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I was involved in a similar matter many years ago. Just going from memory, in general terms, from what I recall a property owner who alters the natural watercourse is generally liable to downstream owners. It sounds like that is what they have done on the church property with their alterations and insufficient drainage solution. When they make changes to their property, they are responsible to ensure that they don't merely redirect water and flood downstream properties.
I don't think you are prohibited from suing either the church or the city. As I recall, in my area there were rules for suing the city, though. I think you had to first "exhaust administrative remedies," which means you have to make a demand through the proper government channels, have that demand denied, etc. (I think after they finally deny your demand they issue a "Right to Sue" letter or something).
The other thing I recall is that is gets very complicated and very expensive. The church will have insurance to pay for lawyers, and the city basically has an open checkbook to fund their defense, and the facts get complicated, with expensive experts needed, analysis, discovery, etc.
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