Tampa Bay Water should reject the $30 million settlement to end the lawsuit over its reservoir when its board meets today. With repairs estimated to cost $100 million, the proposed payout is nowhere near reasonable. The utility has long maintained it has a strong case against HDR, the company that designed the reservoir. And given the small sum on the table, taxpayers would be better served by having this case run its course so responsibility and liability can be placed on the appropriate party.
The utility's nine-member board fell one vote short last month of accepting the deal. Those who backed it seemed to be driven by expediency. The desire to put this episode in the past is understandable, as is the enticement of walking away with a sizeable sum while avoiding the uncertainty of trial and years of continued litigation.
But Tampa Bay Water, the supplier of water to Pinellas, Hillsborough and Pasco counties, sued HDR Engineering in 2008, alleging that the company's flawed design led to cracking in the 15 billion-gallon reservoir soon after it opened in 2005. The utility has opted for a permanent fix that calls for installing a drain in the embankment and replacing the cement face. Over the next three years, the utility will spend about $162 million to fix the reservoir and expand its capacity by 3 billion gallons.
A settlement from HDR certainly would soften the impact of having to raise water rates for any reservoir work. But $30 million is inadequate when the central issue in dispute is whether the design resulted in the need for the $100 million repair job. And where the $30 million figure came from is anybody's guess. According to Tampa Bay Water, that amount was proposed by the mediator, not the utility's staff.
There is more at stake here than merely coming to an accommodation. Tampa Bay Water is going ahead with the repairs regardless of how much it obtains through the lawsuit. So apportioning blame is critically important. That will affect what residents will pay to return the reservoir to operation. Tampa Bay Water already has shelled out $8 million in legal and expert witness fees and this is no time to take pennies on the dollar to walk away.
The board needs to apply a higher standard when it reconsiders the matter today. Its staff is comfortable pursuing the lawsuit, and while resolving it would be nice, it cannot come at just any expense. Taxpayers had every reason to expect that the reservoir would not have these major problems in its first few years. Pursuing the claim will shed light on the design and on the utility's oversight process.