5.2. SR 08-26-2002MEMORANDUM
Item # 5.2.
TO:
FROM:
DATE:
SUBJECT:
Mayor and Council
Lori Johnson, Finance Director
August 26, 2002
Consider Bengston Sewer Backup Payment Request
On July 15, 2002 Ross and Kay Bengston came to Open Mike requesting the City pay for
damage done to their house as a result of a backup in the City's sewer line. Detailed
information was presented to the Council in preparation for that meeting so I have not
attached it this memo. If you would like an extra copy, please let me know. At that time the
City Council requested that staff research this issue and report back to them with any new
information.
Insurance Ad}uster Randy Loebrick and I discussed this claim following the July 15, 2002 City
Council meeting. It was agreed that he would again look at the claim and try to work with the
Bengstons to get additional information that may change the facts of the claim. Attached is a
letter from Mr. Loebrick, dated August 5, 2002, in which he again denies the claim to the
Bengstons. No new information was brought forth during his follow-up investigation. Mr.
Loebrick states in his letter "after carefully reviewing all of the facts of this claim, I am still
denying any liability or negligence on a part of the City of Elk River for causing the damages
to your basement."
The Council asked staff to research if making payment to the Bengstons would in any way
jeopardize our insurance policy. In fact, a payment will not jeopardize the city's insurance
policy; however, it will definitely set a precedent for future claims that are denied by the city's
insurance company. 1 am unaware of any past payment made by the city to a claimant when
the insurance company has denied a claim. It is certainly within the Council's discretion to
pay the Bengstons for the damage done to their house. However, prior to taking any action to
make payment, I would suggest that the Council review the facts of the incident and also
consider the implications this may have on future claims.
This is an unfortunate situation and the city, of course, is sympathetic to the Bengstons and
the damage that has occurred to their house. As we discussed earlier, the city has procedures
in place to keep the sewer lines clean and to respond quickly when sewer backups are
reported. These procedures have helped to protect home owners sewer backups and related
damage. Gary Leirmoe, Chief Wastewater Operator, and I will be present on Monday evening
to discuss any of the sewer department's policies regarding cleaning sewer mains and response
time to sewer backup.
ERS
August 5, 2002
P. O. Box 583479
Minneapolis, MN 55458
(612) 766-3700
FAX: (612) 766-3799
Ross and Kay Bengston
374 Baldwin Avenue
Elk River, MN 55330
RE: Date of Loss
Our File No.
: 5/29/02
: MPS38502
Dear Mr. and Mrs. Bengston:
This letter is a follow up to our telephone
conversations and letters addressed to me regarding
the sewer backup claim that happened at your residence
on May 29, 2002.
As discussed in my telephone conversations with you,
the City of Elk River has no negligence or liability
in causing the damages to your property.
You have stated to me on several occasions that you
thought the City was unable to clean the City mainline
in your backyard and also in several neighbors' behind
your property, due to the fact that they cannot get
large equipment or trucks in that particular area.
However, after talking to Gary Leirmoe, the City still
does an adequate job of cleaning the City line by
manually feeding their jetters by hand in order to
clean the system.
Our records indicate that the line in question that
caused the backup was just recently cleaned on August
16, 2001. This is well within the City's normal two-
year cleaning schedule of their routine maintenance of
their City sewer lines.
P.O. Box 583479 · Minneapolis, MN 55458 · 612-766-3700 · Fax 61~-/66-o t9
A Division of Berkley Risk ~dminisrrators Company LLC
Ross and Kay Bengston
Our File No. : M?S38502
AugusU 5, 2002
I have also questioned whether or not you had sewer backups in
your basement in the past. You have informed me that you have
lived in the house for four or five years and have not had any
sort of sewer backup problems. Due~ to this fact, the City would
not have been put on no~ice of any particular problem and would
not know that any work needed to be done on the line in order to
correct any.sort of pro~!em.
After carefully reviewing all the facts of this claim, I am still
denying any liability or negligence on the part of the City of
Elk River for causing the damages to your basement. Therefore,
no payment will be made.
If you have any questions regarding this claim, pleaSe contact me
at 612-849-3002.
Sincerely,
ALLIED ADJUSTERS
Rand..~_~,,Loebrick
cc:
Lori Johnson
City of Elk River
cc:
Curt Heitschmidt
LMCIT Claims