Cheryl Walker’s rental property in the Ville neighborhood was damaged by last month’s tornado. She was relieved to know her tenant wasn’t injured but became livid when she found out that 25% of her insurance payout would be subtracted and given to the city.
“Give me my money,” Walker told News Channel 4 First Alert’s Morgan Harris last week. “It’s not yours, it’s not yours!”
Walker, who has owned the property since 2006, said she’d always paid her premiums on time and had never made a claim. Learning that part of it would be turned over to the city shocked her.
If the building had been condemned by the building commissioner, she’d not only lose a tenant she’d have to foot the bill to demolish the structure. Thankfully, Walker said her building was only damaged, which meant she could go ahead and apply for her insurance funds to fix the damage. But when processing her payment, the insurance adjuster added an unexpected wrinkle.
“He said, ‘Maim, you’re not going to get all of it because there’s an ordinance in your city that says we have to give them 25%,’” Walker recalled. “I said, ‘that’s not fair! I need all my money.’ But he insisted he had to abide by the laws of the city.”
When she first purchased the policy, Walker recalled no language regarding a 25% deduction. She only heard that from the claims adjuster after she filed her claim.
What the adjuster referenced was a state statute and a complementary ordinance dating back to 1969, according to the Missouri Legislative Library. However, the original statute did not include any withholding language.
That was added in 1984 which set a withholding amount of 10%. In 1996, the City enacted Ordinance #63838, which required insurance companies to pay 25% of proceeds arising from “fire, explosion, or other casualty” to the city comptroller’s housing division. The measure was enacted to combat public nuisance property owners who collected insurance but did not repair or demolish properties.
The implementation of the ordinance is confusing and backwards, Walker insists. She was informed by city officials and her lawyer that the decree would only be triggered if the building had been condemned by the city and the owner was ordered to correct, remove or abate specifically identified defects.
“My property was never condemned,” Walker said, wondering why the ordinance was applied to her in the first place.
After her appearances on local news stations, Walker heard from other storm victims.
“My neighbors, other landlords I know called saying, ‘me, too, Cheryl!’”
At the same time, the city NAACP chapter publicly called for intense scrutiny of insurance company practices. The agency shared research detailing the more than $1.6 billion in property losses that included over 5,000 structures damaged or destroyed in north St. Louis. They also reported that up to 70% of affected households were uninsured and even insured residents “face significant barriers to rebuilding.”
Walker, a self-described “community financial empowerment specialist,” is well known in the region and extremely media savvy. In fact, it seems the First Alert reporter’s call to Mayor Cara Spencer about the ordinance even caught her by surprise.
When she contacted the NAACP, Walker said officials told her they were getting numerous calls from other tornado victims on the matter. “They thanked me for making the issue public. They said it will help in their fight.”
City officials insist the ordinance – despite its language – was not intended to apply to mass casualties such as the May 16 tornado. Spencer said she’s trying to remedy the situation and perhaps find a way to suspend the ordinance.
“We are working with the Missouri Department of Insurance to really develop that path forward here. We are working as quickly as possible,” Spencer told reporters.
However, the mayor also added that the ordinance has been an important instrument in keeping property owners from simply filing claims and then abandoning properties.
Walker bitterly recalled 2017 when she and other city voters approved Proposition NS which was supposed to be a tax-based fund dedicated to improving or demolishing vacant or abandoned properties in the city.
“There are all these abandoned properties and empty school buildings in our neighborhoods while they’re sitting on my money. Are you kidding me?”
Gov. Mike Kehoe released a statement last week advising the city to consider waiving the holdback on all “owner-occupied residential property” and keep it in place for rentals and commercial properties.
None of this gives Walker any comfort. She’s received her claim, minus the withheld 25%, but she’s still in limbo regarding whether it will ever be reimbursed or simply added to the city’s coffers.
“Naw, they haven’t given me my money yet,” Walker said Monday afternoon. “They’re absolutely 100% ignoring me! They’ve been quiet as mice.”
She did, however, share an email response she received Tuesday from the comptroller office’s asset manager who said she had “not received any information regarding this ordinance, however I will check into it and let you know what I find out.”
The official added that the “standard process” required “a memo” from the city inspector” to release funds after he’s assessed the condition of the property and determined the next steps. “They have a 30-day time frame to complete this,” the official said, adding that no funds could be released without documentation from the inspector.
For Walker, the city has made a tragic situation even worse for uninsured and even insured residents. The solution, she said, is simple; get rid of or suspend the ordinance.
“Nike it,” Walker said, “Just do it. Waive it!”
Sylvester Brown Jr. is the Deaconess Foundation Community Advocacy Fellow.