In Reversal, Tampa Bay Water Rejects $30M Settlement With HDR
A month after an invalid vote that provided “conditional approval” of a $30-million settlement with HDR Engineering over cracks in its six-year-old reservoir, on Oct. 17 the board of directors of Tampa Bay Water voted unanimously to reject the deal and proceed with its pending lawsuit in federal court.
In September, the board had voted 4-3 to settle with HDR over flaws at the utility’s 15.5-billion-gallon C.W. Bill Young Regional Reservoir. HDR served as the engineer for the $140-million facility, which opened in 2005. Just over 12 months later, significant cracking was discovered in the internal embankments of the reservoir.
After the utility announced the September vote in favor of the settlement, legal advisors informed Tampa Bay Water that any settlement deals required the approval of five board members.
This time, legal advisors suggested the utility could recoup considerably more than the settlement offered.
“Legal advisors estimate Tampa Bay Water could be awarded up to $97 million if successful at trial, which would greatly offset the $121-million cost to renovate the facility,” the utility announced in a press statement. “Without a valid settlement agreement, Tampa Bay Water will now re-open its lawsuit against HDR Engineering Inc.”
The utility further stated that the board now felt the $30-million offer was too low, “is not representative of HDR’s liability and does not represent a good deal for rate payers.”
Tampa Bay Water earlier settled with the project’s contractor, Barnard Construction Co., Bozeman, Mont., for $750,000. The firm remains liable for up to $5 million, depending upon the outcome of the trial, the utility says. It also settled with construction manager Construction Dynamics Group, now part of ARCADIS, for an additional $6 million.
This summer, Tampa Bay Water hired Kiewit Infrastructure Group South with a $162.4-million contract to repair and expand the facility. Of that amount, $121 million is estimated for repairs.
The federal lawsuit had been scheduled to proceed in October, but after the utility had provided “conditional approval” of the $30-million settlement in September, it had asked the judge to hold the case in abeyance until after the Oct. 17 vote.