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Suwannee River Water Management District has agreed to sell Chiefland the 33 acres with a new city water supply well head on it, but will not be selling the city any of the surrounding 122 acres.
The District board, in its annual meeting Nov. 6-7 in Steinhatchee, agreed to the sale, while declining to give the city a 10-year option to purchase the larger surrounding tract.
The city had hoped to secure all the property and the water supply.
Mayor Teal Pomeroy has said that the wellhead, which was purchased by the District and city was designated to provide wellhead protection for Chiefland.
But District officials have been trying to get the city to agree to allow other cities to share in the approximately 3.5 million gallons per day that can be pumped from the site.
Pomeroy and the commission have balked at sharing, instead preferring to be a wholesaler, creating a new revenue stream for the city by profiting from the sale of water to other governments.
The District is going ahead with the creation of the Nature Coast Regional Water Authority which has participation from Levy, Dixie and Gilchrist counties, and the cities of Fanning Springs, Cross City, Trenton and Bell. Chiefland has an open invitation to join the authority, but is not accepting.