Council OKs fire insurance plan

HUNTINGTON — Huntington City Council Monday passed an ordinance that aims to prevent the abandonment of fire-damaged properties and hold property owners more accountable.

When a structure is gutted by fire, it's common practice for the property owner to pocket the insurance claim check and leave the city to pay for the cleanup and neighbors to deal with problems that arise from living next to a charred structure, city officials say.

The ordinance, which is the first of four proposals under Huntington's home rule plan to make it to the council, requires insurance companies to withhold $2,000 from every $15,000 of benefits payable to a policyholder on every total fire loss within the city. This withheld money would be held in escrow by the city and not released until all debris has been removed.

If the property owner does not obtain a certificate of good standing from the city within 90 days, the city will use some of the money in escrow to pay any delinquent fees on the property. If the owner fails to acquire a certificate within 180 days, the money can be used by the city to tear down the property.

Huntington Fire Capt. David Bias said he has identified 14 standing structures with insurance that should be torn down. The estimated cost to the city to tear them down without funds from the policyholder, he said, would be about $250,000.

The major revision from the original ordinance to the one approved by council was that it will not become effective until July 1, 2009. Councilman Cal Kent said the reason for the date change was to allow the state insurance industry to bring a similar measure to the Legislature for the proposal to have a statewide impact.

If the legislation doesn’t pass during the next session, they have 90-days to two months to implement changes.

Jill Cranston Bentz, president of the West Virginia Insurance Federation, has stated previously that the ordinance will be costly for companies to maintain, create legal conflicts between insurance companies and policyholders and is contrary to the regulatory authority of the state Insurance Commission.

Councilman Jim Insco voted against the ordinance because he said it violates the state’s long-standing value policy law. Insco said the city and/or insurance companies could possibly be sued for withholding funds from a valid policy.

The council  also read an ordinance for the first time that aims to remove a provision that exempts structures built before 1980 from storm water runoff combined system separation requirements.

Before the meeting a request was made by Mayor David Felinton to postpone the ordinance in order to allow Mayor-elect Kim Wolfe to better research the issue. With a vote of seven to three, Councilwoman Mary Neely did not attend, the postponement was voted down.

The $357 million plan, created by the Huntington Sanitary Board in 2007, deals with the city’s long-standing combined sewer overflow problem, with an initial phase of improvements costing an estimated $54.5 million. Huntington was required under a federal mandate to submit a plan to the state Department of Environmental Protection by the end of September.

About 85 percent of Huntington’s sewer system consists of lines that carry both storm water and sewage. The combined lines often overflow during heavy rain, which prevents the Huntington Sanitary Board’s wastewater treatment plant from treating the water. Instead, millions of gallons of untreated water flow into streams, rivers and basements and flood city streets.

Also at the request of Felinton, the City Council voted to postpone an ordinance until the first meeting in January that aims to limit bars and night clubs in the downtown in order for Wolfe to study the issue. By that time, Felinton has said, Wolfe would have had time to study the issue and learn more about the potential impact of the ordinance.