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.
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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.
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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.
