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Desalination’s Future Brackish as Costs Soar for Palm Coast

| May 12, 2010

Palm Coast water tower

A desalination plant isn't much sexier. (© FlaglerLive)

It’s a case of reverse musical chairs around the table of the Palm Coast-led desalination consortium: The more weeks go by, the more chairs go vacant as government after government drops out or reduces its role to spectator status. It’s potentially bad news for Palm Coast taxpayers and water-utility ratepayers. Their costs will rise significantly in proportion to to other governments dropping out, should Palm Coast decide to stick with the project.

The desalination plant originally planned would have cost $1.2 billion and produced up to 80 million gallons of water per day. A project of that size is no longer realistically on the table, but even a scaled down desalination plant producing 20 million gallons a day would cost hundreds of millions of dollars. The fewer governments are part of the regional consortium, the less pull the remaining governments will have to draw state or federal grants to support the project, thus further shifting the burden to local taxpayers and utility rate-payers.

St. Johns County, Bunnell and Flagler County were the last three governments to pass on “supplier” status, which would have given them a vote–and cost them hundreds of thousands of dollars–to participate in the next phase of the project, which entails merely further studies and land acquisitions. (Construction wouldn’t start until 2016 at the earliest, and costs from those phases will dwarf current-phase costs.) Bunnell and Flagler County dropped out entirely, abandoning even the ex-officio designation, which would have still cost them at least $36,000 as observers, without a vote. Flagler Beach is the city most likely to drop out next. (The Flagler Beach City Commission takes up this issue Thursday afternoon.)

By Tuesday’s meeting of the Coquina Coast desalination project (as the group calls itself), held at Palm Coast’s community center, just three local governments were left “clinging to supplier status,” in the words of Jerry Salsano, consulting engineer to the St. Johns River Water Management District: Palm Coast, Leesburg and the Dunes Community Development District (the hyper-ritzy sprawl across the Intracoastal from Palm Coast). The management district is underwriting about $1 million of the project’s next phase.

That leaves some $2.6 million for the three remaining “suppliers” to assume. Exactly how much each would have to pay depends on how much they will plan to draw from the desalination plant when it’s functional. Palm Coast’s share would be the largest regardless (in water and costs). It’s also not at all certain that Leesburg and the Dunes district will stick with the consortium. Leesburg, according to Raymond Sharp, the city’s environmental services and public works director, has budgeted $250,000 a year for its participation. The city is facing the same kind of budget pressures other cities and counties are facing, and Leesburg’s city commission hasn’t yet voted on whether to continue with Coquina. That will happen later this month.

Should Leesburg and the Dunes development drop out, Palm Coast will be left holding the $2.8 million bag today. Cities and counties could always buy their way back in in the future. But in effect, if Leesburg and the Dunes development bail as other governments have, the Coquina desalination project, already on life support, will likely be history: Palm Coast alone may not be able to afford a desalination plan, and the water management district will be hard-pressed to justify underwriting a special and colossally expensive water plant for a single city.

Palm Coast City Manager Jim Landon says the city has been budgeting $1.5 million from its capital funds to the desalination project. But at a recent meeting of the Palm Coast City Council, there was discussion of shifting some revenue from the capital fund to the operating fund (by way of jiggering how the property tax allocates what money to what funds), whose reserves have been declining sharply. Doing so would impact how much money the city could spend on desalination.

Project participants and coordinators took pains at Tuesday’s meeting to put a positive spin on the consortium’s brackish future. “I feel like this project is a viable, doable project for this area,” said Linda Loomis Shelley, the project facilitator and an attorney with a Tallahassee law firm. “We have not really taken a step backward in our discussion today. We have taken a realistic step in how this is going to work.”

The group’s administrative changes–concentrating more administrative powers under Palm Coast’s umbrella–did not change the political equations, and emptying chairs, around the table, however.

Palm Coast isn’t short of water today and won’t be tomorrow. But it will be if its planned development of huge subdivisions west of U.S. Route 1 as well as the development of tens of thousands of plots within the city’s older limits proceed. That’s why the city is staking its water future on a desalination plant. Without one, the city’s developments may face concurrency issues–restraints on further development absent assured water sources.

Landon, the desalination project’s head cheerleader, would not entertain questions after the meeting, closeting himself in the city’s parks and recreation director’s office.

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