The report recommends that the court deny Florida's request for relief because the Corps [of Engineers] is not a party to this original jurisdiction proceeding,” said Holland & Knight attorney Roger Sims, who isn’t party to the case.

BRADENTON, Fla. – The next episode in the decades-old water-rights dispute between Florida and Georgia will take place behind closed doors.

The U.S. Supreme Court will hold a closed conference Friday on a report by its appointed special master, Ralph Lancaster, an attorney with Pierce Atwood LLP in Maine.

The report's conclusion is favorable to Georgia and its public water agencies.

Since Florida filed suit against Georgia in November 2014, Lancaster has presided over the complex case and the jurists are expected to rely heavily on his recommendation.

Florida wants the high court to equitably apportion water from the Apalachicola-Chattahoochee-Flint River Basin, a major source of water for drinking, marine and agricultural resources in Georgia, Florida and Alabama.

The U.S. Army Corps of Engineers distributes the water across the basin through the dams and reservoirs it manages.

The Corps is not a party to the suit, and that factor turns the case in Georgia's favor, Lancaster said in his 137-page report filed with the Supreme Court on Feb. 14.

If the high court agrees with Lancaster, it will not offer any relief to Florida, which has spent more than $40 million on legal fees pursuing the case.

"The Special Master concluded that Florida, as the aggrieved state, must prove 'real and substantial' injury from Georgia's conduct by 'clear and convincing evidence,'" said Holland & Knight attorney Roger Sims, who chairs the firm's Water Resources Team and is not involved in the suit.

"The report recommends that the court deny Florida's request for relief because the Corps is not a party to this original jurisdiction proceeding," Sims said.

For Georgia, Lancaster's recommendation likely removes a significant supply risk for the state's water authorities, according to Fitch Ratings analyst Julie Seebach.

If Lancaster's finding had been adverse and resulted in a reduction in supply allocations for Georgia's water issuers, or in a reduction in their permitted wastewater discharges, Fitch would have considered those findings a negative rating credit factor, she said.

"For some issuers, downward rating pressure could have ensued," Seebach said.

She said Lancaster's report would leave the decision of allocating water resources through its dams and reservoirs to the Corps, as it has been historically.

Georgia Gov. Nathan Deal said he was pleased with the special master's recommendation to the Supreme Court.

"Georgia remains committed to the conservation efforts that make us amicable stewards of our water," he said in a February statement. "We are encouraged by this outcome which puts us closer to finding a resolution to a decades-long dispute over the use and management of the waters of the basin."

The complex federal mandate for the Corps to operate its facilities in the ACF River Basin is at the center of the dispute between Florida and Georgia.

Citing Lancaster's report, Sims said the Corps is supposed to operate its dams and reservoirs as a unified whole to achieve multiple objectives, including navigation, hydroelectric power generation, national defense, recreation, and industrial and municipal water supply.

The Corps is also supposed to comply with other federal statutory objectives, such as "conservation of fish and wildlife, water quality, and protection of threatened or endangered fish and wildlife."

Despite the special master's recommendation about the disposition of the suit, Lancaster was not entirely unsympathetic to Florida.

His report also pointed out deficiencies in the way Georgia has handled agricultural permits for irrigation water.

Florida has "suffered harm" because of decreased downstream flows from the basin that increased salinity levels in Apalachicola Bay and led to "an unprecedented collapse of its oyster fisheries in 2012," Lancaster said.

"It also appears that Georgia's upstream agricultural water use has been – and continues to be – largely unrestrained," he said.

Georgia's irrigated acreage has increased from less than 75,000 acres in 1970 to more than 825,000 acres in 2014, the report said, adding that the state's own estimates show a "dramatic growth" in consumptive water use for agricultural purposes.

"In the face of this sharp increase in water use, Georgia has taken few measures to limit consumptive water use for agricultural irrigation," Lancaster said. "Agricultural permits contain no limitations on the amount of irrigation water that can be used by farmers.

"Even the exceedingly modest measures Georgia has taken have proven remarkably ineffective."

Lancaster's report spurred action from Florida's congressional delegation.

U.S. Sen. Bill Nelson, R-Fla. filed a bill Feb. 15 that would require the U.S. Army Corps of Engineers to send more freshwater south from Georgia into Apalachicola Bay.

"For years, the Corps, which uses a system of reservoirs and dams to control the flow of water along the ACF river system, has been increasing the amount of water it sends to Georgia's larger municipal areas such as Atlanta, where the Army Corps South Atlantic Division is headquartered," Nelson said. "As a result, the amount of freshwater flowing south into Florida's Apalachicola Bay has decreased dramatically, devastating the area's oyster industry and local economy."

Nelson said his bill would explicitly require the Corps to send adequate amounts of freshwater to Apalachicola Bay.

It also would require the National Oceanic and Atmospheric Administration to conduct a study to assess available data and make recommendations on the best ways to maintain the flow of freshwater.

U.S. Rep. Neal Dunn, a Republican from Northwest Florida whose district includes Apalachicola Bay, is also seeking action.

Dunn has filed a Congressional Review Act resolution of disapproval to stop the Corps from implementing what he calls a "harmful" rule that would revise the "master water control manual" for the Apalachicola-Chattahoochee-Flint River Basin.

The Corps is close to completing revisions to the manual.

Dunn said his resolution would overturn the rule being implemented by the Corps.

"This crisis and the fight for our right to river water goes back many years, but the challenge is urgent for us today," Dunn said. "If implemented, this rule would have even more devastating effects on the ecosystem in Apalachicola and the economy in the second district than the current water control plan that led to the unprecedented collapse of our oyster fisheries in 2012.

"This legislation will permanently halt the harmful revised master water control manual and allow the states involved to continue working towards an equitable agreement," he said.

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