The city of Thunder Bay seeks $30 million from insurance provider after it refused to cover cost of damages sustained by sewage treatment plant during 2012 flood.

THUNDER BAY - Damages to the sewage treatment plant caused by the May 2012 flood are now the focus of a legal battle between the city and an insurance provider.

On Tuesday, the city of Thunder Bay filed a statement of claim against the Ontario Municipal Insurance Exchange (OMEX) with the Ontario Supreme Court of Justice.

The statement of claim seeks to recover money the city says is owed by the insurance company in the amount of $30 million plus $1 million in punitive damages.

“They are refusing to pay the repair costs that the city has incurred to maintain and to keep that plant running,” said Thunder Bay city manager, Norm Gale.

“We are very disappointed and we are not pleased with the insurer. The insurer has previously agreed and acknowledged that these costs were insurable but throughout the process and later in the process, the insurer OMEX advised us that much of the costs are no longer insurable.”

The city has been insured by OMEX since 2004 and it has a $300 million property insurance policy.

The sewage treatment plant on Atlantic Avenue sustained heavy damage following the flooding disaster in May, 2012. The total cost to repair the damages was $58 million.

“There’s extensive repair work that had to be done,” Gale said. “There’s a lot of details to that. Tunnels were flooded, machines and equipment were not functioning. It was substantial damage.”

OMEX covered part of the cost of repairs, but Gale could not say how much the insurance company provided.

According to Gale, OMEX claimed the costs of further repairs were associated with upgrades that improve the condition of the plant.

“The insurer did say that the costs were insurable and it was years after the work had been done before OMEX made that claim,” Gale said.

The repairs to the sewage treatment plant are largely complete and it is functioning properly. Gale was not able to say what other repairs still need to be completed, but he did say the city covered the costs.

“We funded it through other ways, different accounts in the city, but it is funded,” he said. “So we are seeking full recovery of those costs.”