Property owners who signed right-of-entry forms last summer to allow government crews to remove debris after the May 22 tornado will be asked to provide documents so that the city of Joplin’s payment records can be reconciled.
The city is required by federal regulations to determine whether any residential property owners received an insurance payment for loose debris removal when the work was done free by crews contracted by the Federal Emergency Management Agency.
“We will send out about 800 letters,” asking property owners to submit copies of their insurance policies and other documents, said Leslie Jones, city finance director. The city is not expecting 800 people to owe money. “We know that not all of them had insurance,” Jones said of those who will receive the letters.
Those who did not have insurance or did not have coverage for loose debris removal, and those who paid a contractor to remove debris even though they signed right-of-entry forms will not owe anything.
The review also does not apply to residential property owners who received free curbside collection of tornado debris, Jones said, or to those who used an insurance payment for some other phase of property cleanup. City officials said, as an example, that if an insurance policy provided $5,000 for the cleanup of loose debris and demolition of any remaining structures, the property owner does not owe anything for government removal if the $5,000 payment was used for demolition.
Property owners may not have intentionally received a payment. City officials said some insurance policies have confusing language about whether loose debris removal is covered in addition to demolition.
In the hardest hit section of the tornado zone, where most buildings were destroyed, FEMA contracted with the Army Corps of Engineers for the removal of loose debris before demolition of damaged buildings could begin.
City officials said right-of-entry forms were required for clearing properties, and those forms specified that the property owner could not have the work done free by the contractors and also receive an insurance payment for it. FEMA refers to that as a duplication of services.
The federal government paid 90 percent of the cost of the debris removal from June 1 until Aug. 7. After that, FEMA’s share of the cost dropped to 75 percent. The state agreed to pay the rest of those costs. FEMA paid $82 million for the debris removal at its 90 percent share before Aug. 7 and an additional $3 million that month until the debris removal was finished.
At the time, the city and FEMA set up a three-tier payment plan for the work so that people who were underinsured but did receive some insurance payment could clear their properties for less money than private contractors charged. If anyone is found to owe money, only the fee from that three-tier plan will be assessed. The fee was based on the size of the lot.
The city’s letter asks that people turn in the requested documents by May 31. Because the city must document to FEMA whether a fee is due, those who do not submit the requested documents will be assessed a fee for the cleanup work.
Residents will be notified by letter if the city determines that no money is owed or if a fee is due, Jones said.
A payment that is found to be owed “will have to come to the city, and we will have to give it back to FEMA,” she said. The city Finance Department will conduct the reviews, and the steps are expected to take several months, she said. She said she may have to arrange for a temporary worker who is experienced in insurance policy language to do the reviews.
RESIDENTS WHO RECEIVE the letters and have questions may call the Finance Department at 624-0820, ext. 244.