This is a background paper on Florida’s approach to water supply issues since 1997. It was written by lobbyists Keith Hetrick of the Florida Home Builders Association and Cathy Vogel of the Florida Association of Community Developers.
Florida is certainly a water-rich state but, as recent history has documented, there are substantial regions where growing demands have resulted in increased environmental impacts, shortages, litigious competition for water and the need to turn to more expensive alternative sources of water supply.
To avoid the detrimental consequences of these circumstances, the Florida legislature in 1997 (HB 715) declared that: “Sufficient water be available for all existing and future reasonable-beneficial uses and the natural systems, and that the adverse effect of competition for water supplies be avoided.” (s.373.0831(2)(a), F.S.)
To accomplish this goal, the legislature directed the water management districts to conduct assessments of the availability of water to meet existing and future demands, and in those areas where deficits are expected to occur over the next twenty years, develop regional water supply plans to address how additional water sources will be developed and funded to meet existing and future demands over the 20-year planning horizon.
The 1997 legislation was a major step in directing the water management districts to actively engage in water resource development.
In fact, there were three major policy shifts:
1) developing new water resources and supplies to meet all existing and future needs instead of water allocation among existing users based on existing and limited groundwater availability;
2) utilizing regional water supply plans to meet future needs; and
3) developing recovery and prevention strategies concurrent with the implementation of minimum flows and levels (MFLs).
In addition to these three main provisions, HB 715 directed better oversight of water management districts’ budgets by the executive branch, authorized the issuance of 20-year water use permits, and established definitions of the terms “water resource development” and “water supply development.”
While this legislation dealt with the development of an adequate water supply for all users, the legislation fell short of addressing a major component of this goal: providing funding or economic incentives for additional water supply development. Despite this shortcoming, many stakeholders including homebuilders, agricultural interests and water utilities agreed to the 1997 legislation and its requirements for specific regional water supply planning, the establishment of MFLs or, as necessary, MFL recovery and prevention strategies, and the statutory mandate to fund additional water supply development.
Pursuant to the 1997 legislation, the first round of regional water supply plans was completed in 2000. The plans encompassed approximately 75 percent of the land mass of Florida, suggesting that the state’s water managers certainly perceived the need for serious development of additional water supply.
While the water management districts’ regional water supply plans identified looming shortfalls, to date they have not proven to be useful tools in developing new sources of water to meet Florida’s growing water needs. The regional water supply plans and other related plans have typically only produced lists of possible sources without proposing specific sources or projects to meet identified water supply deficits.
Additionally, except in the case of the Southwest Florida Water Management District, little has been done to create new water supplies as a result of these plans. Nor have the water management districts evaluated ratepayer acceptance of the costs of the proposed projects or identified funding sources, much less evaluated the economic, technical and permitting feasibility of the alternative sources identified in the regional plans.
These plans are scheduled to be updated this year and it is widely expected that the revised plans will be much more specific with respect to where and when additional sources of water will need to “come on line” in time to keep up with anticipated demands, while ensuring that the state’s environment is protected, and likewise, that the water it needs is provided.
While there is optimism regarding the anticipated improved plans, there are still fundamental issues that could be identified as fatal flaws in the state’s regional water supply planning process - namely, there is no clear direction in law as to the extent to which water management districts and water users must fund the regional water supply plans. A modest calculation of the cost of the plans is in the billions of dollars.
During the past several years, with some notable exceptions, the DEP or the water management districts’ involvement in expanding the “water pie” and creating new water supplies from alternative technologies has been sparse and difficult to quantity. In short, no comprehensive program to identify, fund and schedule additional water supply projects has been developed by the DEP or the districts.
Despite the 1997 legislative mandate that the water management districts must help fund and implement water resource development (s. 373.0831(2)(b)) and help secure the necessary funding for regionally significant water resource development projects (s. 373.0831(4)(a)), the DEP and some water management districts have not made a significant commitment to such financial responsibilities.
Instead, the department and some districts have emphasized efforts to reduce demand, citing the need to “reinforce a water conservation ethic aimed at changing the water-use habits of the populace.”
While water conservation is a worthwhile goal, conservation alone cannot begin to meet the water needs of Florida’s environment, residents, tourists, businesses and farmers. Water resource plans that rely on reduction in demand through rationing measures, increased water charges and moratoria on groundwater withdrawals are simply not realistic or consistent with a sustainable economy.
In addition, such approaches to addressing water supply needs will lead to major economic hardship during droughts. The fact is that even if we achieve highly successful water conservation programs and maximize water reuse, we still need new water supplies.
In fact, since 1997, it seems that the DEP and the water management districts have become even more entrenched in their perceived roles as protectors or conservators of the resource - adopting an almost “prior appropriation” philosophy for the environment - versus accepting their equally important responsibility for promoting the maximum reasonable-beneficial use of the water resources of the state.
In part, the department’s and the districts’ reluctance to lead state or regional water resource development efforts can be traced to the contradictory nature of Florida’s water management structure.
Under the Model Water Code and the 1972 Water Resources Act of Florida, the water management districts are charged with serving two masters: They are charged with preserving Florida’s water resources, as well as maximizing the reasonable-beneficial use of that water to meet Florida’s economic needs. These responsibilities must be carefully balanced, lest they become contradictory. Despite this delicate balancing act, the mandates of 1997 have not been adequately addressed.
As a result, the questions surrounding our future water supply remain largely unanswered.
And, as we have witnessed, the debate has gradually lapsed into a narrow discussion of how to allocate limited available resources instead of a more positive focus on how best to provide enough water to meet all needs, including environmental needs.
Recent legislation has focused on creating even more planning linkages and coordination between water management districts and local governments and increased conservation. There needs to be renewed leadership with respect to creating new water supplies, funding for such supplies, and providing economic incentives to do so.
Unfortunately, this regulatory-driven approach toward allocating limited supplies has been further exacerbated in the past two years by attempts to boldly expand upon and implement a relatively unknown and little understood concept in Florida water law - water reservations.
Water reservations derive from an isolated provision in Florida law that allows the DEP or the water management district governing boards to reserve water for the protection of fish and wildlife and human health and safety, thereby making that water unavailable to be permitted for agricultural, industrial or utility use. In over thirty years, only one water management district has ever established a water reservation.
The law is silent as to why, when or how such reservations are to be established and implemented, nor does it reconcile the notion of reserving water from use with the legislative directive that enough water be available to provide for existing and future users.
The outstanding questions relating to reservations of water became much more focused when the department proposed to substantially broaden the interpretation of the law, through agency rule-making, to suggest that reservations of water could be established to restore entire ecosystems, among other things. The proposed “reservations” rule has since been challenged, and the case remains in abeyance pending any legislative action on reservations in 2005.
An additional layer of complexity in the water reservations arena is the fact that under the Comprehensive Everglades Restoration Program (CERP), the state has committed to utilizing water reservations as a key tool in accomplishing the goal of Everglades restoration. The Everglades program, as presently planned, consists of more than sixty discreet projects. At the point at which the Corps of Engineers and the South Florida Water Management District enter into an agreement to implement each project, the district has committed to establish a reservation of water from that project in furtherance of ecosystem restoration. Stakeholders strongly support the goal of Everglades restoration and endorse the establishment of reservations of water for environmental purposes as it relates to CERP projects.
For the past two years, legislation has been filed to provide further legislative direction on the issue of water reservations. Nothing has been accomplished to date, and the law remains sketchy on the issue. At the same time the DEP and at least one water management district are seeking to implement water reservations that could affect large regions of the state.
This expanded notion of water reservations, perceived by many regulated interests as a “prior appropriation” or “water grab” for the environment, has had the effect of energizing and galvanizing the regulated community over the issue of water supply provision and augmentation.
Meanwhile, the regulators and the environmental community are promoting the concept of reservations much as they did MFLs back in 1997. The DEP seems to take the view that an adequate water supply for growth is not its problem but rather the problem of urban utilities, even though water is a statewide resource with regional implications.
In essence, the resounding theme seems to be that water belongs to the state to allocate for the environment, and it’s up to others to figure out where new sources of water will come from for future economic growth and agricultural use and whether those sources are technologically feasible, permitable and cost-effective. Some have jumped on this bandwagon in the hopes that reservations of water will be a mechanism to further re-allocate the “water pie” rather than making the “water pie” larger, and in doing so, curtail or limit growth in Florida. Our emphasis need to be on making the “water pie” bigger.
There is no question that adequate water for the environment is critically important to Florida. But it is just as obvious that reserving water for the environment will result in such quantities of water being unavailable for continued existing and future uses.
As such, the impacts of reservations will need to be specifically accounted for in the regional water supply plans of the districts, and requisite additional sources of water to replace these quantities will need to be identified, designed and constructed in time to address the impacts of a reservation, i.e. meet demands and avoid exacerbated competition. While this seems fairly obvious, the devil is in the details, and last year’s legislation clearly did not approach a level where it addressed these details.
In the final analysis, Florida has a highly effective, but extremely fragmented, system of public water suppliers coupled with a multitude of self-suppliers, a complicated and costly regulatory system, and few incentives to develop alternative supplies.
This scenario, together with the fact that there is no real legal framework or institutional leadership to bring water user interests and appropriate governmental agencies together to cooperate in the timely development of additional water almost surely will result in a future of competition and scarcity for this state.
Regulatory agencies are looking to utilities and other water suppliers to take the lead in developing additional new water supply. But in many cases, local utilities and self-suppliers are limited by their geographic boundaries and service areas, their financial and technical resources and their proximity to potential new sources of water and therefore not capable of shouldering this responsibility.
A more effective approach would be the development of regional or sub-regional water supply projects that are far more economical and efficient than an array of smaller-scale and potentially competitive alternative supply projects. This is precisely why it is critical, and why stakeholders support, the Florida legislature taking a leadership role in comprehensively addressing our water supply future.
While Florida has established an excellent model for water supply planning, it is now, more than ever, time to establish a model for water supply augmentation to meet the needs of the environment - whether MFLs or reservations - and to meet the needs of people, both existing and projected.
Florida’s water supply law needs to be re-invigorated to provide that:
1) regional water supply plans present specific regional solutions to water supply deficits that incorporate environmental water requirements;
2) regionally-based economic incentives that provide a basis for water supply partnerships with local governments, utilities and private stakeholders must be provided by the water management districts;
3) local water users must be fully engaged in the regional planning process and “incentivized” to concur in the regional solutions that are proposed;
4) local water suppliers should be encouraged through economic incentives to organize as regional entities to cooperate in water supply projects; and
5) an adequate, dedicated and recurring source of seed money should be provided by the state to serve as an economic incentive to “jump start” the development of locally and regionally available additional supplies.
Why economic incentives?
Economic incentives are the key piece of the puzzle to begin creating alternative water supplies. They are the cornerstone available to encourage regional structural changes and to begin amassing the capital resources necessary to achieve the economies of scale that will allow for the development and implementation of cost-effective alternatives. No state in the nation has ever successfully tackled alternative water supply production without a focused and concerted program to provide economic incentives to local governments, utilities or private companies that have the technical wherewithal to develop alternative sources. And, no large water utility in Florida has ever gone to alternative technology without significant government-induced incentives.
Absent economic incentives, Florida will inevitably continue to fight over limited groundwater availability because that is certainly the cheapest source.
And, in the short run, increased competition for a limited supply surely means that economic growth in Florida will suffer as industries and jobs choose to go to neighboring and more progressively “water-friendly” states. There is already anecdotal evidence of that happening in Florida due to limited water availability.
Local governments and other entities simply do not have the initial capital and the economies of scale to build entire alternative water systems for end-users within their geographic boundary limits absent economic incentives.
Last year, Sen. Paula Dockery agreed to “tackle” the water reservations issue. Since becoming actively engaged in the debate on reservations, stakeholders have consistently stressed the need to simultaneously tackle the larger, albeit more difficult, water supply issue in a meaningful way, while incorporating further legislative direction on the issue of water reservations.
While there may be a continued push by regulators and those in the environmental community to deal solely with a broadening of the authority for establishing reservations, many stakeholders including local governments, agriculture, homebuilders and utilities believe that the water reservations issue cannot be dealt with in a vacuum. And many of these interests will oppose any effort to broaden the authority for water reservations unless it is part of a much more comprehensive economic program for meaningful, tangible and definitive water supply development.
In short, we encourage and welcome the leadership of the Florida Legislature to continue to address the water reservations issue in a balanced and fair manner, but only as part of a larger program for additional water supply development.
A summary
• While Florida is a water-rich state, it is clear that there are significant regions in the state that are faced with the problem of water shortages.
• In order to avoid competition for increasingly limited water supplies, in 1997 the legislature passed HB 715 which directed the water management districts to develop regional water supply plans that identify water source options and costs sufficient to meet all present and future reasonable-beneficial needs.
• The first round of these plans was completed in 2000. Presently, the districts are updating the plans and all of these updates are scheduled for completion in 2005. Although the specificity of the plans is improving with time, lack of a dedicated source of funding to implement the plans has limited the development of additional water supply on a statewide basis.
• The water management districts and the Department of Environmental Protection (DEP) have an enormous challenge in funding and implementing the plans, which are very costly. The districts, however, are required to protect water resources at the same time that they are directed to maximize reasonable-beneficial use of the resources. In recent years, because of the lack of a dedicated funding program for water supply development, these regulatory agencies have placed greater emphasis on conservation and more stringent allocation of available resources and less on the development of additional supplies. Thus, regulatory allocation of limited but easily available water, without funding for additional supplies or alternative sources, is leading to competition and conflict.
• Recently, the future of water supply availability has been further called into question by the issue of water reservations for environmental restoration. Florida law currently provides that reservations may be established for the protection of fish and wildlife and human health and safety. The DEP is seeking to expand this authority to include the restoration and enhancement of ecosystems. As a result, the timely development of a funded program for additional supplies of water to meet growth demands is all the more pressing.
• The legislature should address water supply development to ensure a robust economic future for Florida and to avoid competition for water between the environment and people. This approach should focus on providing tangible economic incentives that result in the development of regional additional sources of water supply. Within this larger context of assuring adequate supply for people and the environment, the legislature should provide further guidance relating to the establishment of water reservations and regional water resource development.
• In summary, we must take a positive approach and make Florida’s “water pie” larger so that users, including the environment, the Everglades, agriculture, industry, tourists, residents and recreation have an adequate, sustainable and economical supply of water.