New Insurance Law Riling Residents of Storm Damaged Okla. Town

June 18, 2008

Five weeks after many of them lost their homes to a powerful tornado, Picher, Okla., residents are expressing frustration about a new state insurance law that is affecting the buyout process for residents of the polluted community.

Tensions rose during a meeting of the Lead-Impacted Communities Relocation Assistance Trust to a point that a Picher police officer had to step in and warn some residents to calm down.

“We didn’t ask for a tornado,” trust Secretary Jim Thompson said. “We’re not a disaster relief trust, and this disaster really confused the issue. … We’re trying to make it work.”

Earlier during the meeting, trust members voted to make 52 buyout offers, including 47 to property owners whose homes had been destroyed when the twister struck the fading lead and zinc mining town on May 10. The trust delayed action on 10 other offers, including those to eight tornado victims.

The trust is overseeing a $60 million buyout of the federal Tar Creek Superfund site, in which Picher is located.

Three days after the tornado, trust members moved tornado victims to the front of the line for buyout offers. Officials have said 114 homes in Picher were destroyed when the EF-4 tornado, packing winds estimated at 165 to 175 mph, slammed into the town, resulting in the deaths of seven people.

The goal then was to have buyout offers made to those who lost their homes by the June 16 meeting. Mark Osborn, the vice chairman of the trust, said that didn’t quite happen, but that the trust expects to have completed making those offers before its next meeting on June 30.

A contentious issue during the meeting was the trust’s assertion that those who received buyout offers would not also be able to receive money from private insurance for their destroyed homes.

J.D. Strong, the chief of staff for the office of the state Secretary of the Environment, said that under a new state law – passed after the tornado – storm-damaged homes would be assessed as if no tornado had occurred, allowing Picher residents to receive full buyout value. But he said another part of the law stipulated that any insurance proceeds a person might receive would have to be deducted from the trust’s buyout offer.

Strong said the region’s two state legislators – Rep. Larry Glenn, D-Miami, and Sen. Charles Wyrick, D-Fairland – pushed for the new law.

“We do not think people should be paid twice for any home,” Osborn, of Miami, said.

Resident John Clay, whose home was insured, told trust members the effect of that law was that people who did have insurance would lose the amount they had paid insurers in premiums, while uninsured homeowners would receive the full amount of the buyout offer.

“How can you take my insurance money and not pay the premiums on the insurance?” Clay said. “That’s unheard of!”

Another resident, Paul Sharbutt, asked trust members “why are you guys trying to squeeze everything you can out of the good people of Picher?”

At one point, when Thompson interrupted to answer a question posed by Clay, Clay told him to “shut up,” and when Thompson responded in a loud voice, the police officer issued his warning.

Osborn told Clay and other residents that the rule “is not going to change” and suggested they contact their state legislators about the new law.

“We’re not trying to screw people,” Osborn said. “We’re not out to take away anything from people … We have tried to do a good and decent thing here (with the buyout) … to allow people to start their lives over.”

The Superfund area is beset with mine collapses, open shafts, acid mine water that stains Tar Creek orange and mountains of lead-contaminated mine waste. Local children have tested high for dangerous levels of lead in their blood.

Once a thriving hub of 20,000 people, Picher’s population had dwindled to about 800 in recent years as residents accepted state and federal government buyouts and moved elsewhere.

A status report issued June 16 by the trust indicated that it has made 359 buyout offers, 335 of which have been accepted.

Nine offers have been rejected. The latter number had been 11, but two tornado victims who had previously rejected the trust’s offer changed their minds.

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