LIIDLII KUE/FORT SIMPSON
Fort Simpson's insurance won't cover the damages caused to its sewer treatment plant after fuel entered the system last year.

Damage to the Fort Simpson water treatment plant following a fuel leak into the sewer system won't be covered by insurance, the village was recently told. - Shane Magee/NNSL photo

Council was informed earlier this month by its insurance provider that its claim wouldn't be paid. Acting senior administrative officer Forrest McWade told a committee meeting that's because the village doesn't have environmental coverage and the spill originated from private property.

The spill cost the village about $75,000 according to Mayor Sean Whelly.

"That doesn't happen every day. It's what you hope insurance will cover but the fine print can get you," Whelly said.

Asked if the spill should prompt the community to re-examine its insurance coverage, Whelly said it could be something to look at.

Whelly said the issue highlights a gap in coverage.

"You sort of assume a responsible landlord or homeowner would have the protection," he said.

Tax-based communities in the territory have the same insurance coverage through a collective system run by the Northwest Territories Association of Communities that's been in place since 1978.

Ron Dennill, the insurance program manager with the association, said communities have very broad coverage.

"The policy is what it is, it's broader than what they could get on their own," Dennill said.

The village's policy is the same as Yellowknife's or Hay River's, he said.

Dennill said he couldn't speak to the specifics of the Fort Simpson claim. However, he said most insurance policies won't cover damage to property from a pollutant.

"If the pollutant just migrated there, there's no cover for that," he said.

Abandoned home source of fuel

The fuel that contaminated the water treatment plant originated from a fuel tank in the basement of one of several abandoned fourplex homes owned by Leo Cordero following a flood.

Once the diesel fuel entered the treatment plant in early June, it killed almost all of the bacteria used to break down organic matter.

It took some time for village crews to find the source of the leak. It eventually had to get approval from the territorial government to release partly treated sewage into the Mackenzie River. No fuel was released into the river.

The spill came just two months into the operation of the new bio-reactor treatment plant. It took several weeks to regrow bacteria to normal levels. The cost was put on the property tax bill of the owner.

It's one of several properties owned by Cordero that have been essentially abandoned.

Whelly said the village hasn't been able to reach Cordero for a long time and most of his properties

are in tax arrears.

That means they could be sold in an auction to recoup the property tax bill.

"So if the building does get sold, we may recover some of that bill," Whelly said.

Cordero owns 22 properties in the village, with 19 qualifying for auction.

Of the 23 housing units he owns, 12 were occupied in December according to Larry Swartz, whom Cordero has authorized to maintain the properties and collect rent on his behalf.

The village may look at physical bypass systems at the plant to detect petrochemicals and divert the flow to prevent a repeat of what happened in June. But such a system would likely be an expensive retrofit, Whelly said.

The mayor said the spill has been a lesson for the village.

"It's something for us to take note of in that we have to be a little more proactive in identifying derelict properties and potential hazards to our waste system," he said.