HRK never installed common dirt protective cover at Piney Point

jsalman@bradenton.comJuly 11, 2012 

PALMETTO -- A protective dirt cover was never installed at the gypsum stack liner used to house dredged material at Piney Point, a common step that might have prevented last year's toxic spill, the Bradenton Herald has learned.

Environmental regulators had ordered the dirt cover during a meeting in 2006 with HRK Holdings LLC, months before the firm purchased Piney Point to store material from the dredging of Berth 12 at Port Manatee, public records show.

But the Florida Department of Environmental Protection waived the stipulation later that year after HRK agreed to assume full financial responsibility should anything go awry, documents show.

Now battling bankruptcy, HRK has filed litigation that pushes blame back to the liner installers and manufacturers for the tear that ultimately spewed 170 million gallons of toxic water into Bishop Harbor.

"I have never heard of one that didn't have a dirt cover," said Thomas Reese, an environmental attorney in St. Petersburg who has been following the Piney Point case. "It provides essential protection from the sun. Basically without it, they crack."

Dirt covers are commonly used to blanket dredging storage liners to protect the material from sun cracks, while also lessening corrosion from rainwater and cushioning contact with heavy equipment, Reese said.

An 11-page administrative agreement signed between HRK and the DEP waived that requirement in August 2006, according to emails and documents obtained by the Herald.

A study later commissioned by HRK found that heat-induced stress cracks had penetrated the gypsum stack liner months before it ever

was filled with water, contributing to the cause of the liner tears.

"The department's planned future placement of protective soil cover over the lined interior slopes and bottom portions of the Piney Point phosphogypsum stack system reservoir compartments is no longer necessary due to the anticipated project and plans for similar or other compatible uses," the administrative agreement states.

A DEP spokeswoman Tuesday said the dredge materials stored inside the stacks were expected to function similar to a soil cover.

The amount of dirt needed to blanket the top of the massive 350-acre structure carried an estimated price tag upwards of $4 million in 2006, when dirt prices were high because of surging new home construction.

The cover also would have left less storage room for dredged material in the 13 million cubic yard reservoir, taking potential profits away from HRK, said Jim Mikes, whose company tried to purchase the Piney Point site from HRK and now is owed $250,000 by the bankrupt firm.

"They basically just dodged the torpedoes full speed ahead," Mikes said. "The liners were designed to have a soil cover placed over them shortly after the installation ... HRK had every reason not to."

The Manatee County Port Authority has been pursuing financial damages from HRK for its role in the dredging of Berth 12, which had months of delays due to leaks in the pipes and storage sites that housed the dredged material at Piney Point, a former phosphate facility.

The dredging officially opened South Port, the focus of a $200 million decade-long expansion allowing for larger ships and cargos. The work was completed in October, but the environmental fallout delayed the project and greatly inflated the overall cost.

An exclusive Herald report last week revealed HRK and DEP officials knew about a 6-inch tear along the seams of the liner stack as early as February 2011, months before the dredging had commenced.

The issue wasn't fully resolved until April 2011, and weeks later a similar tear in the system spilled 2,700 gallons of water a minute into nearby ditches, ultimately seeping into Bishop Harbor, which opens into Tampa Bay.

The causes of both tears were attributed to improper welding and stress cracks that had been building along the seams of the gypsum stack, fanned in part by years of sun baking, studies show.

It's unclear whether the port was ever informed about the initial tear before dredging had begun, but port staff was not included in the email correspondence obtained by the Herald.

Port Manatee officials have declined to comment, citing pending litigation. Manatee County commissioners, who serve as the Port Authority, deny knowledge of any prior tears or structural issues at the facility.

"It was never told to us," Commissioner Carol Whitmore said. "They're just pointing fingers, it sounds like. I know staff would have told us, and if there was any potential liability, we certainly would have heard about it."

The DEP water resource manager involved in the project has not returned phone calls or emails seeking comment.

HRK Chief Executive Jordan Levy also refused to answer questions regarding the dirt cover agreement, and whether the added protection could have prevented the toxic spill.

Before the dredging began, the manufacturers of the gypsum stack assured all parties involved that the chances of a leak were nonexistent, Levy said previously.

"Since the dredging project was completed, HRK has worked closely with world-renowned experts to diagnose the cause of the leak," he told the Herald last week. "Our findings have been universally disappointing in terms of the engineering, construction and quality control of the work performed on the site under the DEP's oversight -- especially when considering the strong representations made to HRK, Port Manatee and Manatee County before the project began."

The losses tied to the spill forced HRK to file for Chapter 11 bankruptcy protection, with a hearing scheduled Thursday morning. In the filing, HRK reported a total debt of $21 million owed to 60 different creditors, according to court records.

The port is seeking repayment from HRK for a $4.8 million settlement it signed with the dredging contractor. At the same time, HRK officials claim the port still owes their company about $1.5 million for the work.

The company also has filed a lawsuit against the manufacturers of the gypsum stack, engineers that installed the system, and the firms that released analysis showing the liners were structurally sound.

Josh Salman, Herald business writer, can be reached at 941-745-7095. Follow him on Twitter @JoshSalman

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