City of Joplin finance director: Tornado cost city $24 million

(From the City of Joplin)

City Finance Director Leslie Jones presented a report to the Joplin City Council at the January 17 meeting that summarized insurance proceeds and reimbursements from the Federal Emergency Management Agency (FEMA) and the State Emergency Management Agency (SEMA) in relation to the City’s estimated costs as a result of the May 22, 2011 disaster.

In her comments, Jones noted that the estimated total cost to the City is nearly $24 million. Included in this cost is approximately $9 million for debris clean up outside of the defined “Expedited Debris Removal” area, or the area receiving extensive and catastrophic damage from the EF-5 tornado.

An estimated $15 million is expected for other damages incurred by the City including the loss of two fire stations as well as some of the City’s infrastructure, such as signs, signals, streets, curbs, catch basins, parks facilities and playground equipment.

“Many already know about the damage to the two fire stations and trucks,” said Jones, “but often people don’t realize the other things that this storm tore apart, such as the catch basins, street signs, lights and such. In reviewing the entire list of damages, it is obvious that this storm devastated everything in its path. Nothing went untouched.”

Although the overall cost to the City is noted at $24 million, Jones said that the City had a record-setting amount of eligible donated resources that will help offset these costs.

“The $17.7 million of donated resources is the largest amount recorded in the history of Missouri and in FEMA Region VII,” said Jones. “There were over 102,000 volunteers working over 610,000 hours along with donated goods and services valued at over $8.5 million, and 12,000 hours of donated equipment use. That’s incredible and the City is very thankful for all who have helped Joplin. Not only did the volunteers help clean up Joplin, but they also helped us financially recover a significant amount of expense.”

Although total volunteer numbers reported are higher, the volunteer numbers stated in this instance are referring to the service hours of disaster-related assignments that are eligible for use by the City under FEMA guidelines.

According to FEMA’s reimbursement guidelines, one-third of the value of the donated resources, or approximately $5.9 million, is eligible to offset the costs of temporary projects of this disaster. FEMA reimburses the City 75% of all projects after any insurance proceeds and SEMA reimburses 10%. With the donated resources credit, the City is responsible for 15% of all permanent projects, which is estimated at just over $1.5 million.

However, the City will receive other payments from insurance, as well as FEMA and SEMA to offset the $1.5 million City match. Jones noted the City’s insurance coverage for lost revenue from sewer and franchise fees, as well as pool and shelter revenue estimated at nearly $300,000 is one such source. The City also owned a structure at 20th and Connecticut that was destroyed by the tornado and will not be replaced. The City will receive approximately $335,000 in insurance proceeds for the loss of this building. It is estimated with the receipt of these payments, the City will break even relative to the entire cost of this disaster.

“These payments and the offset credit from donated resources will help ensure little or no cost to the City after all of the accounting for this disaster is complete,” said City Manager Mark Rohr. “This is beneficial to the City and our citizens, when the entire cost of this disaster could have dealt a serious blow to the financial well-being of the City. We again thank the volunteers, and our federal and state partners in this disaster recovery. They have assisted in many ways including funding a large portion of the debris removal costs. The net effect is that the City was on solid financial footing prior to May 22nd and based on the existing and anticipated support and how we have managed the process, we will continue to maintain the same financial status we had established earlier.”

The Expedited Debris Removal initiative was announced by President Obama in late May to provide an efficient debris removal operation of the extensive and catastrophic hit areas. FEMA mission assigned the debris removal process to the U.S. Army Corps of Engineers, while the Missouri National Guard managed the oversight of the project. Costs estimated at $82 million inside the EDR through August 7 included FEMA paying 90 percent and the State of Missouri paying the remaining 10 percent. Costs estimated at over $3 million inside the EDR for the remainder of August included FEMA paying 75 percent and the State of Missouri paying the remaining 25 percent.