Rusty Bolts Will Cost City $50,000

Rusty bolt. Thester11, CC BY-SA 3.0 <https://creativecommons.org/licenses/by-sa/3.0>, via Wikimedia Commons

Within 36 hours of its installation, a new water meter installed by Milwaukee Water Works (MWW) personnel failed and flooded the basement of a near-west side apartment building.

It’s a mistake that will cost the city $50,000 and an insurance company likely more than $100,000.

The issue, based on documentation compiled by city officials and private contractors, stems from reusing rusted bolts instead of new ones that would have only cost a few dollars.

On March 10 the new meter was installed in the basements of each of the three buildings at the Highland Park Apartments complex at N. 17th St. and W. Highland Ave. Tenants of the easternmost building, at 1145 N. Callahan Pl., reported issues on March 11, with standing water found in the basement. At 3:00 a.m. on March 12, water was discovered spraying from the meter. According to MWW data, at least 8,750 gallons of water leaked into the basement.

The property owner, Minneapolis-based Sherman Associates, filed a claim with the city for $164,362 which includes emergency plumbing labor costs as well as replacing boilers and water heaters, repairing the three-story building’s elevator pits and related systems and repairing damaged building finishes.

“There is a substantial evidentiary packet the apartment building owner submitted,” said deputy city attorney Jennifer Williams in briefing the Judiciary & Legislation Committee on the matter Wednesday. A 79-page packet, much of it from Sid Grinker Restoration, details the extent of the damage and the cost to repair it.

A state statute limits the city’s exposure to a maximum of $50,000. That’s how much Williams and City Attorney Tearman Spencer are recommending the city pay Sherman. “That will likely enable the property owner to then recoup the balance of the loss from their insurance,” said Williams.

“On March 16, 2023, MWW Water Meter Supervisors responded to the location and observed six of the 12 bolts on the meter setting were missing washers, and the bolts were rusted and not in proper condition for re-use on a new meter installation,” says a letter from Williams and Spencer.

The committee recommended paying the claim, but not before one council member publicly questioned what was being done about the employees.

“It seems that this was really very much incompetence and negligence,” said Alderman Michael Murphy. “I think [MWW] owes an explanation of ‘what were the consequences for the individuals?'”

Williams said she would work to get a formal answer. No one from MWW was in attendance because the committee delayed acting on the matter until after it was briefed in closed session on unrelated legal issues.

“This wasn’t making a mistake in a minor manner,” said Murphy. “Somebody put rusted bolts on a water meter. I mean, what were you thinking?”

The full council will vote on the measure at its July 11 meeting. The funding would come from a special self-insurance account within the city-owned utility.

McDonald’s Settlement

One of Milwaukee’s leading McDonald’s franchisees will receive approximately $10,400 from the city, but it’s far less than what was once sought.

The city will settle an assessment lawsuit with Steren Management, led by Jeff Steren, for $10,393.30. “That is close to about 10% of what they were initially requesting,” said assistant city attorney Kyle Bailey.

“Good job… that’s a great job actually,” said Ald. Mark Chambers, Jr.

“Good job,” said committee chair Mark Borkowski

The lawsuit was originally about 2021 and 2022 assessments for restaurants at 5890 S. 27th St., 191 W. Layton Ave. and 707 S. 1st St., but the 1st Street restaurant was later removed.

Steren, said Bailey, was seeking about $48,500 per year. He was also challenging 2023 assessments and the resulting tax bills.

The restaurants have all been renovated in recent years.

“We did ultimately adjust the effective ages of those structures,” said Bailey, indicating the city will change how it assesses the buildings going forward.

According to online city assessment records, the 27th Street restaurant property is valued at $1.51 million, the Layton Avenue property at $1.77 million and the 1st Street property at $923,600.

Steren, according to license records, owns at least six McDonald’s in the city and several more in the suburbs.

Property Tax Refunds

The city is poised to reduce some property tax payments following rulings by the Board of Review. The properties whose payment will be lowered include four houses, one apartment building and one commercial building.

“With regards to pretty much all of them we have gotten updated information,” said Assessment Commissioner Nicole Larsen in introducing the refund requests. She said that includes new surveys of the interiors of the four homes, updated income and expense information for the commercial property and property condition and rental roll information for the apartment buildings.

The city will strike $37,203.86 in total property tax payments from prior levies. That includes approximately $20,200 for Hal Leonard Corporation‘s west side office at 7777 W. Blue Mound Rd. and $13,200 for the Chalet at the River, 823 N. 2nd St., and its former owner Bonnie Joseph.

The property tax refund and cancelation review is a quarterly process the council engages in following Board of Review rulings.

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Related Legislation: File 230271