The region's water utility got a boost Wednesday for a plan to buy out its desalination contractor and take sole ownership of the half-built plant.
The executive director of the Southwest Florida Water Management District, the state agency that sets water policy over a 16-county region, gave his blessing to the buyout as "appropriate under the circumstances."
That agency, commonly known as Swiftmud, has no legal authority to stop a buyout.
But board members of the utility, Tampa Bay Water, made it clear this week that Swiftmud's opinion would carry weight when they vote on the buyout because Swiftmud has put up $85-million to defray the cost of building the $110-million plant in southern Hillsborough County.
"It was clear to me that our board takes the partnership aspects of this project very seriously," said Koni Cassini, chief financial officer of Tampa Bay Water.
The Tampa Bay Water board is scheduled to debate the buyout and vote Friday. Under the proposal, Tampa Bay Water would pay Poseidon Resources, the private developer of the plant, $10.3-million in termination and other fees, though Poseidon would stay on as a contractor to see the project through.
Tampa Bay Water staff members concluded that a buyout was the best solution after one of Poseidon's contractors slipped to a very low rating in the bond market, making it doubtful that the additional financing needed to finish the desalination plant would be available except at very high interest rates.
Tampa Bay Water has an excellent credit rating and should be able to find financing without difficulty, but only if the utility owns the desalination plant, Tampa Bay Water officials have said.
The staffs of Swiftmud and Tampa Bay Water met for 90 minutes in Tampa on Wednesday morning.
Afterward, Swiftmud executive director Sonny Vergara, said: "After hearing a full explanation and having the opportunity to ask questions of both TBW and Poseidon . . . we concluded, based upon the information we were provided, that the decision appears to be appropriate under the circumstances."
Jerry Maxwell, general manager of Tampa Bay Water, said he was happy that Swiftmud had signed off on the buyout idea.
"I think they were convinced that the course we were pursuing had the highest probability of achieving our partnership goals," Maxwell said.
Those goals are set out in the agreement among Swiftmud, Tampa Bay Water and the utility's six member governments.
They stipulate that on Dec. 31, the pumping permit covering Tampa Bay Water's 11 regional wellfields will drop from an average of 158-million gallons a day to 121-million, a decrease of 37-million gallons. The 25-million gallons a day from the new desalination plant represents a major part of the supply that would make up the difference.
The desalination plant, now 58 percent complete, is expected to go into operation early next year.