Karl Nurse

By ROB SHAW | The Tampa Tribune

Published: September 20, 2011

For most of the day, Tampa Bay Water thought it had reached a $30 million settlement Monday over cracking issues at the regional reservoir. It was a decision that upset board members on the losing side because they knew it would mean higher bills for ratepayers.

Then, seven hours after issuing a news release about the 4-3 approval, the agency came out with a retraction. It turns out that agency rules require five of the nine members — two were absent Monday morning — to approve such a measure.

Oops.

Board members now will have to reconvene Oct. 17, and the approval is “conditional” until that time. An attorney for Pinellas County, and not Tampa Bay Water, discovered the error.

What remains to be seen is whether the vote on the issue at the C.W. Bill Young Regional Reservoir will change.

Mark Sharpe, who missed the session because he was attending a HART board meeting and didn’t realize a vote was being taken, said he would have voted for the settlement with HDR Engineering Inc., giving it enough votes to pass.

“I don’t see people changing their votes, unless there’s a massive citizen outcry,” said board member Neil Brickfield, who was one of the dissenters. “But I’ve seen stranger things happen.”

The proposed settlement means the lawsuit will go away, but $63 million of problems remain.

* * * * *

The $30 million settlement with the company that helped build the defective reservoir is way short of the expected repair cost, a total that will result in ratepayers paying the bulk of the price to fix it.

The offer left Sandy Murman livid.

It disappointed Susan Latvala, who called it flimsy and inadequate.

Sharpe, a Hillsborough County commissioner, compared it to the ugly process of sausage making.

When all was said and done, however, the directors of Tampa Bay Water seemingly had approved a $30 million settlement with HDR Engineering. At least for a few hours.

The move comes as the agency is in the process of planning to pay $100 million to fix cracking problems that it said were caused by faulty work by HDR and other companies which built the reservoir.

The huge gap between those two sums has many directors worried that water customers will be saddled with making up the difference.

“The ratepayers aren’t at fault,” said Murman, a county commissioner from Hillsborough. “We said all along HDR was at fault. But they’re getting away with $30 million. That’s not right.”

Latvala, a Pinellas County commissioner, agreed.

“I don’t think the settlement is enough,” she said. “I was very disappointed.

“It’s wrong what they did to us,” the Pinellas County commissioner said of HDR. “I think it should have gone to trial. And now the ratepayers are going to be left with the rest of that bill.”

Brickfield, also a Pinellas County commissioner, agreed.

“I didn’t vote for it because I thought it was short,” he said. “We have been told by the attorney what a great case we had.”

“This is just an ugly situation from start to finish. It was a poorly managed project,” Sharpe said. “It never should have been built the way it was in the first place.”

Karl Nurse, Ted Schrader, Ann Hildebrand and Bob Consavlo voted for the settlement.

Jerry Seeber, general manager of Tampa Bay Water, said the agency doesn’t want to get involved in a protracted and costly legal battle.

“I think it’s important for Tampa Bay Water to focus on getting the reservoir fixed,” Seeber said. “We all rely on that every day for the water we use.”

Tampa Bay Water filed a federal lawsuit in 2008 against HDR after cracking was found in the liner of the reservoir.

* * * * *

The trial was to have begun in July, but was delayed until this month. Under terms of the settlement, HDR admits no wrongdoing and must pay the sum within 30 days.

The $30 million settlement is the last piece of the litigation puzzle in the reservoir case. Last year, the agency settled with two other companies — one for $6 million and another for $750,000.

The settlement comes as Tampa Bay Water prepares to undertake a $162 million repair and expansion of the reservoir. Of that total, $100 million is to fix the cracking problem and $62 million is to expand it by 3 billion gallons.

Construction could begin in about a year.

Seeber said it’s too early to tell how much extra customers will have to pay to compensate for the difference between the nearly $37 million in recovered damages and the $100 million price tag for the fix.

Early estimates, he said, are that rates might increase from 10 cents to 15 cents per thousand gallons.

Legal costs alone have soared to $8 million related to the reservoir, according to Seeber. Half of that amount is just for expert witnesses.

Deal to settle Tampa Bay Water reservoir lawsuit comes up one vote short

By Craig Pittman, Times Staff Writer
In Print: Tuesday, September 20, 2011

A sharply divided Tampa Bay Water board voted Monday to settle its lawsuit against the company that designed its flawed reservoir, with HDR Engineering handing over $30 million — far less than the cost of a repair, which means the ratepayers would likely pick up the rest of the tab.

The regional utility’s management announced the settlement in a news release, and an HDR executive hailed it as the best possible solution.

But there was a problem. The settlement passed by a vote of 4-3 — and it turns out that’s not enough.

Late Monday, two Pinellas County commissioners who were on the losing side of the vote pointed out what was wrong: The rules governing Tampa Bay Water require at least five of the board’s nine members to ratify any legal settlement.

Votes to approve the settlement fell one short, so “it doesn’t count,” said Pinellas Commissioner Susan Latvala.

Latvala and Commissioner Neil Brickfield had voted against the settlement and then heard about the problem from county attorneys who were familiar with how Tampa Bay Water was set up, she said.

As a result, the board will have to vote on the proposed settlement again at its Oct. 17 meeting, according to spokeswoman Michelle Biddle Rapp.

But this time it will be different. Monday’s decision to settle the case, as with all previous discussions of the lawsuit, took place behind closed doors, thanks to an exemption in Florida’s open government law. No one in the public knew the terms of the settlement discussions in advance. Now they do.

“Stay tuned for another installment,” joked Latvala, who has seen the utility stumble repeatedly over glitches with its desalination plant and its relations with other government agencies.

For nearly two years, Tampa Bay Water officials have said they hoped the companies that designed and built the reservoir would bear most, if not all, of the cost of fixing its cracks.

Two of the contractors that worked on the reservoir had previously settled the utility’s claims for $6.75 million. Added to the proposed settlement with HDR, that makes $36.75 million in damages — which falls far short of the repair cost, estimated at $121 million.

The decision on how to pay for the rest — and whether it will mean a rate hike — will come next year, said Tampa Bay Water general manager Gerald Seeber. The staff is predicting rates might go up 10 to 15 cents per thousand gallons of water used. The average Tampa Bay area household uses about 8,000 gallons, so that would be 80 cents to $1.20 per month on the average bill.

Latvala, Brickfield and Hillsborough County Commissioner Sandy Murman voted to oppose the settlement, while St. Petersburg City Council member Karl Nurse, Pasco County Commissioners Anne Hildebrand and Ted Schrader and New Port Richey Mayor Bob Consalvo voted to go ahead with it.

Two members weren’t there: Tampa City Council member Charlie Miranda was recovering from surgery and Hillsborough County Commissioner Mark Sharpe was attending a Hillsborough Area Regional Transit committee meeting. Sharpe could not be reached for comment, but Miranda said he’d be at the October meeting “even if I have to find someone to drive me.”

Nurse said he voted for the settlement because he was worried that even if Tampa Bay Water were to win, HDR would appeal and drag the case out for years. Hildebrand said any rate increase would be “just pennies.”

But Brickfield predicted water customers “are going to feel a lot like me — not happy.”

The utility opened the 15.5 billion-gallon C.W. Bill Young Regional Reservoir in June 2005 as a place to store water skimmed from the Alafia River, Hillsborough River and Tampa Bypass Canal. The embankment’s top layer is a mixture of soil and cement to prevent erosion. That’s what cracked in December 2006. Some cracks were up to 400 feet long and up to 15½ inches deep. Workers patched the cracks, but the fix didn’t last.

Last month Tampa Bay Water approved a contract with Kiewit Infrastructure South to repair the reservoir and also boost its capacity by 3 billion gallons for $156 million. The company has promised to finish in two years — during which the reservoir will be drained, forcing the utility to use its desalination plant more.

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

Sandy Murman

Tampa Bay Water – Reservoir