STATE RELIEF AGENCY INSISTS ON RETURN OF 200 FLOOD GRANTS

Although Chaffee resident Phillip Halter produced additional evidence to prove he accepted in good faith a flood grant from the Missouri Emergency Management Agency, the agency wants its money back.

Floodwaters forced Halter, a former Dutchtown resident, from his mobile home in July 1993. The Federal Emergency Management Agency later declared it a total loss, and Halter prepared emergency management paperwork to qualify for disaster loans and grants.

The Small Business Administration offered him a $5,900 loan Nov. 8, 1993, but Halter claimed he rejected it that same month, signing a document indicating his decision and mailing it to SBA.

In January 1994, Halter received a letter from Gov. Mel Carnahan and a EMA grant check for $2,196. The money went to furnish the new mobile home he bought.

Just two days before Christmas, EMA sent Halter a letter saying he shouldn't have received the $2,196, because he rejected the SBA loan Jan. 26, 1994, after he got the grant money. A condition of receiving the grant was that the recipient accept an SBA loan.

The letter, written by EMA grant coordinator Ron Harrison, threatened legal action if Halter didn't act by Tuesday. When Halter called Harrison, the EMA employee said the SBA didn't have any record that Halter rejected the loan in November 1993, long before receiving the grant money. The rejection document Halter claimed to have sent them was gone.

Harrison initially said Halter may not have to pay the money back, but now EMA's decision has changed.

EMA mailed about 200 letters like Halter's, and all recipients had until Tuesday to respond. If they didn't, another letter is to be sent, and then the matter will be turned over to the state attorney general.

Susan Stoner, who is with the agency's public information department, said she couldn't discuss Halter's case specifically, because it would invade his privacy. She agreed to speak hypothetically.

"Things like this happen when you have multiple agencies working on the same case," Stoner said. "This could possibly be one of our mistakes, but it was made in good faith.

"People had to go through a procedure to get grant money; we didn't just hand it out willy-nilly to them."

She said those who received letters like Halter's should call EMA and work out a repayment plan.

However, Halter recently discovered additional information that he never agreed to the loan and then canceled it, as EMA claimed. On page 2 of the unsigned loan application, which is dated Nov. 8, 1993, it reads: "Loan closing documents must be signed and returned to SBA within two months of this loan authorization and agreement. The SBA will cancel this loan if the borrower fails to meet this deadline."

Halter said even if he hadn't sent in a document rejecting the loan, the application indicates it would have been automatically canceled by Jan. 8, 1994, well before the date EMA said Halter canceled it himself.

"They should have said something about this whole SBA deal in the letter that came with the grant," Halter said. "They didn't tell me anything, and I wasn't even planning on getting a grant. I think it is lousy the way the government is treating some of the flood victims."

Halter said he contacted U.S. Rep. Bill Emerson's office about the matter, but planned to cash in bonds to repay the grant, if necessary.