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North has it, South wants it

Florida water flows bountifully far from its thirstiest corners. Business leaders would see it rerouted, for cash.

By CRAIG PITTMAN and JULIE HAUSERMAN
Published August 10, 2003

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Some of Florida's most influential business leaders have spent the past year meeting behind closed doors to divvy up the state's water supply.

Developers, agriculture executives and sugar growers - all with their own interests to protect - have been meeting at the behest of the governor's chief fundraiser to craft new water policies for Florida.

They have come up with a potentially controversial idea: to upend state law and redirect Florida's most precious resource from water-rich and slow-growing North Florida to thirsty, booming Central and South Florida, according to documents obtained by the St. Petersburg Times.

"Water-poor areas and water-rich areas have a lot to offer each other," said Lee Arnold, the Clearwater developer spearheading the water task force of the statewide business group, the Council of 100. Arnold pitched the recommendations to Gov. Jeb Bush on July 29, and the governor "has no objections to any of what we have proposed," according to a Council of 100 memo. Arnold promised to unveil the recommendations next month.

Experts Arnold has relied on contend that the state's water managers are too focused on protecting the environment, and not doing enough to find new water supplies for the state's booming population. This new approach would ensure an abundant supply of water so the pace of growth in South Florida could continue unabated.

But critics warn that quenching the thirst of one region with water from another could spark a statewide version of the Tampa Bay water wars of the 1980s and '90s.

Back then, cities and counties battled one another for water with lawsuits that cost taxpayers hundreds of millions of dollars. The environmental costs may have been even higher.

"We had swamps that had been there for centuries that were dying," said Roy Harrell, who was chairman of the Southwest Florida Water Management District when it put an end to the wars. "Is that what we want?"

Instead of building pipelines carrying water across Florida, Harrell said, "We need to really bear down on what this growth is doing to our state."

Although his recommendations would require legislative action and public money, Arnold refused to discuss in detail what he presented to the governor. Still, he acknowledged the task force favors transferring water from more rural areas north of Interstate 4 to fast-growing areas south of that Central Florida dividing line.

"Do we have enough water in the state and it happens to be in the wrong spot?" Arnold asked. "Some counties are rich. Eighty percent of the consumption is south of I-4. Eighty percent of available supplies are north of I-4."

But the growth isn't. Naples, for example, is the second-fastest growing metropolitan market in the country. Collier County grew from 160,000 residents in 1990 to more than 275,000 in 2002. The population is projected to grow to nearly 550,000 by 2030.

In recent speeches, Arnold singled out the Suwanee River region as a potential water source for growing South and Central Florida.

"They're sitting in the Saudi Arabia of water," Arnold said in one speech. In return for their water, he suggested, they could get money for improving their schools.

But the sheiks of the Suwannee have no interest in cutting any deals for their water supply.

If the council pushes the idea, "I'm sure there would be an uproar," said Suwannee River Water Management District director Jerry Scarborough.

"We have no water to give away, and we're not interested in selling any," said Suwannee County Commissioner Douglas Udell.

Nevertheless, he figures Central and South Florida will come take it. Some compensation for the struggling county - it has a population of 37,000, a per capita income of $14,000 and 800 miles of unpaved roads - would take the sting out of it, Udell said.

Still, the commissioner said, "If you pump us dry, then what?"

There has been talk for at least 30 years of piping water from the Suwannee to quench thirsty lawns and residents elsewhere. During the Tampa Bay water wars, as Pinellas County and St. Petersburg drained the lakes and swamps of Pasco and Hillsborough counties, one Pinellas commissioner announced: "Keep the Suwannee River cold, because we're coming for it."

Pinellas officials were driven to take water from other counties by political pressure from developers eager to keep building, according to a new book, Water Wars: A Story of People, Politics and Power, by Honey Rand, the spokeswoman for the Southwest Florida Water Management District then.

Rand's book quotes another former Pinellas commissioner, Steve Seibert: "When Lee Arnold comes into my office and says, "Where's my water?' I have to give him an answer."

Arnold, 53, is founder, chief executive officer and chairman of the board of the Arnold Companies, a powerhouse in commercial real estate and a developer of residential projects in Pasco and Hillsborough counties.

He is not some deskbound paper-pusher. A licensed commercial pilot, Arnold flies his company plane. In 1996 he climbed to Mount Everest's base camp. He was reached for comment last week during a scuba trip in the Bahamas.

Arnold has developed political clout by donating thousands of dollars to Republican candidates and the Republican National Committee.

For years he has been a member of the Council of 100, a group of business leaders that has advised Florida governors since 1961. Bush has enlisted the council's help selling controversial overhauls of the education and civil service systems.

Each member is approved by the governor, pays $3,000 in annual dues and covers the cost of a staff and a suite in a riverfront office building in Tampa.

The council's chairman is Al Hoffman, an avid polo player and developer from Fort Myers. His company, WCI Communities, is the largest master-planned community builder in Florida. He also enjoys enormous influence as national finance chairman for the Republican National Committee, and chief fundraiser for Jeb Bush's 1998 and 2002 campaigns.

According to council documents, Hoffman established the water task force in May 2002 after he had "had several conversations with members of the Council of 100 about the water supply and distribution issues facing Florida."

After Bush approved that as a topic for study, Hoffman says he picked Arnold to head the 30-member task force, which Arnold describes as "made up of every walk of life."

The members include Fred Bullard, developer of Feather Sound in mid-Pinellas; Gary Morse, developer of a retirement community south of Ocala called the Villages; and Llywd Ecclestone, developer of PGA National Resorts in Palm Beach.

Other prominent members include citrus magnate Ben Hill Griffin III; sugar mogul Alfy Fanjul, chairman of Florida Crystals; former Florida Attorney General Jim Smith; the publishers of the Lakeland Ledger and Jacksonville's Florida Times-Union; and Andrew Barnes, chairman and chief executive officer of the St. Petersburg Times.

Barnes said last week he did not know what Arnold presented to the governor. Task force members have not had discussions since the full Council of 100 gathered in May at the $200-a-night beachfront WaterColor Inn in the Panhandle.

During a two-hour task force meeting there, Arnold presented a series of proposals for approval but did not ask for a formal vote.

"It was more like, "Here's what we've got, here's where we're going, if you've got problems with it, speak up,' " Barnes said.

The most far-reaching proposal, Barnes said, "was to trade North Florida water for mid Florida money."

Out West, water is a commodity to be bought and sold like oil. Property owners can pump as much as they like. California moves water all over the state - even from other states - to high-growth areas.

But Florida law says water belongs to the public. Utilities can charge for the cost of delivering water to your tap, but the government protects the resource by regulating how much can be pumped.

Barnes said Arnold suggested a way around that: "You can't sell water, but you can pay people for providing transportation of water."

Paying a poor county a water transportation fee would likely cost a booming county less than building desalination plants or cutting growth, Barnes said.

The money "could be a huge boon for an unpopulated area," Barnes said. "Assuming you can persuade people to sit still for that."

Florida is not the only place where moving water around could make a lot of money.

In Texas, oil man T. Boone Pickens wants to pump water out of the rural countryside and pipe it to Dallas. But Rep. Nick Lampson, D-Texas, said the fear that water could be taken from his district to supply Dallas "moves the emotions of people to the point that they say they're going to get their guns and protect their water."

Making money off America's insatiable thirst has attracted foreign entrepreneurs. The three country's largest private water companies - USFilter, United Water and American Water Works - are owned by French and German conglomerates Vivendi, Suez and RWE.

Until recently a fourth big player was Azurix, a subsidiary of scandal-plagued Enron Corp. Azurix attempted to gain a foothold in Florida, offering to take over the $8-billion restoration of the Everglades in exchange for the right to sell the water it recovered. State officials rejected the idea.

Lobbying for the Azurix plan were two former South Florida Water Management District officials, Jim Garner and Cathy Vogel. Both lobby for Hoffman's WCI and the Association of Florida Community Developers, and are listed as advisers to Arnold's task force.

In 1997 Vogel wrote a paper for Bush's private think tank, the Foundation for Florida's Future, in which she argued the state should allow booming coastal counties to pay rural inland counties for their water. Such an arrangement would be mutually beneficial, she wrote.

Instead of taking Vogel's advice to let the market control Florida's water, in 1998 the Legislature passed a law mandating "local sources first." That means cities and counties must exhaust all reasonable possibilities for water within their borders before attempting to get it elsewhere.

The law was an attempt to ensure nothing like Tampa Bay's water wars ever occurred again.

In June, Vogel moderated as several "water experts" met with Arnold. They were Jake Varn and Eric Olson, lobbyists for the Florida Home Builders Association; Seibert, the former Pinellas commissioner and former head of the state's planning agency; Doug Manson, a lawyer who has represented utilities and bottled water companies; Tom MacVicar, a consultant for sugar growers; and Pete Dunbar, who lobbies for the state's largest wholesale water utility, Tampa Bay Water.

A report on the meeting says, "there was unanimous agreement that "local sources first' is a bad idea . . . (but) it was agreed that any effort to repeal it would be political suicide."

But there could be a way around it.

For 30 years, Florida's water has been governed by its five water management districts whose boundaries are drawn to follow the state's hydrological features. The districts control who pumps water out of the ground and how much can be pumped. The Southwest Florida Water Management District oversees water for the Tampa Bay area.

Arnold's experts complained that the water management districts were not doing enough to find new sources of water because they were too concerned with protecting the environment.

"In essence, the evolution of environmentalism has seriously detracted from our focus and responsibility to ensure adequate water supply," a report on the June meeting said.

The task force recommended a statewide board to "put water supply on an equal footing with environmental protection and restoration." Such a board would oversee the local districts and, the experts said, redefine local sources first, pushing for "regional water supply solutions and the transport of water from water-rich areas to water-poor areas."

The task force had approved such a recommendation, and Arnold even mentioned establishing a state water authority in recent speeches. But last week he said that wasn't in his pitch to Bush.

"The concept of a state water authority is different from where we landed," said Arnold. He would not explain what he meant "because I don't have to at this point."

Hoffman, who has also discussed the water problem with Bush, promised the plan will not reignite the water wars.

"You only have water wars when water is scarce," he said. "Water in Florida is not scarce. We don't have a water shortage problem in Florida. We might have a water distribution problem."

- Times researchers Kitty Bennett and John Martin contributed to this report, which also includes information from the Fort Myers News-Press, Washington Post and Florida Today.

[Last modified August 10, 2003, 02:02:50]


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