The City will soon send letters to all property owners who signed a right-of-entry (ROE) form with the City of Joplin that allowed FEMA’s (Federal Emergency Management Agency) government-funded contractor, the United States Army Corps of Engineers, to clean the loose tornado debris from their property following the May 2011 tornado.
The letters pertain to the duplication of benefits that may or may not have occurred with each individual property owner. Over the last several years for those properties cleaned by the government-funded contractors, the City has been reviewing insurance policies and working with each of the insurance companies (when authorized by the property owner) to determine if a duplication of benefit had occurred.
Under federal law, an individual who has sustained a disaster loss cannot receive assistance from the government AND from insurance or any other source for the same purpose. If that happens it is considered a “duplication of benefits,” and the government must be repaid the portion that was duplicated. In this case, this means that residential property owners in the areas identified in the EDR (Expedited Debris Removal) initiative could not have their debris removed by government-funded contractors AND also have received an insurance benefit for the same service. As specified by the ROE form that the property owner signed, property owners could not receive insurance coverage to pay for the removal of storm-generated debris and had their property cleaned by the federal government.
If insurance was paid out to a property owner or if their insurance company is retaining an insurance benefit to cover the costs of debris removal, but the owner utilized government-funded contractors to clear his/her property, it is likely that some or all of the proceeds provided for debris removal will have to be turned over to the City of Joplin in order to eliminate the duplication of benefits that has occurred. As the City collects the duplicated funds, the money will then be returned to FEMA and the U.S. Treasury -- it is not retained by the City of Joplin. The reason for this is because FEMA tasked the Army Corps to clean up debris in the hardest-hit areas on behalf of the City, and therefore these funds must go back to FEMA for their contracted work.
In regards to the amount of funds this relates to, the City devised a 3-tier cost structure during the ROE process in order to make debris removal costs as equitable as possible for property owners. The maximum amounts in this structure were based on approximately the same amount that residents owning similar sized lots would pay for that service:
3-tier cost structure:
Lot Size Debris Removal Value
Up to 10,000 square feet $1,500.00
10,001 square feet to ½-acre $2,500.00
½-acre and greater $4,000.00
When authorized by the property owner, the City has been working with the appropriate insurance carriers to help determine if a duplication of benefits has occurred.
Property owners will receive one of two letters:
1) A letter stating that after the review of the City’s records and information received from their insurance agency that no duplication of benefits has occurred. Property owners will not have to take any action; or
2) A letter stating that after the review of the City’s records and information received from their insurance agency that a duplication of benefits has occurred because the property owner has either received insurance proceeds for the debris removal, or the insurance company is still retaining insurance proceeds for this service. An invoice will accompany this letter stating the amount due, based on the information received from the insurance agency and the payment amount that was either already issued to the property owner, or is being held to pay for the service. The City will also mail copies of the duplication of benefit explanation letter to the insurance carriers of each of the property owners. Property owners, who have questions about this, should contact their insurance carrier.
“We appreciate everyone’s attention to this matter,” said Finance Director Leslie Haase. “The review process has taken some time, as we worked with numerous insurance carriers to receive the necessary information. Throughout this recovery, our residents have been understanding about the paperwork and documentation process. It is our hope that this is the final time the City will have to contact them to review data related to the tragedy that took place in 2011.”
Haase said if residents have specific questions for the City they may call 417-624-0820, ext. 250 or ext. 251 for assistance. “The City is contacting 650 property owners about this, and I encourage citizens to be patient as we all work together to close this loop in the clean-up efforts of Joplin.”
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