Source: http://www.tampabay.com, September 20, 2011
By: Craig Pittman
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.