The City of Sterling Heights has filed a lawsuit contesting the $22.2 million assessment by the Macomb Interceptor Drain Drainage District (MIDDD) for costs associated with the December, 2016 collapse of the 15 Mile Road interceptor.
Under the assessment approved by the MIDDD board over the City’s objection on April 19th, 2017, $22.2 million of the estimated $70 million cost is apportioned to Sterling Heights and will ultimately be paid by its residents and businesses. Sterling Heights is one of eleven Macomb County municipalities whose wastewater is transported by the interceptor that MIDDD acquired from the City of Detroit in 2010.
Since the December collapse, the third significant failure since the 1970s, the City has been investigating the degree to which MIDDD had been inspecting, maintaining, and repairing the interceptor. This investigation revealed the following:
• MIDDD has a duty under Section 478 of the Michigan Drain Code of 1956 to operate and maintain the interceptor, which is an intra-county drain owned by MIDDD.
• In 2010, MIDDD, in accordance with Section 471 of the Drain Code, contracted with an agency of Macomb County, the Macomb County Wastewater Disposal District (MCWDD), to operate, maintain and make improvements to the interceptor following its acquisition.
• Despite having material and competent evidence as to the poor condition of the interceptor at the time of acquisition and the risk for imminent failure, MCWDD, an agency of Macomb County responsible for maintenance and repairs to the interceptor, did nothing to abate the conditions that likely caused the December 2016 collapse.
• Public statements by MIDDD board members confirm that the county agency failed to inspect and exercise due care by effectuating repairs.
• MIDDD has failed to pursue recovery against Macomb County for the actions of its agent and instead seeks to assess Sterling Heights and other municipalities for the damages resulting from a breach of contract.
By this lawsuit, the City is challenging MIDDD’s improper assessment under the Drain Code of damages arising from a breach of its contract with MCWDD, an agent of Macomb County. Furthermore, the City seeks to compel the MIDDD Board to fulfill its duty to pursue cost recovery against MCWDD for the material breach of contract. This will prevent the inequitable result of compelling businesses and residents to pay for costs that were avoidable had MCWDD performed its duty in a competent manner.
At an estimated repair cost of $70 million, Sterling Heights ratepayers could be responsible for over $22.2 million. After financing costs are applied, this number could double to over $45 million. Major industrial property owners in Sterling Heights could be responsible for millions of the apportioned costs. Initial estimates show resident bills could go up by more than 6 percent for the next 30 years to cover Sterling Heights’ proportionate share, in addition to the expected double-digit County sewer rate increases in the coming years.
Sterling Heights Mayor Michael C. Taylor states, “It is fundamentally unfair to compel our City, its residents and businesses, to pay the cost for another party’s neglect, particularly when no legal action is being undertaken by MIDDD to pursue recovery.”
Kevin Gleeson of Sullivan Ward Asher & Patton, P.C., the law firm retained by Sterling Heights to pursue its claims, agrees, “Sterling Heights, nor the rate payers, should bear the responsibility for those entities and individuals who failed to perform the most basic inspections and repairs to the interceptor and, that if performed properly, would have avoided this catastrophic failure. The current MIDDD Board has a legal responsibility to pursue complete cost recovery from the responsible entities and individuals. To date, the MIDDD Board has failed to make any demand on the County or its agency for payment of these costs, and for these reasons, Sterling Heights has no choice but to object to the improper cost assessment on behalf of its rate payers.”
Sterling Heights Complaint Exhibits A-G
Sterling Heights Complaint for Superintending Control 5/8/17
Media with questions can email Community Relations Director Bridget Kozlowski at firstname.lastname@example.org or call (630) 730-5087.