Council questioned on status of insurance checks

(Graham Jaehnig/Daily Mining Gazette) The Calumet Village Office is currently holding on to two fire insurance checks paid to the village for the clean-up and remediation of two fire-damaged properties in the village. The village has neither funded clean-up, nor returned the checks, according to a former council trustee.

CALUMET — The Calumet Village Council came under fire at last Tuesday’s regular meeting, in regard to two fire insurance checks in the village’s possession, with which they have done nothing, according to a former member of the board.

Former trustee Virginia Dwyer addressed the council, and said she has brought the issue to the attention of the council several times.

“A while back, I addressed the council, both as a councilperson, and as an audience member,” she said, “as to what happened to the fire withholding check for the (destroyed) property on July 9 (2017). What is the status of said check?”

Of the five trustees present, none of them was aware of the checks. President Dave Geisler said he did not recall details, as it had been months since he had last heard about it.

“We have a fire withholding insurance that some jurisdictions in the state of Michigan have,” Dwyer said. “The village of Calumet was unaware of it. The fire department made them aware of it, so a year ago in May, our village administrator applied or filed a complaint saying Farmer’s Insurance were the insurers of that property, forgot to withhold $12,500 from her insurance payout, to make sure that she cleaned up the property.”

As the village is the listed jurisdiction, Dwyer explained the check was issued, and was to be deposited into a special escrow account, because the funds can only be used to clean the site in the event the insured fails to do so.

In this particular case, said Dwyer, the village filed a complaint with the state, in which it said the property owner had not cleaned the site, and the village, therefore, would. The Michigan Department of Licensing and Regulatory Affairs, contacted the insurer, Dwyer said.

A bill was submitted for asbestos abatement, and site clean-up, Dwyer said, and in response, the insurer mailed a check in the amount of $12,557.

The check was accompanied by a letter instructing the village to inform the insured once the clean-up was complete, because the check was to be used for that purpose.

The village office received the check, said Dwyer, but the trustees were not informed that it had arrived.

The property owner had, in fact, cleaned up the site in November, said Dwyer, and it was not until February the council learned the check was still in the office.

“The village never let Farmers know that the insured cleaned it up on her own nickel,” said Dwyer, “and we never sent the check back, even though we said we needed that money to clean it up.”

When Anderson asked Dwyer if that meant the village had $12,000 in the bank, she responded that the money can only be returned to the insured, or used to pay a contractor to clean up the property.

“We said we needed to clean (it) up,” she said, “and we never did. So, instead of sending it back to Farmer’s, because there are emails from (the insurer) saying we did not use that money to clean up per requirements, you need to return it. The village never returned it.”

The check, Dwyer learned last week, is still in the office.

Trustee Roxanne King said that the money had not been deposited into any account.

“The implication is,” she said, “is that it hasn’t been deposited, then it’s still sitting as a check somewhere.” She went on: “Then, what we have is a piece of paper sitting on a shelf somewhere.”

Geisler said he would look into the matter, and if the check had not been returned, it would be.

“I just wanted the village to know,” Dwyer said, “that I did file a complaint with the state, and with Farmer’s, because we knew very well what that letter (said), that when the demo was done — keep the money to do the demo, they didn’t mean keep the money and put it in your general fund, and that’s exactly what we did. Shame on the village for doing that.”

Dwyer said the issue with the insurance check was one of the deciding factors in her deciding against running for re-election.

“We have to do things in an ethical fashion in this council,” she said, “so, I want to make sure that money is sent back.”

She then said the village had another check, she said the council was probably not aware of, with regards to a Seventh Street residence destroyed by fire in late 2018, which the trustees confessed they did not know.

The check, Geisler said, is in the general fund. Dwyer asked why the village is neglecting such duties.

“It’s something that does happen on a rare occasion,” said Geisler, “and if that check — those monies — have not been returned, they will be returned.”

Trustee Nathan Anderson said he did not think that was true.

“I think we just dropped the ball, Virginia,” Anderson said, “and without people like you sitting there bringing these things up, they’re just going to continue to happen; guaranteed they will continue to happen.”