BancorpSouth Insurance (BSX) is seeking reinstatement as insurance carrier for the Northeast Arkansas Regional Solid Waste Management District (NEARSWMD).
So representatives of the company attempted to explain to the district board the sequence of events that led to a switch to another carrier by then-executive director Jason Wolfenbarger, who was dismissed following his arrest on federal firearms charges.
Steve Shoemaker of BSX told the board his company has a long track record of insuring public entities, and had done business with the district since 2020. “We wrote the premium for $89,000 [a year],” he said, “which is a significant amount of money.”
Over the course of dealing with Wolfenbarger, Shoemaker said, BSX representatives began to notice significant changes in his interactions with BSX. “We had about five or six meetings with Jason on-site,” Shoemaker said, “and sometimes he was there and sometimes he wasn’t. So we were struggling to have good communications, which is vital in our business.”
Therefore, Shoemaker said, sometimes equipment that should have been added for coverage had not been added, while other equipment listed as covered was no longer part of the landfill’s inventory. “Fortunately, we didn’t have any losses,” he said, “so it didn’t become a big issue.”
On the other hand, Shoemaker said, the district had reported the theft of a Caterpillar skid steer on May 7, 2020, under what he called “very unusual” circumstances. “It was a brand-new piece of equipment,” he said, “that had tracking equipment on it.” That is, wherever potential thieves might take items so equipped, the location would be known.
“Most thieves are not very sophisticated,” Shoemaker said, “and they don’t really pay attention to a lot of things [like tracking systems].”
However, he said, the skid steer had apparently been stolen from the landfill by unusual thieves. “They took a heavy truck,” he said, “and they took a heavy trailer – and they took the tracking equipment off of it. That’s really unusual in my opinion.”
The skid steer, theft and replacement of which was previously reported, had a cost of $54,263.
So BSX staff, Shoemaker said, had questions about whether the theft was an inside job, perhaps by a disgruntled employee. “We paid the claim in full,” he said, “and it was less than 20 days later, on Memorial Day, that ... the holding facility, that we had inspected, was on fire and burning up.”
Shoemaker pointed out that, being only a concrete slab with steel girders and open sides, and containing a gigantic pile of trash, the building was “the least likely building that you would think would ever burn.”
Shoemaker speculated that items could have been brought into the building, smoldering undetected, to burst into flames and cause the fire. But he added circumstances of that fire were likewise unusual. He said an employee who’d been terminated – yet retained a key to the facility’s gate – had reported the fire on a holiday Monday. “We had our suspicions,” Shoemaker said. Nevertheless, he said, BSX promptly paid that claim, of $350,000, as well.
“So we had questions,” he said. “And the more questions we asked, the more distant [Wolfenbarger] became.”
As time went on after the fire, Shoemaker said, communication between BSX and Wolfenbarger ceased altogether. When the policy came up for renewal, he said, BSX worked diligently on the policy. “We had an $89,000 premium with $400,000 worth of losses in year one,” he said. “This is an account that had never had any losses, even remotely like this. These are all red flags in our business.”
Shoemaker said Friday that the policy had been in force only since February 2020.
Shoemaker speculated Wolfenbarger had become uncomfortable with BSX based on the company’s suspicions. “And it was just easier for him to terminate our relationship,” he suggested. “He never gave us any reason; he just said ‘I’m just not happy with the service.’”
Shoemaker added that most insurance clients don’t transfer their policies before the policy expiration date, as Wolfenbarger had done. “That’s because most insurance companies don’t recognize [such a] change,” he said. And indeed, three of the four companies insuring the landfill through BSX didn’t recognize the change, meaning that BSX still has those policies. The fourth policy, he added went to a different carrier – also before expiration of the current policy.
“We’re not here to create more issues,” Shoemaker said. “We just want you to feel comfortable to do business with us. We just saw some unusual patterns.”
Upon selection of a new executive director, Shoemaker concluded, BSX representatives would return to the landfill to seek policy renewal.