.
The board of commissioners would exercise all powers of the Latvala Authority in
general as well as the specific powers listed in Section 14 of the Latvala Bill,
including, but not limited to, the power to appoint, remove at its pleasure and fix
compensation for general manager, general counsel and other agency attorneys and
5The Latvala Authority may adopt an alternative method of allocating available water upon
a unanimous vote of it governing board. See 86. Latvala Bill.
6SWFWMD is authorized under the Florida Constitution to levy up to one mill of ad valorem
taxas within its eographic boundaries. The Latvala Bill is silent as to what portion of this one mill
tax levy collected within Pinella, Pasco and Hilleborough Counties will be transferred to the Latvaia
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A. Creation Of The Latvala Authority Is Unconstitutional
Article III, Section 11(aX21) of the Florida Constitution and Section 189.404(2),
Florida Statutes prohibit the Legislature from creating an independent special
district by special law without complying with the minimum requirements of
Section 189.404(3), Florida Statutes, without submitting to the Legislature an
explanation of why the district is the best alternative and without obtaining a
written statement from all the local governments within which the proposed district
will be located stating that the creation of the district is consistent with their local
comprehensive plan and that the local government has no objection to the creation
of the proposed district. The Latvala Bill fails to comply with the minimum require-
ments of Section 189.404(3), Florida Statutes because it does not create a charter
for the new agency. Also, the Latvala Bill is not supported by a statement explain-
ing why creation of the Latvala Authority is the best alternative in accordance with
Section 189.404(2Xe)3, Florida Statutes. Additionally, the Latvala Bill is not
supported by resolutions from all local governments in Hillsborough, Pinellas and
Pasco Counties stating that creation of the Latvala Authority is consistent with
their local comprehensive plans and that they have no objection to creating the new
agency, as required by Section 189.404(2)(e)4, Florida Statutes.
Article III, Section 11(a)(1) of the Florida Constitution prohibits the Florida
Legislature from creating a special law pertaining to the duties of officers of non-
chartered counties. Pasco County is a non-chartered county and the Chairman of
the Board of County Commissioners is one of its officers. Section 9 of the Latvala
Bill requires the Chairman of the Pasco County Commission or his designee to serve
on the Latvala Authority's board of commissioners. Sections 13 and 14 of the
Latvala Bill describe the duties of the Latvala Authority's board of commissioners.
Clearly, all three of these provisions pertain to the duties of an officer of a non-
chartered county and therefore violate the Florida Constitution.
In conclusion, the new water supply authority proposed by Senator Latvala is
unconstitutional. It cannot be created by special law until a charter is prepared
complying with the minimum requirements of Section 189.404(3), Florida Statutes,
until a written statement is submitted to the Legislature explaining why creation of
the Latvala Authority is the best alternative for dealing with water supply issues in
the region and until Pinellas, Pasco and Hillsborough Counties and the municipali-
ties located within their boundaries consent to the creation of this new entity.
Additionally, the Latvala Authority cannot be created by special law, unless the
Chairman of the Pasco County Commission is excluded from the board of commis-
sioners. It is doubtful whether these defects can be cured and still accomplish the
goals set forth by Senator Latvala. In any case, the Latvala Bill in its present form
is fundamentally flawed and should be opposed by Pinellas County.
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B. Acquisition Of Existing Potable Water Supply Facilities By The
Latvala Authority Is Unoonstitutional
Section 6 of the Latvala Bill directs the Latvala Authority to acquire the property
and facilities of the Water Authority. This provision will result in the transfer of the
Cypress Creek Wellfeld, the Cross Bar Ranch Wellfield, the Northwest
Hillsborough Regional Wellfield. the Starkey Wellfield, the North Pasco Wellfield,
the Cypress Bridge Wsllfield, the South-Central Hillsborough Regional Wellfield,
the Northeast Brandon Wellield and the Tampa Bypass Canal Facility to the
Latvala Authority. Section 5 of the Latvala Bill also directs the Latvala Authority to
acquire the property and facilities owned by the members of the Water Authority
and operated by the Water Authority in it is name. This provision will result in the
transfer of the Cosne-Odessa Wellfield and the Section 21 Wellfield to the Latvala
The property and facilities to be transferred to the Latvala Authority act as security
for revenue bonds issued by the Water Authority and its member governments to
finance the construction of these facilities. These revenue bonds and the accompany-
ing bond resolutions are considered contractual obligations of the Water Authority
and its member governments. As such, both the Florida and United States Constitu-
tions prohibit the adoption of laws which impair these bonds. See State v. City of
Coral Gables, 72 So. 2d 48 (Fla. 1964); Pinellas County v. Brinks, 19 So. 2d 1 (Fla.
1944). The potential exists that the transfer of the existing facilities will impair
these revenue bonds, if the Latvala Authority acquires these facilities through any
other means besides purchasing the assets. Under those circumstances, the Water
Authority will no longer have revenue with which to repay these bonds and could no
longer comply with its contractual obligation to make timely payments to the
bondholders. See State u. City of Pensacola, 40 So. 2d 569 (Fla. 1949) (where city
pledged taxes on sale of electrical, gas, water, telegraph and telephone services to
payment of certificates, contract clause prevented legislature from repealing the
charter and statutes under which the taxes where levied). Similarly, if the purchase
price for these assets is less than the outstanding bonds for these facilities, the
revenue bonds would be impaired because the Water Authority will have insuffi-
cient money with which to repay these bonds. In summary, since these scenarios are
not expressly dealt with in the proposed legislation, transferring these assets
violates the constitutional prohibition against impairment of contract rights with
respect to any outstanding revenue bonds.
The Water Authority has entered numerous water supply contracts with its
member governments. These contracts obligate the Water Authority to supply the
7These are the only water supply facilities owned by a member government and operated by
the Water Authority in its name. Th member governments own other water supply facdlitiee such as
the EldridgeWilde Wellfeld (Pinellas County). the South Pasco Wellfield (City of St. Peterburg).
the Morris Bridge Wellfeld (City of Tampa) and the Hillsborough River Reservoir (City of Tampa).
but none of them are operated by the Water Authority.
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member governments, including Pinellas County, with a water entitlement.* These
contracts are also protected by the Florida Constitution from statutes which impair
those contracts. Transferring the Water Authority's assets to the Latvala Authority
will prevent the Water Authority from providing its member governments with
their contractual water entitlements and complying with other contractual obliga-
tions. Also, the Latvala Bill does not require the Latvala Authority to assume the
Water Authority's obligation under these contracts. On the contrary, Section 7 of
the Latvala Bill states that potable water will be allocated among the member
governments based upon the population of the member governments, which directly
conflicts with the water supply contracts. Therefore, the Latvala Bill violates the
constitutional prohibition against impairment of contract rights.
In conclusion, the acquisition of existing water supply facilities by the Latvala
Authority is unconstitutional. Transferring water supply facilities to the Latvala
Authority without expressly requiring the Latvala Authority to assume or pay off
all outstanding revenue bonds issued by the Water Authority and its member
governments to finance the construction of these facilities violates the Florida
Constitution. Additionally, transferring these facilities without requiring the
Latvala Authority to assume the contractual obligations of the Water Authority as
set forth in outstanding water supply contracts with its member governments
violates the Florida Constitution. Unless these defects are cured, the Latvala Bill is
fundamentally flawed and should be opposed by Pinellas County.
C. Allocation Of SWFWMD Millage To The Latvala Authority Is Uncon-
Section 8 of the Latvala Bill allocates a portion of the millage levied by SWFWMD
on all taxable property within Hillsborough, Pasco and Pinellas Counties to the
Latvala Authority to be used by that agency as its sees fit. This violates Article Ill,
Section 11(a)(2) of the Florida Constitution, which prohibits the Legislature from
enacting any special law relating to the assessment or collection of taxes for state or
county purposes. It also violates Article III, Section 11(a)(21) of the Florida Consti-
tution and Section 373.503(2)(b), Florida Statutes, which prohibit the Legislature
from allocating by special law any portion of the millage authorized for water
management purposes to any unit of government other than those districts estab-
lished under Chapter 373, Florida Statutes. The Latvala Authority is not a district
established pursuant to Chapter 373, Florida Statutes.
In conclusion, the Latvala Bill in its present form is unconstitutional. None of the
village levied by SWFWMD can be transferred by special law and the Latvala
Authority cannot receive any millage levied by SWFWMD so long as it is not a
district established under Chapter 373, Florida Statutes. Unless these defects can
SThese water supply contracts also obligate the Water Authority in a number of other ways of
interest to Pinellas County. For example, the Regional System Water Supply Contract obligates the
Water Authority to apply for and obtain all environmental permits needed to operate the regional
water production facilities. As a further example, the Cross Bar Water Supply Contract obligates the
Water Authority to supply Pinellas County potable water meeting certain water quality standards.
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be cured, the tax transfer provision of the Latvala Bill is null and void. Without the
tax transfer provision, the Latvala Authority will have to fund the acquisition of the
existing water supply facilities strictly from water rates. This will most likely result
in a substantial increase in existing water rates for Pinellas County's rate payers.
Therefore, Pinellas County should oppose the Latvala Bill until such time as the
constitutional problems with the tax transfer provision are cured.
D. Allocation Of Water On The Basis Of Gross Population Is Unfair
Section 7 of the Latvala Bill requires that the available potable water supply of the
Latvala Authority be allocated among the member governments based upon the
population of the member governments, as determined in the most recent decennial
census. This formula is unfair because it does not allocate the Latvala Authority's
water supply on the basis of need for that water supply. A large percentage of the
population in the tri-county area relies on domestic wells or is served by utility
systems that are not part of or connected to the Latvala Authority's water supply
system. By counting these persons in the formula, the Latvala Bill has the effect of
allocating more water than is reasonably needed to Pasco and Hillsborough Coun-
ties, whose populations have large percentages of persons on domestic wells or who
are served by other utility system. It also has the effect of depriving Pinellas County
of needed water because it has very few persons who are not directly dependent on
water produced by the regional system for their potable water supply. Therefore,
unless this allocation formula is changed to reflect actual need for water produced
by the Latvala Authority rather than gross population, Pinellas County should
oppose the Latvala Bill.
E. Charging A Uniform Rate For Water Is Unfair
Section 6 of the Latvala Bill requires the Latvala Authority to charge the member
governments within its boundaries a uniform rate for the sale of water. This is
unfair to member governments like Pinellas County and St. Petersburg, whose
existing water supply facilities and low demand for new water, allow them to
provide water to their rate payers at a much cheaper rate than member govern-
ments with little or no existing water supply facilities and a high demand for new
water. It also violates existing water supply contracts with the Water Authority,
which require only those members needing new water to pay for the cost of develop-
ing additional facilities to meet those needs. Unless this provision is amended to
permit the Latvala Authority to charge water rates that fairly apportion capital
costs and operating expenses among the member governments, Pinellas County
should oppose the Latvala Bill.
F. Limiting The Latvala Authority's Water Supply Options To Only
Those Sources Located Within Its Geographic Boundaries Is Overly
Sections 373.1962(5) and 373.1962(7), Florida Statutes authorize and direct the
Water Authority to develop water supply facilities in whatever locations it deems
appropriate, provided, the county from which water is withdrawn is not deprived of
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the prior right to the reasonable and beneficial use of water which is required to
adequately supply the reasonable and beneficial needs of the county or any of its
inhabitants. The ability of the Latvala Authority to develop water supply facilities
is much more restricted. Section 3(2) of the Latrala Bill limits the Latvala Authori-
ty to only developing those water sources located within its boundaries. This
restriction sets up the Latvala Authority's political boundaries as an insurmount-
able obstacle to meeting the water supply needs of the Tampa Bay Area. The
Latvala Authority should be free to develop water resources without regard to
political boundaries. Therefore, unless the.Water Authority's ability to develop
water supplies without regard to location of the water supply facilities is carried
forward to the Latvala Authority, Pinellas County should oppose the Latvala Bill.
G. Governance Of The Latvala Authority Is Unworkable
Section 9 of the Latvala Bill provides that the Latvala Authority is to be governed
by a board of commissioners comprised of five voting members appointed by
Hillsborough County, Pinellas County, Pasco County, the City of St. Petersburg and
the City of Tampa. The quorum for the board of commissioners consists of four
voting members and the affirmative vote of at least four voting members is neces-
sary to take any action. See 11, Latvala Bill. Also, the affirmative vote of at least
four voting members of the board commissioners is needed to approve the Latvala
Authority's budget. See 17, Latvala Bill.
These extraordinary quorum and voting requirements will hamstring the Latvala
Authority's ability to carry out its statutory mission of supplying a reliable water
supply to all persons within its boundaries. A minority of two members could keep
the Latvala Authority from developing facilities to meet the water supply needs of a
majority of the member governments. Alternatively, a minority of two members
could prevent the Latvala Authority from approving its annual budget. Until the
voting requirements of the Latvala Authority are changed to a simple majority,
Pinellas County should oppose the Latvala Bill.*
H. Member Governments Will No Longer Have Preferential Right to
Water From the Regional Authority
According to Section 373.1962(4), Florida Statutes, member governments of the
Water Authority such as Pinellas County have a preferential right to purchase
water for their own use. This provision is not carried forward to the new Latvala
Authority. In fact, Section (10Xh) of the Latvala Bill authorizes the Latvala Authori-
ty to provide water to any local government located within its territorial limits. This
means, for example, the Latvala Authority could decide to allocate water to Dade
City, rather than providing water to Pinellas County. Unless the preferential right
of member governments to purchase water from the regional authority is restored,
Pinellas County should oppose the Latvala Bill.
91ntereetingly, one of the reasons advocated in Senator Latvala's press release for creating a
new water supply authority is to ensure that "...a majority vote of the membership of the Authority
would govern all decisions ofthe Authority.' The Latvala Bill directly conflicts with this goal.
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I. Member Government Water Supply Facilities Will No Longer Be
Protected From Condemnation by Regional Authority
Section 373.1962(2Xe), Florida Statutes prohibits the Water Authority from
acquiring through eminent domain water and water rights already devoted to
reasonable and beneficial use or any water production or transmission facilities
owned by any county or municipality. This prohibition was carried forward in the
interlocal agreement creating the Water Authority, which states in pertinent part
"...it is the intent of the parties hereto that nothing herein shall be construed to
preclude the various municipalities and counties from continuing to operate water
production and transmission facilities for the purpose of meeting their respective
needs and for dependable and adequate supplies of water." These prohibitions were
not carried forward under the Latvala Bill. Therefore, the Latvala Authority could
decide to condemn member government water supply facilities such as Pinellas
County's Eldridge-Wilde Wellfield. Unless this protection against condemnation by
the regional authority is restored, Pinellas County should oppose the Latvala Bill.
The current version of the Latvala Bill is significantly flawed. Many of the key
provisions are unconstitutional. The creation of the Latvala Authority by special act
violates Article MI, Sections 11(a)(1) and ll(aX21) of the Florida Constitution. The
transfer of a portion of SWFWMD's tax levy to the Latvala Authority violates
Article III, Sections 11(aX2) and 11(a)(21) of the Florida Constitution. The transfer
of existing water supply facilities from the Water Authority and Its member
governments to the Latvala Authority impairs contractual obligations in violation of
both the United States and Florida Constitutions. Clearly, Pinellas County cannot
support this proposed legislation in its current form.
It isn't clear whether these defects can be cured. For example, Article III, Section
11(a)(21) of the Florida Constitution and Section 189.404(2Xb), Florida Statutes
prohibit the creation of the Latvala Authority until such time as all the local
governments within the three county region enact resolutions supporting the
creation of this new agency. If one or more of these local governments oppose the
creation of the Latvala Authority, then no amount of word smithing will cure this
infirmity. Therefore, rather than spend a great deal of time and effort in perfecting
legislation that most likely will never pass constitutional muster, I recommend
Pinellas County oppose the Latvala Bill until all the constitutional defects are
cured, at which time Pinellas County should request changes addressing the issues
identified in this memorandum.
cc: Joe Morrissey
Elithia V. Stanfield