Hoeven comes to Grafton for flood insurance roundtable
Options to get out of floodplain discussed
GRAFTON – There was standing room only at the Grafton City Hall council chambers last Thursday as U.S. Sen. John Hoeven was in town to hold a roundtable discussion on flood-related issues pertaining to the city.
Community and business leaders as well as members of the general public were on hand to hopefully find some sort of answer when it comes to skyrocketing National Flood Insurance Program (NFIP) premiums facing residents and business owners.
Beginning this fall, after the passage of the Biggert-Waters Flood Insurance Reform Act of 2012, flood insurance premiums for those who live and conduct business within the 100-year flood zone are starting to see drastic increases in their flood insurance premiums.
Banking institutions currently mandate property owners to carry national flood insurance if they have a mortgage on their home or business.
Those who purchased a home or business before July 1, 2012, are seeing a 25 percent increase in their flood insurance premiums over the next four years. Those who have taken out a mortgage after that date are seeing up to a 400 percent increase in their premiums this year.
Those who already own a home, but are looking to sell, are finding it difficult to find buyers because of the high cost of flood insurance prospective buyers would have to pay.That’s brought the housing market in Grafton to a standstill.
After a few introductory comments by Hoeven, Grafton Mayor Chris West gave an overview of what has been happening locally and the impact of Biggert-Waters.
West also talked about the city’s efforts to restart a flood diversion project to get Grafton residents out of the 100-year flood zone. He said federal money to accomplish the project currently isn’t available.
West said the state currently has $7 million set aside for the project and locally there is about $3 million available. West said he had a meeting scheduled with Gov. Dalyrmple on Dec. 4, but that meeting was cancelled because of the weather. He said he had planned to speak to the governor to see if the state can help fund Grafton’s flood diversion, but if it did happen, that money wouldn’t come until the next biennium, beginning in 2015.
The goal is to get Grafton out of the 100-year floodplain so residents aren’t required to purchase flood insurance.
All three members of North Dakota’s legislative delegation at the time, Hoeven, Kent Conrad and Rick Berg all voted for Biggert-Waters in 2012.
In an opening statement, Hoeven put the blame for the insurance hike on the Federal Emergency Management Agency (FEMA), not Biggert-Waters.
Hoeven said FEMA was supposed to complete an affordability study before making any decision on whether or not to raise rates. However, homeowners began seeing rate hikes after Oct. 1 this year.
“Right now FEMA is adjusting their rates to try to make their program actuarially sound,” Hoeven said.
According to Hoeven, FEMA is interpreting the Biggert-Waters act differently than what he and other legislators had in mind when he voted for it.
“FEMA decided that they are going to adjust these rates. In my opinion, I think that’s wrong,” he said. “In my opinion they were first supposed to do an affordability study and then show Congress they had a plan. Then Congress would determine if that made sense and then (FEMA) would start to make adjustments based on the study.”
One member of the crowd, Allison Skari of Grafton told Sen. Hoeven that she and her husband purchased a home after July 2012 and have seen their flood insurance premium rise substantially. She said it was a big shock and asked Hoeven why he voted for the Biggert-Waters act.
“We’re forced to buy this flood insurance, it’s like they’re putting a gun to our head,” she said. “We feel it’s like extortion, if we don’t pay it (flood insurance) we lose our home.”
Hoeven responded by saying it was FEMA that is making the insurance rate adjustments.
“And I don’t think they have the right to do it,” he said.
Hoeven said he also disagreed with the fact that flood insurance rates are being raised on property owners who haven’t even filed a claim. He informed the crowd that he along with a bi-partisan group of senators including fellow North Dakota Sen. Heidi Heitkamp, introduced a bill to the Senate called the Homeowner Flood Insurance Affordability Act. Hoeven said the bill, if passed would delay the implementation of the rate increase for two years after FEMA completes the affordability study and Congress gives FEMA authority to raise rates. The affordability study would take two years, effectively giving those who are required to purchase flood insurance four years before a possible huge rate hike.
Hoeven said once the Homeowner Flood Insurance Affordability Act is passed and signed by the president, rates would go back to where they were. He said he’d like to make the bill retroactive to the rate hike, but said that probably wouldn’t happen.
Passing of the affordability act would give the city approximately four years to get out of the 100-year flood zone.
Hoeven said Grafton was previously authorized for up to $45 million in federal funds for a flood diversion project, but there are now two roadblocks in the way. He said the federal government used to cost share 75 percent of such projects and now it’s changed to a 65 percent cost share. He also said Congress passed a “no new start” clause, putting a halt to any new projects.
Grafton City Administrator Nick Ziegelmann explained Grafton’s two-phase plan for a diversion. He said the first step is a 3.5 mile diversion channel north of the city, along with all of the engineering. He said the second step or Phase II would be a tie-back levy west of Grafton.
West said unfortunately, both phases would have to be complete before the Army Corps of Engineers would take the city out of the floodplain.
“You can’t do one piece without the other to get out of the floodplain,” Ziegelmann said.
Dist. 19 Sen. Tom Campbell asked Sen. Hoeven if it was possible for Grafton residents to “opt out” of the flood insurance program if they wanted to. He said flood insurance policies carry such a high deductible that most residents have never filed a claim, so the insurance is basically worthless.
Many in the assembled crowd said that not requiring flood insurance would be a difficult sell to banking institutions.
Another possible option discussed to get Grafton out of the flood zone is to have its temporary dike system certified by the Army Corps of Engineers. Campbell said the city has done a good job of keeping dry using its temporary dike system over the past several years.
“We can fix this ourselves, right now because we’re confident we know what to do in our own backyard,” he said.
That option of certifying the city’s dikes also has a maze of federal red tape in the way, because much of the land the temporary dike system sits on is federal buyout property where homes were previously removed because they were constantly being flooded. Federal regulations prohibit any permanent structures on that land, and that includes dikes.
Hoeven said that he would check into that possibility. He said in some, but not all cases, those federal regulations can been lifted.
For many, the roundtable left more questions than answers, however, Sen. Hoeven said he’d start seeking solutions to Grafton’s situation immediately.