A dozen homeowners in Madison Valley have reached a $2.5 million settlement with the city of Seattle over chronic flooding.

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A dozen homeowners in Madison Valley have reached a $2.5 million settlement with the city of Seattle over chronic flooding.

The homeowners had argued in a lawsuit that a city project to control sewage and stormwater runoff in surrounding neighborhoods 40 years ago created more frequent and severe flooding in Madison Valley.

The lawsuit was filed in December 2009, the third anniversary of a torrential rainstorm that flooded more than 30 homes in Madison Valley and resulted in the drowning of a woman in her basement recording studio several blocks away.

The homeowners’ attorney said Wednesday the city had been aware of the chronic flooding problems for years but never built the system that would have carried away the increased wastewater.

In agreeing to the settlement, the city did not admit wrongdoing.

The settlement was first reported in The Valley View, a Madison Valley newsletter.

The backed-up sewage contained heavy metals including arsenic and mercury as well as fecal-coliform bacteria the residents were exposed to when they cleaned up after an intense rain, said A. Richard Maloney, attorney for the plaintiffs.

“It was cheaper to flood a working-class neighborhood than to fix the problem,” Maloney said.

Seattle Public Utilities (SPU) said money ran out from the Forward Thrust bond projects approved four decades ago to separate sewage from stormwater around the city.

At the same time, wastewater became subject to stricter environmental laws.

A plan to pipe stormwater from Madison Valley to Lake Washington was never completed, said Linda DeBoldt, deputy director of SPU.

“There was no conscious decision to create flooding problems,” she said.

She said Seattle’s sewage and wastewater system is generally designed to handle a 25-year storm event but that more intense storms are occurring more frequently, causing the severe flooding in Madison Valley in 2004 and 2006.

Grace Stewart, 83, a retired nurse who has lived in her home in the 200 block of 31st Avenue East since 1970, said that after the city’s sewage and wastewater project on East Capitol Hill started in 1973, the floods in her basement became more severe.

She has a bedroom and a rec-room in the basement where her grandchildren stayed.

Each time the basement flooded — sometimes as often as three times a year — carpets, bedding and paneling were destroyed, Stewart said.

“Every time it flooded, it would drain me of all my money,” Stewart said.

Maloney said the city already had paid to replace many of the plaintiffs’ personal belongings during previous floods.

In 2008, the city reached a $2.8 million settlement over the drowning of Kate Fleming in her Madison Valley home in December 2006.

Although the death happened within a few blocks of the massive residential flooding, the city said they were unrelated and had different causes.

Since the 2006 storm, the city has spent more than $3 million to enlarge a detention pond at 30th Avenue East and East John Street.

By the end of 2011, SPU expects to spend $27 million more to add six blocks of stormwater pipes and a huge stormwater-storage tank at Washington Park.

Lynn Thompson: 206-464-8305 or lthompson@seattletimes.com