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The Steuben Courier Advocate
  • Flood insurance changes confusing and expensive, officials say

  • A 2012 reform to the National Flood Insurance Program has led to uncertainty and confusion, and is on a path to create massive rate increases, a group of local government and business representatives said Friday.
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  • CORNING | A 2012 reform to the National Flood Insurance Program has led to uncertainty and confusion, and is on a path to create massive rate increases, a group of local government and business representatives said Friday.
    U.S. Rep. Tom Reed, R-Corning, who’s working on some proposed changes to the Biggert-Waters bill that made the changes, brought them together at the Southeast Steuben County Library to discuss ways the program can be made better.
    The goal of the 2012 bill, named for creators Rep. Judy Biggert, R-Ill., and Rep. Maxine Waters, D-Calif., was to bring flood insurance rates closer to actuarial levels – to make the cost of insurance reflect the actual flood risk.
    That was necessary because the insurance program, created in 1968, is currently $24 billion in the hole.
    Lawmakers wanted to create a system that was financially sound, and stop having taxpayers pay to rebuild coastal homes that had been repeatedly destroyed by flooding.
    However, in a river valley area with a history of flooding like the Corning-Elmira area, the rate for flood insurance could increase ten times or more for some businesses and homeowners under the current program.
    But that, like so much else when it comes to current policy on flood insurance, remains unclear.
    Part of the 2012 law was a requirement for a comprehensive update of flood maps.
    Janet Thigpen, of the Southern Tier Central Regional Planning and Economic Development Board, said FEMA workers did extensive work on gathering the data to produce a new map for the region.
    But then, Thigpen said, they left producing the actual map to local authorities.
    Part of that was the result of a headache for local governments under the new program – levees.
    FEMA says levees can’t be considered in producing a map of flood risk unless they’re certified.
    Thigpen said they asked FEMA to leave the mapping process incomplete, rather than producing maps that disregarded the levees.
    But the process of certifying the levees is expensive and complicated, and no one seems sure who’s liable if a levee is certified and then fails.
    Erwin Town Manager Rita McCarthy said she’s concerned the town could be liable if the consultant they hire for the certification isn’t as qualified as they appear to be.
    Plus, McCarthy said, it seems wrong to make the local government responsible for certifying the levees when other agencies have been maintaining and inspecting them.
    “We’ve been inspected annually by both Army Corps (of Engineers) and DEC (Department of Environmental Conservation),” she said.
    McCarthy also noted that municipalities already have the responsibility of enforcing code requirements related to flood risk.
    Page 2 of 3 - Corning City Manager Mark Ryckman said he’s concerned that uncertainty about flood insurance and flood risk could stifle development in the area.
    He said the changes to the program feel like a “wholesale shifting of responsibility” to municipalities and homeowners from the federal and state authorities.
    Ryckman noted that issues like the levee certification are difficult to deal with on a local government level because they have regional impacts.
    “We can’t just certify the City of Corning,” he said.
    He stressed that regional issues like flooding are better handled by higher levels of government, though he acknowledged municipalities would have to share some responsibility, and some of the cost.
    Jamie Johnson, executive director of the Steuben County Industrial Development Agency, said the effects of the changes are already affecting development, and could start to lower property values.
    In some cases, he said, sellers are having to cut their asking price significantly to offset the higher insurance cost.
    “In order to sell, you have to take a loss,” Johnson said.
    Reed said he’s seen evidence of that in a situation brought to his attention where someone looking to relocate their business found that flood insurance costs in the new location, expected to be around $5,000-10,000 per year, were actually closer to $50,000 under the new law.
    Thigpen said the problem is bigger than just levees and rising insurance rates for homeowners and businesses.
    She believes the system actually needs more extensive reforms than have been considered, even under the 2012 act.
    As a case in point, she noted that despite a requirement for extremely detailed flood mapping -- something that’s still not completed -- the program as it exists only recognizes a property as being either in the floodplain or outside it.
    There’s no accounting for degrees of risk, or for efforts to minimize that risk.
    Reed said that’s something he’s hoping to emphasize during discussions in Congress next week. He’s looking for ways to create incentives for people to mitigate their flood risk, by doing things like moving furnaces above flood levels.
    He also suggested the possibility of a cap on the annual increases in flood rates, at something like 10 percent, creating a slow increase until the rates reach the “real” level under the law.
    He said he believes in the basic purpose of the 2012 flood insurance law, which is to create an insurance system that can afford to pay out and cover losses in the event of a disaster, rather than depending on massive FEMA expenditures.
    But in the meantime, Reed’s hoping some changes can make the transition to the new system smoother.
    Page 3 of 3 - Elmira Mayor Sue Skidmore is hoping so, too.
    “The entire city’s in the floodplain,” she said.
    Elmira was devastated in the 1972 flood caused by Hurricane Agnes.
    She said the problem has a particular impact in her city because the property values are relatively low already.
    “Should we just move the whole city?” Skidmore asked.

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