$12.5M SETTLEMENT ENDS SINKHOLE SAGA
Candice Miller ‘feeling very good’ at largest award received by county
A Macomb County drainage district will receive $12.5 million in a settlement with three contractors that were responsible for the “human error” responsible for the Fraser sinkhole nearly four years ago.
Macomb County Public Works Commissioner Candice Miller announced the deal Tuesday on the property where one of two houses was demolished due to the catastrophic sewer collapse that required $70 million to fix. A third house was damaged and repaired.
Miller said the award to the Macomb Interceptor Drainage District is the largest ever received by Macomb County government or governmental agency.
“We’re feeling very good about that award,” Miller said. “It was really a team effort” to obtain the settlement. “Many people said we wouldn’t collect anything.”
The settlement will be paid by AIG insurance company on behalf of the three defendants – contractors Jay Dee Contractors and Inland Waters Pollution Control, and a subcontractor, Metco Services.
The lawsuit was filed in April 2019 in Macomb County Circuit Court and was assigned to Judge Joseph Toia.
A mediator recommended the settlement amount.
The case is scheduled to be dismissed in November because of the deal.
The $12.5 million to be paid to the Macomb Interceptor Drainage District will be used for a $28-million proj-
ect to reinforce 2 miles of pipe west of the sinkhole site to ensure a sinkhole never occurs again, Miller said.
“After the sinkhole on 15 Mile, I vowed we’re never going to have a sinkhole here again,” she said.
The collapse occurred Christmas Eve 2016 under 15 Mile Road between Utica and Hayes roads.
In explaining how it occurred, Miller said a forensic engineer discovered an error was made 2-½ years earlier during a sewer project in east Oakland County that went awry. Sewer flow, which had been temporarily blocked for work to be completed, was released over several minutes when it should have been released over 2-½ to 3 hours.
The sudden restart resulted in rush of water that created a “sewer hammer” that cracked the sewer line 65 feet under 15 Mile Road at Eberlein Drive, Miller said.
The crack created in May 2014 allowed silty sand to seep into the pipe and slowly create a void, leading to a full collapse the size of a football field in December 2016. It caused the initial evacuation of 22 homes.
“It took 2-½ years to manifest itself,” she said. “A human error was made. That’s why you have insurance.”
It occurred days before Republican Miller took office after defeating incumbent Democrat Anthony Marrocco for the commissioner post in the November election.
County Executive Mark Hackel praised Miller, who also is chairwoman of the Drainage District board, for her tenacity to find the cause and force a settlement when some people said the cause would not be found.
John “Jack” Finegan, 86, who resides with his wife, Helen, 83, in the condominium complex on the north side of 15 Mile where the sinkhole occurred, said they were pleased with the outcome despite putting up with the “inconvenience” of the major reconstruction project for a year.
“It was only for a year, I can go along with that,” he said. “They did a good job.”
The biggest ramification for them was that the condominium association had to spend $40,000 to rebuild some of the pavement in the complex because of damage caused by construction trucks that used the parking areas. The county gave the association $5,000 toward the cost, he said.
The district completed a repair of the sinkhole and reconstruction of 15 Mile Road for the $70 million price tag. Ratepayers in the 11 Macomb County communities in the district are footing the bill in the form of about $25 per year for 20 years to pay off bonds that paid for repairs.
The $12.5 million infused into the new project will allow it to be completed without a rate increase, Miller said. She said reserve dollars in the budget will be used to pay the $15.5 million balance.
That project reinforcing pipe from Hayes west to the ITC corridor in Sterling Heights will be completed within two years, she said.
Miller said the compromise in the lawsuit was necessary to avoid a trial that could have costs millions of dollars in legal expenses, “and we might not get anything.”
The county’s case would have had to overcome legal hurdles, such as the statute of limitations and the lack of inspections of the pipe under Marrocco, she said.
In negotiations with AIG, Miller, a former member of Congress, said she raised the issue that AIG was bailed out by the government during the 2008-2009 Great Recession, after the AIG representative tried to intimidate her by boasting about the insurance company’s imposing size.
She said she told the AIG negotiator: “You better have deep pockets, not short arms.”
During the news conference Miller criticized the operation of Public Works under Marrocco, who was commissioner for 24 years. In addition to lack of regular inspections and maintenance, she said Marrocco rang up millions of dollars in unnecessary legal expenses and failed to conduct competitive bidding for projects.
The new project was competitively bid. The next lowest bid was $7.7 million higher, she said.
The occupants of the destroyed two houses on the south side of 15 Mile at Eberlein and damaged house were “made whole” by the county, Miller said. One family moved to another area of the county and an elderly couple who lived in the second house moved into nearby apartments.
The sinkhole generated two other lawsuits against the MIDD, one by the city of Sterling Heights and one by an Oakland County drainage district, but both were dismissed.
Several businesses in the area were impacted due to 15 Mile being shut down. Helen Finegan said multiple businesses in the Fraser Square strip mall at 15 Mile and Hayes roads suffered. But Miller also noted that many business, such as the Green Lantern restaurant, remained open as residents in the area made an extra effort to patronize them to help them survive the disruption.