Tampa Bay Water, a regional supplier for three counties on the west coast of Florida, counted on winning $100 million for what it claimed was a faulty reservoir design.
On Tuesday, after a nearly month-long trial, a federal jury disagreed, according to the Tampa Tribune.
The jury did not accept Tampa Bay Water's argument that the reservoir cracked each time it was in use because of design problems by HDR Engineering.
Tampa Bay Water general manager Gerald Seeber told the newspaper that he continues to believe that HDR is liable.
He also said the agency would review its legal options.
HDR attorney Wayne Mason told the paper that the agency can look at its options, "but the court gave us a fair trial and a very clean record."
The 15.5-billion-gallon reservoir went into service in June 2005 and cracks began to appear in its embankment.
HDR Engineering claimed the problem was due to faulty construction, and not the design.
Tampa Bay Water filed its suit against HDR in 2008, and last fall considered a $30 million settlement.
Ultimately, the water supplier rejected the settlement in favor of moving forward with the lawsuit.
The agency is expected to evaluate its legal options at its regular meeting on Monday during an update on the lawsuit, as well as the potential increased budget costs for renovating the reservoir without the jury award that had been sought.
Some $180.92 million is projected as the total budget for the work, according to agency documents.
The proposed 2013 budget currently calls for issuing $51.5 million of revenue bonds to support the work, with another $23.4 million to be issued in the future.
It is not clear if the agency will consider higher bonding amounts now that the court case has ended.
The board's discussion on the budget is on the agenda.
The water agency has $1.05 billion of outstanding revenue bonds.
The bonds are rated AA-plus by Fitch Ratings and Standard & Poor's, and Aa2 by Moody's Investors Service.