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.

Water Rate Increase hits Hillsborough

Tampa Bay Water approves 3-cent rate increase, reservoir expansion

By Craig Pittman, Times Staff Writer
Posted: Jun 20, 2011 11:05 AM

Commissioner Murman quoted in this Times article on Tampa Bay Water rate increase:

CLEARWATER — Tampa Bay Water will raise its rates as it raises the walls of its reservoir, voting Monday for both a 3 cent rate increase and for expanding its reservoir by 3 billion gallons.

The utility’s board also voted to hire a Nebraska-based firm, Kiewit Infrastructure Group, to handle the expansion and repairs to the reservoir’s walls, which have repeatedly cracked.

“This is a historic moment for Tampa Bay Water and for the region,” Pasco County Commissioner Ann Hildebrand, who chairs the wholesale regional utility, said after the vote to expand the 15.5 billion-gallon C.W. Bill Young Reservoir in rural Hillsborough County.

Water rates throughout Pinellas, Pasco and Hillsborough counties would go up by 3 cents per 1,000 gallons of water used, or just under a quarter for the typical user of 8,000 gallons a month. The increase is necessary, according to finance director Koni Cassini, because during the reservoir repair the reservoir will be emptied, and the utility’s Apollo Beach desalination plant will be run more frequently to supply water at a higher cost.

The total price of the repair and expansion of the reservoir is now estimated to be more than $162 million, with $120 million to fix the cracks and another $42 million for the expansion of a facility that originally cost $144 million to build. The utility plans to ask the Southwest Florida Water Management District for financial assistance, although that state agency is facing a 36 percent budget cut mandated by the Legislature.

Some Tampa Bay Water board members had initially questioned the need for expanding the reservoir, but they voted unanimously to approve the expansion. The most vocal critic, St. Petersburg City Councilman Karl Nurse, said he would vote for it because when completed the 18.5 billion-gallon reservoir would lead Tampa Bay Water to be far less likely to use its desal plant, which produces the most expensive water in the system.

However, Nurse and other board members strongly opposed the rate increase included in the $164 million budget for next year, especially since demand for water in the Tampa Bay area has fallen because of the economic slump.

“My constituents are going to ask, ‘How can you justify raising my rates?’ ” Hillsborough County Commissioner Sandra Murman told her fellow utility board members. “We cannot put any more burdens on our rate payers.”

Tampa City Councilman Charlie Miranda warned that if they did not raise the rates a little right now, the reservoir repair cost might force them to raise the rates a lot later and then “the sticker shock to the rate payers is really going to be troublesome.”

The rate increase, raising rates to $2.55 per 1,000 gallons, passed on a 5-3 vote.

At this point the utility staff members hope they will be able to offset at least some of the cost with money from suing the company that designed the reservoir, HDR Engineering. But if that does not cover the cost, then rates may have to go up, with the average user seeing a boost of about $1 a month.

The utility’s general manager, Gerald Seeber, strongly urged the board to approve doing the expansion of the reservoir now even though water demand has dropped. Seeber contended it’s less disruptive to do the expansion work during the repair than to try to do it after it’s fixed; and $42 million is less than the estimated $200 million to $300 million to build a second reservoir.

The utility opened the C.W. Bill Young Regional Reservoir in June 2005 to store water skimmed from the Alafia River, Hillsborough River and Tampa Bypass Canal. The reservoir covers about 1,100 acres in Hillsborough County.

The walls consist of an earthen embankment as wide as a football field at its base, averaging about 50 feet high. An impermeable membrane buried in the embankment prevents leaks.

The embankment’s top layer, a mixture of soil and cement to prevent erosion, began cracking in December 2006. Some cracks were up to 400 feet long and up to 15 1/2 inches deep. Workers patched the cracks, but the patches didn’t last.

An investigation found that water is getting trapped between the soil-cement lining and the membrane. As long as the reservoir is full, the trapped water remains stable. When the utility draws down the reservoir, though, pressure increases on trapped water in some areas, producing cracks and soil erosion.

The cracks have not been deemed a safety hazard, but utility officials say if they don’t fix their underlying cause, conditions could get worse.

However, HDR Engineering says the problem is not that serious and could be solved with a simple monitoring and maintenance program that would cost less than $1 million a year — a contention utility officials say is false.

Now that the board has approved hiring Kiewit, the utility’s staff will begin negotiating a contract with the company. The goal is to get a contractor hired by Aug. 15 so design and permitting can start by Sept. 1 and construction can start by September 2012. The work is likely to last two years.

 

Tagged with: