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Jury verdict leaves Tampa Bay Water officials stunned and uncertain

TAMPA — Tampa Bay Water directors were reeling Wednesday, a day after losing a lawsuit they were counting on to pay for more than $100 million in repairs to the state's largest reservoir.

With legal fees surpassing $10 million, board members said they don't know whether they will appeal their case against the engineering firm that designed the C.W. Bill Young Reservoir. That decision could come Monday, during a closed meeting of the board.

"I don't know what the board will decide, but it's a tragedy for the entire area," said Charlie Miranda, a Tampa City Council member who sits on the water board.

Tampa Bay Water, which represents more than 2 million Pinellas, Pasco and Hillsborough county ratepayers, filed a lawsuit four years ago seeking $73 million in damages from HDR Engineering to help pay for repairs of the 15.5-billion gallon reservoir.

The Nebraska-based HDR designed the $146-million reservoir, which opened in June 2005 to store water from the Tampa Bypass Canal and the Alafia and Hillsborough rivers. Cracks were first discovered in December 2006. Some stretched 400 feet and 15 1/2 inches deep and wouldn't stay patched.

Cracks now show up along two-thirds of the reservoir's embankment and continue to spread, a water official said during the month-long trial.

In 2008, Tampa Bay Water sued HDR and two contractors. The contractors settled for $6.75 million and agreed to cooperate with Tampa Bay Water's lawsuit.

Last fall, HDR offered to settle the suit for $30 million but water officials rejected the offer, something Miranda does not regret.

"Sometimes you have to stand up for what was right," Miranda said. "The board didn't design the reservoir. The board didn't build it.''

Neil Brickfield and Susan Latvala, board members and Pinellas commissioners, agreed.

"We had a strong case and we don't believe that the ratepayers — our six-member government customers — should be stuck with that bill,'' Latvala said. "The design was flawed, and I think we had a responsibility to fight as hard as we could to show that (HDR) had responsibility."

Said Brickfield: "We were confident when we moved forward that we had a very good case. The jury didn't see it that way."

Jurors could not be reached Wednesday for comment. It took them just four hours of deliberation to decide the engineering firm was not responsible for fixing the reservoir.

"Our attorneys had advised us that we had a good case,'' said Sandra Murman, a water board member and Hillsborough commissioner. "Jurors couldn't see that in the end they're going to have to pay for a mistake that they don't see is a mistake."

Lead attorney Richard Harrison said his firm is evaluating grounds for an appeal but would not offer any opinions except to board members.

Board chairwoman Ann Hildebrand, a Pasco commissioner, said she was leaning toward supporting an appeal, but Murman said she wanted to evaluate attorneys fees first.

Thus far, Tampa Bay Water has incurred about $10.6 million in legal fees and costs. Appealing the decision could add between $200,000 and $400,000, water spokeswoman Michelle Biddle Rapp said.

Attorneys expect HDR to file a motion for its legal fees and costs as the winning party, a claim Tampa Bay Water anticipates will be between $13 million and $18 million.

"I don't want to pay another cent of legal fees," Murman said. "We're already $122 million in the hole with ratepayers."

Last year, Tampa Bay Water authorized reservoir repairs and hired Kiewit Infrastructure South to fix cracks and boost capacity by 3 billion gallons for $162 million. Construction is slated to start this fall and last two years.

Repairs alone are estimated to cost about $122 million, and Murman wondered if the project could be scaled back to just that.

Even so, much of the bill seems destined to fall on the backs of ratepayers.

Tampa Bay Water staff is predicting that rates might have to rise 10 to 15 cents per thousand gallons of water used to pay for the $162 million repair and expansion project. The average Tampa Bay area household uses about 8,000 gallons, so ratepayers would see an increase of between 80 cents and $1.20 per month on average.

"Regardless of what the jury had to say, it doesn't really change the fact that we have a reservoir that begins cracking as soon as the water is lowered and it does have to be fixed," board and St. Petersburg council member Karl Nurse said. "We'll have to look at the choices of how we're going to pay for that."

Times staff writer William R. Levesque contributed to this report. Justin George can be reached at jgeorge@tampabay.com or (813) 226-3368.

Jury verdict leaves Tampa Bay Water officials stunned and uncertain 04/11/12 [Last modified: Wednesday, April 11, 2012 11:22pm]
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