City settles with two in sewage backup

The city of Homer has settled with two of three property owners who filed claims in a sewer line backup that pushed raw sewage into three homes on the north shore of Beluga Lake in January 2013. Homeowner Steve Bambakidis accepted a $45,000 settlement and homeowner Ken Halpin accepted a $250,000 settlement. A third property owner, Keith Erickson, is negotiating with the city for a possible settlement, said Homer City Manager Walt Wrede. All three filed claims and Halpin filed a civil suit.

Homer is pleased that the Bambakidis and Halpin claims are resolved, Wrede said in a press release.

“We regret the hardship and inconvenience this event has caused for the property owners,” Wrede said. “We think that these settlement agreements represent a good outcome and that they are fair to the parties.”

“Everybody’s really happy with the settlement,” said Michael Hough, Halpin’s lawyer.

Hough said the settlement will pay to replace Halpin’s modular home, furnishings, attorney fees and lost rent. Initially he thought negotiations would be difficult, but when it went to mediation with another attorney, Mike Corey, it became easier to settle, Hough said.

“It’s one of the few times I’ve seen somebody get made whole,” Hough said. “It’s solely due to Corey being very reasonable.”

Erickson is working in Scotland and Halpin is out fishing. Neither were available for comment.

The claims arose from sewage backing up into three low-lying homes in the Iris Court and Early Spring area. A mid-January 2013 storm with heavy rain overwhelmed the sewage system. Some manhole openings jacked up by frost heaves also broke, causing even more storm water to enter the system.

“We haven’t seen that amount of water in the sewage treatment center ever,” Wrede said.

All three properties affected were rental homes. Beds and furniture were trashed, clothing ruined and electronics soaked in a stinky brown brine. One renter, Chip Duggan, said, “There was feces floating in the house.”

Duggan said he has not yet received an offer of settlement and did not know if other renters had received offers. Wrede said he could not comment on the issue of the renters’ claims.

“All I’ve been doing is waiting for something like this to happen,” Duggan said of the settlement. “Now it’s my turn. … I’m not done yet.”

Initially, the city’s insurance company, the Alaska Municipal League/Joint Insurance Association, called the event an “act of God” and declined to cover the property owners’ losses. Renters were paid $3,500 for each family. The city pays premiums to the association for its insurance.

After looking at the city’s sewage treatment system, including engineering and maintenance procedures, the insurance carrier felt the best course of action was to seek an out-of-court settlement, Wrede said in the press release.

Chris Story, a real estate agent and a talk radio show host, has been a frequent critic of the city’s reluctance to settle claims. He questioned why it took more than a year to settle. 

“If you have an accident, own up to it, clean up your mess and move on,” he said. “It could have been settled long ago.”

The agreement also does nothing to mend the trust lost in the city, Story said.

“When trust is lost, it’s hard to find,” he said. “We need to trust each other and trust the government.”

Wrede said the process took time as both parties negotiated.

“I think this should restore trust in the city,” he said. “We had to follow the process.”

Wrede said the city did repair the manholes damaged by the storm event. The incident also highlights a problem with the sewer system, “I & I,” or infiltration and inflow. Storm water gets into the sewer system when homeowners direct sump pumps and rain gutters into the sewer line, something they’re not supposed to do. 

The city will work on educating people about that issue and stepping up enforcement if education doesn’t work. The city also worked on the slip linings of sewer pipes to keep groundwater out.

Homeowners also can prevent sewage from backing up into houses by installing back-flow preventers, particularly in low-lying areas, Wrede said. One home in the area that had a sewage lift station didn’t get a sewage flood because of a back-flow preventers. Wrede said a back-flow preventer isn’t required in the city’s building code.

Michael Armstrong can be reached at michael.