Freudenthal says state is working to resolve 'Tree Street' issue

By JEFF GEARINO - Southwest Wyoming bureau Posted: Friday, February 5, 2010 12:15 am

ROCK SPRINGS -- The state has been working to resolve the problems with "Tree Street" homes damaged by a 2007 mine subsidence project, Gov. Dave Freudenthal wrote in a recent letter to nine area lawmakers.
The governor responded to a letter sent Jan. 20 by State Sen. Stan Cooper, R-Kemmerer, and eight other lawmakers after their tour of the Rock Springs homes and discussions with homeowners.
Cooper urged the governor to break what he called the "bureaucratic impasse" that seemed to be preventing a satisfactory financial resolution for homeowners.
In his Jan. 28 response letter, Freudenthal said that while he understood the need for Cooper to "offer animated rhetoric in support" of constituents, "I take issue with your assertion of an absence of a state effort to reach a conclusion."
Freudenthal said he assumed Cooper "is not advocating the state simply begin writing checks" to Rock Springs residents.
"The Constitution requires and the Legislature expects a factual and legal basis for any payment authorized by the (state) Attorney General," the governor wrote.
"It is appropriate that any state compensation to homeowners be tied to damage which is likely to have resulted from the dynamic compaction project, rather than the subsidence events which have plagued Rock Springs for decades, and which are certain to occur in the future," Freudenthal's letter continued.
The July 2007 project was conducted by the Wyoming Abandoned Mine Lands Division. It was designed to free up vacant lands in the city so they could be developed for much-needed affordable housing.
The $2.8 million pilot reclamation project employed a controversial process known as dynamic compaction.
For three weeks, 25- and 35-ton weights were dropped over vacant lands adjacent to the neighborhood to collapse the underground mine void below.
Homeowners believe vibrations from the dynamic compaction severely damaged more than a dozen homes, cracking foundations, driveways, ceilings and walls, opening sinkholes in some yards, and causing gaps in windows and door frames among other concerns.
They have been battling state government for two years over the state's first settlement offers, which most homeowners rejected as too low to pay for damage repairs.
Filling voids
In 2006 -- at the request of Rock Springs Mayor Tim Kaumo -- the city began discussions with AML officials and Gov. Freudenthal about possibly using AML money to mitigate some lands within the city that had not been scrutinized for development before because of old mine voids.
Rock Springs was built around the coal mines that were first developed in the 1860s to supply coal to the Union Pacific Railroad.
As a result, many of the city's residents live over old, poorly built coal mines. Many miles of underground mine tunnels traverse underneath the city.
State rules forbid the AML from conducting subsidence work on undeveloped lands, but the city received special permission from the state to try a new subsidence technique, dynamic compaction, on a tract of land adjacent to the Tree Street neighborhood.
For three weeks beginning July 17, 2007, AML contractors using cranes dropped the weights about 2,300 times before residents' complaints halted the project.
AML directors said shortly after that the state would pay for all repair to homes damaged by the dynamic compaction portion of the project.
But homeowners contended the state's first settlement offers in Dec. 2008 -- which were based on a state-contracted engineer's assessment of the damages and repair costs -- weren't nearly adequate to fairly compensate for the needed repair work.
End point
In his letter to Cooper, the governor said the state is willing to fund up to $275,000 in repairs per structure.
Freudenthal noted attorneys for both sides have been engaged in finalizing the details of a mediation agreement that would lead to new inspections by a mutually agreed upon engineering firm.
The new inspections would be the basis of the next round of settlement offers to homeowners.
The governor said the state is willing to commit to accepting the findings of that engineer, if the homeowners are willing to do the same.
"For mediation to be successful at some point, the parties need to agree to a mediation process which determines an end point for both the homeowners and the state," Freudenthal wrote.
"For the state to agree to fund repairs while leaving open the possibility of continuing litigation would be irresponsible," the letter continued.
State Attorney General Bruce Salzburg said in a Jan. 28 memorandum to Freudenthal's letter that the "unresolved question" is whether the ground movement -- which appears to be ongoing more than two years after the dynamic compaction was halted -- was caused by the dynamic compaction.
"Although the media seem to have accepted the claim that the project caused the damages, I would like to have that question answered by a qualified neutral expert," Salzburg wrote.
He said the state "remains willing to undertake the significant expense of retaining another geotechnical engineer ... to consider these claims and make an independent determination whether the damages were caused, in whole or in part, by the dynamic compaction project."
Salzburg said while homeowners were negotiating the terms of the mediation agreement, the claimants filed a lawsuit in Sweetwater County District Court in July against two of the state's consulting engineers who had done work for the AML related to the dynamic compaction project.
He said the filing of the lawsuits raised the question of a possible "double recovery" for homeowners.
"The terms of the agreement to resolve the claims through this process must account for the pending suits ... so there is no double recovery," Salzburg's letter said.
Contact southwest Wyoming bureau reporter Jeff Gearino at 307-875-5359 or gearino@tribcsp.com