Water Law

Holland & Knight’s Water Team covers a myriad of issues generally divided into three broad areas – regulatory matters, system operations/development, and litigation. Our staff is an experienced team of professionals, including former state legislators who dealt with water issues, as well as attorneys who have focused their practice in the area of water law.

Regulatory Matters

Water Use Planning and Development
Our lawyers have a wide range of experience in water use planning and development. This experience and our involvement has resulted in:

• the Tampa Bay Partnership Agreement – which formed the basis for settlement of the long standing Tampa Bay Water Wars and consisted of a contractual agreement for the decrease in use of existing wellfields with environmental problems for funding to develop new water sources, including desalination, reservoirs, conservation and the like
• the first binding interlocal agreement among 15 governmental entities for a national estuary program
• the largest municipal reclaimed water system in the United States
• the second largest plumbing retrofit program in the U.S., and similar type projects

Legislation and Rulemaking

We represent private sector and local government clients in reviewing proposed water management rules, identifying issues and solutions, working with the proposing agency to improve the rule language, and otherwise assuring that the rule ultimately adopted is effective and workable.

Many of our lawyers devote their practice to legislative representation. With offices in capital cities and other major markets, our team provides legislative representation to water/wastewater clients before Congress and the state legislatures.

Permitting

Our team also has experience in advancing client projects through the water and environment permitting process, as well as in evaluating, modifying and (if necessary) challenging the permitting efforts of others. We assist our clients in obtaining permits from jurisdictional agencies and governmental entities on behalf of utilities, other government entities and the private sector, as well as in transferring existing permits from acquired entities.

Our involvement includes:

• representation of a manufacturing client with existing water permit in evaluating long-range plans for operation, obtaining agency support for long-range approval, challenging proposed competing uses that presented a threat to the client (and reaching amicable resolution thereof), and defending the client in a challenge by a third party to the long-range permit
• representation of the environmental impact statement and subsequent permitting of more than 10,000 acres of wetlands by the Army Corps of Engineers
• representation of a municipal water provider with a pumping station on Lake Michigan in obtaining permits from the state of Illinois and the Army Corps of Engineers, including installation and operation of a chlorine line and diffuser system for zebra mussels protection

Stormwater Management

Our Water Team represents clients in obtaining federal appropriations for stormwater projects, including $5.35 million to date for an innovative four-county Big Haynes Creek Stormwater Project that may serve as a national model. The federal appropriation permitted the four metro counties surrounding Atlanta, Georgia, to cooperate on a stormwater treatment facility that collects stormwater runoff for the entire Big Haynes Creek watershed in a large retention pond and treats the water to serve as a drinking water source for the four counties. We also assisted with related Federal Clean Water Act requirements (i.e., Total Maximum Daily Load), EPA requirements and other regulatory hurdles.

Compliance and Enforcement

Our Water Team has experience representing water/wastewater clients in enforcement actions brought by state and federal regulatory authorities as well as public interest groups who may oppose a permit application or an operational technique. Should litigation arise, our Water Team works with you to develop litigation strategies and to evaluate potential settlement opportunities. We have successfully argued challenges to environmental permit denials and defended clients in enforcement actions taken by federal and state environmental regulatory agencies and the Department of Justice.

Water System Development and Operations

We are regularly involved in the day-to-day legal issues arising from the development and operation of water supply systems. Our involvement includes developing and modifying state legislation to help water agencies organize and successfully finance and construct water supply systems; obtaining water rights; drafting and assisting in the administration of construction contracts whereby water system facilities are constructed; and negotiating water purchase and sale agreements. Our lawyers continually work with water system clients as they face growth and change in their service areas.

We have considerable experience in acquiring necessary interests in land, permits and other approvals for the construction of water system infrastructure – from pumping stations to reservoirs and stand pipes to water mains, metering stations and pressure adjusting stations. This experience ranges from simple easement acquisitions, to multiple party real estate transactions to acquire appropriate sites, to obtaining consent to locate facilities in remote areas.

Relying on our extensive experience in public bidding and public works construction law, we provide legal advice on every aspect of construction and expansion of water systems. Our work includes development of model bidding and contract forms, resolution of bidding disputes, contract administration, and bond and insurance issues.

We draft and negotiate complex water purchase and sale agreements on behalf of both purchasers and sellers of bulk water supply for ultimate retail sale to customers. We also are involved in cutting edge issues for water suppliers, including negative impacts on water intakes in the Great Lakes region and the effects of chemical additives to water for water safety on water system infrastructure.

Examples of our experience include:

• representation of both the oldest and the largest intergovernmental water commissions in the state of Illinois, from initial formation, financing and construction through day-to-day operations
• representation of a planning consortium of public agencies and tribes in the state of Wisconsin relating to the creation of a formal agency to plan, finance, construct and operate a new Lake Michigan water system serving 11 communities, special districts and Indian tribes
• representation of a major city/county planning consortium in the state of Michigan relating to the creation of a formal agency to plan, finance, construct and operate a new Lake Huron water system
• acting as Special Assistant State’s Attorney for all matters relating to an Illinois County’s water (and sewer) system
• representation of many different Illinois municipalities in obtaining permission to use Lake Michigan water, in addressing agreements and issues involving the intergovernmental production, sale and purchase of water, and in a wide range of litigation relating to water (and sewer) systems, service and rates

Alternative Project Delivery Methods

Our team represents local governments and water/wastewater utilities in structuring and implementing water, sewer and residuals management projects through design/build and design/build/operate project delivery approaches. We provide legal assistance, as needed, to determine the legality of such approaches in the applicable jurisdiction as well as the preparation of the necessary procurement documents, such as requests for qualifications and requests for proposals. Through our experience in the water industry, we provide valued support during the proposal evaluation process, and draft the design/build and design/build/operate agreements, as well as the related transaction documents, to be negotiated with the successful proposer. The breadth of our firm’s practice allows us to provide representation to our clients in all the areas of law which are necessary for these transactions to be successful, including contract, environmental, construction, real estate, labor, finance and tax.

Acquisitions and Contract

Drafting/Negotiation

A significant part of the firm’s water practice involves representation in connection with the sale of water and wastewater utility facilities. Our team has participated in the drafting of purchase and sale agreements, negotiation of environmental insurance policies, drafting of indemnification agreements, negotiation of consent decrees and orders, negotiation and interpretation of franchise agreements between water/wastewater utilities and local governments, drafting of service agreements and other contracts necessary for a successful water/wastewater utility operation, and other forms of transactional documentation.

Finance

Our team possesses substantial experience in all types of debt and equity transactions, including tax-exempt bonds, sale-leasebacks, synthetic leases, like-kind exchanges, tax credits, tax-increment financing, general leases and participating mortgages. We work with lawyers from the firm’s corporate and tax practice areas to ensure that the transaction structure that is ultimately utilized best meets our client’s financial and operational goals. The Water Team has been involved in numerous financings of various water or wastewater facilities or their delivery systems, including representation of the largest intergovernmental water agency in the state of Illinois in financing its $350 million water transmission and distribution system.

Privatization

Our team provides comprehensive services to governments, private sector investors, operators and intermediaries in privatization and restructuring of water assets operating in the United States and abroad. Among U.S.-based law firms, we have one of the largest groups of partners and associates with linguistic and cultural capabilities in Latin America. In addition, our lawyers have a great depth of knowledge and experience with the political and legal systems in this region and have established close and effective relationships with major law firms throughout Latin America.

Our privatization experience includes:

• design and implementation of a regulatory and legislative framework; concessions and management contracts and of institutional arrangements: institutional settings, legislative initiatives, regulatory regimes (pre/post privatization, including tariff and competition issues)
• acting as sellers’ counsel in all aspects of the process; from overall divestiture and privatization strategy design, transaction design and supervision, legal audits, contractual drafting, and negotiation and post privatization issues
• acting as investor counsel in the performance of legal audit exercises, support in proposal preparation, bid support and contractual negotiations
• project and asset-based financing
• corporate finance

Our experience includes:

• representation of the governments of Peru and Ecuador in a World Bank-financed project on the implementation of build, operate and transfer (BOT) structures for the construction and management of water and sewer systems as well as solid waste disposal systems
• acting on behalf of a multilateral financial institution in the design of the regulatory framework leading to private sector participation in several South American countries
• development, in collaboration with the Ministry of Finance and national public works development bank, of U.S. Export-Import Bank model project and finance documentation to support design, construction and operation of municipal wastewater treatment plants
• negotiation of U.S. Export-Import Bank financing facilities in the aggregate of $60 million for engineering and construction of regional and municipal aqueducts and potable water transportation infrastructure

Ratemaking

Our Water Team is trained in ratemaking and utility accounting principles. The firm has experience in rate cases before several regulatory commissions, including our recent representation of a water utility in obtaining a significant rate increase through proposed agency action procedures.

In addition to regulatory ratemaking, our lawyers have experience in rate disputes governed by common law ratemaking principles where the water provider is not subject to utility commission jurisdiction. For example, in Illinois, we represented a water retailer in an intricate ratemaking arbitration against the wholesale supplier, resulting in a long-term contract for water supply at one of the lowest rates in the Chicago metropolitan area.

Litigation

The Water Team has extensive experience in litigating claims arising from water supply issues. The Team has been involved in many challenges by third parties to rules and permits desired by clients of the firm, as well as challenges initiated by clients. Members of our environmental litigation team also have substantial experience handling major toxic tort lawsuits arising from allegations of contamination in the groundwater migrating to the drinking water. The firm recently concluded, with great success, a case where clients opposed some 1,100 claims of alleged injury made against over 70 defendants, brought by two well financed plaintiffs’ law firms in 13 separately filed mass tort state cases.

Our team includes attorneys, both at the trial and appellate level, who have successfully litigated these massive cases, and have the experts, the skill and experience to do so. Our experience also encompasses claims of groundwater contamination as well as issues of water treatment, blending and storage, basin pumping rights and the best available technology for remediation issues. In such cases, we have worked with the U.S. EPA, state environmental agencies, state utility commissions, local water and air agencies, and state health agencies.

While we are quite prepared to litigate vigorously, we are also open to consideration of alternative settlement procedures, such as mediation and/or arbitration in the appropriate case. We also offer to all clients preventative consultative strategies and approaches to avoid litigation of this nature.