published Sunday, May 29th, 2011

FEMA seeks return of overpayments

WASHINGTON — After Robert and Eloise Taylor’s two-story condominium in the Bellevue area of Nashville was destroyed during the May 2010 flooding, the elderly couple was just able to scrape together the $60,966 it cost to rebuild their home of more than two decades.

Robert, 84, and Eloise, 83, cashed in some retirement accounts and insurance policies on their children and received $26,517.56 from the Federal Emergency Management Agency.

After spending about five months living in his brother’s house, they moved back home a few days after Labor Day, thinking that, except for the health problems Eloise has had that they think are related to stress, the nightmare was behind them.

But in mid-March the Taylors received a letter from FEMA saying they had to repay $10,500 of the assistance they received because they had received that amount through a homeowners insurance policy. That is considered double payment, FEMA said.

The Taylors are among 403 Tennesseans, mostly Nashville-area flood victims, who have received letters in recent weeks from FEMA telling them they have to return assistance payments totaling $1.6 million that the agency says were improper.

Nationwide, 5,650 recipients of federal assistance are being told to return about $22 million. And this is just the first batch of letters that FEMA plans to send out as it plows through a backlog of 168,000 improper payments totaling $643 million going back to Hurricanes Katrina and Rita in 2005.

A federal court suspended FEMA’s efforts to recoup improper payments in 2007 in response to a class-action lawsuit filed by people who applied for assistance after the two hurricanes.

Partly in response to the lawsuit, FEMA revised its procedures for recovering improper payments, and the court dissolved the injunction in August 2009.

Anita DePasquo and her husband, Tony, got a letter from FEMA three weeks ago telling them to repay $27,700 of the $29,900 grant they received.

Their home on Newsom Station Road ended up almost completely underwater last May. They put all but $2,200 of their FEMA grant toward buying a house in Bellevue, which they are renovating while they rent another home.

DePasquo said the Small Business Administration required the couple to put the money into buying the Bellevue home.

But the letter from FEMA said the money was for repairing the exterior of their house on Newsom Station Road. The letter also noted that the couple received an insurance payment from State Farm.

“Now they’re saying we’re not eligible because of duplication of benefits,” DePasquo said. “Why they didn’t tell us that at the beginning, I don’t know.

“It just doesn’t seem like FEMA is trying to help people get through this. They’re making it worse.”

DePasquo, a Realtor, said she and her husband, an information technology contractor for the Air Force, are trying to figure out how to repay.

“We feel there’s no choice because it’s the government,” she said. “They’re going to look at my husband’s income and say we have the ability to pay, even though we have so much debt.”

Tony DePasquo is working 84 hours a week at an Air Force base in Qatar to generate more income so the couple, who have two children, can pay off other flood-related debts.

WAIVER PROPOSAL

Some Democratic members of Congress who represent states where the disasters have occurred are pushing legislation that would give the FEMA administrator the authority to waive repayment in cases where the agency was in error.

Republican opponents say that would set a bad precedent at a time when the federal government is facing massive deficits.

Twelve declared disasters have occurred in Tennessee dating back to the 2005 hurricanes. Besides the flooding, one of the most severe occurred on April 27 when tornadoes ripped through the Chattanooga area, killing nine people in Apison and nine in Bradley County, along with dozens more in Georgia and Alabama.

As of May 19, more than 5,000 people in East Tennessee had registered for FEMA disaster assistance as a result of those storms. They had received more than $3 million.

U.S. Sen. Mark Pryor, D-Ark., proposed the bill that would allow waivers in cases where the collection would be “against equity and good conscience.”

Committee member U.S. Sen. Susan Collins, R-Maine, said every federal agency has some discretion to cancel repayments and that the bill would send the wrong message at a time when the federal government is trying to recover improper payments that totaled $120 billion just last year.

“We’re fixing the wrong problem,” said U.S. Sen. Tom Coburn, R-Okla. “We need to fix FEMA.”

Rep. Jim Cooper, D-Nashville, cut the middle between those two positions, saying that he didn’t think flood victims should have to pay for mistakes by FEMA.

A DUTY

FEMA officials say it is their legal duty to collect the improper payments, and emphasized that the amounts sought are just a small portion of the total disaster assistance that was paid.

Taylor isn’t concerned about the philosophical arguments going on in Washington. He just doesn’t think he should have to repay the federal assistance.

He appealed the order and received a letter last month that, without explanation, reduced his obligation to about $2,800. That’s almost exactly the couple’s monthly income from a combination of their Social Security and two small pensions.

Taylor was supposed to receive a letter from FEMA outlining a payment plan, but never did. So he contacted Cooper’s office, hoping he could receive a waiver on what he owes.

“I’ve been going through this since last May,” Taylor lamented.

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