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Deposition from SWIM Challenges Case No. 92-3038, 92-3039, and 92-3040 |
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1
1 DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF ADMINISTRATION, STATE OF FLORIDA
2
SUGAR CANE GROWERS COOPERATIVE )
3 OF FLORIDA; ROTH FARMS, INC.; and )
WEDGWORTH FARMS, INC., )
4 )
Petitioners, )
5 vs. )DOAH Case No. 92-3038
SOUTH FLORIDA WATER MANAGEMENT )
6 DISTRICT, an agency of the State )
of Florida; et al., )
7 Respondents. )
- - - - - - - - - - - - - - - - - x
8 FLORIDA SUGAR CANE LEAGUE, INC., )
UNITED STATES SUGAR CORPORATION; )
9 and NEW HOPE SOUTH, INC., )
Petitioners, )
10 vs. )DOAH Case No. 92-3039
SOUTH FLORIDA WATER MANAGEMENT )
11 DISTRICT, an agency of the State )
of Florida; et al., )
12 Respondents. )
- - - - - - - - - - - - - - - - - x
13 FLORIDA FRUIT AND VEGETABLE )
ASSOCIATION; LEWIS POPE FARMS; )
14 W.E. SCHLECHTER & SONS, INC., )
and HUNDLEY FARMS, INC., )
15 Petitioners, )
vs. )DOAH Case No. 92-3040
16 SOUTH FLORIDA WATER MANAGEMENT )
DISTRICT, an agency of the State )
17 of Florida; et al., )
Respondents. )
18 - - - - - - - - - - - - - - - - - x
19 100 Southeast 2nd Street
Miami, Florida
20 January 26, 1993
10:45 a.m. - 2:15 p.m.
21
22 DEPOSITION OF JAMES D. WEBB
23
Taken before RICHARD BURSKY, Registered
24 Professional Reporter and Notary Public in and for
the State of Florida at Large, pursuant to Notice of
25 Taking Deposition filed in the above cause.
2
1 APPEARANCES
2
ON BEHALF OF THE PETITIONERS SUGAR CANE GROWERS
3 COOPERATIVE OF FLORIDA, ROTH FARMS, INC., and
WEDGWORTH FARMS, INC.
4
HOPPING BOYD GREEN & SAMS
5 123 South Calhoun Street
Tallahassee, Florida 32314
6 BY: DONNA STINSON, ESQ.
7
ON BEHALF OF THE RESPONDENT-INTERVENOR
8 UNITED STATES OF AMERICA
9 MAUREEN DONLAN, ESQ.
Assistant United States Attorney
10 155 North Miami Avenue
Suite 600
11 Miami, Florida 33130
12
ON BEHALF OF THE ENVIRONMENTAL INTERVENORS
13
DAVID G. GUEST, ESQ.
14 Sierra Club Legal Defense Fund, Inc.
111 South Martin Luther King, Jr., Boulevard
15 Tallahassee, Florida 32302
16
INDEX
17
Witness Direct Cross Redirect
18 JAMES D. WEBB
19 By Ms. Stinson: 3 -- 70
By Mr. Guest: -- 61 --
20
21
22
23
24
25
3
1 Thereupon --
2 JAMES WEBB
3 was called as a witness and having been first duly
4 sworn, was examined and testified as follows:
5 DIRECT EXAMINATION
6 BY MS. STINSON:
7 Q. Would you please state your name and
8 business address?
9 A. James D. Webb, business address is the
10 Wilderness Society, 4203 Ponce de Leon Boulevard,
11 Coral Gables, Florida, 33146.
12 Q. Mr. Webb, what is your position with the
13 Wilderness Society?
14 A. I am the regional director.
15 Q. How long have you held that position?
16 A. Since, I believe since June or July of
17 1986.
18 Q. I have here a copy of your resume. As I
19 understand until 1986 you lived in Tucson or in
20 Arizona, practicing law, is that correct?
21 A. That's right.
22 Q. How did you come to be in your current
23 position in Florida?
24 A. I followed my wife here as a dutiful hubby
25 of the present day will do.
4
1 MS. STINSON: Off the record.
2 (Discussion off the record)
3 MS. STINSON: Back on the record.
4 A. My wife was interested in a job here, she
5 is the Dean of the University of Miami Law School.
6 I thought I could be interested in South
7 Florida if I could work with a public interest group
8 or foundation on natural resource issues and found in
9 the course of trying to discover such a job that the
10 Wilderness Society was interested in opening an
11 office here. They knew me well and I knew them
12 principally from work on the Alaska National Interest
13 Lands Act and we got together right away.
14 Q. So there was not an office before you
15 started here?
16 A. No.
17 Q. Let me follow up than on that.
18 You said you knew people there through
19 your work on the Alaska --
20 A. National Interest Lands Act, which was the
21 legislation that finally determined the extent,
22 following the Native Claim Settlement Act, of
23 conservation areas in Alaska.
24 Q. What role did you play in that
25 legislation?
5
1 A. I was at the time an official in the
2 Interior Department.
3 Q. Were you a Deputy Assistant Secretary of
4 the Interior at the time?
5 A. Yes.
6 Q. Did you have a primary focus in that
7 position, a particular part of the country or a
8 particular subject area?
9 A. There are two people who had that title,
10 two deputies to the Assistant Secretary for Fish,
11 Wildlife and Parks. The agency responsibilities were
12 for the Fish and Wildlife Service, the National Park
13 Service and the Bureau of Outdoor Recreation in a
14 couple of its guises.
15 My work was more sharply focused on
16 external and regulatory factors associated with the
17 life of those agencies and the other deputy on the
18 internal administration and management issues. There
19 was an informal division and there was lots of
20 overlapping.
21 Q. In your current job what are your duties
22 and responsibilities?
23 A. The Wilderness Society's focus
24 historically is on conservation and management of
25 federal public lands.
6
1 My responsibilities here are dominantly
2 about that, and therefore about the Everglades.
3 We are kind of a glistening headwaters
4 outfit, but that is not the story of the Everglades.
5 And therefore this regional office is more than
6 typically concerned with actions and authorities of
7 state and local government, particularly in the water
8 management area.
9 And the core of our program is restoration
10 of natural values in the Everglades and that is in
11 turn focused on restoration of healthy water regimes.
12 Q. Mr. Webb, do you have any background in
13 economics either educationally or professionally?
14 A. I have studied economics largely in the
15 context of public utility economics, rate making.
16 I have worked in the field of economic
17 relations to water resource policy extensively as in
18 the review mentioned in that little bio of Western
19 Water Resources Projects and in a number of
20 securities related tasks, particularly following the
21 amendments of the '34 Act that brought cities the
22 duty of due diligence and full disclosure in the
23 offering of those securities.
24 Q. Let me explore those in a little more
25 detail.
7
1 You say public utilities rate setting.
2 Exactly what were you involved in in that regard?
3 A. I worked -- I began my legal career mainly
4 as chief examiner of the Arizona Corporation
5 Commission which was a public utility.
6 Q. Like the Florida PSC?
7 A. Very like that.
8 Q. In the position you held there did you
9 review information for rate setting in various
10 utilities?
11 A. I did. I was a hearing officer.
12 Q. And the -- excuse me, go ahead.
13 A. And simultaneously I took course work, six
14 hours, as I recall, in public utility economics.
15 Q. Where was that?
16 A. Arizona State University.
17 Q. The economic relationship to water
18 resource policy, again, tell me more specifically
19 what you did there.
20 A. The occasion for the review I mentioned
21 was a determination at the beginning of the
22 administration, it was the Carter administration had
23 taken office and was faced with a range of early
24 decisions about the continuance of authorized and
25 uncompleted water resource projects of the Bureau of
8
1 Reclamation and the Corps of Engineers.
2 Q. And it was in your position as a Deputy
3 Assistant secretary --
4 A. No, Special Assistant to the Assistant
5 Secretary for Energy and Minerals at the time which
6 was sort of a flag of convenience. There was a task
7 force assembled to do this review.
8 I participated in the determination of the
9 economic and other performance standards that would
10 be used to select water resource projects for review,
11 and then internally standards and expressions for,
12 for the review themselves, how to determine whether
13 we should stay in pursuit of those projects or
14 recommend that they be deleted from the budget, and
15 in preparation.
16 Q. What period of time was that?
17 A. That was in the spring of 1977.
18 Q. How long did you do that?
19 A. During the spring of 1977.
20 Q. Just for a few months?
21 A. Yes, while we had to get the budget. But
22 that had been preceded by considerable work on behalf
23 of the City of Tucson and others about the
24 development of its water sources, conflicts with
25 other uses, farmers, as it happened, the relation of
9
1 City of Tucson's water resources plans to the
2 prospective costs and opportunities associated with
3 their participation in the central Arizona project.
4 That examination began during the time
5 that the central Arizona project was being authorized
6 which culminated in 1968, and continued through my
7 association with the city.
8 Q. Your position in which you had
9 that responsibility was as a member of the Tucson
10 City Council, is that correct?
11 A. As an assistant city attorney, as a member
12 of the Tucson City Council and as city attorney.
13 Then too we were faced with a major claim
14 by Indian tribes against the established groundwater
15 resources of the city, established in prospective.
16 I as issuer's counsel and as counsel
17 generally for the water resources department
18 supervised the, with our role in that litigation the
19 expression of that situation in revenue bond
20 offerings of the city's and engaged, instructed
21 counsel for the underwriter, a class yet unborn
22 because of the public competition for underwriter
23 services, first such I think in the nation, and
24 developed the economic basis for assuring as best we
25 could the whole potential class of underwriters that
10
1 we could repay the bonds, so engaged all aspects of
2 the city's water resource potential.
3 Q. That ties into your securities related
4 tasks that you had mentioned earlier?
5 A. Yes.
6 Q. And that was in your involvement as
7 assistant and city attorney and a member of the city
8 council as well in Tucson?
9 A. Yes.
10 Q. It states here in your resume that in
11 April of 1977 you were appointed the department's
12 associate solicitor for conservation wildlife,
13 general counsel to the National Park Service. Did
14 you do that from 1977 until 1980?
15 A. I did that from -- yes. That was for the
16 National Park Service and the other agencies I
17 mentioned there.
18 General counsel is a description, not a
19 title. I was associate solicitor for conservation
20 and wildlife.
21 Q. Okay. You have handed me a couple of
22 documents here. One is an article written by you
23 called Managing Nature in the Everglades.
24 What publication is that in and when was
25 it written?
11
1 A. It appeared in the EPA journal of
2 November-December 1990 and was written shortly before
3 that.
4 Q. And Everglades in the 21st Century, The
5 Water Management Future, 1992. Off the record you
6 had indicated you principally authored that document,
7 is that correct?
8 A. I did.
9 Q. Was that on behalf of the Everglades
10 Coalition?
11 A. Yes.
12 Q. What is the Everglades Coalition?
13 A. That is a good question.
14 That is the association of state and
15 national conservation organizations who have
16 substantial interest or activities in the Everglades.
17 Q. Is the Wilderness Society a member of that
18 coalition?
19 A. Yes, it is. I think the other members are
20 or at least the other members at the time are listed
21 in the publication.
22 Q. What was the purpose of this document?
23 A. To express the common aims of the
24 Everglades Coalition in the restoration of the
25 Everglades.
12
1 Q. Mr. Webb, you have been listed as a
2 witness in the upcoming proceedings involving the
3 Everglades SWIM plan, as I am sure you are aware.
4 Can you tell me what you understand your
5 area of testimony to be?
6 A. I intend to testify on the relation to
7 state and federal policy for the public lands they
8 administer of the proposed SWIM plan, its value in
9 the protection of publicly owned resources.
10 Q. That sounds pretty broad and general. Can
11 you specifically tell me what about the SWIM plan and
12 its relationship to, let's start with federal policy
13 for federal lands?
14 A. There is federal interest in lands in
15 Loxahatchee National Wildlife Refuge which as you
16 know has underlying ownership by the state and is
17 administered according to the Refuge Administration
18 Act and the Refuge Recreation Act by the US
19 Department -- by the US Fish and Wildlife Service.
20 It is subject to a license agreement that
21 was made first with the Central and Southern Florida
22 Flood Control District which imposes certain
23 standards and limitations on their related conduct.
24 It is my conclusion that it requires the
25 state to conform to the purposes for which that was
13
1 established as a refuge.
2 Q. Earlier I believe you indicated you have a
3 copy of that license agreement here, is that correct?
4 A. I think I do.
5 Yes, here it is.
6 Q. Is that a copy I can have or we can have a
7 copy run?
8 A. Yes, you can have this. We will have to
9 pass it back and forth if we are going to talk about
10 it.
11 Q. All right. Are you familiar with that
12 license document generally?
13 A. Generally, yes.
14 Q. Can you tell me what it is in that
15 document that the state is required to do?
16 A. The document contains an agreement in
17 paragraph 18 that in the operation and management of
18 conservation area lands, that is those lands we now
19 know as Conservation Areas 1, 2 and 3 and their
20 subdivisions, for the primary purpose of flood
21 control and other allied purposes, the lands and
22 waters will be managed in the manner most consistent
23 with Section 2, that is, its purpose as a wildlife
24 refuge, so far as it is not inconsistent with the
25 primary purpose, consistent.
14
1 Consistency in this context is very much
2 like the standard in the Refuge Administration Act
3 for secondary uses on refuges, that is, they can be
4 permitted when they are consistent with the purpose
5 of the refuge.
6 I think the state at least to the extent
7 that it is bound, the state in general is bound by
8 that agreement or that expresses an enforceable
9 policy, is bound to do nothing inconsistent with the
10 primary purposes of that refuge.
11 Q. In your opinion is the state currently or
12 has it behaved inconsistently, acted inconsistently
13 with the purposes of the Refuge Administration Act
14 and that license agreement?
15 A. Yes.
16 Q. In what way?
17 A. The state has unnecessarily, that is
18 without specific need to do so to fulfill the
19 purposes of the Central and Southern Florida Project,
20 distorted the Water Management Regime in Loxahatchee
21 National Wildlife Refuge, and it has permitted
22 discharge of waters to the area that degrade habitat
23 values within the refuge because of their ionic
24 composition, I believe.
25 Q. The first thing you mentioned is that they
15
1 have unnecessarily distorted the water management
2 regime. Are you talking about the hydrology, the
3 water flows?
4 A. Yes, I am.
5 Q. And the second had to do more with water
6 quality than quantity?
7 A. That's correct.
8 Q. In your opinion does the SWIM plan, and
9 you know what I am talking about when I talk about
10 the SWIM plan, correct?
11 A. I presume unless we say otherwise we will
12 be talking about the current --
13 Q. Everglades SWIM plan, correct.
14 Does the SWIM plan deal with the water
15 quantity issue you first mentioned?
16 A. Collaterally, it does. It includes --
17 observes the fact that the District is engaged in a
18 water supply planning process presumably at some
19 point to be merged with features of the plan now
20 under appeal and some of the objectives of which as
21 indicated in the District's water supply policy
22 documents will be to restore biological functions of
23 the Everglades in general, Loxahatchee being among
24 them.
25 Q. It is true, though, is it not, that the
16
1 SWIM plan does not have any specific tasks or
2 projects outlined to change the water management
3 regime of Loxahatchee?
4 A. It is hard for me in this context to --
5 well, I don't recall whether those things that have
6 been done to change the Water Management Regime in
7 Loxahatchee or that are currently in progress are
8 detailed considerably in the SWIM plan. There is
9 such action under way basically increasing the
10 flooded area and hydroperiod of Loxahatchee by
11 changes approved between the District and the Corps
12 of Engineers.
13 Through my direct participation in the
14 water supply planning process, I know that it is an
15 area of high concern in that process.
16 Q. The water quantity released to or from
17 Loxahatchee is a decision made by the Army Corps of
18 Engineers, is it not?
19 A. It engages the Army Corps of Engineers.
20 Q. What do you mean, engages them? How is
21 the decision made?
22 A. It is made between the local operating
23 agency, the South Florida Water Management District,
24 and the Army Corps of Engineers and is subject
25 therefore to review or consideration in light of a
17
1 broad range federal authorities.
2 And obviously that includes the Fish and
3 Wildlife Service, both in its land management
4 capacity and in its regulatory roles.
5 Q. Explain to me, is there a document that
6 describes how much and when water will be released to
7 the Loxahatchee, a general guideline?
8 A. Yes.
9 Q. Of what agency is that document? What
10 agency issues that document?
11 A. I think it is finally issued as a
12 memorandum order of the Corps of Engineers.
13 Q. What requires the Army Corps of Engineers
14 before issuing that document to get agreement from
15 the Water Management District?
16 A. It is not in that instance, among those,
17 between those it is not a question of agreement. I
18 suppose that the Corps of Engineers can impose
19 operating standards.
20 It is in a practical sense typically
21 developed as an integrated part of the plans of a
22 local operating agency like the South Florida Water
23 Management District, therefore more typically than
24 not it is initiated by the local agency.
25 I think that is the case in present
18
1 proceedings. It is, of course, subject to the Fish
2 and Wildlife Coordination Act, the Endangered Species
3 Act and whatever else in the range of federal
4 authorities may be deemed to apply to a particular
5 decision.
6 Q. It is my understanding that your testimony
7 will deal in some respects with the economics of the
8 administration, I guess, of the Refuge Administration
9 Act and operation of Loxahatchee and I guess
10 Everglades National Park.
11 Can you explain to me the economics of
12 those operations that you intend to testify about or
13 how the SWIM plan affects those?
14 A. Let me put it in a current context.
15 This arises because it is my understanding
16 that appellants in the SWIM plan process have raised
17 the contention that the space within those public
18 land resources must be provided as mixing zones, in
19 permitting conformity, that this plan and a related
20 permit will require cost avoidance on the part of the
21 permitting planning authorities. That basically
22 comes down to allowing standards not to be met within
23 a certain zone of those public lands, federal and
24 state.
25 There are systematic values associated
19
1 with those lands presently because of their use
2 within the refuge system and park system, and in
3 relation to the refuge and park system that I am
4 gathering information on and intend to testify about.
5 There are also categorical restraints in
6 state and federal law on what may be permitted in the
7 use of those properties and I intend to talk about
8 the relation of those to economic determinations that
9 may be derived from general views of state pollution
10 control.
11 Q. Let me start with what I understand was
12 the first part of that.
13 The systematic values associated with
14 those lands, I take it you mean Loxahatchee and the
15 conservation areas as well?
16 A. And Everglades National Park.
17 Q. Tell me what you mean by systematic
18 values. I am not sure I understand that term.
19 A. When you have had an opportunity to review
20 some of the material provided such as the Everglades
21 in the 21st Century you will find our objective in
22 the Wilderness Society and the coalition is the
23 restoration to the maximum extent that remains
24 possible of the abundance and variety of natural life
25 in the Everglades.
20
1 There has been a diminution by about 50
2 percent of the areal extent of the lands that once
3 functioned as Everglades
4 The marginal utility in the restoration of
5 that abundance and variety of the land remains, that
6 remains is thereby increased and the availability of
7 the range of landscapes necessary in that restoration
8 is, grows in more critical importance.
9 The ability to restore water control and
10 hydroperiod throughout the Everglades is diminished
11 if the remaining unimpaired lands or lands that are
12 remaining and available for restoration is diminished
13 and that diminution is disproportionate because of
14 the constraints that have already been placed on
15 restoration of native habitat.
16 In order, for instance, to restore
17 hydrologic regimes in the Everglades, an important
18 objective is to restore or replicate storage
19 functions that once existed in long period wetlands
20 that are now encompassed by urban development on the
21 east side, or urban or agricultural development on
22 the east side of the conservation areas of the Park
23 or north of the conservation areas in what is now
24 Everglades Agricultural Area which once contributed
25 very substantially both to the volume and natural
21
1 regulation, if you will, of water flows and what
2 remains. The result of the present geometry is that
3 current evidence indicates substantial dewatering of
4 conservation areas immediately south of the
5 Everglades Agricultural Area and in the northern
6 portion of Loxahatchee National Wildlife Refuge.
7 The possibility of restoring
8 systematically, that is, ways that incorporate
9 restoration of amounts and qualities necessary to
10 meet the publicly expressed aims for restoration of
11 the Everglades is diminished if flows of water
12 meeting state water quality standards can not be
13 applied to those areas, if those are sacrificed,
14 essentially, to a private interest upstream.
15 Q. You said you were gathering information on
16 this topic. Do you have information or have you
17 collected any with respect to a monetary value of
18 some sort to be assigned to, by acre or some unit?
19 A. That's the final calculation, as I see it.
20 Q. What information goes into that
21 calculation?
22 A. I think that the part of it that interests
23 me most is what functions will be lost and what the
24 likely increase in the marginal cost of meeting state
25 aims for restoration of water quality and water
22
1 quantity in the Everglades will be as a consequence
2 of the current changes in Everglades habitat that
3 have been occasioned by increased nutrient loads.
4 And rather value per acre, which as you
5 know in unmarketed acres is hard to establish, we
6 would be seeking an approximation of reproduction
7 cost of those acres if the functions that they can
8 provide in restoration of the system have to be moved
9 elsewhere, what the impacts of that are likely to be
10 on the public both in respect to the direct loss of
11 those resources and the added cost of response.
12 Q. In doing this analysis have you or do you
13 intend to distinguish between effects of hydroperiod
14 and effects of increased nutrients?
15 A. It is my intent by the process I just
16 described to diminish the significance of that
17 distinction. Basically speaking what it would be
18 would be to look at the costs imposed on the public
19 by having to move out of areas now impacted by
20 nutrient pollution as described in the SWIM plan and
21 others elsewhere and do the job, do the project kind
22 of work of restoring Everglades hydroperiod and
23 quality outside that area.
24 Of course, those calculations are forced
25 in sort of a zero sum gain. What the Everglades
23
1 needs is additional quantities of clean water.
2 Additional quantities of dirty water won't help much.
3 So the process is to try, as we do in that
4 document and elsewhere, to see those as integrated
5 matters, not subject to the jurisdictional
6 limitations of litigation or choices about SWIM
7 plans.
8 Q. What is your assumption with respect to
9 what functions are lost by the nutrient loading or
10 increased nutrients in a hypothetical mixing zone
11 that would have to be replicated elsewhere?
12 A. My assumptions follow from my personal
13 observations of life in the present mixing zone which
14 is markedly diminished in its variety and typicality.
15 Q. Let me ask you about that. The present
16 mixing zone being what, where?
17 A. I tried to put quotations around there but
18 court reporters don't translate tones of voice.
19 Q. I understood it.
20 A. The presumed obligation of discharges
21 within the EAA to meet water quality standards in
22 their discharges to public waters, that is the canals
23 of the EAA, is the failure to be brought to some
24 requirements to control that.
25 The failure to have permits
24
1 comprehensively issued has resulted in substantial
2 changes of native macrophytic life particularly at
3 discharge points much observed when people are -- you
4 have talked to people better qualified than I to deal
5 with those specifics. So as a consequence the public
6 lands are now bearing consequences of that. And the
7 quotations around mixing zones are that those are now
8 functioning as treatment areas for excessive
9 nutrients that have their, in waters that have their
10 origin in drainage waters and tail waters of the EAA.
11 Q. So I understand your quotes around the
12 term mixing zone, by using that term you are
13 referring to a de facto sort of mixing zone --
14 A. I do.
15 Q. -- in the canals and portions of the water
16 conservation areas, is that correct?
17 A. Yes.
18 Q. What functions are lost in those areas? I
19 assume you will have to assume certain functions are
20 lost that will have to be replicated elsewhere if in
21 fact those become de jure mixing zones. What
22 functions are you assuming are lost there or do you
23 know are lost there?
24 As I understand, for example, there is the
25 testimony of changes in macrophyte communities and
25
1 changes to cattails.
2 A. I have heard in the development of the
3 SWIM planning process and elsewhere a good deal and
4 read studies from 1975 onward about those phenomena.
5 I don't purport to some expert knowledge of those but
6 only that I have been in those places and that the
7 conditions described seem to affirm those conclusions
8 and clearly they are accompanied by a loss of
9 macrophytic and benthic communities that I am
10 familiar with in sawgrass communities of the
11 Everglades and they fell.
12 Q. Are you assuming some inherent value
13 difference between, say, sawgrass and cattails?
14 A. If you live on one or another there are
15 inherent value differences. Broadly speaking, I
16 don't -- I'm not misled by the belief that cattails
17 are of themselves evil creatures. I find them around
18 healthy rookeries in certain limited distributions,
19 associated, and I understand that they are
20 historically so distributed in the Everglades, that
21 the large scale monocultures that I have seen in the
22 Everglades are alleged by investigators and believed
23 by me to be not typical and that functionally
24 represent a distinct difference in value and a
25 phenomenon not associated with any part of the native
26
1 Everglades.
2 Q. Will your analysis then assume that any
3 mixing zone which would allow for, say, a cattail
4 community would have to therefore be replaced by a
5 pristine sawgrass wetlands somewhere?
6 A. My assumption will be that restoration of
7 native Everglades habitat can only be met where water
8 quality meets the narrative standards for Class 3
9 waters of the State of Florida, that is, where it is
10 not -- where pollution of those waters does not
11 result in alteration of the native balance of fauna
12 and flora.
13 That is a -- I am not talking about the
14 legal significance of that but just the design and
15 engineering significance of that.
16 If you begin a restoration project where
17 those standards are not met you can't restore the
18 native balance of fauna and flora and that is the
19 inherent objective.
20 I think that meeting current water policy
21 declarations of the State and of the District and
22 objectives of organizations like my own will
23 necessarily exclude those areas.
24 Q. In terms of doing an economics analysis,
25 though, tell me how you are going to assign economic
27
1 values. I am still not making that link very well, I
2 am afraid.
3 A. Let me give you an illustration of the
4 approach.
5 Q. Okay.
6 A. If you are acting in the management of a
7 water system generally, the further upstream your
8 action takes place the more general the significance
9 and ramifications of the action is downstream.
10 If restoration of Everglades waters has to
11 occur further in, further down in the system, that
12 is, below the present works established in the
13 perimeter of the Everglades Agricultural Area, for
14 instance, it will require the development of new
15 facilities rather than the application of those
16 facilities.
17 There is going to have to be a zone, a
18 buffer, essentially, established on public lands
19 between the Everglades Agricultural Area and
20 restoration areas of the Everglades. That has
21 economic significance not only in terms of the land
22 and resource values in the buffer itself, but the
23 applicability of facilities to it.
24 Q. Facilities being?
25 A. New facilities to accomplish objectives of
28
1 storage and transmission of water that has been
2 cleaned up. The fact is it is imposing additional
3 cost for works and operations.
4 Q. Can you give me --
5 A. -- in restoration.
6 Q. Can you give me a specific of that?
7 A. Yes. You will recall that I earlier
8 observed that evidence seems to indicate a dewatered
9 condition in the zone immediately south of the
10 Everglades Agricultural Area in the conservation
11 areas along its southern boundary. Positing that --
12 Q. Go on, I will come back.
13 A. We are just positing.
14 Q. Okay.
15 A. Positing that, supposing that the design
16 objective is to deliver waters that will not diminish
17 the native abundance and variety of Everglades life
18 in that area, there are existing facilities between
19 the S-8 structure over to S-6 that could be employed
20 as a part of water distribution system that permit
21 the restoration of sheetflow in that broad area,
22 potentially reduce nutrient contributions by
23 dispersing them across that entire front so you would
24 have a bit of a functional buffer there too.
25 If you have to move southward, downstream,
29
1 that is, from those existing features of the project
2 to replicate those functions, that is to be able to
3 manage water in a new facility for the restoration of
4 sheetflows and the manipulation of hydroperiod and
5 the isolation of nutrients, you are going to lose
6 functions that are presumably adaptable in the
7 existing facility --
8 Q. Are you saying --
9 A. -- to its purposes.
10 Q. Are you saying that if mixing zones were
11 allowed within the conservation areas, additional
12 gates or physical structures of some sort would then
13 be required to separate those mixing zones?
14 A. To reintroduce those waters to the
15 Everglades to which mixing would not apply.
16 Otherwise you would have to rely solely on the
17 discharge functions in the mixing zones, above the
18 mixing zones to control those waters.
19 Q. Let me go back to a question I wanted to
20 ask earlier.
21 You indicated there is evidence of a
22 dewatered area on the south side of the EAA. What is
23 your source of that information?
24 A. I am a member of the advisory committee of
25 the Lower East Coast Water Supply Plan. The District
30
1 has distributed to that committee runs of its
2 so-called natural systems in South Florida Water
3 Management District models comparing conditions under
4 certain parameters, low flow, low water years, high
5 water years, normal water years, between the
6 simulations of the system.
7 The South Florida Water Management
8 District Model is as we have it under 1989, that is
9 current operating conditions, and the Natural System
10 Model which is a version of that model abstracts all
11 the canals, levees, pumps and so forth, a persistent
12 difference under almost all conditions in those
13 models. And one is drying or a limited hydroperiod
14 or diminished flows in that area.
15 It follows too from the fact that it is an
16 area in which flow from the EAA is blocked and there
17 are discharge points on the side of it which don't
18 reach it, so it is almost inevitable and no surprise,
19 and in fact an affirmation of the models that they
20 indicated.
21 Q. Are you saying that the current system of
22 gates basically narrows or focuses where the
23 nutrient-rich water gets into the conservation areas
24 and that if you open these additional gates or
25 structures to allow for more sheetflow, that will be
31
1 a greater problem, or am I not understanding
2 correctly?
3 A. I am saying that the SWIM plan, if we go
4 back all the way to there, as presently envisioned,
5 will provide for the improvement of water quality in
6 such a way that water could be reintroduced across
7 that boundary by some fairly simple alterations of
8 the perimeter levees and their operations, while if
9 it had to move south of some mixing zone could not be
10 associated physically with the existing facilities to
11 get the same relative quality of water introduced
12 into the Everglades.
13 Q. In terms of economics, I guess, all the
14 way back to that, your testimony would be related to
15 the cost of building these additional structures,
16 sort of separating the mixing zone from the pure
17 area, is that correct?
18 A. Yes, and might encompass, if those are
19 found, inhibitions on management choices that would
20 be induced by having to move things that way.
21 Q. Give me an example of a diminution in
22 management choices.
23 A. Areas within the levees of the EAA tend to
24 be lower than areas around the EAA. It is a polder.
25 Water levels within the EAA are lower than
32
1 surrounding water levels and are so maintained by
2 pumps and the levee system of the South Florida Water
3 Management District.
4 Recreating storage capacity in areas that
5 have not experienced that subsidence means that you
6 have less storage than if that were to be built as
7 the STAs are within the boundaries of the EAA and in
8 areas where soil subsidences is marked.
9 There are requirements for hydroperiod
10 restoration in areas around the EAA as in Loxahatchee
11 National Wildlife Refuge that will require the
12 manipulation of water as close as you can get it to
13 the top of the system. The more you come from, the
14 more you come south from the top of the system you
15 are narrowing your opportunities not only in the
16 stream, if you will, but in areas lateral to it.
17 You can't do anything about water in
18 Section 1 if your gate is in Section 36. And you
19 can't do anything about it in section 1 of the
20 adjoining township either.
21 Q. Let me see if I understand this.
22 First of all, what requirements for
23 hydroperiod restoration, is there a plan you are
24 speaking to or an agreement? What are those
25 requirements now?
33
1 A. There is a water supply planning policy
2 adopted by the South Florida Water Management
3 District reflecting requirements of state law to make
4 for the restoration or for the establishment of
5 minimum flows and levels for the Everglades,
6 somewhere appears, and other planning objectives
7 within the District that encompasses restoration
8 aims.
9 Q. Those are not specifically in the SWIM
10 plan, are they?
11 A. Not to my recollection. There are a lot
12 of activities like urban water supply for instance
13 that are not specifically in the SWIM plan but may be
14 specifically implicated in it, by it, so other
15 processes in the District and in other people's plans
16 have to respond to what happens or doesn't happen as
17 a consequence of the SWIM plan.
18 I am talking about things that are going
19 to have to respond to what determinations are made by
20 the SWIM plan.
21 Q. These requirements you indicate will mean
22 that the water level at the point where the water, I
23 guess, comes into the Loxahatchee or other
24 conservation areas will need to be higher, is that
25 what you said?
34
1 A. No, not other but water conservation --
2 Q. No?
3 A. No.
4 Q. Let me try again.
5 I thought you indicated that requirements
6 for hydroperiod restoration around the Loxahatchee
7 will mean need for a higher water level. Is that
8 outside or inside the Loxahatchee?
9 A. No, I am talking about inside the
10 Loxahatchee. And the fact is there is no point in
11 restoring the hydroperiod with water that can't meet
12 the narrative standard state law which is
13 coincidentally just a restoration standard for places
14 like Loxahatchee.
15 Therefore, if it is not done somewhere
16 else it has to be done -- it will, some part of
17 Loxahatchee or other areas will be used for purposes
18 other than restoration for purposes other than
19 meeting the standard so described.
20 If that standard incorporates an objective
21 to use part of the public land as a treatment
22 facility for people outside the public lands, that is
23 going to radically diminish the utility of those
24 public lands directly and variously increase costs in
25 restoration objectives for those public lands. If
35
1 you can't do it -- if it has to be done there it is
2 not going to be -- it is going to be added loss to
3 the prospect of Everglades restoration.
4 Some of that can be monetized.
5 Q. I guess what I understand, the only
6 specific I understand now in terms of putting a
7 dollar value on it would be the cost of additional
8 structures between the mixing zone and the pure area.
9 Can you tell me other specific things that you can
10 monetize or put a number on?
11 A. There may be values to be attributed to
12 that land itself. Obviously that would have to be
13 constrained by the fact that it is not the market, it
14 would have to be some fairly remote comparable and
15 therefore not too accurate.
16 There are values associated with the
17 original purposes of the Central and Southern Florida
18 Project that have been carried on through various
19 manifestations for wild fish and wildlife that would
20 be lost and are subject to such estimations.
21 Q. Have you implied or meant to say that the
22 construction of the stormwater treatment areas, STAs,
23 outside of the conservation areas, will result in an
24 improved hydroperiod in any way?
25 A. No.
36
1 Q. For the Loxahatchee?
2 A. No.
3 (Pause)
4 A. They could have that result with proper
5 association of other features, but not of themselves.
6 MS. STINSON: Off the record.
7 (Luncheon recess)
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
37
1 AFTERNOON SESSION
2 1:00 p.m.
3 MS. STINSON: On the record.
4 BY MS. STINSON:
5 Q. Mr. Webb, I am not sure whether we kept
6 these pieces distinct or not. Let me clarify
7 something.
8 When I asked you generally what economic
9 things you were looking at, what kind of analysis you
10 would do, my notes indicate anyway that you talked
11 about two things, one, systematic values, and two,
12 categorical restraints.
13 A. Yes.
14 Q. And then we went into a long discussion on
15 what I believe or understood to be a description of
16 how you would assign values to the systematic values,
17 or did we mix that in with categorical restraints?
18 A. No, I don't think we mixed it much. There
19 was presumption operating in there that you could do
20 this stuff.
21 I believe that -- I am trying to encompass
22 this in a brief statement -- there are values
23 associated with various categories of Everglades
24 lands that categorically inhibit what can be done
25 with it.
38
1 I mentioned one briefly derived from the
2 agreement between Central and South Florida Flood
3 Control District and the United States.
4 In valuing non-market commodities, land
5 commodities, protected areas, particularly, I think
6 it is fatuous at some point to compare them to
7 developable and marketed lands because finally it
8 comes down to the question of what values have been
9 pronounced by social action, political decisions, for
10 that particular category of land. It is not unfair I
11 think to analogize it to what some local public
12 authority said was CB 1. There has been a
13 determination made by public authority that does
14 affect values.
15 When you have a long and consistent
16 determination at several levels of government that
17 the highest and best use of Everglades is Everglades,
18 then that variously imposes restrictions on what
19 other things you can do or what kind of values ought
20 to be imputed to it.
21 It would seem under those conditions about
22 as close as you can come to determining the value of
23 Everglades is the reproduction cost of Everglades, if
24 there is indeed a reliable opportunity to reproduce
25 Everglades.
39
1 That latter is not clear and therefore you
2 get values approaching infinity for that particular
3 commodity. It is the only Everglades there is.
4 Q. Let me see if I understand this.
5 You were describing to me what effect or
6 what the categorical restraints are or what that
7 means and how that affects essentially land values or
8 value of the Everglades, is that correct? That is
9 what you just described to me?
10 A. Yes.
11 Q. As distinguished from the systematic
12 values which I understood to be, well, to include the
13 value of the land itself but also more direct and
14 hard things such as physical structures and fish and
15 wildlife.
16 A. The kind of things you would have to
17 undertake for restoration, yes.
18 Q. What information specifically have you
19 gathered or do you plan to gather to assign values,
20 economic values?
21 A. I think it is fairly easy, and be prepared
22 at any time to do so, to make rough attributions of
23 the kinds of project costs that would be associated
24 with the reintroduction of hydroperiods, and if
25 suitable water were available. Those can be based
40
1 with a reasonable degree of accuracy just on
2 currently experienced costs of channelization, the
3 kind of economic data that is in the SWIM plan, for
4 instance, about construction costs.
5 Q. Again, those kinds of things you would see
6 as necessary between the nutrient affected zone and
7 the pure zone?
8 A. Yes.
9 Q. What about the value of fish and wildlife,
10 how do you propose to put a value on those things? A
11 mullet is $1.39 a pound?
12 A. It is indeed a living mullet if that is
13 what you are after. It is subject to fairly typical
14 valuation methodologies that are either what does it
15 cost to create a mullet, the kind of values that are
16 embedded in a lot of customary calculations about a
17 fish, for instance, what you have to do to get a
18 salmon back in the river.
19 Then there are value schemes associated
20 with what people will pay to have a look at that
21 mullet swimming around or to take it. Those are
22 calculations of the order that usually go into cost
23 benefit analyses for water projects, federal water
24 projects, for instance.
25 Q. Have you gathered any of that information
41
1 or have you put together a value to be assigned to
2 fish and wildlife in the Everglades?
3 A. We published a report which I know you
4 have seen.
5 Q. Craig Diamond?
6 A. Craig Diamond's report which incorporates
7 some of the that data. I would tend to rely
8 substantially on the values that are reflected there.
9 Because of a limitation of fish and
10 wildlife as pure market phenomena, that is fairly
11 small change compared to the project requirements
12 that would be, well, imposed on the public if they
13 weren't being imposed on all participants of nutrient
14 load in the Everglades.
15 Q. For purpose of your analysis would you
16 assume that the mixing zone would reduce the supply
17 or value of fish and wildlife by 100 percent, 50
18 percent? Have you assigned any degree of impact in
19 that regard?
20 A. The value of nutrient treatment areas as
21 proposed in the SWIM plan I think are accompanied by
22 no offsetting calculations for their fish and
23 wildlife values.
24 I would think if the same processes were
25 taking place on public lands, that there would be a
42
1 high degree of diminution of value. My own
2 experience with what is available in presently
3 impacted areas of the Everglades would lead me to
4 believe that there is little aesthetic, recreational
5 or wildlife value associated with those areas.
6 Q. Just to be clear again, those areas being
7 the canals and --
8 A. Being the areas that are impacted
9 presently, substantially impacted by nutrient
10 pollution.
11 Q. Again, to pin that down a little bit, we
12 are talking about canals and those areas that have
13 been --
14 A. Have developed substantial monocultures of
15 cattail and similar nutrient tolerant vascular
16 plants. We are talking about the canals and -- we
17 are talking about cattails and those that developed
18 similar nutrient tolerant vascular plants.
19 Q. You indicated when you were describing to
20 me the categorical restraints that essentially the
21 values can approach infinity if this resource is not
22 reproducible, I guess, is what you told me.
23 Have you or do you intend to assign actual
24 monetary values under that view of things?
25 A. No, not to areas that can not be reduced
43
1 and can not be reproduced and are subject to high
2 standards of public protection, I would say not.
3 Q. Essentially, as I understand then, your
4 testimony with regard to economic effects would be
5 really the economic effect of the alternative of
6 allowing mixing zones proposed by petitioners, or
7 does it go beyond that?
8 A. I think it would go to the displacement to
9 the public domain for those costs whether it is done
10 formally by mixing zones or by failure to do
11 something that inhibits the current pace of
12 degradation. That's where the quotations around that
13 one kind of mixing zone can be dispensed with. It is
14 pretty much the same kind of impact.
15 Q. Have you formed any opinions as to the
16 economic effect of allowing either formally or
17 informally mixes zones to occur in the water
18 conservation areas?
19 A. Yes, I have.
20 Q. What are those opinions?
21 A. I believe that it will -- just a minute --
22 Q. This is an open book test.
23 A. If I have the book. I think it is another
24 thing I failed to fax.
25 I will give you an approximation. I think
44
1 that the loss of marginal utility that is now
2 embedded in the facilities surrounding the EAA that
3 would be associated with that is not less than $45
4 million.
5 I believe the value per acre of public
6 land -- per acreage calculations, I have not
7 attempted to complete.
8 Q. I guess now moving from the more general
9 to the more specific, I would like to know how you
10 came up with that figure, the $45 million figure,
11 minimum.
12 A. By approximating what it would cost to
13 impose storage capacity within that area and to
14 extend transmission facilities in lieu of the
15 application of storage and transmission facilities
16 that are now there, that are there in the perimeter
17 of the EAA.
18 Q. Do you have any numbers, calculation,
19 data, that go into this? Have you actually sat down
20 with pencil and paper or computer and screen to
21 calculate this figure?
22 A. I have, and I do not and I didn't keep a
23 memorandum of that or bring it with me. I just have
24 that figure. I am sure I can reproduce its basis
25 readily.
45
1 Q. Extend transmission facilities, I think I
2 now understand, you are talking about the structures
3 between the nutrient impacted zone and the pure zone.
4 A. Yes.
5 Q. What about cost, the first thing you
6 said --
7 A. Storage facility.
8 Q. Yes. What do you mean?
9 A. If you are to begin the management of
10 hydroperiod, only outside the zone of operation of
11 some private purpose treatment facility, that is if
12 you are not to overcharge the mixing zone, that is,
13 if all that is calculated to respond to the degree of
14 pollution that is put there at the drainage schedules
15 and at the concentrations that are determined, for
16 instance, and operate in EAA, it would be necessary
17 to have sufficient storage within that facility and
18 associated with those transmission works that you
19 could produce something like a native hydroperiod on
20 downgradient from there.
21 Q. Would that require some physical
22 alteration of what is currently there?
23 A. Yes.
24 Q. In what way?
25 A. You would have to make it hold more water
46
1 than it can hold now.
2 There is a collateral benefit of STAs in
3 that regard or at least the potential for such
4 depending on their management regimes, that wouldn't
5 be available.
6 Q. Potential benefit of holding more water?
7 A. No, they hold some water. The current
8 rate of discharge responds only to climatic
9 conditions and the operation of within the EAA to
10 hold water tables at optimal levels for purposes
11 within the EAA. Even if by inadvertence the STAs
12 buffer that effect to some measure.
13 Q. Can you tell me today of that $45 million
14 what amount of that you would assign to the storage
15 facilities and what amount of that you would assign
16 to the transmission facilities?
17 A. My recollection particularly, because pump
18 facilities would be attributable to storage more than
19 transmission, would be that it is most dominantly in
20 storage. Of course, there are large scale pumps at,
21 in the perimeter of the EAA that are presently
22 adaptable to some extent to hydroperiod restoration
23 that would be -- would not be associated with that.
24 Q. Does this figure include such facilities
25 in all of the water conservation areas or just
47
1 Loxahatchee? Have you looked at WCAs 1, 2 and 3 in
2 this regard?
3 A. Yes. And in fact the figures that I am
4 talking about are mostly not Loxahatchee.
5 Q. Why is that?
6 A. Because I don't know -- it is not as clear
7 what is to be done about hydroperiod restoration in
8 Loxahatchee or where that would occur. Some of that
9 has to do with the native drainage of Loxahatchee
10 which included areas that once laid in the north of
11 it that were apparently highly sensitive to current
12 water levels, so forth, as to whether they drained to
13 Loxahatchee or to the east coast or even back to the
14 lake, apparently, from some observations I have
15 lately read, and neither is it as simple given the
16 established design of the system to locate where
17 alternative storage and transmission facilities would
18 be for Loxahatchee.
19 Q. In forming your opinions on testimony to
20 be given at hearing in this matter, do you intend to
21 comment or use in any way the impact analysis
22 performed by Hazen and Sawyer for the Water
23 Management District?
24 A. My views about it are not derived from
25 that impact analysis which was largely directed at
48
1 other issues.
2 You are speaking of the impact analysis of
3 the SWIM plan as proposed?
4 Q. Correct.
5 A. Yes.
6 Q. Are they based -- and maybe you assumed
7 this was included, but the Hazen and Sawyer or
8 subcontractor also did an economic benefits analysis
9 of the proposed SWIM plan. Are your opinions in any
10 way based on that document?
11 A. No, although I am not beyond checking what
12 I develop with what is said in that document.
13 I do know that in the structure of the
14 Marjorie Stoneman Douglas Act, largely because of
15 cost relationships, first proposed by the sugar
16 industry, that the concentration in the act and in
17 the development of STAs is rather more exclusively on
18 nutrient treatment than the interests of the
19 Everglades Coalition or my own view of the system
20 encompassing it.
21 Q. Again I asked you this but I want to go
22 back to it, in terms of building storage facilities
23 within the WCAs, you said that they would have to be
24 physically changed to hold more water. Would that
25 mean digging them out or building levees or just what
49
1 would that include, or both?
2 A. Yes.
3 Q. Anything other than that?
4 A. Pumping facilities.
5 Q. You have formed the opinion that the loss
6 of marginal utilities, as I wrote down, anyway, would
7 not be less than $45 million. You have not yet
8 assigned a per acre value of that figure.
9 A. No. And I am not sure that I can.
10 Q. Are there other opinions which you intend
11 to offer at hearing on the subject of economic impact
12 or effect?
13 A. That we haven't discussed in some way or
14 another?
15 Q. Right.
16 A. Wait a minute.
17 (Discussion off the record)
18 MS. STINSON: Back on the record.
19 BY MS. STINSON:
20 Q. I am looking at your document, Everglades
21 in the 21st Century. I notice in there is a sentence
22 here that "Managing EAA water levels is the C&SFFC"
23 -- Central and South Florida Flood Control --
24 "Project's the core function, it was the central
25 feature of its design."
50
1 What leads you to the statement that that
2 was the major purpose for the project's development?
3 A. Because that's where the horsepower is.
4 In the design memoranda of the project
5 originally most of the value attributed to the
6 project was in creation of agricultural lands.
7 Q. What document are you referring to?
8 A. House Document 643.
9 But more significantly, I think, beyond
10 the calculated value, the fact is that upstream
11 features and events in a system like this
12 suboptimalizes, if you will, what happens downstream.
13 Those features that can be most comprehensively
14 managed are those at the top of the system. And in
15 this instance that's the EAA.
16 The pumping facilities around the EAA
17 creating, as I indicated before, a 700,000 acre
18 polder is no small deal.
19 And the strongest features in terms of
20 just application of big design including pumps and
21 levees and so forth surround the EAA. There is no
22 other place in the system of any considerable scale
23 where groundwater levels can be managed or water
24 levels period can be managed with such accuracy,
25 except in the related Lake Okeechobee. And by and
51
1 large as a matter of design and as a matter of
2 practice, water levels in Lake Okeechobee are
3 controlled to, in association with required water
4 levels in the EAA because obviously if Lake
5 Okeechobee floods, the first thing that floods is the
6 EAA.
7 In the original design it was to be a
8 recipient of flood waters in the Everglades
9 Agricultural Area, it was to provide irrigation as
10 required, does provide irrigation as required for the
11 EAA. And Lake Okeechobee is by far the strongest
12 storage element in the water management system.
13 Q. You indicate here too that "No plan exists
14 assuring that measures taken to improve water quality
15 will advance other public objectives in water
16 management or at least not impede them."
17 I assume in terms of measures taken to
18 improve water quality, you are primarily referring to
19 the STAs, is that correct?
20 A. Plan, when I am talking about plans, yes.
21 Q. Right. But can you explain to me that
22 sentence?
23 A. At the time that was written and still to
24 some extent the operation of STAs in relation to
25 those other public purposes that we described in that
52
1 publication, restoration of hydroperiods, so forth,
2 is not established, it just hasn't been integrated.
3 And integrating that is an interest of my
4 organization.
5 Q. Tell me what collateral activities outside
6 the SWIM plan are occurring to coordinate the
7 measures taken to improve water quality with other
8 public objectives in water management.
9 A. I think the most significant one is the
10 Lower East Coast Water Supply Planning process.
11 Q. Enlighten me on that. What is going on
12 with that process and what stage is it in?
13 A. It is late, as most such processes seem to
14 be. They have given themselves last year and this,
15 opportunity to develop an assessment of water supply
16 requirements for agricultural, urban demands and
17 environmental needs, to identify deficiencies in
18 those -- in prospective of meeting those needs and
19 describe what ought to be done about that.
20 Q. Who is writing that plan? Is there a
21 council or work group?
22 A. There are four water supply advisory
23 committees. One is regional in character. There are
24 three others working on water supply plans for Palm
25 Beach County, for Broward County and for Dade County,
53
1 Dade and Monroe Counties, Dade County and the Florida
2 Keys.
3 Q. Are the people on these committees
4 employees of the Water Management District?
5 A. No. It is staffed by employees of the
6 Water Management District as is typical and of all
7 interests having representation.
8 Q. The plan ultimately though would be one of
9 the Water Management District, is that the
10 assumption?
11 A. Yes. And I think that it is a fairly safe
12 assumption that its plan will have to be a plan also
13 of the United States and others. I don't think that
14 the policy objectives stated in support of the
15 planning process can be achieved without substantial
16 modifications in the project.
17 Q. That plan will deal not just with urban
18 water supply, for example, but also with hydroperiod
19 issues for natural systems, is that correct?
20 A. Yes. And there's current authorization in
21 the 1992 Water Resources Development Act for the
22 Corps to undertake such investigations and
23 modifications, Section 307, if memory serves.
24 Q. Let me read you another sentence and ask
25 you about it. "Treatment facilities designed in
54
1 advance of a comprehensive plan for EAA Water
2 Management must have enough margin and flexibility to
3 assure they can both meet water quality objectives
4 and serve comprehensive purposes without wasted
5 investment."
6 Do you know or do you have an opinion
7 whether the SWIM plan in terms of the STA has enough
8 margin and flexibility to assure that those
9 facilities request meet those goals?
10 A. I think by themselves they do not. What
11 they do do is afford reasonable assurance that at
12 least interim water quality measures will be met and
13 that those can be associated with other efforts or
14 other facilities that can do that.
15 Q. Do you have an opinion as to whether the
16 STAs and the investment needed to build those STAs
17 meet those purposes without wasted investment?
18 A. I have not seen any evidence that the STAs
19 are designed beyond the necessary capacity to meet
20 the stated water quality goals, that is, there is not
21 a wide margin beyond that required to provide
22 reasonable assurance that they will do what they plan
23 to do, that money is being spent there that won't
24 have to be spent.
25 Another question will be for another
55
1 process or forum how those features will be best
2 integrated into other things necessary to, like the
3 sort of restoration facilities we earlier talked
4 about, how that will be done. Whether there is
5 wasted investment in them now, I suppose, in respect
6 to those other purposes will finally depend on how
7 those other purposes are met.
8 To the best I can discern the STAs are to
9 treat phosphorus. They are to incidentally do what
10 have some benefit for other nutrient components. I
11 don't think they have a design purpose beyond that.
12 Q. You indicate here sort of in conclusion
13 that "Landowners in the EAA must develop a new
14 agricultural economy better adapted to the Water
15 Management District requirements of the Everglades
16 and of South Florida's urban economy."
17 Do you envision by that or do you propose
18 a significant change in the type of agriculture to be
19 conducted in the EAA, and if so, what?
20 A. I made fairly laborious efforts not to be
21 fairly proscriptive of what farmers ought to be doing
22 in the EAA. It is my belief that the agriculture in
23 the EAA as a product of design of the system and
24 because of other historical developments, growth of
25 urban society, increased social value and
56
1 understanding of the value of productive ecosystems,
2 places a disproportionate burden on the Everglades at
3 present. They not only use most of the horsepower,
4 they use most of the choices about what people can do
5 in the rest of the system. I am not casting
6 aspersions, I think that is just a consequence --
7 MR. GUEST: Off the record.
8 (Discussion off the record)
9 A. I think that conditions as they obtain
10 presently are going to tax the capacity, not just
11 financial but brains and initiative and everything
12 else of farmers in the EAA, that adapting to the
13 various demands placed on the system, is going to
14 have to be undertaken by them. Environmentalists and
15 governments are not going to be able to tell them how
16 to successfully farm. But it is going to be a more
17 demanding condition than it has been in the past.
18 Some of the facts about farming in the EAA
19 and their relative immunity from the effects of
20 drought and rainfall are going to be more sharply
21 tested, may become less reliable.
22 Those are just factors that I can foresee
23 as a result of design, as a consequence of design and
24 as a consequence of other demands now being placed on
25 the system, some of which are embedded in the law.
57
1 It is going to require a great deal of
2 initiative and intelligence on the part of EAA
3 agriculture to adapt to the fact they are living in
4 the Everglades and the fact that urban rate payers
5 have to live with them.
6 Q. You have not, however, developed a
7 proposal for how that can be done?
8 A. I wouldn't dare.
9 Proposals how that has to be done have to
10 respond to internal structures and market conditions
11 and a lot of things that are only in the hands of
12 farmers. They are not going to be successfully
13 regulated into ideal agriculture for the Everglades,
14 they are not going to be cajoled into it.
15 Q. In the last paragraph in your section on
16 EAA you say, "The needs of South Florida cities and
17 the needs of the Everglades will be met." But then
18 you go on to say, "The needs of a more responsible
19 agriculture less dependent on economic subsidies and
20 less damaging to South Florida's environment can be
21 met."
22 I gather you are making a significant
23 difference there in the future that there is no
24 question about the continuation of the cities and the
25 Everglades but there may be some question about the
58
1 continuation of agriculture and the EAA?
2 A. No, that is not a guess. That is not some
3 kind of sequencing of events.
4 Non-agriculture -- people used to say
5 non-Catholics to include the whole world --
6 non-agricultural accounts for something like 98
7 percent of the regional output. 98 percent of the
8 regional output is not going to be deeply sacrificed
9 for the remaining 2 percent.
10 We have -- there is a national and
11 international recognition of not only the importance
12 but the peril of the Everglades. That is recognized
13 to such an extent that federal law and policy, state
14 law and policy are more harmonized and more strongly
15 directed to the protection of the Everglades than of
16 any other considerably modified system I can think
17 of.
18 The institutional stage is set more firmly
19 for restoration of the Everglades than it is for the
20 Columbia or the Colorado or the Sacramento/San
21 Joaquin or any other similar system I can think of.
22 That kind of determination, I think, will inevitably
23 result in those values being strongly expressed, and
24 that brings us to the second part of the sentence
25 which is back to what I said before about farming in
59
1 the Everglades.
2 It can be done and the conditions are not
3 public conditions, the conditions are whether
4 farmers, farm interests, businesses in the Everglades
5 can adapt at the pace and intensity that will be
6 required in that process. And it is up to them.
7 If, for instance, without the present
8 transfer of values from the urban sector to the EAA
9 for water management cost, and without competitive
10 protections of one kind or another, there are sharp
11 effects on the sugar industry, obviously there would
12 be a great effect on total investment values in the
13 EAA just concentrated in sugar mills.
14 It is in that respect a tenuous future, I
15 suppose, but I do notice that in 1948 the Corps of
16 Engineers were pointing out that there were net
17 returns of $125 an acre for sugar lands, far beyond
18 any other value in agriculture in the region.
19 I understand that those are still the most
20 valuable agriculture acres overall in the region in
21 terms of net returns.
22 Whether that -- whether the current
23 investment pattern situation permits compliance with
24 environmental standards and meeting the exigencies of
25 business operations is a hazard and it is one that
60
1 the industry frankly hasn't faced in the period from
2 1948 to the present when they were at that time
3 expounding the importance of price supports and
4 external stability as a component of living in the
5 EAA and benefiting from water management operations
6 there.
7 MS. STINSON: Off the record.
8 (Discussion off the record)
9 MS. STINSON: Back on the record.
10 BY MS. STINSON:
11 Q. Mr. Webb, off the record we had a
12 discussion about your opinion on the $45 million
13 figure. There are a number of questions regarding
14 the specifics of that, for example, how many acres,
15 what structures, et cetera, that you don't have
16 today, is that correct?
17 A. That's correct.
18 MS. STINSON: And there is agreement,
19 David, that I can propound those types of questions
20 to you by interrogatory and you will respond?
21 MR. GUEST: Yes, we will respond, to be
22 more exact, we won't object on the ground of
23 relevancy or any other fallacious grounds that have
24 been so recurrent in this case.
25 MS. STINSON: With that I don't have any
61
1 more questions today.
2 MR. GUEST: I just have a few followup
3 questions, just for clarification purposes. That is
4 literally just to clarify.
5 CROSS-EXAMINATION
6 BY MR. GUEST:
7 Q. Earlier towards the beginning of your
8 questions from Ms. Stinson you were asked if your
9 economics testimony would be limited to the cost of
10 extra facilities. Were there any other costs besides
11 the cost of extra facilities that you are going to
12 testify about?
13 MR. GUEST: If I might ask him a leading
14 question.
15 Q. You were going to talk about the values of
16 the land in addition to the cost of extra
17 facilities --
18 A. Yes.
19 Q. Just to clarify, if the proposal were to
20 use the water conservation areas or the Loxahatchee
21 Wildlife Refuge as a mixing zone or as a site for
22 treatment of polluted water; and in that connection I
23 believe you later testified about the value of those
24 lands in the water conservation areas. Could you
25 just very quickly summarize how you would ascribe a
62
1 value to those lands?
2 A. I would attempt to find lands that could
3 be systematically associated in similar ways with the
4 operation of the project and the Everglades, that is,
5 for instance, for the creation of replication of
6 similar storage capacity and so forth and
7 reintroduce, for the reintroduction of waters to the
8 Everglades and see what those cost.
9 Q. Just to use what we see in costs in the
10 SWIM plan as a replacement cost, would you see in
11 your method of examining the value of that acreage,
12 would you see any connection between the cost of
13 restoration and the value of the land itself?
14 Do you understand what I am asking?
15 A. Do you mean land outside the EAA applied
16 to those purposes?
17 Q. Yes.
18 A. That would depend on whether there was
19 other land like that available, to land that would
20 do -- for instance, there is land that could do what
21 has to be done in a mixing zone and it is directly
22 upgradient from what is now being discussed in this
23 mixing zone concept. It is in the EAA and it is to
24 some extent or another in production, and has values,
25 market values derived from that.
63
1 If that were to be the only land available
2 to do outside the mixing zone what would be in the
3 mixing zone, the value to be attributed to this
4 mixing zone is that value, is the value of the
5 alternative functional source.
6 If, for instance, you were providing such
7 a zone in black acre to keep white acre in business,
8 keeping white acre in business becomes the basis of
9 value.
10 Q. I see from your vitae that you have had
11 substantial experience in utility rate making. Do
12 you see any applicability of the two basic kinds of
13 cost recovery systems for utility rate making as they
14 apply to cost of, first, water, and second, pollution
15 cleanup in the Everglades?
16 Am I being too cryptic?
17 A. No. Let's speak of one, and a dominant
18 one, that is the principle that costs are to be
19 recovered from the place they are imposed, that is
20 cost of service principles in public utility rate
21 making.
22 There those are principles because they
23 reflect a broad value in society for getting payment
24 for things like utility services from the people who
25 benefit from them.
64
1 The structure of finance in the Central
2 and Southern Florida Project is, however, based on
3 land value, since principal source of funding for all
4 those is property tax applied only in two zones and
5 no necessary association, and in fact a
6 disarrangement between costs that are experienced by
7 the South Florida Water Management District and the
8 sources of their revenue, the people who pay to
9 operate the South Florida Water Management District
10 are not in the Everglades Agricultural Area, for
11 instance.
12 Q. Is this the former system you described
13 sometimes referred to as the cost of service
14 approach?
15 A. Yes.
16 Q. And the latter that you referred to was
17 called what, the support approach, perhaps?
18 A. I don't think it is called anything. It
19 is a property tax system. And we use it for general
20 welfare purposes like police and fire and schools and
21 supporting agriculture in the EAA.
22 Q. So referring now to the stormwater utility
23 system, are you familiar with that mechanism?
24 A. Yes.
25 Q. I take it that is a service, cost of
65
1 service based kind of rate structure.
2 A. I would -- I wouldn't call it that.
3 Q. Why not?
4 A. Because it is not a utility fee. It is
5 sort of a hybrid of standard improvement district
6 principles where it might be based on the number of
7 lampposts you get in your district or the volume of
8 your land.
9 In this case it is based on the amount of
10 phosphorus removed in relation to your calculated
11 contribution to the demand for phosphorus removal.
12 So there is a service involved, and there
13 is a cost involved, but it is partial and indirect
14 and has this kind of improvement district overlay on
15 it.
16 I don't think you can compare that
17 proposal to cost of service rate with much more
18 accuracy than can the present system. But it does
19 have some relationship to, unlike the present system,
20 it does have some relationship to a particular public
21 function.
22 Q. If a utility rate structure were shifted
23 to a cost of service structure, would you expect
24 economic consequences to businesses that were
25 affected by --
66
1 A. You bet.
2 Q. What kind of consequences would you
3 expect? Would some of them go out of business?
4 A. I hope not. If you are in business you
5 hope like hell not.
6 Typically speaking there are -- this kind
7 of an approach -- let me say, I am going to use a
8 real homey hypothetical because this is sort of a
9 schematic picture of Tucson in the olden days.
10 There was a postage stamp rate, that is a
11 single described rate for water service. The extent
12 that it varied from a single rate, it was one in
13 which the cost per unit volume decreased with the
14 increase in usage, that is based on, justified at
15 least by increased efficiencies and application to
16 the whole plant, better load factors and such things,
17 and just using more in proportion to the gross
18 capital investment plan.
19 There is a general attitude about rate
20 making that in an atmosphere of decreasing average
21 cost and an atmosphere of decreasing average cost
22 pervaded public utilities and other forms of public
23 investment in the United States for a long, long
24 time, for just about the century from the Civil War
25 to the sixties. It is even in the last few decades
67
1 almost the contrary picture, and particularly in
2 water resources development almost every additional
3 development effort experiences increased average cost
4 and rapidly escalating incremental costs because they
5 tend to come in big hunks. So the value of
6 conservation of the base resource and of the plant is
7 increased a lot.
8 And rate structures responsive to that are
9 more and more common, as in the hypothetical I just
10 mentioned. If you have a scale that increases with
11 the demands that are placed on the system, those
12 demands tend to diminish and that tends to be
13 economically the correct thing to do in an atmosphere
14 of increasing average cost.
15 And that is what happened there.
16 It could be a great imposition on
17 enterprises that have -- that are specifically
18 adapted to the former condition. Let's take a place
19 like that desert community, a bottling plant that
20 uses a lot of municipal water compared to other
21 folks, or to people that are on the municipal water
22 supply for commercial irrigation purposes,
23 greenhouses and so forth.
24 It is similarly a principal of making
25 rates in such condition that should do it by, that
68
1 should do it incrementally, that you do your best to
2 see that that imposition either by how capital
3 investment is answered by the refunding bonds or by
4 how you impose the rate demand to begin with, is --
5 Q. Phased in?
6 A. -- phased in, essentially, in order to try
7 to avoid to the extent possible those consequences.
8 Q. Is that possible in implementing this
9 Everglades SWIM plan as to spreading the utility
10 costs of cleaning up the water around by phasing them
11 in?
12 A. Well, inherently I think that happens,
13 just in the finance and repayment structure
14 anticipated in the act and the financial aspects of
15 the SWIM plans to some extent. I couldn't make an
16 accurate or even reasonable estimate as to specific
17 impacts of that on a specific industry unless I could
18 hire a competent accountant and could get the books
19 of that industry.
20 Obviously the more radically a particular
21 business sector is displaced from meeting the costs
22 of service, the more deeply you have
23 institutionalized subsidies for such an industry or
24 have more extensively permitted them to externalize
25 their costs, the more uncomfortable it is going to be
69
1 for them.
2 But that's a historical consequence
3 usually of the status of, character of a particular
4 industry and not public policy determination that you
5 are going to -- there are limitations on what you can
6 sensibly do to make life comfortable. And there are,
7 for instance, if you take the business back to mixing
8 zones, I suppose that one view of the matter would be
9 that you could externalize the effects of pollution
10 and have a mixing zone that was sufficiently ample
11 that it wouldn't make anybody contributing to that
12 mixing zone uncomfortable, that they wouldn't
13 experience costs.
14 The calculation of the costs that they
15 ought in those circumstances to bear is a public
16 policy determination which is left to legislatures.
17 And I think that's what they did in this instance.
18 MR. GUEST: I have no further questions.
19 MS. STINSON: I have one followup.
20 Did you have anything?
21 MS. DONLAN: No questions.
22
23 (Continued on following page)
24 REDIRECT EXAMINATION
25 BY MS. STINSON:
70
1 Q. Does the $45 million figure include an
2 assignment of land value?
3 A. As I am recollecting the way I derived it,
4 it did not.
5 MS. STINSON: That is it.
6 A. It was, if I could continue that, a
7 calculation derived from the costs of other stuff
8 that is now being worked on as, for instance, in the
9 northeast Shark River Slough, just currently
10 estimated costs for similar kinds of things.
11 MS. STINSON: Thank you.
12 MR. GUEST: I would recommend not waiving,
13 signature, that is, reading.
14 (Thereupon, the taking of the
15 deposition was concluded)
16
17
18
19
20
21
22
23
24
25
71
1 I, JAMES D. WEBB, do hereby certify that I
2 have read the foregoing deposition and that the same
3 is a true and accurate transcript of my testimony,
4 except for attached amendments, if any.
5
6
7
8 _______________________________
9
10
11
12
13 The signature above of JAMES D. WEBB was
14 subscribed and sworn to before me this day of _______
15 , 1993. __________
16
17
18
19
20 _______________________________
21 Notary Public
22 My commission expires
23
24
25
72
1 CERTIFICATE
2 STATE OF FLORIDA:
: SS.
3 COUNTY OF DADE
4
5 I, Richard Bursky, a Registered
Professional Reporter and Notary Public for the State
6 of Florida at Large, do hereby certify that I was
authorized to and did report the deposition of
7 JAMES D. WEBB in stenotype; that the said witness was
first duly sworn to testify the whole truth; that the
8 reading and subscribing of the deposition were not
waived by the witness; and that the foregoing pages
9 numbered from 1 to 70, inclusive, constitute a true
and correct transcription of my shorthand notes of
10 the deposition by said witness.
11 I further certify that the said deposition
was taken at the time and place hereinabove set forth
12 and that the taking of said deposition was commenced
and completed as hereinabove set out.
13
I further certify that I am not an
14 attorney or counsel of any of the parties, nor a
relative or employee of any attorney or counsel
15 connected with the action, nor financially interested
in the action.
16
The foregoing certification of this
17 transcript does not apply to any reproduction of the
same by any means unless under the direct control
18 and/or direction of the certifying reporter.
19 Witness my hand in the City of Miami,
County of Dade, State of Florida, this 3rd day of
20 February, 1993.
21
22 _________________________
RICHARD BURSKY, RPR, CM
23 NOTARY PUBLIC AT LARGE
MY COMMISSION EXPIRES:
24 July 18, 1994
25
