NEW PORT RICHEY — Pasco County has sued the engineering firm that handled a reclaimed water reservoir project, claiming the company failed to do its homework when it recommended a Land O'Lakes site where sinkhole problems drove up the cost by nearly $8 million.
Commissioners on Tuesday endorsed the Sept. 8 lawsuit filed by Pasco County, which alleges professional negligence and breach of contract against Tampa-based King Engineering. The two sides have officially been in mediation since February 2009 but only met twice.
"King had failed to fully and properly investigate the site to determine its suitability as a site for the construction of such an improvement," the lawsuit says.
The original bid on the project was $14.6 million, said assistant county administrator Bruce Kennedy. The final price tag was $22.4 million. Nearly all but a roughly $6 million grant from the water district came from Pasco utility customers.
But King Engineering officials say Kennedy pushed for that site all along — despite the multiple red flags that the firm pointed out along the way.
"Taking this issue to court will cost a lot more money and will not undo the decisions that were made by the county," King CEO Keith Appenzeller said in a statement. "King would rather not fight but is committed to protecting its excellent reputation."
State officials in 2006 required the reclaimed water reservoir, located near U.S. 41 and Ehren Cutoff, to cure environmental violations.
In 2007, King engineers and Pasco officials revealed to commissioners a series of possible mistakes in planning the project.
The county chose a design without a more protective liner to save $2 million. But engineers later decided that the reservoir would need that liner because of a collapsed embankment and sinkholes.
King officials say that they advised Pasco to seek bids for the grouting necessary to deal with possible sinkholes before pricing the rest of the project so they'd get an idea of the cost of going without the liner.
"The county did not follow King's advice," the company's statement says. "Grout costs ... increased substantially during the course of construction. Eventually, the county decided to line the reservoir anyway."
Officials liked the site by the Land O'Lakes sewage plant because it was near utility lines and the county already owned the land. But the site had been used for drainage ponds, which might have contributed to the sinkhole problem.
"Had King conducted a proper and reasonably prudent investigation of the site, it would have revealed the presence of numerous geologic features that eventually made the construction of the improvement significantly and materially more expensive than the amount which King had opined the cost would be as part of its assessment," the county says in its lawsuit.
King argues that it was the county that decided the reservoir should be at the Land O'Lakes site.
"The county understood the risk of sinkholes in the area selected for their reclaimed water reservoir," King's Appenzeller said in a statement. "They decided that the potential cost savings was worth the risks outlined by our geotechnical consultant, Qore Properties Sciences, and King Engineering. Had it worked out there would have been substantial savings. But it didn't. That does not mean that it was a bad decision, but it was not Qore Property Sciences or King's decision. King's advice was not followed."
Pasco hired the law firm of Mills, Paskert & Diverts in 2007 to pursue a possible legal claim against King. Officials have agreed to pay the outside legal firm up to $175,000, all but $50,000 of which has been spent. More money will be needed to proceed with the case, county officials said.
In February 2009, Pasco signed an agreement that started the clock running on a two-year statute of limitations for professional negligence to give the two sides a shot at mediation.
Only two mediation sessions were held, one this past February and one on Aug. 5. "Despite the parties' willingness to mediate, King failed to make any meaningful offer during the mediation," according to a memo by assistant county attorney Joe Richards.
Pasco terminated the agreement on Aug. 5 and filed its lawsuit on Sept. 8.
On Tuesday, Commissioner Ann Hildebrand, who had met with King officials, initially wanted to hold off on continuing with the lawsuit to allow more time for a settlement. "I think ... they would like to have one more shot at revisiting with our staff," she said.
"We gave them that opportunity and they walked out of the room," said County Administrator John Gallagher.
County Attorney Jeff Steinsnyder said there was still plenty of time for the two sides to reach a settlement.
Jodie Tillman can be reached at [email protected] or (727) 869-6247.