City gets $5 million from insurance in flood’s wake

Recovery at policy limit, federal assistance to be determined

By: Brian Louwers | Warren Weekly | Published February 25, 2015

 Warren recovered a $5 million insurance settlement related to the Aug. 11 flooding event. The city’s insurance carrier waived the $100,000 deductible. Flooding caused millions of dollars in damage at the city’s police station, district court, community center and wastewater treatment plant.

Warren recovered a $5 million insurance settlement related to the Aug. 11 flooding event. The city’s insurance carrier waived the $100,000 deductible. Flooding caused millions of dollars in damage at the city’s police station, district court, community center and wastewater treatment plant.

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WARREN — The flood that ravaged Warren and other parts of metro Detroit in August was unlike anything ever seen in the city. So was the property insurance payout, which hit the city’s coverage limit at $5 million.

Earlier this month, members of the Warren City Council unanimously signed off on a budget amendment to account for the claim settlement, the maximum allowed under the city’s property insurance policy.

“I’ve lived here in the city for 40 years, and I don’t recall there ever having been the kind of event that would have given rise to municipal liability the way this flood did,” said Phil Easter, Warren’s director of personnel management and human resources. “I’m sure this is one of the biggest, and we were fortunate in a sense that, you know, the damage was all well-preserved when the adjuster came through. We were able to document the claim, and we were able to recover the full amount of the property policy.”

Unfortunately, that doesn’t mean the city was made whole.

City Controller Rob Maleszyk said a flood of bills came in for damages across city departments after the rain stopped and the magnitude of the calamity became evident.

“There was a lot of damage right away to a lot of our buildings: the police station, wastewater treatment plant, court and the community center, to name the four biggest, and senior housing for that matter,” Maleszyk said.

Bills for damages and property restoration were paid through a contingency fund in the aftermath. Maleszyk said he worked with Easter and Craig Treppa, Warren’s purchasing agent, to compile the claim and expedite the process of restoring the city’s damaged and lost property.

“We went through and we’ve accumulated over $5 million of items, but our insurance policy was for $5 million,” Maleszyk said. “That’s what this budget resolution is for. This is step one.”

Maleszyk said the city has been working with the Federal Emergency Management Agency to determine if further assistance is possible. Once the city knows for sure what additional relief is or isn’t coming, losses not covered by insurance or FEMA will be reimbursed with cash from the general fund, hopefully before the city’s fiscal year ends June 30.

Stormwater that fell on Aug. 11, 2014, caused an estimated $5 million in damage at the Warren Police Department, where officials said boiler damage alone had been expected to cost an estimated $1.2 million to repair. Rainwater flooded the lower level of the Christopher M. Wouters Police Headquarters, east of Van Dyke and north of 12 Mile Road, and damaged the adjacent 37th District Court complex, which sustained an estimated $2.25 million in damage. Officials said 15 police cars were damaged while officers raced across a flooded city responding to calls for service.

The Warren Fire Department saw much of its fleet of frontline emergency equipment damaged or destroyed in the flood. Fire Commissioner Skip McAdams said the department sustained roughly $3 million in damages after a heavy rescue vehicle, purchased with state funds after the Sept. 11 terrorist attacks on the United States, was swamped by more than 5 feet of water for seven hours near Van Dyke and Old 13 Mile Road — the epicenter of the flood’s impact.

Two frontline engines were put out of service with engine and transmission damage, while three others needed overhauls to electrical systems, engines or drive trains to ensure long-term reliability. Five of the city’s seven EMS rigs went down in the days after the flood, after all of them were called to respond to emergencies in water up to 3 feet deep. Both of the city’s aerial trucks and a list of specialized gas monitors, stored on a swamped truck, were also damaged.

Warren Public Service Director Richard Sabaugh previously placed the total damage to the city at roughly $10 million. The insurance settlement would pay half of that.

Fouts said Warren employees spent more than $157,000 on overtime for employees in the wake of the flood. Most of that money was spent on Department of Public Works and Sanitation Department crews.

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