There are two fundamental legal agreements in existence that govern the operation and development of Tampa Bay Water's potable water supply sources, and delineate the rights of member governments that make up Tampa Bay Water, the local water supply authority.

The first legal agreement is known as the "Northern Tampa Bay New Water Supply and Ground Water Withdrawal Reduction Agreement Between West Coast Regional Water Supply Authority, Hillsborough County, Pasco County, Pinellas County, City of Tampa, City of St. Petersburg, City of New Port Richey, and Southwest Florida Water Management District (1998)," also known as the Partnership Agreement.

The Partnership Agreement does the following: governs the development of new water supplies; requires phased reduction of groundwater withdrawals from the Central System wellfields; ended litigation and administrative hearings between the District, Tampa Bay Water and its member governments; and provides for financial assistance from the Southwest Florida Water Management District to Tampa Bay Water to develop new water supplies and achieve reduction of withdrawals at the Central System wellfields. All of these items are intended to contribute to the recovery of the natural environment in the wellfield areas.

The Agreement makes available to Tampa Bay Water $183 million from the Southwest Florida Water Management District to be used for new water supply development projects, excluding groundwater sources and including alternative sources of potable water and regionally significant transmission pipelines. Independently, the Tampa Bay Water Master Water Plan provides for the development of an additional annual average daily quantity of at least 85 million gallons per day (mgd) and partially offsets additional need by increased conservation and demand management.

The second legal agreement is known as the Amended and Restated Interlocal Agreement reorganizing the West Coast Regional Water Supply Authority (1998), also known as the Governance Agreement. Tampa Bay Water was created on August 31, 1998, through a governance process that resulted in contracts and legislation that changed the name, structure and operations of the West Coast Regional Water Supply Authority. The creation of Tampa Bay Water represented an end to the region's so-called "water wars" and a new alliance between six governments in west-central Florida: Hillsborough County, Pasco County, Pinellas County, New Port Richey, St. Petersburg and Tampa. Under the Governance Agreement, all member governments relinquished to Tampa Bay Water their individual rights to develop drinking water supply sources. Tampa Bay Water became the sole and exclusive wholesale drinking water supplier for all member governments and has the absolute and unequivocal obligation to meet the wholesale drinking water needs of the member governments.

Tampa Bay Water also acquired all regionally-significant wholesale water supply facilities and tangible assets owned by the member governments at an agreed value. It now charges a uniform per gallon wholesale rate to member governments for the wholesale supply of drinking water.

The Governance Agreement also sets out procedures for arbitration to resolve differences over permitting and other issues, and expanded Tampa Bay Water's governing Board of Directors. It further required Tampa Bay Water and the Southwest Florida Water Management District to submit a Partnership Agreement, mentioned above.