Planning can lower flood insurance costs

Coverage of the 1993 Mississippi River flood and the more recent floods in Georgia, Texas and California has focused attention on the use of the nation’s floodplains. Congress has already acted to expand the existing post-disaster mitigation program and now has provided a planning and mitigation fund to be used in a pre- or post-disaster setting.

This new program was created by passage of P.L. 103-325, Title V of which is entitled “National Flood Insurance Reform Act of 1994.” The act provides grants to communities for two new programs: planning assistance grants for communities to develop management plans and mitigation assistance grants to implement eligible activities contained within the plan.

Grants may not exceed $50,000 for planning assistance and $3.3 million for mitigation assistance during any five-year period.

The appropriations bill for the Federal Emergency Management Agency (FEMA) for this fiscal year has been passed and contains most of the funding for the programs — $10 million the first year, $15 million the next year and $20 million each year thereafter. A grant under this program cannot exceed three times the local contributions; this is a 75/25 federal/state or local cost-share program. However, communities must take certain steps before the funds can be made available.

A FEMA-appointed task force must develop interim regulations by the end of this month, which will then be published in the Federal Register for public comment. These comments will be reviewed and the regulations revised by this summer.

The 1994 Reform Act gave statutory authority to the previously merely administrative Community Rating System (CRS), a voluntary program to reward communities doing more than just meeting minimum standards to help their citizens prevent or reduce flood losses.

Currently, 821 communities have been accepted into the CRS program, and an additional 90 have applied this year. This is only 5 percent of the total number of communities in the flood insurance program but represents about 60 percent of the approximately 2.8 million existing policies.

To become part of the CRS program, a community must fill out an application for any or all of 18 planning activities specified and attach documentation to verify these activities.

The application is reviewed by FEMA and its contractors; a site visit to the community is made to verify the community’s activities and performance, and then it is given its CRS classification. Applications are due by December 15 of each year, and premium reductions go into effect the following October.

There are 10 CRS classifications. Class 1 requires the most credit points and receives the greatest premium reduction.

A community that does not apply for the CRS or does not receive sufficient points is a Class 10 community and receives no reduction in insurance premiums. The application identifies 18 creditable activities classified under the following four headings: public information, mapping and regulations, flood damage reduction and flood preparedness. Each year, classified communities must recertify that they are continuing to perform the activities for which it is claiming credit. The recertification includes progress reports for some activities.

Communities can receive additional points by developing a floodplain management plan (FMP). Adoption and implementation of an FMP increases the credits for activities affected by the plan by 10 percent. If the plan includes a review of the natural and beneficial functions of a community’s floodplains, then the credits for those activities that are implemented are increased by an additional 5 percent. The FMP must cover the following areas: problem identification; flood hazard area inventory; review of possible activities; coordination with other agencies; developing an action plan; seeking public input; and adoption and implementation.