BP Lags in Reimbursing Local Governments

When the federal government says its owed money by BP for reimbursement of spill-related expenses, each bill gets its own press release, and you can bet that it gets paid.

The same isn’t true, however, of the coastal counties in the Gulf — several of which have spent millions of taxpayer dollars fronting these costs while navigating a lengthy and confusing reimbursement process.

Some, like Bay County in Florida, are still waiting. BP still owes the county more than $6 million, according to Valerie Lovett, a county spokeswoman.

“We have not received any reimbursement yet,” Lovett told me. “Currently the claims are turned in to a company called ESIS. They’re a contractor for BP. We don’t know what happens after that.” (The reimbursement of government cleanup expenses is handled separately from the $20 billion escrow fund that BP has set up for damage claims from private citizens and businesses.)

Escambia County, four counties to the west of Bay County, has also had frustrating experiences with ESIS.

Escambia, the Florida county closest to BP’s spill, also spent about $6 million on contracts for booms and other spill-related expenses, and waited for weeks to get any part of it reimbursed by BP—or from money that BP has given to four of the Gulf states.

“We had to go through six different processes for reimbursement,” County Commissioner Grover Robinson told me. “Every time we got through one process, they changed it on us.”

In late June, Escambia even got a letter from ESIS, saying that BP’s claims processing center had been unable to contact the county, “as we do not have a working phone number to reach you.”

“Our telephone number was on every piece of letterhead in dealing with the claim,” Robinson said. “It just added to the frustration.”

(When I called ESIS for comment, the woman I spoke with told me she didn’t answer questions from reporters and referred me to a press information line. When I dialed that number, I found it did not have a working voice-mail system. Both the Pensacola News Journal and The Associated Press seem to have run into this same problem.)

In late June, frustrations in Florida’s Panhandle culminated in a meeting of the Florida Association of Counties, where a BP representative “stood in front of various county officials and told them checks were going to start arriving for the mounting costs,” The Tampa Tribune reported.
For Escambia, the money did eventually arrive, piecemeal—some from money that BP gave to the state, and some from BP directly.

When I asked Robinson why the money didn’t come automatically from the $50 million in grants that BP had given Florida, he told me that the state needed some of it for its own spill-related expenses, and that some counties had less in cash reserves than his—“the state was fronting those counties more,” he said. Plus, BP had set up a separate process for local governments to file claims for reimbursement—a process that he hopes will work more smoothly going forward than it has thus far.

“For the most part, we’ve been made whole,” Robinson told me. “None of this happened until day 80, day 75. That’s our biggest frustration.”

Baldwin County in Alabama has been through some of the same difficulties.

“The reimbursement process is very slow,” County Treasurer Kim Creech told me. “It seems like every day a procedure at BP’s claim center changes.”

Baldwin has had one claim paid, but still has three pending—not including claims for lost revenue from taxes. That, it seems, could be an ongoing issue.

BP spokesman John Curry told me he wasn’t aware of the specific situations of the counties I asked him about, but mentioned the money that BP has given to Florida, Louisiana, Alabama and Mississippi as a possible source of funding for the counties.

“We gave each state $25 million to activate their area contingency plans and to begin the process of booming and all of that,” Curry said. “I don’t know what happened with that.” Alabama, Mississippi and Florida have each received a second payment of $25 million from BP.

“We’re enhancing the claims process every day trying to make it better, smoother, and more efficient,” Curry said. “We’re going to try our very hardest to work with them and make sure they’re reimbursed.”

by Marian Wang
© Copyright 2010 Pro Publica Inc.

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