Pasco okays $400,000 reservoir lawsuit settlement

DADE CITY — Pasco County and King Engineering Associates have settled their nine-year legal fight over the ballooning costs of a sinkhole-plagued reservoir project in Land O'Lakes.

Completed in 2008, the final cost of the reclaimed water reservoir was $22.4 million — almost six times the originally announced price and still more than $8 million above the eventual bid price of $14.1 million. Pasco utility customers paid for three-quarters of the expense, with a $5.6 million Southwest Florida Water Management District grant covering the balance.

Pasco sued King Engineering in 2011, contending the costs escalated because the company was negligent and failed to fully vet the property for potential sinkholes.

"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 (reservoir) significantly and materially more expensive than the amount which King had opined the cost would be as part if its assessment," the county lawsuit contended.

The firm, however, said the county pushed for the site — 35 acres it already owned next to its sewage-treatment plant on the west side of Parkway Boulevard — and ignored the company's advice on seeking grout pricing to deal with potential sinkholes before calculating the cost of the rest of the project. King, meanwhile, filed a third-party claim against its subcontractor, Qore Properties Sciences, which provided geotechnical engineering for the project.

In a mediated settlement approved without comment by county commissioners Dec. 13, the county essentially will receive nearly all of the expenses accrued by outside legal counsel since the dispute began.

The settlement, reached Nov. 28, is confidential. But a memorandum to commissioners from Joe Richards, senior assistant county attorney, said the county will receive $400,000. The county hired the firm of Mills, Pakert and Divers of Tampa in 2007 and spent $419,058 on legal fees.

King Engineering CEO Keith Appenzeller declined to comment on the settlement. The original project and the lawsuit predates four of the five current commissioners, the county administrator and the assistant county administrator overseeing utilities. Only Commissioner Jack Mariano remains in office since the project began. He, too, declined to comment.

The reservoir, announced in 2006, stores up to 100 million gallons of reclaimed water for distribution to customers during the dry season. The state required the county to built the reservoir to help solve environmental violations with its wastewater treatment system.

In 2007, commissioners learned of a series of possible mistakes in planning the project. To save $2 million, the county chose a design without a more protective liner. Later, engineers decided the reservoir needed the liner because of a collapsed embankment and sinkholes, even though the county also had spent substantially on grout.

Two attempts at mediation failed before the county filed suit in 2010.