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Utility seeks short-term loan for desal plant

The $42-million loan would let work begin on Tampa Bay Water's plant despite a legal challenge.


© St. Petersburg Times, published March 27, 2001

The $42-million loan would let work begin on Tampa Bay Water's plant despite a legal challenge.

CLEARWATER -- Tampa Bay Water, the region's drought-beleaguered utility, moved Monday to ensure that an anticipated legal challenge to the seawater desalination plant in Hillsborough County doesn't delay the project.

In an emergency meeting Monday morning, the board voted to authorize its contractor, Tampa Bay Desal, to secure a short-term, $42-million loan that would allow work on the plant to continue during several months when a challenge would be heard by a law judge from the state Department of Administration.

Should a challenge succeed in stopping the project -- considered a remote possibility at best -- then Tampa Bay Water would have to use taxpayer dollars to repay the part of the $42-million that could not be defrayed by selling off equipment and supplies bought for the desal operation.

"We don't think of that as an unreasonable risk at all," said Koni Cassini, finance director of Tampa Bay Water.

The state Department of Environmental Protection already has announced its intent to permit the project, and the federal Environmental Protection Agency signed off on it last week.

But a citizens group based in Apollo Beach, Save Our Bays and Canals, has said it will file a challenge after the final public hearing on the project Wednesday. DEP will not issue the final permit for the plant while there is a legal challenge. And lending institutions would not be willing to underwrite the entire project without a permit.

The interim financial arrangement would let Tampa Bay Desal buy some equipment, pumps and pipes and start construction during the challenge period. Once the final permit is issued, the $42-million would be rolled over into the long-term financing arrangement.

The 25-million-gallon-a-day desal plant is scheduled to begin operation by Dec. 31, 2002.

"This keeps us on schedule," said Tim De Foe, project director for Tampa Bay Desal.


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