CC SUM 2011 03 28
CHANHASSEN CITY COUNCIL
REGULAR MEETING
SUMMARY MINUTES
MARCH 28, 2011
Mayor Furlong called the meeting to order at 7:05 p.m. The meeting was opened with the
Pledge to the Flag.
COUNCIL MEMBERS PRESENT:
Mayor Furlong, Councilwoman Ernst, Councilman
Laufenburger, Councilwoman Tjornhom, and Councilman McDonald
STAFF PRESENT:
Todd Gerhardt, Kate Aanenson, Paul Oehme, Todd Hoffman and Roger
Knutson
PUBLIC ANNOUNCEMENTS:
None.
CONSENT AGENDA: Councilman Laufenburger moved, Councilman McDonald
seconded to approve the following consent agenda items pursuant to the City Manager’s
recommendations:
a. Approval of Minutes:
-City Council Work Session Minutes dated March 14, 2011.
-City Council Verbatim and Summary Minutes dated March 14, 2011.
Receive Commission Minutes:
-Park and Recreation Commission Verbatim and Summary Minutes dated February 22,
2011.
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b. Approval of Three-Year Contract for July 4 Fireworks, Pyrotechnics Display Inc.
Resolution#2011-17:
c. Approve Resolution Accepting Donation from KleinBank for
Summer Consent Series.
Resolution#2011-18:
d. 2011 Street Improvement Project 11-01: Call Assessment
Hearing.
f. Approval of Arbor Day Poster Contest Winners.
g. Approval of Liquor License Renewals.
h. Approve Purchase Agreement, Riley Ridge Park, U.S. Home Corporation.
All voted in favor and the motion carried unanimously with a vote of 5 to 0.
1e. 2011 SEALCOATING PROJECT 11-04: AWARD CONTRACT.
City Council Summary - March 28, 2011
Councilwoman Ernst asked staff to explain how much money the City has saved by collaborating
with other communities in the sealcoating program.
Resolution#2011-19: Councilwoman Ernst moved, Councilman Laufenburger seconded
that the City Council awards the following contracts for the 2011 Sealcoat Project:
1) Allied Blacktop Company for roadway sealcoating in the amount of $183,712.61.
2) Twin City Striping for pavement striping in the amount of $6,705.50.
3) Fahrner Asphalt Sealers, LLC for pavement cracksealing in the amount of $40,000.00.
4) Pearson Bros. Inc for street sweeping in the amount of $13,200.00.
All voted in favor and the motion carried unanimously with a vote of 5 to 0.
VISITOR PRESENTATIONS:
None.
LAW ENFORCEMENT/FIRE DEPARTMENT UPDATE.
Sgt. Peter Anderley reminded
people that with the warmer weather people are getting out jogging, bicycling, skateboarding, etc
and to slow down in their neighborhoods. He asked that people be careful on area lakes, and
provided an update on the flooding situation. Councilwoman Tjornhom asked Sergeant
Anderley to provide an update on rules governing solicitation in the city. Mayor Furlong asked
about winter parking rules after April 1 if there’s a snow storm that needs plowing. Chief Roger
Smallback provided the monthly and year-to-date numbers on calls for service, discussed the
flooding and water emergency procedures and protocols. Councilman Laufenburger asked for
the final disposition on the gas leak at Chanhassen Elementary.
UPDATE ON CHANHASSEN HILLS SEWER BACKUP.
City Manager Gerhardt provided
an update on the second review by Travelers Insurance Company denying all claims. As a good
will gesture staff recommended a $2,500 reimbursement to the homeowners affected by the
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February 23 event. As a part of that offer the City would expect those individuals accepting
the offer would sign a full waiver and release of all claims. Mayor Furlong opened the meeting
for public comment.
Amy Powell, 8581 Chanhassen Hills Drive South showed pictures of the damage and restoration
work done in her basement and discussed the differences between this event and the watermain
break in 2010 which is the basis for the $2,500 payment. She asked that these differences be
considered in any kind of settlement offer. Glen Gerads, 1071 Barbara Court explained that he
has been employed in the municipal water, waste water field for over 30 years and is presently
the Assistant Utilities Superintendent for the City of Bloomington. He explained that regardless
of liability this event is a failure of both the water system and the waste water system and asked
that the City treat it as the unique event that it is and not compare it to other watermain and sewer
line breaks. He expressed concern with Travelers Insurance’s comment about the water pipe
freezing, described services offered by the City of Bloomington in similar cases, that the $2,500
amount is wholly inadequate and asked the City Council approve a reimbursement similar to
Edina in which they offered up to $15,000. Veronica Scholz, 1070 Lake Susan Drive expressed
concerns about fairness, a lack of due diligence and the hidden costs that the residents are all
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City Council Summary - March 28, 2011
going to incur as part of this event. A.J. Dordel, 1030 Lake Susan Drive explained the extent of
damage in his full sized, fully furnished basement.
Mayor Furlong closed the public comment portion of the meeting. Councilwoman Ernst asked
about the extent of the review by Travelers insurance adjusters and city staff. Councilman
Laufenburger clarified his belief that the number of affected homes is 31 or 32 and not the 27
proposed by staff. Councilman McDonald asked for clarification of where the money to pay
claims would be found in the budget, it’s affect on rate increases and Travelers’ claim that the
City was not negligent. Councilwoman Tjornhom asked whether this incident was an anomaly
or trend within the city. Mayor Furlong asked staff to provide background information on the
criteria used for the proposed $2,500 reimbursement. After comments Councilwoman Ernst
made a motion to table this item, asking that more information be provided. There was no
second and the motion failed for lack of a second. After comments and discussion by council
members Councilwoman Ernst stated she would like to see what was submitted to the insurance
company as a part of the claim, and any data that shows watermain breaks in the same area.
After council comments and discussion Councilwoman Ernst and Councilman McDonald asked
that staff provide the following information: claims from individual homeowners to the City,
documentation submitted by the City to Travelers Insurance, and documentation submitted by
Travelers Insurance to the City. Mayor Furlong suggested residents submit information on
whether or not they had insurance and how much was covered before explaining that no action
was needed on this item.
(Glen Gerads submitted Minutes from the Edina City Council meeting dated February 11,
2002 as Exhibit A and League of Minnesota Cities Risk Management Information
regarding Optional “No-Fault” Sewer Backup Coverage as Exhibit B.)
The City Council took a short recess at this point in the meeting.
TH 101 & PLEASANT VIEW ROAD INTERSECTION PROJECT 11-05: RECEIVE
FEASIBILITY STUDY; AUTHORIZE PREPARATION OF PLANS &
SPECIFICATIONS.
Councilman McDonald recused himself prior to Paul Oehme presenting the staff report on this
item. Councilwoman Tjornhom asked about a barrier or buffer between the trail and intersection
turn lanes and municipal consent from Eden Prairie. Councilman Laufenburger asked about
comments from property owners who attended the neighborhood meeting, clarification of the
easement acquisition process, and the costs associated with delaying the project until spring of
2012. Mayor Furlong asked for clarification of the State’s grant approval criteria, asked staff to
check with the County regarding the safety improvements made at Powers Boulevard and Lake
Lucy Road and asked the Park and Rec Director to explain the importance of making these trail
connections.
Resolution#2011-20: Councilwoman Ernst moved, Councilwoman Tjornhom seconded
that the City Council approve the feasibility report and authorize the preparation of plans
and specifications for TH 101 and Pleasant View Road Intersection and Trail
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City Council Summary - March 28, 2011
Improvements Project 11-05. All voted in favor and the motion carried unanimously with
a vote of 4 to 0. (Councilman McDonald recused himself from this item.)
APPOINTMENT TO PARK AND RECREATION COMMISSION, ENVIRONMENTAL
COMMISSION AND SENIOR COMMISSION.
Mayor Furlong moved, Councilwoman Ernst seconded that the City Council appoint the
following commission members:
Senior Commission:
Carol Buesgens, Terry Grathen-3 year terms, Tom Wilson-2 year term.
Environmental Commission:
Katie Mahannah, Matthew Myers-3 year terms.
Park and Recreation Commission:
Steve Scharfenberg, Peter Aldritt and Brent Carron-3 year
terms.
All voted in favor and the motion carried unanimously with a vote of 5 to 0.
COUNCIL PRESENTATIONS:
Councilman Laufenburger noted that in conjunction with the
Chanhassen Dinner Theater’s production of Jesus Christ Superstar they were seeking people who
are enhancing life in the community as nominations for Community Superstars and an
announcement that the Chanhassen Red Birds are starting their second season this year. He
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invited the public to attend the First Annual Red Bird Rally on Saturday, April 9 at the
Chanhassen Legion from 7:00 to 9:00 p.m. Mayor Furlong discussed the Chamber of Commerce
Breakfast with the Mayor presentation and noted that Mr. Gerhardt will be distributing a ballot
for the Rotary Club’s Distinguished Service Award.
ADMINISTRATIVE PRESENTATIONS:
Todd Gerhardt thanked Mayor Furlong for his
great presentation at the Breakfast with the Mayor.
CORRESPONDENCE DISCUSSION.
Councilman Laufenburger asked about the letter from
the Redistricting Committee and clarification of the role the Chanhassen City Council plays, if
any, in the redistricting as a result of the census. Mayor Furlong asked that the issue of
redistricting be put on a work session in April for council discussion.
Councilman McDonald moved, Councilwoman Ernst seconded to adjourn the meeting. All
voted in favor and the motion carried unanimously with a vote of 5 to 0. The City Council
meeting was adjourned at 9:25 p.m.
Submitted by Todd Gerhardt
City Manager
Prepared by Nann Opheim
4
Feb. 11, 2002 Edina City Council Special Meeting Minutes Page 1 of 4
MINUTES ji f ►
OF THE SPECIAL MEETING OF THE
EDINA CITY COUNCIL HELD AT CITY HALL
FEBRUARY 11, 2002
6:00 P.M.
ROLLCALL Answering rollcall were Members Housh, Hovland, and Mayor Pro Tern Kelly.
Member Masica entered the meeting at 6:05 p.m.
Mayor Pro Tern Kelly stated the purpose of the special meeting was for the Council to consider
the resolution offering up to $10,000 in reimbursement for structural damage and sanitization
to the homeowners who experienced damage from the January 6, 2002, watermain break that
surcharged the sanitary sewer system.
Manager Hughes noted that as directed by Council staff had prepared and sent a resolution
allowing up to $10,000 in reimbursement for structural and sanitization repairs for the
homeowners affected by the watermain break. Mr. Hughes reported he had met with an
indepencdent adjuster who was ready to start work just as soon as ire was given the go ahead.
Member Hovland asked if there was a need to address the type of adjustment standard used.
Member Housh said that he thought it was clear that homeowners' coverage would be utilized
first. The City would then reimburse losses up to $10,000 including homeowners' deductibles.
Member Hovland asked the other members of the Council if they felt that $10,000 was
adequate in light of the amount of loss some homeowners suffered. He added he felt it
worrisome that some people had no coverage at all. Member Hovland said if a natural
disaster happened FEMA would be available to assist people. However, in this tragic
unfortunate accident that was no fault of either the City or homeowners, there was no place to
go for help.
Mayor Pro Tern Kelly agreed, but added that according to the City Attorney there was a fine
line of what the city would be allowed to reimburse. He added that he would be worried that
homeowners would not pursue their own option (insurance and litigation if necessary) if the
City offered a dollar for dollar reimbursement. Mayor Pro Tem. Kelly added it would be
difficult to depart from the industry standard of $10,000 set by the League of Minnesota Cities
Insurance Trust.
Member Masica stated she would like to know if the proposed $10,000 would cover the cost of
structural repair and sanitization. If not, then she said she would consider increasing that
amount.
Member Housh asked how many times this type of incident has happened. Mr. Hughes
outlined the following occurrences:
• 1987 after severe rains about 1000 homes were damaged;
• 1994 - 70' S watermain be s rchaffec� theanitry sewer, 15 to 20
homes involve ; i gation s owe e ciy no e neg igen ;
• 1997 after severe rains caused surcharging of sanitary sewer approximately 75-
100 homes were affected and none litigated.
Mr. Hughes added that on an on -going basis between three and five homes are affected
annually. Usually the cause is a service line plug, but sometimes there is a plug in the main.
He noted that Mr. Gulbronsori s incident was a plug in the main.
Member Housh said he was comfortable with the $10,000 reimbursement. However, he
expressed concern with linkage of this occurrence with any future incidents. Member Housh
said he knew authorizing the reimbursement could be brought up as a precedent. If a larger
reimbursement were to be offered now, there would be a greater issue in the future.
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Feb. 11, 2002 Edina City Council Special Meeting Minutes Page 2 of 4
Member Kelly agreed with Member Housh, adding he was very concerned about adhering to
the statutory authority as outlined by the City Attorney.
Member Masica stated she felt the reimbursement met the public purpose test especially when
restricted to sanitization and structural repairs. She stated the City must strongly market to
our homeowners and businesses, the need for them to insure themselves against this type of
damage.
Member Hovland stated while he was mindful of the City Attorney's concern, he was still
worried about the $10,000 cap on the proposed reimbursement. He said he viewed the
Interlachen break as a unique incident. Member Hovland stated he felt that a communication
campaign would keep the policy from being precedent setting He said he would be
comfortable with a $10,000 limit for any long -term policy, but at the current time he still felt
the needs were greater.
Member Masica suggested increasing the limit to $15,000 for this unique situation while still
requiring the funds e spent on sanitization and structural repair.
Public Comment
LeeAnn Gustafson, 1 Cooper Avenue, stated she had been through the process of adjusting
with her insurance company. Ms. Gustafson said that the adjuster used a software program
that allowed so much for each damaged item based upon size, style, age, etc. Her contractors
use the same program in estimating costs. Ms. Gustafson pointed out that $10,000 may be
inadequate to cover structural and sanitization costs because the homes that have sustained
damage are large.
Karen Wermager, 3 Cooper Avenue, referred to the letter she had submitted offering an
amendment to the proposed draft resolution prepared by the City Attorney. Ms. Wermager
said her estimated clean up was approximately $24,000. She added as a homeowner she had
done the best she could and urged the Council to consider a larger amount of reimbursement.
Terrie Rose, 5001 Interlachen, said she appreciated the Council's sympathy and concern. She
asked how the reimbursement would be delivered, meaning how would residents document
their expenses. Continuing, Ms. Rose expressed her concern over damaged landscaping. She
pointed out her home was only two years old. Mr. Hughes explained the City would hire an
independent adjuster who would work with the homeowners. Member Housh suggested Ms.
Rose provide the City with copies of her invoices. Ms. Rose concluded that when she
previously asked for an emergency response team, that even a brochure handed out to
residents telling them where to call to begin the clean -up process, should be available.
Carl Gulbronson 5 Cooper Avenue expressed concern that the language in the proposed
resolution "Section 3" would exclude him from recovering the cost of his lost boiler. Council
discussed the issue and directed City Attorney to amend Section 3 to reflect this area of
concern.
Tom Wesley, 5633 Interlachen Circle, explained he also supported increasing the maximum
amount of reimbursement. Mr. Wesley stated he has a lift station in his front yard that was
damaged and needed replacing and the current language in Section 3 would not help him with
that expense. Council directed the City Attorney to include sanitary sewer systems in Section
3.
Mayor Pro Tern Kelly declared the hearing closed at 6:40 p.m.
Members Housh, Masica and Hovland all stated they would agree to increase the maximum
reimbursement to $15,000. Mayor Pro Tern Kelly concurred with this suggestion. He told the
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Feb. 11, 2002 Edina City Council Special Meeting Minutes Page 3 of 4
residents he felt the Council was being extremely generous with them and noted that it
probably would be rare to receive this same treatment in another city.
Member Hovland introduced the following resolution and moved its adoption:
RESOLUTION NO. 2002-15
PROVIDING FOR REIMBURSEMENT FOR DAMAGES TO
RESIDENCES AS A RESULT OF BACKUP OF SANITARY
SEWER SYSTEM BY A SURCHARGE FROM WATER MAIN
BREAK
BE IT RESOLVED by the City Council of the City of Edina, as follows:
SECTION 1. RECITALS. The City owns and operates a water utility and a sanitary sewer
utility. On January 6, 2002 a break in a water main located on Interlachen Boulevard in the
vicinity of Cooper Avenue resulted in a backup in the sanitary sewer system in homes in
the vicinity due to "surcharging" caused by the water main break (the "Event "). Owners of
homes damaged by the Event have submitted claims to the City seeking reimbursement
from the City for their damages. The City's liability insurance carrier has reviewed the
Event and denied the claims because of an absence of showing of negligence on the part of
the City. On January 15, 2002 and on February 5, 2002 the City Council took testimony
concerning the Event and the damages to homes caused by the Event. Many of the
homeowners damaged by the Event do not have insurance coverage for sewer backups or, if
they have insurance coverage, have incurred damages in excess of coverage limits.
SECTION 2. FINDINGS The City Council believes that the Event is a unique event that
has resulted in a hardship to the owners and residents of homes in which the sanitary sewer
backup occurred, and that there is a potential public health and safety hazard to the City if
the damaged homes are not properly cleaned, sanitized and repaired. Because of either a
lack of insurance coverage or being underinsured, certain homeowners do not have the
financial means to properly clean, sanitize and repair the damage. The City Council
believes that because of the uniqueness of the Event and the potential health and safety
hazard, some form of City assistance to the owners of the residences damaged by the Event
is appropriate.
SECTION 3. COSTS ELIGIBLE FOR REIMBURSEMENT The City Council hereby
approves reimbursement to homeowners for damages caused by the Event not covered by
the homeowner's property insurance in the amount of up to $15,000 per home. Such
reimbursement shall cover costs of clean up and sanitation of the home, costs of the
disposal of damaged items, losses from damage to carpets, heating and air conditioning
equipment, plumbing and sanitary sewer systems, hot water heaters and water softeners,
and losses from damage to sheet, rock, wall board and paneling. Costs of replacement or
sanitizing of rugs and furniture and of other contents damaged by the Event shall not be
reimbursed. Homeowners whose property insurance provided coverage for damages from
the Event shall be eligible for reimbursement for any deductible amount paid by the
homeowner subject to the conditions established herein.
SECTION 4 ADJUSTMENT AND PAYMENT OF CLAIMS The City Manager is
authorized to retain an independent adjuster to evaluate claims to determine losses to be
reimbursed by the City within the conditions set forth in Section 3 hereof using the same
standards that would be used by an insurance company in adjusting claims for property
damage. The costs of any reimbursement and of the independent adjuster shall be paid
from City utility reserves.
SECTION 5 REIMBURSEMENT PROVIDED ON NO FAULT BASIS; NO ADMISSION
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Feb. 11, 2002 Edina City Council Special. Meeting Minutes Page 4 of 4
OF LIABILITY The reimbursement for damages caused by the Event authorized to be paid
is being provided on a "no fault" basis by the City and it shall not be a condition of such
reimbursement that homeowners receiving reimbursement provide a release of liability to
the City. Any reimbursement for damages caused by the Event paid by the City shall not in
any manner constitute an admission of liability for such damages on behalf of the City and
such reimbursement shall only apply to this Event and not to any other damage caused by
other sanitary sewer backups in the City.
Dated: February 11, 2002. Member Housh seconded the motion.
Rollcall:
Ayes: Housh, Hovland, Masica, Kelly
Resolution passed.
There being no further business on the Council Agenda, Mayor Pro Tern Kelly declared the
meeting adjourned at 6:45 P.M.
City Clerk
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ca
OF CONNECTING & INNOVATING
MINNESOTA SINCE 1913
1,ITIES
RISK MANAGEMENT INFORMATION
OPTIONAL "NO- FAULT"
SEWER BACKUP COVERAGE
The League of Minnesota Cities Insurance Trust (LMCIT) offers property /casualty member cities
"no-fault" sewer backup coverage. This optional coverage will reimburse a property owner for
clean -up costs and damages resulting from a city sewer backup or from a city water main break,
irrespective of whether the backup was caused by city negligence.
The "no- fault" sewer backup coverage option is intended to:
• Reduce health hazards by encouraging property owners to clean -up backups as quickly as
possible.
• Reduce the frequency and severity of sewer backup lawsuits (i.e. property owners may be less
inclined to sue if they receive conciliatory treatment at the time of the backup).
• Give cities a way to address the sticky political problems that can arise when a property owner
learns the city and LMCIT won't reimburse for sewer backup damages because the city wasn't
negligent and therefore not legally liable.
Many cities and their citizens may find this coverage option to be a helpful tool. However, it's
also important to realize it's not complete solution to sewer backup problems, and not every
possible backup will be covered.
Which sewer backups are covered?
The "no- fault" coverage would reimburse the property owner for sewer backup damages or water
main breaks, regardless of whether the city was legally liable, if the following conditions are met:
• The backup must have resulted from a condition in the city's sewer system or lines. A backup
caused by a clog or other problem in the property owner's own line would not be covered.
• It's not a situation that is specifically excluded in the coverage.
• The coverage limit has not been exceeded.
Which situations are excluded?
The "no- fault" coverage will not apply in several "catastrophic" type situations. Specifically,
these are:
This material is provided as general information and is not a substitute for legal advice.
Consult your attorney for advice concerning specific situations.
LEAGUE OF MINNESOTA CITIES 145UNIVEMITYAVF.WEST nicwe (651) 281-1200 FAx: (651) 281-1298
INSURANCE TRUST ST. PAUL. MN 55103 -2044 TOLL FREE: (800) 925 -1122 WEB: W`WW.LMC.URG
Sewer Toolkit
Other Resources - 14
Any event, weather - related or otherwise, for which FEMA assistance is available;
Any interruption in the electric power supply to the city's sewer system or to any city sewer lift
station which continues for more than 72 hours; or
Rainfall or precipitation that exceeds the amount determined by the National Weather Service
to constitute a 100 -year storm event.
What costs would be covered?
The coverage would reimburse the property owner for the cost of cleaning up the backup, and for
any damage to the property, up to the coverage limit. For purposes of the city's deductibles,
claims under the no -fault coverage are treated as liability claims, so the same per - occurrence
and /or annual deductibles will apply.
However, there are certain costs that would not be reimbursed under the no -fault coverage:
• Any costs which have been or are eligible to be covered under the property owner's own
homeowner's or other property insurance; and
• Any costs that would be eligible to be reimbursed under an NFIP flood insurance policy,
whether or not the property owner actually has NFIP coverage.
What is the coverage limit?
The basic limit is $10,000 per building per year. The city also has options to purchase additional
limits of $25,000 or $40,000 per building. For purposes of the limit, a structure or group of
structures that is served by a single connection to the city's sewer system will be considered a
single building.
Only true "no- fault" claims are counted toward the limit. Claims for damages caused by city
negligence, for which the city would be legally liable in any case, are not charged against that
limit.
What does it cost?
The premium charge is a percentage of the city's municipal liability premium:
• 8.5% for the $10,000 limit;
• 10.0% for the $25,000 limit; or
• 12.5% for the $40,000 limit.
Because the LMCIT Board's intent is that this coverage be self - supporting, charges will be
continually monitored and, if necessary, adjusted in the future.
Is every city automatically eligible?
No. To be eligible, the city must meet these underwriting criteria:
Sewer Toolkit
Other Resources - 15
• The city must have a policy and practice of inspecting and cleaning its sewer lines on a
reasonable schedule.
• If there are any existing problems in the city's system which have caused backups in the past
or are likely to cause backups, the city must have and be implementing a plan to address those
problems.
• The city must have a system and the ability to respond promptly to backups or other sewer
problems at any time of the day or week.
• The city must have in place an appropriate program to minimize stormwater inflow and
infiltration.
• The city must have in place a system to maintain records of routine sewer cleaning and
maintenance, and of any reported problems and responses.
When establishing these criteria, the goal of LMCIT was to focus on reasonableness rather than on
creating specific standards. The intent isn't to set an arbitrary requirement that sewers be
inspected and cleaned every six months, every three years, every five years, etc. What makes
sense in one city with some older and sometimes sagging
clay lines probably wouldn't make sense in a city with. More Information
newer plastic lines, and vice versa. From the underwriting For assistance in developing sewer .
standpoint, the real concern is that the city has considered policies, practices, and schedules,
its own situation and developed policies, practices, and please see the Sewer Toolkit
schedules that make sense for its own situation. IL
How would the "no- fault" coverage work if a sewer backup was caused by city
negligence, and where the city was legally liable for the resulting damages?
If the situation isn't one where the "no- fault" coverage applies, the city's LMCIT liability
coverage would respond just as it does now. That is, LMCIT would investigate and if necessary
defend the claim on the city's behalf, and would pay the resulting damages if in fact the city is
legally liable for those damages.
The same would be true for damages that exceed the $10,000 no -fault limit, or for a subrogation
claim against the city by the homeowner's insurance company. The city's existing LMCIT
liability would respond just as it does now.
What's the legal basis for this coverage? Wouldn't it be a gift of public funds to
pay for damages the city isn't legally liable for?
First, as noted earlier, one goal is to help reduce health hazards by encouraging prompt clean -ups
That's clearly a public purpose and in the public interest.
Second, the law and facts surrounding most sewer backup claims are rarely so clear that the
liability issue is entirely black and white. There's virtually always a way that a claimant's attorney
can make some type of argument for city liability. Having this coverage in place should help
eliminate the need to spend public funds on litigation costs in many of these cases.
Sewer Toolkit
Other Resources - 16
Finally, part of the process.for putting the coverage in place is for the city council to pass a formal
resolution that makes this no -fault sewer backup protection part of the agreement between the city
and the sewer customer. The idea is that by paying their sewer bill, the sewer user is purchasing
not just sewer services but also the right to be reimbursed for certain specified sewer backup costs
and damages. In other words, the basis for the no -fault payments to the property owner would be
the contract between the city and the sewer user.
How do we put coverage in place?
Contact your LMCIT underwriter for an application. If the
city qualifies for coverage, we'll send the city a formal
quote, along with a model resolution. To put coverage in
place, the city council must formally pass that resolution,
and send a copy to LMCIT.
If the city decides to add this coverage, it will also be
important to make sure citizens know about it. LMCIT can
Your League Resource
Contact your LMCIT underwriter at
651 - 281 -1200 or 800 - 925 -1122 for
more information about the "no-
fault" sewer backup coverage.
also provide models for a press release, newsletter article, utility bill insert, etc.
Pete Tritz 06/10
Sewer Toolkit
Other Resources - 17
COMPREHENSIVE MUNICIPAL COVERAGE
No -Fault Sewer Back -up and Water Main Break Coverage Endorsement ($10,000 Limit)
Section I, Coverage A, Municipal Liability Coverage, is amended to include no -fault sewer back -up and
water main break coverage as outlined below.
1. No -fault sewer back -up coverage
a. If all of the following four conditions are met, LMCIT will pay for claims presented by the city for
sewer back -up damage to property of others which was not caused by city negligence:
(1) The sewer back -up resulted from a condition in the city's sewer system;
(2) The sewer back -up was not the result of an obstruction or other condition in sewer pipes or
lines which are not part of the city's sewer system or which are not owned or maintained by the
city; and
(3) The sewer back -up was not caused by or related to a catastrophic incident.
(4) The date of the occurrence giving rise to the claim for damages must be on or after the
retroactive date shown on this endorsement.
b. However, LMCIT will not pay for any damages or expenses:
(1) Which are or would be covered under a National. Flood Insurance Program flood insurance
policy, whether or not such insurance is in effect; or
(2) For which the property owner has been reimbursed or is eligible to be reimbursed by any
homeowners' or other property insurance.
2. No -fault water main break coverage.
LMCIT will pay for claims presented by the city for water main break damage to property of others
which was not caused by city negligence. But LMCIT will not pay for any damages or expenses for
which the property owner has been or is eligible to be reimbursed by any homeowners' or other
property insurance.
3. Definitions
For purposes of this endorsement, the following definitions apply.
a. Catastrophic incident means any of the following:
(1) Any weather- related or other event for which FEMA (Federal Emergency Management
Administration) assistance is available;
Sewer Toolkit
Other Resources - 18
(2) Any interruption in the electric power supply to the city's sewer system or to any city sewer lift
station which continues for more than 72 hours; or
(3) Rainfall of precipitation which exceeds the amount determined by the National Weather
Service to constitute a 100 -year storm event.
b. Sewer back -up damage means damage to property, including removal and clean-up costs, resulting
from a sewer back -up.
c. Water main break damage means damage to property, including removal and clean-up costs,
resulting from the rupture of a city water main, line, or pipe.
4. Limits
a. LMCIT will not pay more than $10,000 for sewer back -up damage to any building under this
endorsement, regardless of the number of occurrences or the number of claimants. For purposes of
this limit
(1) A structure or group of structures served by a single connection to the city's sewer system is
considered a single building.
(2) If a single structure is served by more than one connection to the city's sewer system, the
portion of the structure served by each respective connection is considered a separate building.
b. LMCIT will not pay more than $10,000 for water main break damage to any claimant, regardless
of the number of occurrences or the number of properties affected.
c. LMCIT will not pay more than $250,000 for water main break damage resulting from any single
occurrence. All water main break damage which occurs during any period of 72 consecutive hours
is deemed to result from a single occurrence.
If the total water main break damage for all claimants in a single occurrence exceeds $250,000, the
reimbursement to each claimant will be calculated as follows:
(1) A preliminary reimbursement figure is established for each claimant, equal to the lesser of the
claimant's actual damages or $10,000.
(2) The sum of the preliminary reimbursement figures for all claimants will be calculated.
(3) Each claimant will be paid a percentage of his or her preliminary reimbursement figure, equal
to the percentage calculated by dividing $250,000 by the sum of all claimants' preliminary
reimbursement figures.
5. Deductibles
The amount LMCIT pays for sewer back -up damages or water main break damage under this
endorsement is subject to the Municipal Liability Deductible shown in the Municipal Liability
Declarations or the General Annual Aggregate Deductible if any shown in the Common Coverage
Declarations.
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For purposes of the Municipal Liability Deductible, all claims for sewer back -up damages which are
covered under this endorsement, which occur within a 72 hour period, and which result from or are
related to the same condition or conditions in the city's sewer system are deemed to be a single
occurrence; and water main break damage which is covered under this endorsement and which occurs
during any period of 72 consecutive hours is deemed to be a single occurrence.
6. Retroactive Date
The retroactive date for this endorsement is
All other terms and conditions remain unchanged.
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COMPREHENSIVE MUNICIPAL COVERAGE
No -Fault Sewer Back -up and Water Main Break Coverage Endorsement ($25,000 Limit)
Section I, Coverage A, Municipal Liability Coverage, is amended to include no -fault sewer back-up and
water main break coverage as outlined below.
1. No -fault sewer back -up coverage
a. If all of the following four conditions are met, LMCIT will pay for claims presented by the city for
sewer back -up damage to property of others which was not caused by city negligence:
(1) The sewer back -up resulted from a condition in the city's sewer system;
(2) The sewer back -up was not the result of an obstruction or other condition in sewer pipes or
lines which are not part of the city's sewer system or which are not owned or maintained by the
city; and
(3) The sewer back -up was not caused by or related to a catastrophic incident.
(4) The date of the occurrence giving rise to the claim for damages must be on or after the
retroactive date shown on this endorsement.
b. However, LMCIT will not pay for any damages or expenses:
(1) Which are or would be covered under a National Flood Insurance Program flood insurance
policy, whether or not such insurance is in effect; or
(2) For which the property owner has been reimbursed or is eligible to be reimbursed by any
homeowners' or other property insurance.
2. No -fault water main break coverage.
LMCIT will pay for claims presented by the city for water main break damage to property of others
which was not caused by city negligence. But LMCIT will not pay for any damages or expenses for
which the property owner has been or is eligible to be reimbursed by any homeowners' or other
property insurance.
3. Definitions
For purposes of this endorsement, the following definitions apply.
a. Catastrophic incident means any of the following:
(1) Any weather - related or other event for which FEMA (Federal Emergency Management
Administration) assistance is available;
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(2) Any interruption in the electric power supply to the city's sewer system or to any city sewer lift
station which continues for more than 72 hours; or
(3) Rainfall of precipitation which exceeds the amount determined by the National Weather
Service to constitute a 100 -year storm event.
b. Sewer back -up damage means damage to property, including removal and clean-up costs, resulting
from a sewer back -up.
c. Water main break damage means damage to property, including removal and clean-up costs,
resulting from the rupture of a city water main, line, or pipe.
4. Limits
a. LMCIT will not pay more than $25,000. for sewer back -up damage to any building under this
endorsement, regardless of the number of occurrences or the number of claimants. For purposes of
this limit
(1) A structure or group of structures served by a single connection to the city's sewer system is
considered a single building.
(2) If a single structure is served by more than one connection to the city's sewer system, the
portion of the structure served by each respective connection is considered a separate building.
b. LMCIT will not pay more than $25,000 for water main break damage to any claimant, regardless
of the number of occurrences or the number of properties affected.
c. LMCIT will not pay more than $250,000 for water main break damage resulting from any single
occurrence. All water main break damage which occurs during any period of 72 consecutive hours
is deemed to result from a single occurrence.
If the total water main break damage for all claimants in a single occurrence exceeds $250,000, the
reimbursement to each claimant will be calculated as follows:
(1) A preliminary reimbursement figure is established for each claimant, equal to the lesser of the
claimant's actual damages or $25,000.
(2) The sum of the preliminary reimbursement figures for all claimants will be calculated.
(3) Each claimant will be paid a percentage of his or her preliminary reimbursement figure, equal
to the percentage calculated by dividing $250,000 by the sum of all claimants' preliminary
reimbursement figures.
5. Deductibles
The amount LMCIT pays for sewer back -up damages or water main break damage under this
endorsement is subject to the Municipal Liability Deductible shown in the Municipal Liability
Declarations or the General Annual Aggregate Deductible if any shown in the Common Coverage
Declarations.
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For purposes of the Municipal Liability Deductible, all claims for sewer back -up damages which are
covered under this endorsement, which occur within a 72 hour period, and which result from or are
related to the same condition or conditions in the city's sewer system are deemed to be a single
occurrence; and water main break damage which is covered under this endorsement and which occurs
during any period of 72 consecutive hours is deemed to be a single occurrence.
6. Retroactive Date
The retroactive date for this endorsement is
All other terms and conditions remain unchanged.
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COMPREHENSIVE MUNICIPAL COVERAGE
No -Fault Sewer Back -up and Water Main Break Coverage Endorsement ($40,000 Limit)
Section I, Coverage A, Municipal Liability Coverage, is amended to include no -fault sewer back -up and
water main break coverage. as outlined below.
1. No -fault sewer back -up coverage
a. If all of the following four conditions are met, LMCIT will pay for claims presented by the city for
sewer back -up damage to property of others which was not caused by city negligence:
(1) The sewer back -up resulted from a condition in the city's sewer system;
(2) The sewer back -up was not the result of an obstruction or other condition in sewer pipes or
lines which are not part of the city's sewer system or which are not owned or maintained by the
city; and
(3) The sewer back -up was not caused by or related to a catastrophic incident.
(4) The date of the occurrence giving rise to the claim for damages must be on or after the
retroactive date shown on this endorsement.
b. However, LMCIT will not pay for any damages or expenses:
(1) Which are or would be covered under a National Flood Insurance Program flood insurance
policy, whether or not such insurance is in effect; or
(2) For which the property owner has been reimbursed or is eligible to be reimbursed by any
homeowners' or other property insurance.
2. No -fault water main break coverage.
LMCIT will pay for claims presented by the city for water main break damage to property of others
which was not caused by city negligence. But LMCIT will not pay for any damages or expenses for
which the property owner has been or is eligible to be reimbursed by any homeowners' or other
property insurance.
3. Definitions
For purposes of this endorsement, the following definitions apply.
a. Catastrophic incident means any of the following:
(1) Any weather - related or other event for which FEMA (Federal Emergency Management
Administration) assistance is available;
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(2) Any interruption in the electric power supply to the city's sewer system or to any city sewer lift
station which continues for more than 72 hours; or
(3) Rainfall of precipitation which exceeds the amount determined by the National Weather
Service to constitute a 100 -year storm event.
b. Sewer back -up damage means damage to property, including removal and clean-up costs, resulting
from a sewer back -up.
c. Water main break damage means damage to property, including removal and clean-up costs,
resulting from the rupture of a city water main, line, or pipe.
4. Limits
a. LMCIT will not pay more than $40,000. for sewer back -up damage to any building under this
endorsement, regardless of the number of occurrences or the number of claimants. For purposes of
this limit
(1) A structure or group of structures served by a single connection to the city's sewer system is
considered a single building.
(2) If a single structure is served by more than one connection to the city's sewer system, the
portion of the structure served by each respective connection is considered a separate building.
b. LMCIT will not pay more than $40,000 for water main break damage to any claimant, regardless
of the number of occurrences or the number of properties affected.
C. LMCIT will not pay more than $250,000 for water main break damage resulting from any single
occurrence. All water main break damage which occurs during any period of 72 consecutive hours
is deemed to result from a single occurrence.
If the total water main break damage for all claimants in a single occurrence exceeds $250,000, the
reimbursement to each claimant will be calculated as follows:
(1) A preliminary reimbursement figure is established for each claimant, equal to the lesser of the
claimant's actual damages or $40,000.
(2) The sum of the preliminary reimbursement figures for all claimants will be calculated.
(3) Each claimant will be paid a percentage of his or her preliminary reimbursement figure, equal
to the percentage calculated by dividing $250,000 by the sum of all claimants' preliminary
reimbursement figures.
5. Deductibles
The amount LMCIT pays for sewer back -up damages or water main break damage under this
endorsement is subject to the Municipal Liability Deductible shown in the Municipal Liability
Declarations or the General Annual Aggregate Deductible if any shown in the Common Coverage
Declarations.
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For purposes of the Municipal Liability Deductible, all claims for sewer back -up damages which are
covered under this endorsement, which occur within a 72 hour period, and which result from or are
related to the same condition or conditions in the city's sewer system are deemed to be a single
occurrence; and water main break damage which is covered under this endorsement and which occurs
during any period of 72 consecutive hours is deemed to be a single occurrence.
6. Retroactive Date
The retroactive date for this endorsement is
All other terms and conditions remain unchanged.
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