Paying for water-main-break flooding is complicated

CENTER CITY The water-main break that flooded part of southwest Center City two summers ago has long been repaired, and the city has committed to paying for the damages.

But now, it gets complicated.

Water damage to dozens of homes and businesses flooded that night - estimated at $2.8 million based on claims filed so far - is more than five times what the city is statutorily allowed to pay out. And a fight is brewing in court as the claimants, including utility giants Verizon and Peco, fight for the $500,000 pot of city money.

"No one plans for this," said Bruce Amos, who lives a half-block north of 21st and Bainbridge Streets, where the main broke July 22, 2012. He has filed a claim for $29,462 in damages.

Like most homeowners, Amos has insurance that does not cover flooding, so he has had to pay to restore his finished basement, where his kitchen and living room are. But he and others will likely only get a fraction of the cost back from the city.

The $500,000 cap on the city's total payout in such events is set by a state law. So State Sen. Larry Farnese (D., Phila.), whose district includes the area, introduced a bill this summer to raise the cap, set in 1980, to $2 million.

Because of old infrastructure below ground in Philadelphia and many parts of the state, Farnese wants to increase the claim cap in anticipation that other big water-main breaks are bound to happen.

It's not yet clear how the Democrat's proposal, now in the Judiciary Committee, will fare in the Republican-controlled legislature. The bill "is being reviewed but no time frame has been set to consider it," said Erik Arneson, spokesman for Senate Majority Leader Dominic Pileggi (R., Delaware).

Though the 2012 break was large, it is just one of hundreds the city has each year. Some pipes are more a century old; the average age is 67. The main that broke was 126 years old. The cause of the break was external pressure over time that "stressed the pipe to the point of failure," Water Department spokeswoman Laura Copeland said.

A factor in the claims being so high is that Peco and Verizon have filed more than $1 million in combined claims.

Amos and his lawyer, Benjamin R. Picker, are arguing that Peco and Verizon can afford their own repairs and should not be taking money from the "mom and pops," as Picker put it. "It would be inequitable and improper to permit Verizon and Peco to assert claims for the full amount of the purported losses," the lawyer wrote.

The companies dispute this.

"Waiving a claim like this would be a significant hit to our cost to doing business," Verizon spokesman Lee Gierczynski said, adding that doing so could set a bad precedent. Verizon is claiming more than $100,000 for damages to cables and ducts during repair of the water main.

Peco is vying for the largest chunk of change with its $932,448 claim. The utility's underground infrastructure sustained "extensive damage," spokeswoman Catherine Engel-Menendez said.

The company is self-insured, but that pot of money is set aside for when Peco is liable for damages to customers, she said. In the 21st and Bainbridge case, it is Peco that sustained damages, so the company will follow the claims process, Engel-Menendez said.

If Peco were to withdraw its claim, the rates it charges customers could increase, Engel-Menendez warned. "Our rates are based on our cost to do business," she said.

A Common Pleas Court judge will determine how much each claimant receives in compensation from the $500,000 chunk.

"I think there's going to be issues," said Liron Agiv, who with her husband, Victor, owns La Va Cafe at 21st and South Streets. "I'm not sure how courts are going to determine who lost what."

Agiv said she had to close the cafe for two days to clean up a mess that included damage to refrigeration equipment and supplies when water poured into the basement. She said her claim was for at least $10,000.

She and others vividly remember their neighbors being rescued from their homes in canoes that night - not to mention the cleanup.

"There was so much mud taken out of people's basements," Agiv said, noting that that's where many homeowners keep family pictures and other personal belongings of sentimental value. "It was really sad."

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