RES 11-21RESOLUTION NO.: 2011 - 21
CITY OF OTSEGO
COUNTY OF WRIGHT, MINNESOTA
RESOLUTION ESTABLISHING LIMITED CLEAN UP AND
PROPERTY DAMAGE PROTECTION FOR SEWER BACK-UPS AND
WATER MAIN BREAKS FOR WATER AND SEWER CUSTOMERS
WHEREAS, the City of Otsego provides water and sanitary sewer services to
property within its jurisdiction; and
WHEREAS, water main breaks may cause water to enter into property causing
damage; and
WHEREAS, blockages or other conditions in the City of Otsego's sanitary sewer
lines may cause the back-up of sewage into properties that are connected to those City
of Otsego's sanitary lines; and
WHEREAS, water main breaks and sewer back-ups pose a public health and
safety concern; and
WHEREAS, it is often difficult to determine the exact cause and responsibility for
water main breaks and sanitary sewer back-ups, and
WHEREAS, the City Council of the City of Otsego desires to encourage the
expeditious clean-up of properties that have encountered damage from water main
breaks and sewer back-ups; and
WHERAS, the City Council of the City of Otsego desires to minimize the potential
of expensive lawsuits arising out of water main breaks and sanitary sewer back-up
claims; and
WHEREAS, the City of Otsego is a member of the League of Minnesota Cities
Insurance Trust (LMCIT); and
WHEREAS, LMCIT has offered the City of Otsego limited "no fault" sewer
coverage and water main break coverage that will reimburse users of the water and
sewer system for certain clean-up costs and property damage regardless of whether the
City of Otsego is at fault.
WHEREAS, City staff has drafted a this resolution and policy (attached as Exhibit
A) outlining the limited protection for property damage and clean up that may be
available to sewer and water customers in the event of a sewer backup or water main
break.
NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Otsego that:
The City of Otsego, as part of the contract for providing water and sewer services to the
customers of the City of Otsego, and in consideration of the payment of water and
sewer bills, agrees to reimburse water and sanitary sewer customers for up to twenty
five thousand dollars ($25,000) of clean-up costs and property damages caused by a
water main break or sanitary sewer back-up, regardless of whether the City of Otsego is
negligent or otherwise legally liable for damages, subject to the following conditions:
A. For Sanitary sewer back-ups:
The back-up must have resulted from a condition in the City of Otsego's
sanitary sewer system or lines, and not from a condition in a private line.
2. The back-up must not have been caused by catastrophic weather or other
events for which Federal Emergency Management Assistance is available.
3. The back-up must not have been caused by an interruption in electric
power to the City of Otsego's sewer system or to any City of Otsego lift
station, which continues for more than seventy hours (72) hours.
4. The back-up must not have been caused by rainfall or precipitation that
would constitute a 100 -year storm as determined by the National Weather
Service.
5. Neither the City of Otsego nor LMCIT will reimburse any costs which have
been or are eligible to be covered under a property owner's own
homeowners' or other property insurance, or which would be eligible to be
reimbursed under a National Flood Insurance Protection (NFIP) policy,
whether or not the property owner actually has NFIP Coverage.
6. The maximum amount that the City of Otsego or LMCIT will reimburse is
twenty five thousand dollars ($25,000) per building, per year. In this
regard, a structure or group of structures served by a single connection to
the City of Otsego's sewer system is considered a single building.
B. Water Main Breaks. For water main breaks:
LMCIT will pay for claims presented by the City of Otsego for water main
break damage to property of others which was not caused by the City of
Otsego's negligence.
2. Neither the City of Otsego nor LMCIT will pay for damages or expenses
for which the property owner has been or is eligible to be reimbursed by
any homeowners' or other property insurance.
3. The maximum amount that the City of Otsego or LMCIT will reimburse is
twenty five thousand dollars ($25,000) to any claimant, regardless of the
number of occurrences or the number of properties affected.
4. Neither the City of Otsego nor LMCIT will pay more than two hundred fifty
thousand ($250,000) dollars for water main break damages 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 two hundred fifty thousand ($250,000) dollars,
the reimbursement to each claimant will be calculated as follows:
a. A preliminary reimbursement figure is established for each
claimant, equal to the lesser of the claimant's actual damages or
twenty five thousand dollars ($25,000).
b. The sum of the preliminary reimbursement figures for all claimants
will be calculated.
C. Each claimant will be paid a percentage of their preliminary
reimbursement figure, equal to the percentage calculated by
dividing two hundred fifty thousand dollars ($250,000) by the sum
of all claimants' preliminary reimbursement figures.
MOTION BY: CM SCHARBER
SECOND BY: CM SCHROEDER
ALL IN FAVOR: MAYOR STOCKAMP; COUNCILMEMBERS: SCHARBER, SCHROEDER, HEIDNER AND
DARKENWALD
THOSE OPPOSED: NONE
2011.
ADOPTED by the City Council of the City of Otsego this 9t" day of May
CITY OF OTSEGO
BY: �8� e vw�-�
Jes ica Stockamp, Mayor
ATTEST: Has
Tami Loff, City Clerk