Burlington intercedes, insurance company to pay for private sewer line breaks

--You may not be able to fight city hall, but city hall can fight for you.

Burlington City Manger Jim Ferneau's calls to an insurance company have resulted in the city getting its own special terms and two payouts for sewer repairs for customers who initially were denied.

To help residents defray the cost of water and sewer line repairs, the city of Burlington partnered four years ago with American Water Resources.

AWR sells an insurance policy that covers water and sewer line repairs. That contract is up for renewal and soon will be reviewed by the city council.

In January, residents asked the council to tone down what one person called AWR's "Chicago strongarm" advertising tactic, claiming it incited fear and upset elderly water and sewer customers.

That issue has been addressed. However, recently the city became aware of other complaints the company wasn't paying for repairs policyholders thought were covered.

The five-year contract ends in January, but the city must let AWR know by September if it is renewing, Ferneau said.

The city endorses the company in exchange for 5 percent of the net revenue from enrollments, which has totaled $33,173 since 2010.

The city's sewer and the Burlington Municipal Waterworks customer addresses regularly are updated and given to AWR for mailings. The city's logo tops the letterhead. The return address on the cover letter and on the envelope is the city's.

Ferneau's signature appears on the cover letter, which states, "In the event of a water line break or sewer line blockage, as the homeowner, you are responsible for locating a reliable contractor and paying for the repairs. The City of Burlington is responsible only for the mains in the street. In addition, water and sewer line problems are not typically covered by homeowners insurance and can be very complicated to fix, often requiring digging equipment and a team of local, insured and independent plumbing contractors ...

"Because we recognized our residents were unaware of their service line responsibilities and the potential high cost of water and sewer line repairs, we've partnered with American Water Resources, a subsidiary of American Water, to offer the Water Line and Sewer Line Protection Program."

The annual fee for both the water and sewer line protection program is $144. For just a water line, it is $60 a year. For a sewer line only, it is $108 a year.

City Councilman Tim Scott gave some background about how the city got involved with AWR.

In 2009, he led a council discussion on water and sewer pipe repairs. Scott owns Stinky Inc., which, among other services, unclogs drains.

"There are inequities throughout the community on lateral lines," he said. "For example, there is a person at the lowest point off a sewer main, with six lines running off it, whose line backs up into her basement. She has to pay to have the line cleaned out so she doesn't have sewage in her basement."

Scott said he had a sewer line break in 1989. It was 22 feet underground, required hauling eight dump trucks of dirt away and eight dump trucks of sand back to fill the hole. Scott said sand no longer is allowed by the city. Now a more expensive cement slurry is required to fill holes.

Compare that cost to the person whose sewer line is only 3 feet underground, he said.

Scott gave other examples of repairs costing private individuals $20,000, $16,000 and $3,000.

The aging water and sewer systems and the inequities of the systems spurred Scott to propose an election asking voters whether to impose a $29 or $59 tax, which would be used to maintain all lateral lines in the city.

Scott said a compromise was to partner with AWR.

He said he wrote a letter to the editor some years ago stating AWR's coverage is less than he expected and offered two recent examples where AWR refused to cover sewer line breaks.

"This isn't what I had in mind. It's basically a maintenance agreement, not an insurance agreement by any means. Clogs caused by tree roots and paper products -- they'll pay for that," Scott said.

At 1322 Angular St., Scott said a man with AWR insurance had a clog in his sewer pipe, which AWR cleared out. But the auger came away with mud on it. Scott said that indicates a break in the line and thought AWR should have notified the owner, which should have precipitated further repair.

Scott said neither happened. As a result, the leak created a sinkhole, which caused the roadbed to fail, and now the property owner is on the hook for an expensive repair. Scott said the owner was told AWR will not cover the break.

Chris Clements, head of city sewer and street maintenance, confirmed the city is charging the owner $3,200 for the repair.

James and Patricia Jarvis, 500 S. 10th St., didn't know they had a problem until a sinkhole formed, which also was discovered by a city maintenance crew.

Clements said without cameras and dyes it is difficult to diagnose if the city or property owner is responsible. In both cases, the break was between the city's sewer main and the private property.

Clements said he has nothing to do with AWR and agreed with Scott that an experienced person, seeing mud on the auger, would conclude there's a break in the line. He said when a sinkhole by a private line break is discovered, it's treated as a nuisance abatement, unless it's an emergency repair.

"We give them 30 days to hire their own contractor or fix it on their own. If it's not done by then, the city hires a contractor to do it and charges are assessed to the owner," Clements said.

He said the owner is responsible not only for the lateral line up to the sewer main but also "the piece that hooks into the main."

Burlington Municipal Waterworks director Alan Borden said, "If the water line break is between the main and stop box or shut off box, usually located under the curb and sidewalk and city right of way, we want our crews to fix that. It can't become a public health issue.

"We charge a flat fee- $1,100 -- for normal household service," he said.

Borden said any damage to a water main is the Burlington Municipal Waterworks' responsibility.

When Ferneau saw the Jarvises' letter to the editor about AWR, he called the company.

"I told them this letter to the editor looks bad, right before the city is considering whether to renew our agreement," Ferneau said.

AWR responded, stating it would cover the Jarvis' break and future similar breaks in Burlington, Ferneau said.

Patricia Jarvis said she and her husband are relieved.

"When we called them, they said they only fix clogs, not breaks. I told them to cancel the policy," she said. "We were going to have to take a mortgage out on our house. Then American Water called yesterday (June 23) and said they had reviewed the case and decided they would pay for it."

Jarvis said she and her husband still are undecided whether to keep the policy.

"We're discussing it," she said.

Ferneau noted the fine print on the policy does state it will only cover sewer line breaks if caused by a clog. The Jarvis line did not have a clog, but a hole.

But AWR, according to Scott, didn't cover the Angular Street sewer line break either, which appeared to be due to a clog.

The cap per occurrence to fix lines is $4,000 for water lines and $5,000 for sewer lines, and the cap to fix city sidewalks or streets is $4,000 for water lines and $5,000 for sewer lines.

Therefore, the maximum payment per occurrence is $8,000 for a water line and $10,000 for a sewer line.

If costs exceed those amounts, AWR will contact the owner before proceeding. The owner has 30 days to pay AWR the excess, the policy states.

"We've had a partnership with the city for nearly five years," said American Water president Malcolm Conner said. "In that time we have had no attorney general or Better Business Bureau complaints. We did take the Jarvis' complaint very seriously. Our relationships with the city and our customers are extremely important to us."

Conner confirmed AWR is revising the Burlington sewer and water line policy terms and now sewer line clogs and breaks will be covered. He also confirmed the Jarvis' break initially was not covered because a clog was not present. He said he couldn't comment on the 1322 Angular St. break without further research, but if the break is caused by a clog, the company typically covers it.

He emphasized the common service call is for a clogged sewer line. The procedure is to clear the clog before going on to more drastic repairs that require a yard to be torn up, for example.

Later, an AWR spokeswoman, Denise Free, said AWR investigated the break and said the subcontractor did not inform it of the subsequent break caused by the blockage. The company will pay the $3,200 owed to the city, she said.

Conner said the company is 12 years old, but it is a subsidiary of American Water, a 125-year-old company. AWR was formed to fill a need, he said. American Water, a water service provider, learned customers were unaware of their responsibility for water and sewer lines and that breaks and leaks generally are not covered by homeowners insurance.

AWR, in 12 years, has more than 600,000 customers in 42 states. Conner said the company surveys all of its customers who have a service event and more than 97 percent respond the service provided was very good, he said.

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