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Tampa Bay Water rejects $30 million settlement on cracked reservoir

CLEARWATER — Two weeks after voting to accept a $30 million settlement for the cracks in its reservoir, Tampa Bay Water's board has reversed itself. The board voted unanimously Monday to reject that settlement, contending it isn't fair to make the ratepayers foot the bill for repairing a problem the utility says was caused by a bad design.

"The ratepayers should not be held culpable for the damage to that facility," said Hillsborough County Commissioner Mark Sharpe, one of the board members.

Last month, Tampa Bay Water's board voted 4-3 to settle its lawsuit against HDR Engineering, the designer of the utility's flawed reservoir. The case had been set for trial this month, but after that vote the board's attorney, Richard Lottspeich, filed a motion with federal court dismissing the lawsuit.

Afterward, however, attorneys for the Pinellas County Commission pointed out an error. Tampa Bay Water's rules require a vote of at least five of the nine board members to settle a lawsuit, not a mere majority of those present.

That meant they had to vote again Monday. They spent an hour and 15 minutes in a closed-door meeting with Lottspeich. Then they filed into their board room and, with no further debate, voted 9-0 to reject the settlement with HDR.

Now Lottspeich has to tell the judge that his clients are reopening the case. As a result, the trial is not likely to occur before next year, according to agency spokeswoman Michelle Biddle Rapp.

HDR executives said in a statement that they were "disappointed" by the board's decision to reject the settlement proposed by an independent mediator.

"We have always been ready to accept responsibility for our portion of the necessary repairs," the HDR statement said. "We believe the actual repair costs and our responsibility have been grossly exaggerated."

The original 4-3 vote was a quick one, handled with little discussion, said Pinellas County Commissioner Susan Latvala, who was on the losing end of that vote. Monday's discussion covered the case in greater detail, she said.

"We obviously talked for a long time and additional members and staff weighed in with stronger arguments," agreed St. Petersburg City Council member Karl Nurse, who voted for the settlement last month but changed his mind Monday. "We will see at the end of this what the right decision was."

Tampa Bay Water officials have long said they hoped the companies that designed and built the reservoir would bear most, if not all, of the $122 million cost of fixing its cracks.

Their suits against two of the contractors were settled for $6.75 million, leaving one suit outstanding: the one against HDR. Rapp said the agency is hoping to get up to $97 million from HDR.

The utility opened the C.W. Bill Young Regional Reservoir in 2005 to store water skimmed from the Alafia River, Hillsborough River and Tampa Bypass Canal. The reservoir covers 1,100 acres in Hillsborough County.

The walls consist of an earthen embankment as wide as a football field at its base, averaging about 50 feet high. The embankment's top layer, a mixture of soil and concrete, began cracking in December 2006. Workers patched the cracks, but the patches didn't last.

An investigation found water is getting trapped under the soil-concrete lining. When the utility draws down the reservoir, pressure increases on trapped water, producing cracks.

The cracks have not been deemed a safety hazard, but utility officials say conditions could get worse. HDR contends the problem could be solved with a maintenance program for less than $1 million a year.

Tampa Bay Water recently approved a contract with Kiewit Infrastructure South to repair the reservoir and boost its capacity by 3 billion gallons for $156 million. During the repair and renovation work, expected to take two years, the utility will have to drain the reservoir dry.

Craig Pittman can be reached at craig@sptimes.com.

Tampa Bay Water rejects $30 million settlement on cracked reservoir 10/17/11 [Last modified: Monday, October 17, 2011 11:46pm]
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