Agenda Item 8FAGENDA ITEM # 8F
DECEMBER 9, 2013
CITY OF ATLANTIC BEACH
CITY COMMISSION MEETING
STAFF REPORT
AGENDA ITEM: Report on Activities of the North Florida Utility Coordination Group
(NFUCG)
IPSUBMITTED BY: Donna Kaluzniak, CEP, Utility Directo
DATE: November 18, 2013
STRATEGIC PLAN LINK: None
BACKGROUND: The St. Johns River Water Management District (SJRWMD) has been
undertaking a water supply planning process over several years. This process includes setting
minimum flows and levels (MFLs) for area lakes and springs. The Suwannee River Water
Management District (SRWMD) has also been working on their water supply issues and is in the
process of setting minimum flows and levels for area rivers and springs.
MFLs are adopted by the Water Management Districts to prevent harm to the water resources or
ecology of an area that could result from permitted water withdrawals. Results of the MFL
studies and the associated prevention and /or recovery strategies may have a huge impact on the
City's future water infrastructure and cost.
The North Florida Utility Coordination Group (NFUCG) is composed of eight utilities in
Northeast Florida: City of Atlantic Beach, City of Neptune Beach, City of Jacksonville Beach,
JEA, Clay County Utility Authority, St. Johns County Utilities, Gainesville Regional Utilities,
and the Town of Orange Park.
These utilities formed the NFUCG in order to speak as one voice to the Water Management
Districts. The group also combines resources for engineering and legal assistance to determine
the most accurate and reliable groundwater resource projections and review policy activities.
All water utilities place protection of our water resources at the highest level. Yet water utilities
have the added responsibility of providing the most cost - effective product to our customers.
In order to meet these objectives, the group hired technical experts to work with the Water
Management Districts on the MFLs. The NFUCG also engaged legal experts to advise us on
policy and regulatory issues.
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AGENDA ITEM # 8F
DECEMBER 9, 2013
Summary of Activities
Rulemaking Participation
• We jointly participated in several Rule- Making processes, including the Consumptive
Use Permit Consistency Rule.
Minimum Flows and Levels (MFLs)
• Clay /Putnam County MFLs - We participated in numerous Technical Group, Modeling
Group, Implementation Workgroup and Stakeholder committee meetings.
o We provided valuable technical information to the SJRWMD staff, including
many presentations.
o We educated stakeholders and SJRWMD on utility concerns, such as the need for
long range planning to fund major capital projects — and the need for certainty
with regard to the sustainable availability of water for our customers.
• NFUCG and our consultants worked hand -in -hand with the St. Johns River Water
Management District to refine the ground and surface water models.
o This demonstrated that the original MFLs for lakes in the Clay /Putnam area were
overstated. The SJRWMD is now proposing the adoption of a revised MFL that is
scientifically based and will have much Tess impact on utilities and other water
users.
• We are currently working with SJRWMD to develop a Prevention and Recovery strategy
to address the revised Clay /Putnam MFLs.
o NFUCG has concerns about SJRWMD's Draft Prevention Strategy, which includes
multiple projects totaling $400 million to be paid for with "consortium"
funding— meaning all permittees contribute. The SJRWMD strategy also includes
projects to recharge the aquifer with reuse water — something NFUCG members
believe will be difficult to permit and will greatly increase our customers' rates.
o NFUCG's engineers have conducted research and additional modeling so we can
recommend a prevention /recovery strategy that provides the best solutions
based on cost /benefit analysis. These include projects close to the affected lakes
and transfer of water from the Lower Floridan Aquifer to the Upper Floridan. We
also believe this type of project will be more permittable through the
Department of Environmental Protection.
• Lower Santa Fe and Itchetucknee Rivers MFLs — Concurrently, NFUCG and our
consultants have been working with the Suwannee River Water Management District
( SWRMD) along with SJRWMD and the Department of Environmental Protection (DEP)
on MFLs for the Lower Santa Fe River and Itchetucknee Rivers and other springs. Similar
to our work with the Clay /Putnam MFLs, we have participated in numerous meetings,
conducted engineering work and provided information and presentations.
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AGENDA ITEM # 8F
DECEMBER 9, 20I3
The Current Issue:
NFUCG has found it much more difficult to get access to the technical data and proposed MFLs
for waters in the Suwannee River District. Adoption of the MFL for the Lower Santa Fe River
has been delegated to DEP, and is rapidly approaching.
NFUCG has major concerns with the scientific basis for this proposed MFL. Based on the
information we have, adoption of this MFL could require a major reduction in groundwater
pumping for all of North Florida — possibly back to levels from the 1960's. This could have a
major impact on the City's water supply, requiring us to find alternatives to groundwater. The
resulting increase in the cost of water treatment and supply would raise water rates considerably.
Because of the uncertainty with the MFL and the Prevention/Recovery Strategy, it is impossible
to estimate the cost to Atlantic Beach exactly. However, NFUCG's engineers, Jones Edmunds &
Associates provided an estimated cost between $750,000 and $9 million for Atlantic Beach to
comply with the rule.
It appears that the Suwannee River WMD and DEP may proceed with adoption of the MFL
without considering our technical data. Also, it appears they may adopt the MFL without
providing a Prevention/Recovery Strategy or the associated costs that would allow water users
to understand their responsibilities. Adopting an MFL without a concurrent Prevention/Recovery
strategy is not consistent with the law.
Also, NFUCG objects to adopting an MFL with no Prevention/Recovery Strategy as it creates
uncertainty about possible reductions in permitted withdrawals. These strategies may require
utilities to participate in very expensive projects. Utilities need to know what is expected of them
in order to make long range plans for design and construction of projects and adjust rates
accordingly. In addition, NFUCG members want to thoroughly examine proposed projects for
costs vs. benefits.
Due to these grave concerns, NFUCG members are considering a legal challenge to DEP's
adoption of the Lower Santa Fe River MFL. While NFUCG's agreement already includes
funding for legal assistance, our members wanted to advise our Boards and Commissions that we
are considering a rule challenge.
To ensure attorney - client privilege, the group members would like to enter a Joint
Defense /Common Interest Agreement. This would not affect any requirement to provide
information under the Public Records laws, however it would protect information that would fall
under attorney - client confidentiality laws.
BUDGET: Atlantic Beach's portion of NFUCG costs is 1.4% of the total expenditures. The
current budget is $7,000 (based on 1.4% of $500,000 estimated consulting costs) under account
number 400 - 5502 -533 -3100 Professional Services.
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AGENDA ITEM # 8F
DECEMBER 9, 2013
RECOMMENDATION: Approve the North Florida Utility Coordination Group Joint
Defense /Common Interest Agreement.
ATTACHMENTS: 1. Joint Defense /Common Interest Agreement
REVIEWED BY CITY MANAGER:, _ _..
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AGENDA ITEM # 8F
DECEMBER 9, 2013
JOINT DEFENSE /COMMON INTEREST AGREEMENT
THIS AGREEMENT, is made and entered into on this day of
, 2013, by and between the City of Atlantic Beach, Clay County Utility
Authority, City of Gainesville, City of Jacksonville Beach, JEA, City of Neptune Beach,
Town of Orange Park, and St. Johns County, which are hereinafter each individually referred
to as a "Party" and collectively as the "Parties."
WHEREAS, the Parties are public water suppliers providing water utility service to
customers in Northeast Florida; and
WHEREAS, the Parties have executed a Memorandum of Agreement to jointly and
collaboratively pursue their shared objectives of assuring that water resources in the region are
protected, and that sufficient water supplies exist to meet existing and future water demands in
the region; and
WHEREAS, the Parties have operated collaboratively under the Memorandum of
Agreement as the North Florida Utility Coordinating Group ( "NFUCG "); and
WHEREAS, the Suwannee River Water Management District ( "SRWMD ") has
developed draft minimum flows and levels ( "MFLs ") for the Lower Santa Fe and Ichetucknee
Rivers and Priority Springs (the "LSFR MFLs ") pursuant to Section 373.042, Florida Statutes;
and
WHEREAS, the Florida Department of Environmental Protection ( "FDEP ") has
accepted SRWMD's request that FDEP conduct rulemaking to adopt the LSFR MFLs and
related prevention and recovery strategies, such that the LSFR MFLs and related prevention or
recovery strategies must be applied by all water management districts within the State of
Florida; and
WHEREAS, on September 13, 2013 FDEP published Notice of Rule Development
proposing to adopt the LSFR MFLs and related recovery strategy by rule, and have indicated
intended fmal adoption of the proposed rule by January 2014; and
WHEREAS, the Parties desire to jointly oppose the LSFR MFLs and related recovery
strategy as currently proposed, including but not limited to the initiation of a legal challenge to
the validity of the proposed rule adopting the LSFR MFLs and related recovery strategy, and
share a common interest in said legal challenge(s); and
WHEREAS, the Parties desire to share information in furtherance of their common
interest and to maintain the confidentiality of all information exchanged in furtherance of their
common interest, and intend on using the information exchanged only for the common interest
of the Parties.
NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated
herein as covenants, the mutual promises herein made and exchanged, and for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby
agree as follows:
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AGENDA ITEM # 8F
DECEMBER 9, 2013
1. Confidential Information and Joint Defense.
1.1 Mutuality of Interest. The Parties have a common interest in opposing the
adoption of the LSFR MFL and related recovery strategy by FDEP, which arose
upon publication of the Notice of Rule Development on September 13, 2013. To
protect this common interest, the Parties shall establish and operate under a
common interest arrangement concerning any administrative challenge to LSFR
MFL and any related litigation.
1.2 Confidential Information. The Parties are not required to, but may in their
respective sole discretion, share Confidential Information with the other Party as
set forth herein. Except as expressly set forth herein, the term "Confidential
Information" shall be defined as any documents, communications, or other
information disclosed to one Party by the other Party in furtherance of the
Parties' common interest. The Parties agree that any Confidential Information
that would otherwise be protected from disclosure to third parties will remain
confidential and protected from disclosure to any third party by the attorney -
client and attorney work product privileges, and the Parties agree that any
exchange of Confidential Information is not intended to waive any attorney -
client or work product privilege.
1.3 Use of Information. Each Party shall use the Confidential Information received
from the other Party only in furtherance of the common interest of the Parties.
No other rights are implied or granted under this Agreement. Nothing contained
herein obligates any Party to divulge, communicate, or exchange any
confidential documents and/or information. All Confidential Information shall
not be copied or distributed, disclosed or disseminated in any way or form to
anyone except the Parties, the Parties' attorneys or Parties' own employees,
contractors, agents or consultants who have a reasonable need to know said
Confidential Information, who are advised as to the confidential and proprietary
nature of such Confidential Information, and who shall be bound by the
restrictions on use as specified in this Agreement.
1.4 Requests for Confidential Information. If a third party, including any
government agency, requests or demands, by subpoena, discovery request, public
records request, or otherwise, any or all of the Confidential Information or any
other documents or information exchanged or made available in furtherance of
the Parties' common interest, each Party agrees to notify the other Party in
writing as soon as practical. All reasonable steps shall be taken to enable the
Parties to assert any and all applicable rights to privileges or protections with
regard to such documents or information. Additionally, the Parties shall have the
ability to contest the disclosure of the Confidential Information before it is
disclosed to any outside party. Nothing herein is meant to contravene any
applicable provision of the Florida Public Records Act (the "FPRA "). To the
extent that a document is public under the FPRA, notification will be provided to
the originator of the document prior to or contemporaneous with the production
of the document to the extent feasible.
2. Termination. Any Party may terminate this Agreement at any time by providing
written notice to the other Parties. Termination shall be prospective only and will not
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AGENDA ITEM # 8F
DECEMBER 9, 2013
affect the parties' mutual obligation to hold confidential all Confidential Information
exchanged prior to receipt of written notice of withdrawal.
3. Survival. The privileges and confidentiality obligations set forth herein shall survive
termination of this Agreement.
4. Non - Assignability. The Parties shall not assign any of its rights or responsibilities under
this Agreement to any other person or entity without all other Parties' prior written
consent.
5. Governing Law. This Agreement has been entered into in the State of Florida and shall
be construed and interpreted in accordance with, and shall be governed by, the laws of
the State of Florida.
6. Severability. Should any provision of this Agreement, or part thereof, be deemed invalid
or unenforceable by a court of competent jurisdiction, the remainder of the provisions
and this Agreement shall continue in full force and effect.
7. Non - waiver. The failure by any Party to insist upon the strict performance of any term
of this Agreement shall not constitute a waiver of such term or a waiver of the right to
assert a breach thereof. No waiver of any breach shall alter or affect this Agreement,
which shall continue in full force and effect until terminated.
8. Effective Date of Common Interest. The Parties agree that while this Agreement is
executed the date first written above, it shall be effective to cover all Confidential
Information shared by and among the Parties beginning on the first date FDEP published
Notice of Rule Development on September 13, 2013.
9. Execution. This Agreement may be executed in counterparts and by facsimile signatures
which when taken together shall constitute the entire Agreement.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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AGENDA ITEM # 8F
DECEMBER 9, 2013
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the date
first written above.
City of Atlantic Beach JEA
Name: Name:
Title: Title:
Clay County Utility Authority
Name:
Title:
City of Gainesville
Name:
Title:
City of Jacksonville Beach
Name:
Title:
City of Neptune Beach
Name:
Title:
Town of Orange Park
Name:
Title:
St. Johns County
Name:
Title:
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