[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
A LOOK AT THE NATIONAL FLOOD INSURANCE
PROGRAM AND FLOOD MITIGATION EFFORTS:
IS BUCKS COUNTY, PENNSYLVANIA,
READY FOR ANOTHER FLOOD?
=======================================================================
FIELD HEARING
BEFORE THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
__________
AUGUST 15, 2006
__________
Printed for the use of the Committee on Financial Services
Serial No. 109-115
U.S. GOVERNMENT PRINTING OFFICE
31-544 PDF WASHINGTON : 2007
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HOUSE COMMITTEE ON FINANCIAL SERVICES
MICHAEL G. OXLEY, Ohio, Chairman
JAMES A. LEACH, Iowa BARNEY FRANK, Massachusetts
RICHARD H. BAKER, Louisiana PAUL E. KANJORSKI, Pennsylvania
DEBORAH PRYCE, Ohio MAXINE WATERS, California
SPENCER BACHUS, Alabama CAROLYN B. MALONEY, New York
MICHAEL N. CASTLE, Delaware LUIS V. GUTIERREZ, Illinois
EDWARD R. ROYCE, California NYDIA M. VELAZQUEZ, New York
FRANK D. LUCAS, Oklahoma MELVIN L. WATT, North Carolina
ROBERT W. NEY, Ohio GARY L. ACKERMAN, New York
SUE W. KELLY, New York, Vice Chair DARLENE HOOLEY, Oregon
RON PAUL, Texas JULIA CARSON, Indiana
PAUL E. GILLMOR, Ohio BRAD SHERMAN, California
JIM RYUN, Kansas GREGORY W. MEEKS, New York
STEVEN C. LaTOURETTE, Ohio BARBARA LEE, California
DONALD A. MANZULLO, Illinois DENNIS MOORE, Kansas
WALTER B. JONES, Jr., North MICHAEL E. CAPUANO, Massachusetts
Carolina HAROLD E. FORD, Jr., Tennessee
JUDY BIGGERT, Illinois RUBEN HINOJOSA, Texas
CHRISTOPHER SHAYS, Connecticut JOSEPH CROWLEY, New York
VITO FOSSELLA, New York WM. LACY CLAY, Missouri
GARY G. MILLER, California STEVE ISRAEL, New York
PATRICK J. TIBERI, Ohio CAROLYN McCARTHY, New York
MARK R. KENNEDY, Minnesota JOE BACA, California
TOM FEENEY, Florida JIM MATHESON, Utah
JEB HENSARLING, Texas STEPHEN F. LYNCH, Massachusetts
SCOTT GARRETT, New Jersey BRAD MILLER, North Carolina
GINNY BROWN-WAITE, Florida DAVID SCOTT, Georgia
J. GRESHAM BARRETT, South Carolina ARTUR DAVIS, Alabama
KATHERINE HARRIS, Florida AL GREEN, Texas
RICK RENZI, Arizona EMANUEL CLEAVER, Missouri
JIM GERLACH, Pennsylvania MELISSA L. BEAN, Illinois
STEVAN PEARCE, New Mexico DEBBIE WASSERMAN SCHULTZ, Florida
RANDY NEUGEBAUER, Texas GWEN MOORE, Wisconsin,
TOM PRICE, Georgia
MICHAEL G. FITZPATRICK, BERNARD SANDERS, Vermont
Pennsylvania
GEOFF DAVIS, Kentucky
PATRICK T. McHENRY, North Carolina
JOHN CAMPBELL, California
Robert U. Foster, III, Staff Director
C O N T E N T S
----------
Page
Hearing held on:
August 15, 2006.............................................. 1
Appendix:
August 15, 2006.............................................. 35
WITNESSES
Tuesday, August 15, 2006
Cawley, Hon. James F., Chairman, County of Bucks, Office of
Commissioners.................................................. 8
Collier, Carol R., Executive Director, Delaware River Basin
Commission..................................................... 19
Keller, Hon. Laurence D., Mayor, New Hope Borough................ 11
Komelasky, George F., Vice President, Paiste & Noe, Inc., on
behalf of the Independent Insurance Agents & Brokers of America 21
Maurstad, David I., Acting Mitigation Division Director and
Federal Insurance Administrator, Emergency Preparedness and
Response Directorate, Department of Homeland Security.......... 6
Mohn, Hon. Daniel, Council Member, Yardley Borough............... 10
Smith, Sam, flood victim, Langhorne, PA.......................... 23
Winslade, C. William, Manager, Yardley Borough................... 27
APPENDIX
Prepared statements:
Oxley, Hon. Michael G........................................ 36
Cawley, Hon. James F......................................... 38
Collier, Carol R............................................. 40
Keller, Hon. Laurence D...................................... 59
Komelasky, George F.......................................... 63
Maurstad, David I............................................ 66
Mohn, Hon. Daniel............................................ 73
Smith, Sam................................................... 88
Winslade, C. William......................................... 92
Additional Material Submitted for the Record
Hon. Michael G. Fitzpatrick:
Statement of Jeanne Doyle.................................... 100
A LOOK AT THE NATIONAL FLOOD
INSURANCE PROGRAM AND FLOOD
MITIGATION EFFORTS: IS BUCKS
COUNTY, PENNSYLVANIA, READY FOR ANOTHER FLOOD?
----------
Tuesday, August 15, 2006
U.S. House of Representatives,
Committee on Financial Services,
Washington, D.C.
The committee met, pursuant to notice, at 10:05 a.m., at
Yardley Community Center, 64 S. Main Street, Yardley, PA, Hon.
Michael G. Oxley [chairman of the committee] presiding.
Members present: Representatives Oxley and Fitzpatrick.
The Chairman. The committee will come to order. Today the
Committee on Financial Services is holding a hearing on the
National Flood Insurance Program here in Yardley, Pennsylvania,
in the 8th Congressional District of the Commonwealth of
Pennsylvania, entitled, ``A Look at the National Flood
Insurance Program and Flood Mitigation Efforts: Is Bucks
County, Pennsylvania, Ready for Another Flood?''
I want to thank our host, Congressman Mike Fitzpatrick, for
inviting the committee here today. During the 108th and 109th
Congresses, this committee spent consideration time and effort
on legislation to reauthorize and reform the National Flood
Insurance Program. On June 30, 2004, President Bush signed the
Bunning-Bereuter-Blumenaur Flood Insurance Reform Act into law.
The major goal of the Flood Insurance Reform Act at the last
Congress was to reauthorize and reform the program with an eye
toward maintaining the financial viability of the NFIP.
While some provisions were included to address
administrative and procedural concerns regarding the NFIP, we
did not focus on issues that were procedural in nature such as
the filing of claims, the timeliness of response to the claims
filing, policy holder education, and insurance agent sales and
training. During deliberations on last year's reauthorization
legislation concerns were raised regarding the administration
of the program. In fact, several concerns were brought to the
attention of FEMA.
First, it is alleged that policyholders often do not have a
clear understanding of their coverage under the policy.
Secondly, insurance agents often do not clearly articulate the
terms and conditions of the policy at the time of sale and they
do not know how to process claims correctly. Third,
policyholders do not know or understand the appeal process.
Fourth, many questions regarding the adequacy of payments and
the adjustment system were raised. Finally, a lack of
coordination between private insurers, the NFIP, and FEMA, and
inadequate training have been cited as possible sources for
some of the administrative problems plaguing the NFIP.
Since the enactment of the Bunning-Bereuter-Blumenauer
Flood Insurance Reform Act, Members of Congress have continued
to hear from their constituents who are frustrated with the
flood insurance program. During this Congress, the House
overwhelmingly approve H.R. 4973, the Flood Insurance Reform
and Modernization Act of 2006, also know as the FIRM Act, on
June 7, 2006, with a 416-4 vote. In an effort to make the NFIP
more actuarially sound, the FIRM Act phases out the subsidized
rates currently enjoyed by the owners of hundreds of thousands
of vacation homes and second homes.
In addition, the bill introduces new lines of coverage at
actuarial prices and increases the program's coverage limits to
reflect inflation. These are common sense reforms that will
again be actuarially priced. The FIRM Act requires FEMA to
administer the program more responsibly. Flood maps will be
improved and updated and FEMA will have to certify to Congress
that they have done so. The NFIP's borrowing authority will be
temporarily increased to ensure that all outstanding claims
will be paid.
The FIRM Act increases the amount that FEMA can raise
policy rates in any given year from 10 percent to 15 percent,
and for those lending institutions that drop the ball in
enforcing mandatory flood insurance purchase requirements,
fines will be tripled from where they are now. It is important
to note that this program was created in 1968 because there
wasn't an affordable private sector insurance alternative that
would cover flooding events, particularly for residential homes
and small businesses. Hence, the Federal Government stepped in
where the market was clearly not working.
Some 30 years later, as the consumer market becomes more
sophisticated, its expectations regarding the insurance
industry, and particularly the NFIP, appeared to have outpaced
the original intent and purposes of the program. In late June
of 2006, east coast communities from Virginia to Vermont
experienced heavy storms and flooding leading to damaged homes,
loss of property, and physical injury. In Pennsylvania alone,
nearly 150,000 people were displaced by those storms.
Particularly, the flooding left Bucks County with 308
severely damaged single family homes. About 4,000 residents
living along the Delaware River were ordered to evacuate. This
flood was the third time since 2004 that homes and businesses
in Bucks County have been damaged by flood waters. On June 30,
2006, 28 counties in Pennsylvania, including Bucks County, were
declared disaster areas by the President, thus qualifying the
region for Federal aid.
On July 17, 2006, Congressman Fitzpatrick held an ad hoc
field hearing in New Hope, Pennsylvania, a community located
here in Bucks County to review the recent flooding of the
Delaware River and what can be done to prevent future damages.
This hearing today will give us an opportunity to hear from
both practitioners and policyholders on how well the program is
working and to what extent this Congress should address any
further reforms to ensure that the National Flood Insurance
Program is meeting the original Congressional intent of
protecting and assisting families and businesses in the event
of a flood. Thank you to Mike Fitzpatrick for your leadership
on this important issue, and I look forward to today's
testimony. I yield the floor to the gentleman from Bucks
County.
Mr. Fitzpatrick. Thank you, Chairman Oxley, for making the
trip to Yardley Borough, Bucks County, Pennsylvania, and for
your interest and advocacy in reform of the National Flood
Insurance Program. Also, thank you for convening this important
hearing to discuss the damage and potentially mitigate future
damage from, as you just described, 3 successive floods in just
2 short years, and it is really hard to overestimate the
devastation that has occurred to residential property owners
and business owners, not just here in Yardley, but throughout
the Bucks County area, and specifically the Delaware River
watershed.
Before I make my remarks, I do have a video clip. It takes
about 7 minutes. It is an indication of--actually the videos
were made here in Yardley Borough, but it is an indication of
the devastation that the flooding caused in the communities of
the 8th Congressional District up and down the Delaware River.
Please refer to the screen in front here.
[Video]
Mr. Fitzpatrick. Thank you, Bill. For the record, just
identify your name and your title.
Mr. Winslade. Cyril William Winslade, borough manager as
well as risk management coordinator.
Mr. Fitzpatrick. Thank you, Bill, and thank you also to
Karl Gober for providing that footage to us here today. Mr.
Chairman, I know that you have been referred to in the headline
of the local Bucks County Carrier Times this morning. The
underground infrastructure referred to as a house of cards,
almost, which is crying out for--that is a result of the damage
resulting from the flood, successive floods, but specifically
the flood of June 27-28 of this year, crying out for
coordinated Federal, State, and local response, which is what
we are going to provide.
I would like to thank the chairman of the House Financial
Services Committee for traveling to Bucks County for this vital
hearing. I would also like to thank our distinguished witnesses
for taking time from their busy schedules to testify to their
experiences with the National Flood Insurance Program and flood
mitigation efforts throughout Bucks County, Pennsylvania. This
morning I look forward to an instructive discussion on the
current state of the National Flood Insurance Program and how
the program responded to the recent flooding in Pennsylvania's
8th Congressional District.
In addition, this hearing will focus on how State and local
governments operate under the NFIP, as well as the steps
currently being taken by the Federal Emergency Management
Agency, local officials, and the insurance industry to resolve
problems dealing with inconsistencies and delays which are
inherent in the program. I trust that after this hearing
everyone will understand what NFIP is doing now, and can do
better in the future, to resolve these problems. As you all
know, the 8th Congressional District is exceptionally
susceptible to Delaware River flooding; Bucks County has faced
a devastating flood in each of the last 3 years.
Floods have displaced hundreds of families and businesses,
destroyed countless homes, degraded our environment, and
damaged the local economy. When flooding struck Bucks County in
April 2005, it was the second event of its kind in only 7
months. Many residents and businesses had just completed
repairing the damage from the last flood when the Delaware
River spilled over its banks once again. April's floods forced
the evacuation of more than 6,000 people. More than 500 homes
sustained major damage, another 500 minor damage, and 100
businesses felt the effects of the worst flooding in the region
in a half a century. National flood insurance claims paid in
Bucks County amounted to over $18 million for the 2004 flood
and over $23 million for the 2005 flood.
In the days leading up to our most recent flood on June
28th, intense heavy rainfall in the Delaware River basin caused
near record flood crests along many streams and rivers
throughout the river basin. In New Hope the Delaware River
crested at approximately 19.5 feet, just below the 2005 level
of 19.6 feet. The flood levels again led to the evacuation of
many local residents and uncalculated costs to repair the
affected areas. It is estimated that there is major damage to
250 Bucks County homes and nearly 50 businesses this time.
As I previously discussed, flooding has hit Bucks County
and surrounding communities with startling regularity. With
such frequent flooding in our region over a relatively short
period of time, it is not surprising that serious concerns have
been raised regarding the cause of these events. I have made it
a top priority of my Congressional agenda to shed light on the
causes of flooding along the Delaware and to find ways to
mitigate damage from future events.
I have discussed the issue with various Federal, State, and
local officials who say a combination of factors contribute to
flooding events including extreme rainfall, the release of
water from upstream reservoirs, pollution, and increased
development within the flood plain. One cause, in particular,
has not been addressed and must be a focus of our efforts to
deal with the threat of future flooding--a new flood mitigation
study of the Delaware River.
Even though flooding is a regular event along the Delaware,
the last flood mitigation study is more than 30 years old.
Directly after the April 2005 flood, I introduced my first
piece of legislation in Congress specifically designed to fix
this oversight. I introduced H.R. 1983, legislation calling for
a new flood study of the Delaware River. This legislation
quickly gained bipartisan support, and was included in the
Water Resources Development Act, which passed the House last
year.
Recently the Senate passed their version of the
legislation. The House and Senate conference negotiation is the
next step to a final version of WRDA. After the June floods, I
was encouraged when Senator Specter pledged his support for
this legislation and committed himself to seeing that it would
be passed in this conference. The Delaware River basin is
located within four States; Pennsylvania, New Jersey, New York,
and Delaware. Because of this, it is imperative that the four
States work together to improve conditions in the Delaware
River basin. Water use upstream impacts downstream areas and
similarly actions on one side of the river affect the other
side.
I strongly believe that we must work together and plan
together to mitigate flood damage, which is the reason why I
formed the Congressional Delaware River Task Force. The task
force has established a network of Congressional offices to
improve communication and coordinate efforts to support
initiatives that benefit the environmental and economic
vitality of the Delaware River interstate watershed and its
communities. This task force continues to meet and invites
comment from interested conservation groups.
I have also worked to restore funding to the NRCS watershed
protection and flood prevention programs which the President
zeroed out in his Fiscal Year 2006 budget request. I fought to
return the program to its Fiscal Year 2005 level. Through
negotiations with Congressional appropriators, we were
successful in securing $75 million for watershed operations, $7
million for watershed planning, and $31.5 million for
rehabilitation of aging watershed dams; $3 million of that
total was secured specifically for flood mitigation programs
along the Neshaminy Creek, including buy-outs in razing and
elevation of homes.
In addition to my flood study legislation, I introduced the
National Flood Insurance Program Further Enhanced Borrowing
Act, which was signed into law by the President on November 21,
2005. This legislation increased the amount of money FEMA is
permitted to borrow from the Treasury to pay flood insurance
claims from $3.5 billion to $18.5 billion. Although the program
has been financially self supporting for the average historic
loss year since 1986 last year's fate of massive hurricanes
overwhelmed this, and if this had not been passed possible
claims by Bucks County residents would not have been met.
These are some of the initiatives I have undertaken to deal
with flooding right here in our area. However, this work cannot
be successful without the combined efforts of local, State,
county, and Federal Government representatives. I look forward
to hearing from today's witnesses their thoughts on the state
of the National Flood Insurance Program, the government's
response to recent floods, and their expectations for the
future. Before we begin, I would like to ask unanimous consent,
Mr. Chairman, for submission to the record of testimony of my
constituent, Jeanne Doyle, whom I met with this past week. Jean
resides in Upper Black Getty, currently lives in Regalsville,
and she has been out of her home since 2004. She is having
serious problems in negotiating with the underwriter of her
flood insurance policy, and would ask that her remarks be
submitted into the record.
The Chairman. Without objection.
Mr. Fitzpatrick. And additional remarks from constituent
Sam Smith, whom I met in, I guess, the midpart of the 1990's,
but as a result of a hurricane that occurred here, Hurricane
Floyd in 1999, we worked closely with Sam Smith and some of his
residents along the Neshaminy Creek. Sam's home has been
elevated. He and his family have avoided habitual and
additional flooding damages, I suspect, saving the National
Flood Insurance Program quite a bit of financial resources, and
would ask unanimous consent that his testimony be submitted as
well.
The Chairman. Without objection.
Mr. Fitzpatrick. Thank you, Mr. Chairman. Mr. Chairman,
thank you again for your continued leadership, and I yield back
the balance of my time.
The Chairman. I thank the gentleman from Pennsylvania and
once again thank him for his leadership on this issue. I am
sure the local folks thank him, as well. It is relatively rare,
very rare, that we have a new member who has been able to
accomplish as much in a short period of time. We thank you for
that. Let me now turn to our first panel and introduce them.
Mr. David I. Maurstad, Director and Federal Insurance
Administrator, Mitigation Division of the Federal Emergency
Management Agency, Department of Homeland Security. Welcome,
Mr. Maurstad. The Honorable James F. Cawley, chairman, Office
of County Commissioners, Bucks County, Pennsylvania. Welcome.
The Honorable Daniel Mohn, member, Yardley Borough Council,
Bucks County. Welcome. And the Honorable Laurence D. Keller,
Mayor, New Hope Borough, Bucks County, Pennsylvania. Mayor,
good to have you with us. We thank you all for your
participation, and, Mr. Maurstad, we will begin with you.
STATEMENT OF DAVID I. MAURSTAD, ACTING MITIGATION DIVISION
DIRECTOR AND FEDERAL INSURANCE ADMINISTRATOR, EMERGENCY
PREPAREDNESS AND RESPONSE DIRECTORATE, DEPARTMENT OF HOMELAND
SECURITY
Mr. Maurstad. Good morning, Chairman Oxley, and Mr.
Fitzpatrick. It is good to join you this morning. I am David
Maurstad, Mitigation Division Director and Federal Insurance
Administrator for the Federal Emergency Management Agency.
After three Bucks County flood events in the last 21 months, I
am pleased to say that the Mitigation Division, particularly
FEMA's Region III office in Philadelphia has worked well with
Pennsylvania to carry out an integrated mitigation strategy of
analyzing risk, reducing risk, and insuring risk.
In the risk analysis arena, we work with State and local
officials to collect, study, and distribute pre- and post-event
data, to carry out technical activities, and to develop policy
and guidance as needed. For instance, FEMA Region III is
working with Pennsylvania, the Delaware River Basin Commission,
and others to reevaluate the flood risk along the Delaware and
Susquehanna Rivers and to correct any inaccurate flood
insurance data and flood hazard data. Results will be combined
with other information to help areas rebuild stronger and plan
wisely primary parts of mitigation's second element, risk
reduction.
Risk reduction helps States and communities prepare for the
future with pre-disaster mitigation planning and mitigation
projects. State and local governments must develop hazard
mitigation plans as a condition for receiving hazard mitigation
grant program funds. There are two levels of hazard mitigation
plans, standard and enhanced. Standard plans entitle States to
HMGP funding that is 7.5 percent of disaster assistance. All 50
States have approved standard plans. Enhanced plans require a
higher commitment to mitigation and States with such plans, and
there are seven now, are entitled to HMGP funding of up to 20
percent of disaster assistance.
FEMA Region III has been working closely with
Pennsylvania's mitigation staff as they put the finishing
touches on their enhanced plan, and barring any unforeseen
issues, we expect it will be approved soon. State mitigation
plans are the gateway to HMGP, which provides 75 percent of the
funding for activities such as acquiring flood-prone homes from
willing owners, elevating flood-prone homes or businesses, and
retrofitting buildings to minimize damage from flooding and
other hazards. HMGP projects must be cost-effective, with the
benefit cost ratio greater than one.
This leads to the essential third priority of our
mitigation strategy, insuring against flood risk. The National
Flood Insurance Program is simple and effective. Communities
join the program and adopt building codes and land-use planning
policies to mitigate future flood dangers. Residents can then
purchase the flood insurance, which standard homeowner coverage
usually does not provide, and the NFIP provides insurance
coverage to policyholders after they suffer a loss. Now, thanks
to the 2004 Flood Insurance Reform Act, the NFIP is even
stronger. Two Reform Act informational documents, the Flood
Insurance Claims Handbook, and the NFIP Summary of Coverage can
help thousands of NFIP policyholders clearly understand their
flood insurance coverage.
These materials were distributed throughout affected
Pennsylvania counties after the June floods, and we are mailing
these documents to new and renewing policyholders across the
country, as required. FEMA has also developed the training and
education requirements called for by the Act. Pennsylvania's
Department of Insurance proactively informed their insurance
partners of the requirements months before they appeared in the
Federal Register, and I am pleased that the State is processing
continuing education credits for agents who complete relevant
insurance workshops.
We have also instituted an interim final flood insurance
claims appeals rule, formalizing how policyholders may appeal
the decisions of adjusters, agents, insurance companies, and
FEMA regarding claim settlements. Finally, I would like to
thank you, Mr. Chairman, and the committee for the repetitive
loss mitigation tools the Reform Act provides. The Flood
Mitigation Assistance Program's funding is up to $28 million a
year. The $10 million repetitive flood claims program is in the
awards process, and the severe repetitive loss pilot program is
almost underway. We stay committed to aggressively implementing
these programs as we continue to address the repetitive loss
issue and work to eliminate the flood-rebuild-flood cycle that
Bucks County residents unfortunately have become so familiar
with.
As Pennsylvanians know, common events like spring rains and
no-name tropical waves can cause flooding just about anywhere,
yet year-in and year-out, we see flood victims in highly
vulnerable areas without flood insurance. In the northeast,
only 28 percent of the homes located in the high flood risk
areas are covered by the NFIP flood insurance. In Pennsylvania,
roughly 25 percent of homes in the high risk areas are covered.
In Bucks County, it is a little higher, 30 percent.
Mr. Chairman, I have attached to my written statement some
NFIP statistics for Pennsylvania, Bucks County, and Yardley,
and I would ask that this material be included in the hearing
record. We must also do better to see that every homeowner,
renter, and business located in the Nation's high risk areas
are insured against flood because no matter how well we plan
and mitigate, floods happen, so it only make sense to protect
the public and private investments with the financial safety
net of flood insurance. After three flood events in less than 2
years, Pennsylvanians know that flood hazards can't be
completely eliminated.
However, through coordinated mitigation strategies the
impacts of flooding can be dramatically reduced. FEMA, the
Mitigation Division, and the NFIP will continue strengthening
our partnership with Pennsylvania, so that future flooding
events can be managed through sound mitigation planning, not
disaster declarations. Mr. Chairman, I will be happy to answer
any questions the committee might have. I appreciate the
opportunity to listen to the comments that will be made today.
As a former mayor, State senator, lieutenant governor, and
insurance agent, I have some experience in all of these areas
and I look forward to hearing what the experiences are here in
Yardley and Pennsylvania.
[The prepared statement of Mr. Maurstad can be found on
page 66 of the appendix.]
The Chairman. Thank you. Mr. Cawley.
STATEMENT OF HON. JAMES F. CAWLEY, CHAIRMAN, COUNTY OF BUCKS,
OFFICE OF COMMISSIONERS
Mr. Cawley. Thank you, Mr. Chairman. Good morning. I want
to thank you, the committee, and of course our Congressman,
Mike Fitzpatrick, for allowing us to share with you some
thoughts on the National Flood Insurance Program. I am
especially pleased to see two of our municipal partners as part
of the hearing today. I think that they will bring a unique
perspective both to the National Flood Insurance Program and to
flooding and its aftermath here in Bucks County.
The National Flood Insurance Program response in Bucks
County has been integrated into a flood plain that is
constantly being redefined. Maps need to be perpetually updated
due to changes in geography, construction and mitigation
activities, and meteorological events. During the Bucks County
floods of September 2004, April 2005, and June 2006, FEMA has
worked well with local and State emergency management
officials. FEMA came into the area for disaster assessment
along with the Pennsylvania Emergency Management Agency within
days of the events.
Our emergency management director, John Dougherty, who is
here with us today, supervised the respective site inspections.
The FEMA and PEMA officials agreed with our assessment, and we
got the disaster declarations that we desperately needed
quickly. They also worked well with Bucks County on getting a
Disaster Recovery Center up and running quickly following each
flood event. I want to specifically, again, thank Congressman
Fitzpatrick for his hard work in establishing the most recent
Disaster Recovery Center following the June event.
During the recovery process from the June 2006 flood, 153
DRC visitors were able to perform one-stop shopping services
for processing low-interest loan applications through the Small
Business Administration, receiving assistance with Disaster
Unemployment Assistance, Federal, and State disaster tax
assistance, and finding cost-effective measures for reducing
the impact of future flooding and disaster losses. The DRC also
offered flood plain rebuilding advice, as well as American Red
Cross referrals.
County departments included at the DRC included the Health
Department, which offered well testing kits, tetanus shots, and
mental health counseling; the Area Agency on Aging for
specifically senior concerns; and, of course, our emergency
management agency. During the September 2004 storm, we had a
problem with some of the dollar amounts FEMA was using for
temporary housing and repairs because they were using figures
from Philadelphia that were much less than those here in Bucks
County.
Once we got PEMA and brought it to FEMA's attention, they
made the needed changes and we were able to identify much
needed help. One of the biggest NFIP problems, if I may, is
that we see an outdated nature to a lot of flood maps as the
previous speaker, I think, indicated in his remarks. We also
see a significant need for more public service announcements
noting the 30-day waiting period. We need as many resources as
possible to help our citizens buy early, and if I may, being
that Pennsylvania, I am told, is the most--one of or the most
flood-prone States in the Nation, perhaps a special effort
toward public service announcements here in the Commonwealth
would be extremely beneficial to the residents of the
Commonwealth, and certainly to the residents of Bucks County.
In Bucks County, we have had enormous success, as
Congressman Fitzpatrick mentioned, with the Neshaminy Creek
Elevation Program that was implemented by the National
Resources Conservation Service. During each of the three
floods, houses that were elevated through this program were
spared from structural damage to their living space and utility
infrastructure. Elevated residents simply swept out water from
the concrete shell basement.
Along the Neshaminy Creek watershed, Bucks County's
Community Alert Network, CAN, uses five water-level gauges to
notify residents of rising creek levels. The CAN system
provides a model for implementation within the Delaware River
communities, as well. Already, it has created a phone bank that
is triangulated with zip codes of communities within the
Delaware River flood plain. The next phase for CAN
implementation involves coordination with a Geographic
Information System (GIS), which will make the old zip code
system obsolete.
As a first step in understanding the frequent flooding
dynamic, we urge the Congress to pass legislation that was
introduced by Congressman Mike Fitzpatrick authorizing the Army
Corps of Engineers to conduct a study of the Delaware River
Basin. Such a study would provide an invaluable data base line.
Additionally, it would help government officials at all levels
to coordinate flood mitigation. Again, Mr. Chairman, thank you
for allowing me to enter those remarks.
[The prepared statement of Mr. Cawley can be found on page
38 of the appendix.]
The Chairman. Thank you. The next witness is Honorable
Daniel Mohn, a member of the Yardley Borough Council. Mr. Mohn,
thank you.
STATEMENT OF HON. DANIEL MOHN, COUNCIL MEMBER, YARDLEY BOROUGH
Mr. Mohn. Chairman Oxley, Representative Fitzpatrick, thank
you for inviting me to testify today. My name is Daniel Mohn,
and I am a member of Yardley Borough Council. Since 2004, I
have worked with residents, State and Federal Government, and
various public agencies to explore mitigation options for
borough residents. This committee has asked several important
questions. I believe the most important question that is raised
is, what steps are being taken to mitigate future flood damage
by FEMA, the Commonwealth of Pennsylvania, and specifically
Bucks County?
The unfortunate answer to this question is that since late
2004 when the first of three floods that have affected up to
one-third of our community occurred not one dollar has been
saved due to FEMA hazard mitigation programs in our
municipality. This represents not only a loss for residents of
our community, but a loss for all taxpayers who fund NFIP
claims. But it is not for lack of effort. Substantial effort
from local community, State, and Federal officials have
resulted in very little progress.
It is also not for lack of potential savings. The top NFIP
claim payments for the 2005 flood only in the Borough of
Yardley totaled $4.2 million. These NFIP payments ranged from
$42,000 to $169,000. Had a grant been offered of 2 times the
NFIP payments made to residents from the previous flood with a
maximum of $80,000, an investment of $4 million would have a
payback of one flood event. The most comprehensive change that
can be made to minimize the impact is a return to funding of
structural elevation projects. Currently, FEMA's mitigation
program prioritizes acquisition projects over all other types.
This one-size-fits-all approach does not suit communities like
ours and leaves communities like ours with no viable mitigation
options.
Acquisition projects can never be a long-term solution for
Yardley and other similar municipalities. We are a river
community. Plainly put, a vast majority of residents do not
want to leave. Thirty percent of the borough's tax base would
be lost with acquisition projects. Removing 30 percent of the
tax base would have a devastating effect on the financial
wellbeing of our community. Even when Yardley residents have
expressed interest in acquisition programs, their homes do not
meet the benefit cost analysis that FEMA requires. That is
because this formula does not accurately account for the high
cost of real estate in the northeast and Philadelphia regions.
Elevations are less expensive than acquisitions. The main
cost of flood damage in the borough is first floor damage.
Elevating a home is, on average, one-third of the cost of
acquiring and demolishing the home, yet provides a comparable
savings by placing the first floor above the flood plain. Not
only are elevations less expensive than acquisitions, they
would save FEMA and NFIP a substantial amount of money. Anyone
who has lived through a flood event can tell you there is much
more impact than the financial factor; the loss of one's home,
irreplaceable family heirlooms, peace of mind, and life as it
was known, is devastating.
FEMA does offer some assistance with elevation through the
increased cost of compliance grants available directly to
homeowners from the NFIP. These monies are available to homes
that have been substantially damaged, meaning the cost to
repair the home was 50 percent more than the total cost of the
structure. The ICC grants provide up to $30,000 to assist in
home elevations. Though the ICC can be a valuable resource,
only a small percentage of affected residents have the
financial means to elevate their homes on their own. This
$30,000 is but a small percentage of the entire cost of a home
elevation and is not adequate to enable most residents to take
on elevation of their homes.
I am here today to make one point. Home elevations are the
best, most feasible, and most cost-effective solution for
Yardley Borough and its residents, as well as many other
communities in the county. I hope we can count on your support
as we pursue funding and policy options to assist residents.
Specifically, we urge you to set aside 25 percent of hazard
mitigation program funds for elevation projects, increase the
amount that the NFIP pays for increased cost of compliance
grants from the current $30,000 to 2 times the NFIP flood
payment for the most recent flood event, reevaluate the benefit
cost analysis to adjust the means guide funding factor to
better reflect the large difference in home prices in different
areas of the State.
Thank you again for this opportunity to testify, and when
appropriate I am happy to answer any questions you may have.
[The prepared statement of Mr. Mohn can be found on page 73
of the appendix.]
The Chairman. Thank you, Mr. Mohn. Mayor Keller.
STATEMENT OF HON. LAURENCE D. KELLER, MAYOR, NEW HOPE BOROUGH
Mr. Keller. I wish to thank Chairman Oxley and
Representative Fitzpatrick for inviting me to testify today.
The title of this hearing, ``A Look at the National Flood
Insurance Program and Flood Mitigation Efforts: Is Bucks
County, Pennsylvania, Ready for Another Flood?'', is a topic of
vital interest in the New Hope community that I represent. The
short answer to this committee's question is no.
My name is Laurence Keller, and I am the Mayor of New Hope
Borough. New Hope, which encompasses an area or about 1.2
square miles is located in Bucks County, Pennsylvania,
approximately 40 miles north of Philadelphia, and across the
river from the City of Lambertville, New Jersey. The Delaware
River and the canal are the dominant physical features defining
the town's eastern border and providing unique scenic,
historic, cultural, and recreational amenities for our
residents and the many visitors who arrive each year.
Pursuant to the Borough Code of the Commonwealth of
Pennsylvania, I am responsible for protecting and preserving
public safety and for participating with the Council in the
declarations of local disaster emergencies. Gentlemen, I have
signed three disaster emergency proclamations since September
2004, and all resulted from severe flood conditions along the
Delaware River.
According to data supplied by the National Weather Service,
three of the most severe floods in the history of the Delaware
River in New Hope occurred in the period of September 2004
through June 2006, a period of less than 3 years. In terms of
the historical crests of the Delaware River dating back to
1841, the three recent floods ranked third, fourth, and eighth.
Without a doubt, the frequency and severity of floods along the
Delaware River are increasing, as are the corresponding damage
to property and the threat to human life.
The committee has expressed an interest in evaluating the
response of the Federal Emergency Management Agency and the
National Flood Insurance Program to the recent floods in New
Hope.
First, FEMA has not played a role in providing or
supplementing emergency response efforts either in preparation
for or during a flood event. Local emergency services
personnel, consisting mostly of dedicated volunteers
demonstrated both competence and professionalism in managing
these key aspects of the local emergency operation plan.
Second, with respect to FEMA's role in the recovery
process, I received very few complaints from property owners,
tenants, and the business community. It appears that FEMA has
performed its job admirably with respect to providing financial
assistance to those in need.
Third, and most important for New Hope, FEMA is tasked with
the responsibility to administer Federal grant programs related
to the mitigation of hazards in our communities. The programs
include the Hazard Mitigation Grants and Flood Mitigation
Assistance Grants. These funds may be used by local communities
for hazard mitigation retrofitting projects, including
elevating structures, acquiring badly damaged flood-prone
properties, and certain structural improvements such as levees
and dams.
Gentlemen, this is where we need your help. The Hazard
Mitigation Grant Program is limited to an expenditure of only
7.5 percent of the funds expended on public and individual
assistance as the result of a declared emergency. Until
recently, the amount set aside by the Federal Government
totaled 15 percent. The Federal contribution is matched by 25
percent in State and/or local funds. Unfortunately, the dollar
amount of grant funds available under this program is sorely
inadequate and fails to provide significant relief to flood
damaged communities. In addition, the paltry funds that are
available are restricted by Federal and State program
preferences to acquisition of flood damaged properties. No
significant funds are available for elevation, which is the
preference of the great majority of New Hope property owners
who live in flood damaged areas.
My comments on the Flood Mitigation Assistance Grant
Program will be limited, just as the funding for this program
is limited. The second part of the committee's inquiry deals
with the effectiveness of the National Flood Insurance Program.
I can offer little useful information on this program. However,
I can inform you that the Borough of New Hope participates in
this program and that the borough's flood plain management
ordinance complies with all program requirements of the NFIP
and the Commonwealth.
In terms of identifying issues with the NFIP, there is an
apparent discrepancy between the model FEMA flood plain
management ordinance that serves as a guide to municipalities
throughout the Nation and NFIP regulations. The model FEMA
ordinance defines substantial damage as damage amounting to 50
percent or more of the market value of a structure as the
result of a flood. On the other hand, NFIP regulations allow a
determination of substantial damage to result from one or more
floods over an extended period of time.
The significance of this apparent discrepancy is that a
property owner, who sustains substantial damage, may qualify
for an increased cost of compliance benefit, which is currently
set at $30,000, to retrofit, including elevation, a structure
to protect against future flood damage. The model FEMA
ordinance should be amended to be consistent with this NFIP
standard.
Another problem with the NFIP is the standard used to
assess substantial damage. The regulation states that the
structure must receive damage amounting to 50 percent or more
of its market value. First of all, it is difficult to determine
the market value of a structure divorced from the value of the
underlying land, especially in New Hope. Second, in an inflated
real estate market, it is often difficult to reach this 50
percent threshold. Consideration should be given to changing
this standard to one based on construction cost rather than
market value.
The committee's last question asked what is being
accomplished by Federal, State, and county governments to
mitigate future flood damage. Based on my testimony to this
point, the answer to the question is little or nothing.
However, I would like to clarify this dour assessment by
stating that there is very little that the Commonwealth and
Bucks County governments can accomplish, given the regional
scope of this problem. Flooding along the Delaware River
affects four States, consequently, the problem is one that
requires Federal leadership and resources to solve.
For what they are worth, here are my recommendations to the
committee. One, the national government must adopt an active
leadership position in assessing and mitigating flood
conditions along the Delaware. Two, the Federal Government, in
cooperation with the four States that comprise the Delaware
River basin area, should commission a comprehensive study of
the Delaware River, for example, the Mid-Delaware River Basin
Study, to determine the causes of flooding and develop options
to reduce or eliminate flood conditions. Three, FEMA should
give high priority to updating flood plain maps along the
Delaware. These maps are based on pre-1985 studies, are
hopelessly outdated, and may be contributing to the flood
condition.
Four, the Federal Government should significantly increase
the funds available to States and municipalities for flood
mitigation projects, especially elevation projects. Property
owners in New Hope do not want buy-outs. We desire to elevate
our homes and businesses to get out of harm's way. Five, all
parties should work closely with, and provide needed funding
for, the Delaware River Basin Commission to carefully assess
the use of water supply reservoir capacity for flood storage.
The coordination of reservoir operations may contribute
significantly in the short-term towards reducing the severity
and frequency of flood events along the Delaware River. The
DRBC is a multi-State and Federal agency and offers an existing
framework for flood mitigation efforts. I appreciate the
opportunity to testify today and will be happy to answer any
questions. Thank you.
[The prepared statement of Mayor Keller can be found on
page 59 of the appendix.]
The Chairman. Thank you, Mayor, and thank you to all of our
witnesses. I think it was concise testimony and excellent
recommendations from all parties. Let me begin, obviously the
hit of the day was Mr. Mohn's testimony according to the
audience reaction, and I would be interested in the other
panel's take on this. That is the, I guess, age old issue
between elevation mitigation versus acquisition and buy-out. In
a general sense, we already know your position, I think, Mr.
Mayor; you made it pretty clear as well.
Mr. Cawley and Mr. Maurstad, I wish you would both comment
on both of their testimony and what your reaction is to that.
Mr. Cawley. Mr. Chairman, if I may, I can tell you that it
is a comment that I have heard many, many times since June and
before that, April. And one of the things I mentioned earlier,
kind of parenthetically, that we are all one family. One of the
things that I think the results of September 2004, or April
2005, or June 2006, have cemented in a lot of Bucks Countians'
minds is that from Regalsville down to Morrisville we are one
riverfront community, and as much as we share that commonality,
one of the things too that has become very clear is that there
is not a one size fits all approach that is going to serve each
one of the communities.
Mitigation projects that may work in Regalsville would not
be successful in Morrisville. Things that would work in New
Hope may not be successful in Tinicum or somewhere else along
the waterfront. I think, though, one thing is becoming clear,
one thing is emerging even as I say that, and that is that
there needs to be a very serious look at the reprioritization
and a move toward elevation specifically along this watershed.
As I mentioned in my comments earlier about the Neshaminy Creek
watershed, that was a multi-dimensional, if you will, approach
with an eye toward the current structure of buy-outs first,
elevations later. But I think in this case due to the distinct
nature of the communities along the Delaware River that perhaps
a reevaluation and a look at, as both the Mayor and the
Councilman said, people don't want to move. They want to stay
where they are, but they want to be taken out of harm's way,
and if it is cost effective to do so, so we ought to be doing
it.
The Chairman. Mr. Maurstad.
Mr. Maurstad. Thank you, Mr. Chairman. I think it is very
important--let me back up for a minute. I want to thank the
witnesses for the generous comments they made on FEMA's
response and recovery efforts here. And Mr. Tom Davies, the
Federal coordinating officer appointed by the President is here
today, and certainly leads that effort, and we want to look
forward to working with the State and all the local communities
and continuing the mitigation planning and mitigation projects
that need to occur to help reduce future vulnerabilities, but
we appreciate all of your kind comments.
I think it is very important that we make clear the
priority circumstance relative to elevations and buy-out, a
question that has been raised. And the most important aspect of
that is that the Hazard Mitigation Grant Program is a State-
administered program. FEMA does not set the priorities for the
States. FEMA does not set the priorities for the local
communities. As a part of the Disaster Mitigation Act of 2000,
there is a requirement that all communities, to be eligible for
emergency disaster assistance, develop local mitigation plans.
Part of that Act also requires all States to develop State
mitigation plans. I referred to it in my testimony. All 50
States met that requirement. About half of the communities in
Bucks County have local mitigation plans. The local mitigation
plans and the State mitigation plans drive the priorities. The
State administers HMGP. They develop the projects. If those
projects are eligible projects that meet the criteria set forth
in the regulations, if they have a cost-benefit of at least one
or greater, then FEMA approves those but FEMA does not dictate
the priorities. The State sets those priorities working, I
assume, with the communities in doing so.
So that issue is one that I want if I accomplish anything,
Mr. Mohn, when I leave today is to make sure that FEMA does not
set the priorities for the State of Pennsylvania or its
communities for the Hazard Mitigation Grant Program, and
emphasize that a key component of that is looking at the State
plan, what is the priority in the State plan, and then looking
at the local plans and what are the priorities in the local
plans.
The Chairman. I assume that the issue is based on
ultimately the choice of the homeowner, is that correct? That
is, if in fact under the State provision a homeowner has a
choice between mitigation elevation versus a buy-out, is that
just kind of assumed, Mr. Mohn?
Mr. Mohn. The way the process works is that individual
homeowners cannot apply for this mitigation. It is all
community based. And it is a choice of the homeowner. We have
local meetings. We discuss all of the options. And then we will
put a grant application together, and if you came to us and
said, ``I would like to elevate my home,'' we would say,
``Sorry, those aren't funded priorities.'' We probably are not
going to send a grant in for you but if you came and said that
you wanted your house to be acquired we would then fill out the
grant application, and forward it on to PEMA. And I know the
gentleman over here knows probably more than I do about how
priorities are set, but I am just a little confused because I
think that is not what I have in heard in talking to PEMA. FEMA
is telling me that there is some FEMA level involvement, and I
am not clear what that is on prioritization.
And the second issue is that there is not enough money to
go around. I understand conceptually that acquisitions may save
more money if you can get them done but, you know, we are
competing against $150,000 homes in central Pennsylvania, and
the same home here is $400,000. We are never going to get any
acquisition funds unless every single home in central
Pennsylvania is bought out.
The Chairman. So right now, though, the preference would
be, or the easier road would be acquisition as you described it
as opposed to mitigation?
Mr. Mohn. Well, if you are talking about Yardley Borough,
the answer is, no, that is not the easier road because what
happens is, first of all, a very small percentage of people
want acquisitions. Of those who do, we have submitted 16 homes
to the acquisition program and all but one of those homes has
not met the benefit cost analysis that FEMA does primarily
because the homes are $400,000 homes.
The Chairman. What about the issue of elevation in terms of
business arrangement or business, that doesn't work, does it,
for a retail business, for example?
Mr. Cawley. Well, again, because of the prioritizations
that are placed and the minimum amount of money that is
involved here, it is very seldom that we get to a business
elevation because there is so much residential need. So here
locally we haven't had that experience.
The Chairman. Where would a business elevation make any
sense? I guess if you have a business on the main drag
Mr. Keller. I can answer that, Mr. Chairman. We have a
restaurant-night club-cabaret called Odettes on the south end
of town in New Hope, and they have suffered severely in all
three floods. And at this point I don't know that they are
going to reopen. They are still going back and forth, and they
certainly are cleaning up the place, but that would probably be
the key establishment that I can think of, the most important
one along with the Yardley Inn that was right on the river as
well but Odettes, if you saw it, they had probably I would say
about 6 to 7 feet of water in the entire restaurant and the
cabaret, and it just decimated them, but that would be a
perfect example, and I know they would be in a long line
waiting to get any funding. And the only thing that is
available to them, to my understanding, is some low interest
loans but after three--
The Chairman. In terms of elevation. They would do
elevation in a heart beat, is that what you are saying, if they
had the wherewithal to do it?
Mr. Keller. If they had the funding to do it, they would
start tomorrow.
The Chairman. I will yield to the gentleman from
Pennsylvania.
Mr. Maurstad. If I could make a comment along that same
line, Mr. Chairman.
The Chairman. Yes, I am sorry.
Mr. Maurstad. I think we are talking a lot about post-
disaster mitigation activity, and when again the Hazard
Mitigation Grant Program was changed to 7\1/2\ percent of the
disaster eligibility at the same time a new program was
approved by Congress, the Pre-Disaster Mitigation Grant
Program, that quite frankly has helped fund many of the
planning--local plans across the country to help communities
look at and assess what steps they need to take pre-disaster to
be able to avoid future losses from natural hazards.
Part of the Pre-Disaster Mitigation Grant Program, last
year we had about $175 million worth of projects in addition to
planning so there is a project portion of that where
communities again can make application through their States for
pre-disaster mitigation grant funding, so I want to make sure
that that is kept in this equation that we don't just focus on
the post-disaster activities.
The Chairman. Mr. Fitzpatrick.
Mr. Fitzpatrick. Thank you, Mr. Chairman. On the Hazard
Mitigation Grant Program it seems to me that if the program is
underfunded, and I would like to hear, Mr. Maurstad, your
position on what the correct number is, but if it is
underfunded wouldn't it make more sense to reach more people
and help more flood victims both past and potentially future to
put more dollars into the elevation program as opposed to the
buy-out program, the acquisition program. You would be able to
help more people. It wouldn't provide a permanent solution
because the structure would still be within the flood plain but
the living area above the 100-year flood plain.
I am confused by the colloquy between Mr. Mohn and
yourself. Mr. Mohn has issued a challenge, which seems to make
sense of a minimum of 25 percent set aside for elevation, I
think you indicated. Mr. Maurstad indicated that it is not
actually FEMA's role to set those guidelines but it is the
State's. If you could address that issue.
Mr. Maurstad. Sure. Thank you, sir. First, I think it is
important if you look at this in the scope of these are issues
that come up, quite frankly, after every presidentially
declared disaster in virtually every State. Flooding is the
number one cause of natural disaster losses year-in and year-
out, and so what we are wrestling with here is not just being
wrestled with here. Secondly, the eligibility component, as I
said before from the program's point of view, if a State
determines that a project is one that they want to move forward
with, and it is an eligible project in our regulations--both
elevation and relocation are eligible projects that the State
can put forward.
So again we don't say that one is better than the other.
They are eligible projects and the State determines their
priorities. The State also has the latitude, if they wanted, to
indicate that the HMGP funding from a particular disaster were
going to have a particular percentage set aside for certain
types of projects. The State would have the ability to do that.
The overall funding level is a hard one to address on a
specific-to-specific disaster because in some disasters,
clearly the amount of individual assistance and the public
assistance vary a lot. And 7\1/2\ percent of that, it certainly
doesn't get stretched very far when you are looking at the
number of counties that are being addressed, for example, here
recently.
But in some disasters such as we have been dealing with in
the National Flood Insurance Program, there are some parallel
things, as I have been listening here today. Since September of
2004 we have had a fairly active period of time also with the
largest flood claims in the program's history in 2004 and the
Florida hurricane, 75,000 claims, over $2 billion, and then of
course last year with another record of 220,000 claims
approaching $20 billion. We have been running with parallel
concerns that you have here but in those disasters 7\1/2\
percent is going to mean a $1\1/2\ billion estimate for a
Hazard Mitigation Grant projects in Louisiana, $500 million for
Hazard Mitigation Grant projects in Mississippi, Florida the
year before obviously 7\1/2\ percent of those totals--are
significant sums of money. So it is difficult to say 7\1/2\
percent in some cases is adequate. In some cases it is not.
Mr. Fitzpatrick. That is the national number. Now say
Louisiana or Alabama or Mississippi don't use the full
allocation of their Hazard Mitigation Grant Program as a result
of Hurricanes Rita and Katrina, could those dollars be flexed
to a community like Bucks County that has used their full
amount but still have homes or businesses that qualify for
elevation?
Mr. Maurstad. No. The requirements now are that the 7\1/2\
percent is for that disaster in the area that has been declared
so the dollars are for that area. And again in those disasters
in the past that had substantial amounts, there have been times
where the State has not accessed all of the Hazard Mitigation
Grant dollars available to them because of capability and
capacity and the limit of time that you have to spend those
dollars.
Mr. Fitzpatrick. I just want to make sure I understand this
because I think Mr. Mohn testified that after the September
2004 to April 2005 flood, the Yardley Borough put together an
application under the HMGP program, and you put it for
acquisitions only because you believed that that was what was
going to qualify, not for any elevations. Now elevations did
occur in the watershed. Some folks elevated their homes and the
truth is that those who invested their own dollars not waiting
for the Hazard Mitigation Grant Program probably saved the
National Flood Insurance Program a lot of money.
And it seems to me, you know, that if Yardley was told you
are going to qualify for elevation dollars under this FEMA
program not only would it have been a good investment, we would
have saved a lot of families and potentially businesses a lot
of heartache. But your testimony is that that is a State-driven
formula and requirement?
Mr. Maurstad. It is a State-administered program. Seven and
one-half percent obviously is set by Federal statute, but the
State is the entity that determines the priorities for that
particular disaster, again in many cases working with the local
communities that are affected, but there is not a FEMA mandate
that one type of eligible activity has a greater priority than
another type of eligible activity.
The Chairman. If I could just interject. I don't know the
answer to this. How did the 7\1/2\ percent figure get
ascertained ultimately?
Mr. Maurstad. Right. It is in the Act and--
The Chairman. How was that--
Mr. Maurstad. Well, the change from 15 percent to 7\1/2\
percent was done prior to my assuming this role. It is my
understanding that that was a negotiated change at the time
that the Pre-Disaster Mitigation Grant Program was developed.
The funding for the PDM program offset in an average year the
amount that HMGP funding was being reduced, and then PDM was
reduced a little bit from there.
The Chairman. We appreciate the testimony of the gentleman.
We may have some written questions that we may both want to
present to the witnesses, but again we thank you for your
participation. And this panel is dismissed. Thank you. We would
like to invite our second panel up to the podium. Ms. Carol R.
Collier, executive director of the Delaware River Basin
Commission; Mr. George Komelasky, vice president, Paiste & Noe,
testifying on behalf of the Independent Insurance Agents &
Brokers of America; Mr. Sam Smith, resident of Middletown
Township of Bucks County; and Mr. C. William Winslade, Yardley
Borough, Bucks County, Pennsylvania. Thank you all for
participating, and, Ms. Collier, we will begin with you.
STATEMENT OF CAROL R. COLLIER, EXECUTIVE DIRECTOR, DELAWARE
RIVER BASIN COMMISSION
Ms. Collier. Thank you, sir. Good morning, Mr. Chairman,
and Congressman Fitzpatrick. I am Carol R. Collier, director of
the Delaware River Basin Commission, or DRBC, as it is known.
We appreciate the opportunity to speak to you this morning, and
I do request that my written testimony with the attachments be
entered--
The Chairman. Without objection, all of the written
testimony will be made a part of the record.
Ms. Collier. Thank you. I hope to concisely present DRBC's
role in ongoing flood loss reduction efforts, highlight some
needs, and offer a few recommendations, and then I will be glad
to take questions. First, let me just start with a background.
We need to really look at the basin perspective when we are
looking at flood mitigation. The basis is over 13,500 square
miles, 330-mile long river, and it is the longest un-dammed
river east of the Mississippi. And what makes it complicated is
that we have four States, 25 Congressional districts, two
Federal Emergency Management Agency regions, two EPA regions,
five USGS offices, two National Weather Service local forecast
offices, 42 counties, and 838 municipalities. And as I will
discuss later, coordination of effort is a critical need for
flood loss reduction. There are nearly 15 million people who
depend on the waters of the Delaware Basin.
I do want to thank Congressman Fitzpatrick for forming the
Delaware River Basin Congressional Task Force. That is an
entity that really helps pull together the issues that are
involved with the basin. DRBC is an interstate/Federal agency
with a mission to manage water resources without regard to
political boundaries looking across at the boundaries of the
watershed itself. There are five commissioners, the governors
of the four States, and a two-star general in the Corps of
Engineers who represents the president and all Federal
agencies.
We have regulatory as well as management planning and
resource opportunities. One thing I must say is that
unfortunately the Federal Government has decided not to pay
their Federal fair share to the commission for a number of
years now. They should be paying a 20 percent share, so we
cannot do all of the water management that people want us to
do, including some of the flood mitigation efforts. We can talk
about that more in the recommendations. As has been stated, and
as known by thousands of property owners and emergency
responders, the Delaware River Basin has experienced three
major floods over less than a 2-year period, and I do have an
exhibit that shows that we have not had such a flood in almost
50 years since 1955, so things are changing and we need to look
differently at our flood management.
Flood vulnerability remains a chronic problem in Bucks
County due in part to the sporadic nature of flooding, but also
due to the insufficient funding of Federal mitigation program
and the cost-share formulas that are difficult for many local
municipalities to meet. DRBC did do an analysis of Bucks County
and the repetitive loss numbers. These are in the packet. It
shows that Bucks County has the highest number of repetitive
loss properties in the whole basin, not the Commonwealth, the
whole basin, and that Yardley Borough is the second highest
ranking municipality, so I ask you to look at Exhibit B.
The analysis shows that there are 561 repetitive loss
properties in Bucks County that have received insurance claims
totaling over $60 million through the National Flood Insurance
Program for losses that occurred during the period of 1978
through 2005. This analysis does not include claims from the
last flood, the June 2006 flood, nor uninsured flood damage. So
the question is what can we do? There is no silver bullet for
flood control. It is going to take a combination of a number of
efforts from the Federal level down to the municipal level down
to the homeowner.
We have put together in my written testimony a list of
recommendations that have come to us both from public and
professionals alike, and they are organized in three levels:
one, measures to lower existing flood levels; two, measures to
reduce damage to existing structures; and three, to prevent
flood damage from getting worse, and what can we do to make the
future better.
Of those, I would like to highlight some that are
priorities by DRBC. One of the strengths of DRBC is an ability
to bring together governmental and non-governmental
stakeholders, and we do have a flood advisory committee that is
comprised of Federal, State, and local organizations with flood
loss reduction responsibilities. They, with DRBC staff, have
put together these priorities. Number one, encourage and
support completion and local adoption of the FEMA-approvable
flood and/or hazard mitigation plans for all municipalities as
required by the Act of 2000, and then once the plan is
completed increase the funding needed to implement the
mitigation options.
The next few deal with flood plains, and I know this is not
a popular statement but flood plains flood, and they are a
natural extension of the river and an integral part of river
systems. If you take a flood plain area away either by filling
it in or by putting levees and separating it from the river,
the river will continue to try and re-establish that flood
plain. So what can we do to get people out of harm's way? One
is, as was mentioned by the first panel, appropriate Federal
and State funding for building elevations and acquisitions in
the flood-prone areas. This is really critical.
Second, and as mentioned by Mayor Keller, we really need to
look at map modernization. As people become more aware of flood
plain issues they are going to go to the right agencies and
look for the flood plain line and right now it is not correct,
and it is not correct because of development upstream, and also
the frequency of floods, so the map modernization should be
prioritized for the municipalities where flood conditions have
changed due to development.
Next, we really need to look at strengthening flood plain
regulations. One, encourage regulations to be consistent with
the no adverse impact recommendations by the Association of
State Flood Plain Managers. Also, looking around the basin at
what other States are doing and also around the country. Just
across the river New Jersey has a Governor's Flood Task Force
that was put together after the last flood event of April 2005,
and they are looking at a number of recommendations, and they
also have a different definition, a more restrictive definition
of floodway that we might want to look at on this side of the
river.
Next, really look at storm water controls and implement
best management practices so that we reduce the storm waters
during floods that enter the waters. Expand flood plain
awareness and flood safety education programs, and strengthen
flood warning systems, which has already been done. This is a
main effort of our flood advisory committee but there is
certainly more that needs to be done. And next I know there has
been a lot of discussion about the impact of the upstream
reservoirs, although they did not cause damage during this
flood by opening the gates as some have said. That was not true
but there is a plan that could make it better. There could be a
reservoir operating plan that looks both at drought management
as well as flood management, and we are willing to lead that
effort. One of the things that is needed is a technical model
so we can really look at different storm scenarios and
different operation modes of the reservoirs, and that would
take some Federal funding to do that. There is an attachment to
my testimony that provides information on that.
We definitely support Congressman Fitzpatrick's effort to
have the Corps of Engineers update and expand their 1984
Delaware River Basin survey. That would be a very good approach
to looking at mitigation options and the cost effectiveness of
different options. And, finally, ensure funding for adequate
maintenance of existing flood control structures. I would just
like to end with two things. It is important to look at the
success story that already occurs in Bucks County, and that is
on the Neshaminy Creek. And it is an excellent example of the
effective work done by Federal, State, and local government
coming together to do a plan and get people out of harm's way.
So finally, there is no silver bullet; there are many
things we have to do. DRBC is here to help in that effort, and
I look forward to taking questions at the appropriate time.
[The prepared statement of Ms. Collier can be found on page
40 of the appendix.]
The Chairman. Thank you, Ms. Collier. Mr. Komelasky.
STATEMENT OF GEORGE F. KOMELASKY, VICE PRESIDENT, PAISTE & NOE,
INC. ON BEHALF OF THE INDEPENDENT INSURANCE AGENTS & BROKERS OF
AMERICA
Mr. Komelasky. Thank you. Good morning, Chairman Oxley,
Congressman Fitzpatrick, and members of the committee. My name
is George Komelasky, and I am pleased to be here today on
behalf of the Independent Insurance Agents & Brokers of America
to provide my association's perspective on efforts to reform
the National Flood Insurance Program. I am also vice president
of Paiste & Noe, an independent insurance agency based in
Richboro, Bucks County. I am currently chairman of the
Insurance and Agents and Brokers of Pennsylvania, which is the
State affiliate of the IIABA. I am a local township official,
being a supervisor in Northampton Township for more than 20
years, and I have been a resident of Bucks County for over 30
years.
The IIABA is the Nation's oldest and largest trade
association of insurance agents, and we represent a nationwide
network of more than 300,000 agents, brokers, and employees.
Under the NFIP program, independent agents play a vital role in
the delivery of the product through the Write Your Own system.
Independent agents serve as the sales force of the NFIP and the
conduits between the NFIP, the Write Your Own companies, and
the consumers. This relationship provides independent agents
with a unique perspective on the issues surrounding flood
insurance. Yet it also means that the role of the insurance
agent and the delivery process of flood insurance is
considerably more complex than that of traditional property/
casualty lines. Agents must possess a higher degree of
knowledge and expertise than their non-NFIP participating
counterparts. This is done through attending flood conferences
and seminars. This is done regularly and involves traveling to
different regions throughout the Commonwealth to attend these
seminars costing personal time and money.
Every agent assumes these responsibilities voluntarily and
does so as part of being a professional representative of the
NFIP. In an effort to bring the education process to as many
agents as possible, our State association has begun to provide
Internet-based seminars conducted by nationally recognized
flood insurance expert, Rita Holladay. This training has been
extremely popular and a tremendous tool. We believe in the
effectiveness of the program and would like to see it continue
and offer consumers even greater protections in the years
ahead.
However, no program is perfect, which was made all the more
clear by last year's devastating hurricane season and the
unpredictable weather patterns here in Bucks County. This
increased flooding activity in such a short period of time has
highlighted some of the deficiencies in the program and has
strained government resources. While the IIABA is confident
that the NFIP will recover, it is important that Congress shore
up the NFIP's financial resources and use this opportunity to
enact needed reforms to ensure that the long term
sustainability of the program.
For this reason, the IIABA has been strongly supportive of
your committee's legislation, H.R. 4973, the Flood Insurance
Reform Modernization Act of 2006. In November of 2005, the
IIABA released a 23 point plan for reform to restore the NFIP
to sound actuarial footing, and we are extremely pleased to see
a number of the IIABA recommended provisions in your
legislation. In particular, the increase of the NFIP's
borrowing authority has been a top issue for independent
insurance agents and brokers. The Federal Emergency Management
Agency distributed a memo to Write Your Own companies last
November informing them that lines of credit were suspended
until further Congressional action regarding an extension of
borrowing authority.
With claims expected to exceed $23 billion, extending
borrowing authority was necessary in order to meet consumer
needs. The initial borrowing limit of $1.5 billion from the
U.S. Treasury was extended by Congress in the immediate wake of
Hurricanes Katrina and Rita, but even this extension was
inadequate to meet the anticipated claims. Chairman Oxley and
Congressman Fitzpatrick, your efforts to increase the borrowing
authority of the NFIP are vital to ensure the continued payout
of promised monies to consumers, and the IIABA applauds you
both for your efforts to ensure that the U.S. Government
delivers on that promise.
The inclusion of optional business interruption coverage is
also crucial to Big I members and their commercial customers.
Many of these have lost their businesses in the area affected
by the hurricanes last year. Business interruption coverage and
the security and peace of mind it provides is crucial to our
members and to small business people across America. Also chief
among our recommendations, and present in your bill, are
provisions that would increase the maximum coverage limits, and
include additional living expenses for residential policies.
The IIABA is very pleased that the House has moved forward
on comprehensive flood insurance reform and passed your
committee's legislation. The Flood Insurance Reform and
Modernization Act of 2006 is critical towards ensuring the
long-term stability of the vital National Flood Insurance
Program. The NFIP is essential to Americans and to the U.S.
economy and we strongly support your efforts to update it to
reflect today's risks. We are also strongly supportive of your
efforts to include the optional coverage of business
interruption insurance, additional living expenses, and
increasing the maximum coverage limits.
I would like to thank the committee for giving me the
opportunity to express the views of the IIABA on this important
program. Thank you.
[The prepared statement of Mr. Komelasky can be found on
page 63 of the appendix.]
The Chairman. Thank you, Mr. Komelasky. Next is Mr. Sam
Smith, resident of Middletown Township.
STATEMENT OF SAM SMITH, LANGHORNE, PA
Mr. Smith. I was asked to comment on a little bit different
side of it as a flood victim, a person who has had his house
elevated, so my testimony is a little bit different than what
we have heard. First, Mr. Oxley, thank you for allowing me to
testify on the current flooding issues and concerns. My name is
Sam Smith, and I live in Middletown Township, Bucks County, PA.
My home is situated in the Neshaminy Watershed adjacent to, and
a part of, the Delaware River Watershed. I was not affected by
the recent flooding, though there was flooding in our area. My
home was elevated out of harms way in 2003 as a part of the
Neshaminy Watershed Supplemental Plan of Work, PL-83-566.
Prior to Hurricane Floyd, that was September 16, 1999,
residents from all of the various communities along the lower
Neshaminy, banded together and formed an association to
convince our county commissioners of the need to reduce flood
damages and reexamine at an existing, but dormant flood control
project. A new, updated study was commissioned at the end of
1996 by Bucks County and the Department of Agriculture, NRCS. I
was selected as a steering committee member to search for
alternatives to reduce flood damages. After the completion of
the study in 2002, I was on the advisory board to help with the
mechanics of the plan as well as work with the lead engineering
firm to make enhancements to some of the details that needed
more resolution.
Our home was flooded during Hurricane Floyd. A second
building on the property, the cottage, was flooded again on
Father's Day, June 2001, by tropical storm Allison. The night
before I had just put the last piece of trim up in the kitchen
to finish the repairs from Floyd. My family and I were out of
our home for over 5 months. The cottage was unusable for 3
years. I can't begin to tell you the stress and burden we
endured during that period. To this day we still seem to be
putting pieces of our lives back together. The Red Cross, God
bless them, put us up in a hotel for 4 weeks, and gave us
vouchers for a local diner.
I signed a waiver with the NFIP adjuster after the flood,
that being Floyd, to have all the work done by a contractor for
a 10 percent increased return on my claim. Unfortunately, you
couldn't find a qualified contractor anywhere because of the
circumstances. There were so many homes that were devastated
such as in Yardley now. My wife and kid and I did all the muck
out and demolition necessary to begin the sanitizing and drying
process. It took 8 weeks to dry to the proper level of moisture
by core testing. FEMA gave us $1,000 for living expenses and
estimated the repairs could be completed within 4 weeks. I
spent 3\1/2\ hours on hold trying to get through on a FEMA
hotline so I could return the money, but the girl stationed in
Texas somewhere couldn't tell me where to send it. We used the
money to extend our stay in the hotel by 2 weeks.
Soon, the hotel and diner costs were exhausting our
financial resources. My wife and I improvised a plan to get
back in the house. We set up a table in the basement with a
microwave and a coffee pot. I temporarily installed a washbasin
in the kitchen for dishes and rigged the flooded boiler back
into service for heat and hot water. The kids and pets couldn't
come home because of unsafe conditions but by Christmas the
contractor we finally hired had the outside of the walls back
together and insulation was in, so we managed climbing a ladder
to the upstairs bed and bathroom. By the end of February there
was enough of the house pieced back together that we brought
the kids home and the pets a month or so later.
There was a FEMA hazard mitigation period after Floyd for
buy-outs. Our house did not meet the 50 percent damage
requirement and was not eligible. Damages sustained during
Floyd were estimated at $108,000 on the house and the cottage
was an additional $60,000. There was no payout on the cottage
even though the premiums were being paid. The insurance writer
failed to write two separate policies and the NFIP declined
payment. I asked them to return the premiums and their comment
was to take them to Federal Court in Philadelphia. Likewise was
our option to appeal the payout figure of less than $60,000 in
our home, which was approximately 60 cents on the dollar.
The house elevation took place in April of 2003. We were
again out of our home for 8 weeks, though under far better
circumstances. Now that we are elevated, I still watch the
Weather Channel as intensely as I used to prior to a large rain
event, the same emotions always come rushing back but the fear
of losing everything is slowly dissipating. The negative
impacts of being elevated are far outweighed by the positive
ones. I have claimed back a certain peace of mind. If we wanted
to sell our home we could do so with a clear conscience. After
10 years and hundreds of meetings, seminars and the like, I am
able to look forward to living my life again.
There are two issues that I would like to comment on at the
hearing, and they may be redundant because they were commented
on previously but at a steering committee meeting that occurred
in 2000, Jeff Mahood, environmental specialist, of the NRCS, he
is here with us today by the way, made mention of the fact that
it would take FEMA up to 5 years to adopt new flood plain
values established by the ongoing study and incorporate them
into the NFIP rate maps. I didn't put too much thought into it
at the time, however, it is clearly a fundamental problem that
is costing huge amounts of money and grief.
I am not sure exactly when the information became available
to FEMA but it was calculated within a month after Floyd that
it was not a 100-year event by Walter Boles, hydrologist of the
NRCS. That means he had the information available back to him
in 1999. He perhaps hadn't completed all the details but it was
certainly ready in 2000. To this day the new values have not
been adopted. Since we are spending or investing $14 million on
a non-structural reduction of flood damages in the watershed,
it is critical that all municipalities in the watershed adopt
and comply with the storm water management act so that no
increase of flooding occur in the future, otherwise, all those
values are just out the window. It is absolutely ludicrous to
allow building in the same flood plain that we are still in the
process of trying to correct.
The average difference in the flood plain elevations from
the FEMA maps to the new values is approximately 30 inches in
the lower Neshaminy. My home was flooded by 24 inches and it
caused such havoc. My neighbor just put a 700 square foot
addition on his house, right in the flood plain because the
township is required to use FEMA values even though they know
better. They are aware of the new values. The same township is
approving development plans near flood plains and I witnessed a
retention/detention basin adjacent to the 100-year flood plain
by mere feet. Add 30 inches of water and the entire storm water
plan has no value. In one instance, in a borough where houses
are being lifted, the zoning officer told me he wouldn't issue
the permits to elevate because the homes were being elevated
higher than the FEMA values. I had to go to the borough council
for relief.
I have no idea how often this has occurred throughout the
watershed over the last 6 years but we are throwing good money
at bad. There must be a change in the priority of FEMA to
remedy this situation. If not, let the agencies that actually
define flood plains regulate the maps so the people who need
them have good information. Planning commissions can't possibly
make good recommendations without the proper information. Good
people are unknowingly being put in harms way by the agency
that is supposed to protect them. Flooding and flood damage is
being increased by the agency that is there to enforce the
opposite.
One last example on this is from today, August 8th. In
talking to Paul Lenher from Pennoni Engineering, he told me
that the FEMA rate map values at Stockton, New Jersey,
alongside the Delaware River, are 5 feet below what the New
Jersey Department of Environmental Protection has calculated. I
don't know if or when those values may have been sent to FEMA.
Consider that homes and businesses in Yardley and elsewhere
recently along the Pennsylvania side of the Delaware River have
already been lifted. Can you imagine spending $150,000 of your
own money for peace of mind and then find out you are still in
the 100-year flood plain. If the New Jersey side of the river
is 5 feet over the rate maps, then so is Pennsylvania.
The second issue that I would like to comment on is the ICC
money as well, and we have heard this already. I would like to
offer my point of view, if I can. It would seem advantageous to
all concerned to consider a substantial increase. Given the
right parameters and qualifying criteria it would make sense
and would be a win-win situation. The cost benefit ratio, 1 to
1.4, from the Neshaminy Watershed Plan of Work shows that
Federal dollars would be funded if there was a similar plan
along the Delaware River in place. Then consider that the NFIP
payouts in a flood plain are just a matter of when. This
becomes a pay me now or pay me later scenario.
Currently, the NFIP requires that you elevate from the
flood plain within, I believe, a 2-year period from having been
flooded. I don't understand this stipulation but it is
worthwhile to be proactive and make it available any time if
there is a history of flooding on the property. If a homeowner
was interested in lifting his home in Yardley back in 2001 for
a cost of half the value of the home, the NFIP paid out, say,
$100,000 or half the value of the home, wouldn't the NFIP have
saved 2 times that amount by 2006 considering the payout values
of today and of course the multiple flood events? Even if the
flood events didn't occur, it is just a matter of time before
one does and the money is recouped.
Many homes sit in the 50-year flood plain or less. A house
where the first floor is flooded by 6 inches of water will have
the same claim as if it took 4 feet. Giving more incentive and
ability to these types of homeowners to pay for an elevation
will save taxpayers greatly in the long run and provide quick
relief for the homeowners. Elevation costs on average are
running over $100,000 today; most homeowners can't afford to do
it on their own. Is the NFIP going to pay out for elevations
one time or floods forever?
It is obvious that the Delaware River watershed is in need
of updated flood plain values along with ensuring that all
municipalities in the watershed are adhering to strict storm
water guidelines. A study to search for alternatives to correct
the issues at hand in such a large scale area could take a very
long time. Perhaps adopting the New Jersey DEP values and an
aggressive plan to enforce storm water management in the region
for the short term, as well as increased ICC funds, can offer
property owners a way out quickly. Should a plan develop down
the road that includes elevations, it could include
reimbursement funds to those who have already helped
themselves. The next flood event will have significantly less
impact with each and every home that is removed from the flood
plain. Thank you very kindly for this opportunity.
[The prepared statement of Mr. Smith can be found on page
88 of the appendix.]
The Chairman. Thank you, Mr. Smith. Mr. Winslade.
STATEMENT OF C. WILLIAM WINSLADE, MANAGER, YARDLEY BOROUGH
Mr. Winslade. Good morning. I would like to take this
opportunity to thank Chairman Oxley and Congressman Fitzpatrick
for the opportunity to speak to the Committee on Financial
Services regarding how the National Flood Insurance Program has
responded to these floods and to floods throughout the
Commonwealth of Pennsylvania, and how the Federal Emergency
Management Agency cooperated with State and local governments
under NFIP during recent floods. Have we experienced problems
in the administration and implementation of NFIP, and what
could be done to correct these problems? What steps are being
taken to mitigate future flood damage to the Yardley area?
Lastly, what efforts are being made to modernize the flood maps
in Pennsylvania, specifically, Bucks County?
As introduced, my name is C. William Winslade. Presently I
am the Yardley Borough manager and have been for almost 2
years. This gives me four disasters in dealing with FEMA. I
have also been the emergency management coordinator for
approximately 25 years. That gives me nine Federal disasters. I
have had tremendous experience in dealing with various elected
and appointed officials at the local, county, State, and
Federal levels. May I introduce two support individuals
presently, I have John Dougherty, who is the Bucks County
emergency management director, as well as Mr. Bill Clark, a
resident of Yardley Borough whom you will get to know quite
well in the coming minutes.
First, I would like to mention that with all the
advertisements of the hearing, is Bucks County ready for
another flood, I must say, yes, we are ready, but does the
severity of the flood need to be as much as Mother Nature
intends. There are things we can do. It is probably more
appropriate for the constituents to ask is FEMA ready for
another flood in Bucks County. Again, during the advertisement,
we are told we have experienced flooding 3 times in the last 21
months. Let me correct the record. Bucks County has been
declared a major disaster area by FEMA 4 times in the last 21
months.
There was a rain event of June 30th, recently, disaster
number 1649, the rain event of April 14th, disaster number
1587, tropical depression Ivan in September of 2004, 1557, and
also the rain event associated with tropical depression
Francis, also in September of 2004, disaster number 1555. It
was at FEMA's direction that we grouped those two together and
were calling it one. It is not fair to residents of this
borough to say, oh, you only had one flood. They had to move
things. They have to put their lives back in order twice during
that period.
For the record, two serious other flood events in January
of 1996, disaster 1093, and again in July of 1996, disaster
1130. Major disasters are not new in Bucks County and
unfortunately fastly approaching the frequency of routine. My
distinguished colleague, Councilman Mohn, has spoken on
mitigation efforts in our small borough, which is certainly
mirrored by all the river communities. I would like to address
the committee on some issues with regard to FEMA's increased
cost of compliance. Again, is FEMA ready for another flood?
How much coverage is available? If a disaster stricken
person is applying for ICC help to bring their house and/or
business into our community's flood plain ordinance, they can
receive up to $30,000 in assistance for complying. Can or will
the committee investigate raising the ceiling level of $30,000
to a today dollar value. When ICC was adopted in 1994 the
maximum was $20,000, moved to $30,000 in 1995. It needs to be
reevaluated. ICC provides four options for funding, and these
aren't in the particular order of FEMA but in our order.
Elevation, this raises your home or business to or above the
flood elevation levels adopted by our community. Our present
ordinances require 18 feet above the 100-year plain. With 12
homes underway with an elevation project, all have exceeded
$100,000 in cost to comply to our local ordinances. Only one
resident at the present time has received ICC funds. With our
rain event of June 2006, we have already accepted 14 additional
applications.
Number two, relocation. This moves your home or business
out of harm's way. With most residents in the confines of
Yardley Borough, this is not an option. Open lots prevailing
rates are in excess of $150,000 in lower Bucks County. Number
three, demolition. This tears down and removes flood-damaged
buildings. Again, not much of an option. I am sure you will
concur no one wants to see their home demolished. Number four,
flood proofing. This option is available primarily for non-
residential buildings. It involves making a building watertight
through a combination of adjustments or additions of features
to the building that reduced the potential for flood damage. If
we made this available for residential buildings, we could also
reduce the cost to the Federal Government while supplying aid
to the residents.
As previous testimony has stated, the item of choice for
mitigation is elevation. With regard to NFIP and the
underwriters, it is not quite as easy as written in all the
publications or manuals. Listed below is a typical timeline of
a family's ordeal.
In April, we had the floods of course. During April and
May, the Clarks start to research what they need to do with
background checks on house movers and other such contractors.
At the end of May, the Clarks sign a contract with Wolfe
Movers. May to August consists of a long process of meeting
contractors, trying to find the right architect, taking bids,
etc. The Clarks decide on an architect and he does all the
drawings that that necessary. They are finally ready to go up.
In the meantime, they get their application for substantial
review from Borough Hall and attempt to gather all the
information and fill it out.
On August 30, 2005, the Clarks raise their house. In
September 2005, the Clarks sign Phase 1 with City Builders and
they immediately begin the building of the foundation and
everything that goes with it, such as relocation of electrical
lines, plumbing lines, etc. On October 28, 2005, the Clarks
hand in the application for substantial damage review to the
borough for necessary signatures. They get the application back
soon after in the mail. They believe that all is done. No one
told them otherwise, so they start a lengthy process of calling
Traveler's Insurance Company trying to find the right
department to help them. They are sent around to several
different claims offices and no one knows anything about an
application for substantial damage.
On January 4, 2006, the Clarks fax and mail again several
pages from the application for substantial review. This time
they are finally told by Traveler's Insurance Company that this
is not what they need, but instead a letter from the borough on
borough stationery that says the house is substantially
damaged. And for the record every insurance carrier requires a
different item from the borough when passing judgment on
whether a house is substantially damaged. On January 17th, a
letter is written confirming substantial damage and the Clarks
send it in immediately. This is the official date for the ICC
claim. The Clarks can't remember why there is such a long lag
here, but they believe it was more general confusion about who
was handling the claim. They eventually reach a woman where
named Stacey Olsen, who was amazing.
On March 6th, Stacey is now the Clarks' angel. She hears
their plea and tells them to send the flood policy and letter
of substantial damage to Colonial for another claim avenue.
They will handle the claim for Traveler's. They are now in
communication with another individual from Colonial. They are
also amazed at how on top of things this person is. On March
10th, Colonial Claims send to the Clarks a letter listing the
11 documents necessary to pursue an ICC claim. They gather what
they can and send it in. One thing they need is a copy of the
Borough's flood mitigation ordinance. It is not rocket science
what the flood mitigation ordinance is.
On March 17th, the Clarks provide photographs along with
everything else to the insurance carrier. On March 20th, the
Clarks send even more photographs of the cement foundation
going up but they have nowhere to go. The remainder of the
documents they need they cannot get since it was in the house
that was devastated. On March 30th, the Clarks get a copy of
the mitigation permit from Colonial. It is asking for their
letter along with flood ordinance plan to Colonial Claims. Now
they are told all they need are permits involved. The building
inspector gives the Clarks copies of all permits for the
elevation. Colonial takes issue with the permit numbers being
handwritten in the upper right-hand corner, so they are given a
hard time, and we have to date stamp and punch the permit, a
ridiculous request.
In early July 2006, the Clarks stay in touch with Colonial
who doesn't forget about them since they don't have their CO
yet. She tells them that they do not need to have a CO but they
need a letter stating that the elevation is complete and that
they are in compliance with borough ordinance so they can get
their money. The Clarks also order another survey to prove that
the house is indeed above the 100-year flood plain as
recommended or required by Colonial.
The Chairman. I know you have several more pages on this,
and we have about 6 more minutes.
Mr. Winslade. All right. Let me go to my conclusion.
The Chairman. Okay. This is all obviously part of the
record.
Mr. Winslade. On August 9th, the Clarks receive Proof of
Loss from Colonial. They sign it and have it notarized. They
fax it back. The Clarks are now waiting anxiously to hear if
Traveler's Insurance will accept their claim. It is now today,
16 months later, $100,000, but they raised their house without
help from FEMA. This is just one story of many from our small
borough. Can the government standardize reporting, streamline
government bureaucracy and assist a homeowner in time of need?
In summary, has the National Flood Insurance Program responded
to those in need after a flood? You can just ask the Clarks.
Answering the question of how the Federal Emergency
Management Agency cooperated with State and local governments
under the NFIP during the recent floods, there was minimal
involvement during the floor proper. During the few weeks
immediately following the flood, there was good representation
of underwriters and adjusters. Unfortunately, 4 weeks after a
disaster in a household, a tragedy begins in trying to secure
Federal monies in putting lives of families back in order. We
are being asked what corrective action could be done to the
problems we are experiencing with NFIP, the residents had
telephones and written hundreds of letters to our local elected
officials to reevaluate older and possibly outdated statutes.
Our next step of course is our plea today to have you review,
revise, update flood mitigation opportunities.
With respect to the flood maps in Pennsylvania,
specifically Bucks County, I must request the updating of old
maps so our local planning and zoning entities can further
assure safeguards in the flood zone. Again, I take this
opportunity to thank you and Congressman Fitzpatrick for the
opportunity.
[The prepared statement of Mr. Winslade can be found on
page 92 of the appendix.]
The Chairman. Thank you, Mr. Winslade. I just had a
couple--actually one question, and I will yield the rest of the
time to Mr. Fitzpatrick. Mr. Smith, you mentioned the positive
aspects outweighed the negative aspects for elevation. What are
the negative aspects to the elevation issue?
Mr. Smith. Steps, social impact.
The Chairman. In a word.
Mr. Smith. Steps are certainly one. I kind of like the
esthetics of my home but some people wouldn't necessarily like
that part of it. Some other negative impacts would be going
to--I limited the market of people who would actually want to
buy my home because of steps basically. But those are some of
the things that are negative impacts but as I said they are far
outweighed by the positive ones.
The Chairman. Thank you.
Mr. Fitzpatrick. Mr. Chairman, in that particular case that
decision was made actually by the homeowners. There was an
acquisition program and an elevation program sort of going
along on parallel tracks. Sam, would you--Mr. Smith, would you
comment because I know you got experience beyond even elevating
your own home in construction on the cost effectiveness of
elevation as you know it as opposed to because we heard Mr.
Mohn testify--Councilman Dan Mohn testify that when you are
required by the Hazard Mitigation Program to make an
application on behalf of Yardley Borough and you are told that
only acquisitions are going to qualify and you do your best and
you put your applications together and given the cost value of
real estate here in Yardley as it ends up the cost benefit
analysis results in only one home can be purchased and
essentially you have helped nobody. The effectiveness, cost
effectiveness of elevation in your view.
Mr. Smith. During the study, as I mentioned, the cost
benefit was 1 to 1.4 but I think that the Neshaminy Watershed
Project inside itself looks at the overall project. They
addressed every home in the flood plain or in the 100-year
flood plain, so you can look at buy-outs and look at elevations
and flood proofing, but when you take out certain amounts of
homes through the buy-outs it affords more for elevations so to
speak. So it is an average in our plan of work looking at the
entire picture. Cost effectiveness in terms of an individual
trying to do it at home, there is an advantage to doing so
because our contracts, we must pay prevailing wages, and I
don't think that is true with either ICC money or obviously if
you just do it out of your own pocket. So you can save by
finding contractors that aren't paying the same rate as perhaps
are required under a Federal contract.
Mr. Fitzpatrick. Mr. Chairman, there is some good news
actually tucked in all this testimony I heard today. Ms.
Collier, you indicated that the Delaware River Basin Commission
is willing to undertake a reservoir management plan to
essentially manage not only water during time of drought but
also water during time of flood. Can you tell me what it is I
can do as a Federal official representing this community to
assist DRBC to actually get that done because it seems that if
there is an opportunity to use an existing reservoir to reduce
future flooding on the Delaware River and those are structures
currently in place that we have already made the investment in,
we should do that.
Ms. Collier. Thank you for the question. There are
different types of reservoirs within the basin. Some are
designed and operated by the Corps of Engineers specifically
for flood control. The ones in question were really developed
for water supply and those are three very large reservoirs
owned and operated by New York City in the upper basin. There
are also some power reservoirs in addition, which also don't
have the same outlet structures as a flood control dam. So the
question is, is it possible to maintain voids in those drinking
water and power reservoirs so that it could mitigate flooding.
It is not a silver bullet. It will not prevent flooding in
Yardley but it might reduce the level of flooding. And so what
we would like to do is prepare a model that could look at if we
held such voids or worked with New York City to hold such voids
how would that improve the flooding, how might that impact the
drought situation and look at the balance that is needed. In
order to do that, we do need some dollars to support this model
and we are estimating that it would cost about $500,000. There
is a one-page exhibit in my written testimony that describes
the tools that would be needed and how we would utilize that
working with the National Weather Service and other agencies as
well as the basin States in New York City.
The Chairman. Would that be in the energy and
appropriations that you are referring to, that money?
Ms. Collier. That would be fine.
The Chairman. I think that is what that is.
Mr. Fitzpatrick. I will take a look at that, Mr. Chairman.
The Chairman. Yes, I think it is an appropriations issue
specifically on energy model.
Mr. Fitzpatrick. It is computer modeling, is that what you
are talking about?
Ms. Collier. That is right.
Mr. Fitzpatrick. Mr. Chairman, I know we are running very
low on time and so I am just going to ask one additional
question although I have a number of questions that I would
have liked to have asked Mr. Maurstad. We spent all of our time
on the previous panel talking about the Hazard Mitigation Grant
Program and really didn't get into the fact that while
homeowners in this community are waiting for word about the ICC
program or elevation programs, buy-out programs, they are at
the same time negotiating with their own insurance companies
and many times having a very difficult time. I referenced
Jeanne and Michael Doyle who are here today, and the fact that
they haven't settled their claim from September of 2004.
And so I am going to submit a number of questions to Mr.
Maurstad about the Write Your Own policy program and about the
status of all the claims and the three floods in Bucks County
and what FEMA and the National Flood Insurance Program can tell
us about that. Mr. Winslade, you talked about the insurance
agents that are here during the flooding or immediately after
the flooding. I am sure you see claims agents coming in and
visiting with their insureds. You did indicate in your
testimony that some of the requirements were onerous or maybe
even a little crazy what they were asking for while a homeowner
is waiting to elevate.
I would like you to elaborate on that a little bit, and I
know that, Mr. Komelasky, you talked about the benefits of
Internet based training for some of the Write Your Own claims
adjusters. I would like to hear whether or not you think, Mr.
Komelasky, the current status of training of claims adjusters
is adequate in Pennsylvania and whether or not a Federal
standard should be considered so that there is more equal
training across the board. First, Mr. Winslade, if you could.
Mr. Winslade. Just a few examples, Mr. Fitzpatrick, would
be a request from an insurance adjuster to the homeowner as to
the flood gates in the house after it has been raised,
justification of those. As I see it, that is a building and
zoning ordinance. It is not a reason for the insurance
companies to prolong the opportunity to pay out to their
insureds. Photographs of foundations, it is ridiculous to ask
for that. We have in place a building department, a zoning
department, and of course they are all brought to today's codes
with regard to rebuilding. It is not their job to--
Mr. Fitzpatrick. So you are saying some of the information
being requested is duplicative of what you are doing on the
zoning and building code enforcement level in the borough. And
I think I also heard you testify that different insurance
companies had--
Mr. Winslade. Different rules.
Mr. Fitzpatrick. --much different rules on the same Federal
program.
Mr. Winslade. A substantial damage letter. It could be as
little as two or three lines to satisfy the insurance company
and then it went to as far as on borough letterhead with a copy
of the justification.
Mr. Fitzpatrick. Is that delaying the claims adjustment
process?
Mr. Winslade. I believe it is, yes.
Mr. Fitzpatrick. What does it do to the staff of the
borough? I mean, I am sure that you don't have a huge staff
here.
Mr. Winslade. We don't have a staff. I am a part-time
employee and we have a full-time borough secretary. Our
building department works 6 hours a week, so it does tax the
borough's wherewithal.
Mr. Fitzpatrick. Mr. Komelasky, the training of the claims
adjusters for the flood insurance program.
Mr. Komelasky. The specific program that I was taking about
has been designed by the State insurance agents and that dealt
with agents and their familiarity with the actual NFIP program,
not so much with the actual adjusters. One of the criticisms
that had been mentioned was that many of the consumers don't
understand what they are being sold or how the policies
actually work, so this is a program staying ahead of the curve
of the requirements for continuing education for agents.
A number of the actual adjusters, and there is a difference
between the agents who aren't really adjusting the claims for
the carriers, the agents are working along with the consumers
to try to be their advocate and be the conduit between the
companies and the consumer. The adjusters themselves are in a
position where they are receiving their training through the
carriers. Most of the flood adjusters are generally independent
adjusters, not necessarily a company employee, and I believe
that is probably in part due to the overall low volume of flood
policies that are actually being written by the particular
carriers.
They will go to somebody who is out there, and certainly I
think part of the confusion that is taking place as Mr.
Winslade has indicated comes from various companies'
interpretation of what the rules and regulations are. And does
it in fact delay pay-outs to people? Absolutely. You can get
one letter that moves up the line, somebody doesn't think that
it is sufficient, and it can not get back to the consumer to
know something is different for several weeks. So certainly
there could be something done on the adjusters level to make
sure that they are familiar with the process that is necessary.
And I think that within the insurance industry overall there is
a strong sense of getting into disaster planning that you will
see a number of steps moving forward not only for the
commercial clients but also for residential clients to advise
them of what would be not necessarily the end all or everything
that is necessary but here are items that you should be
prepared for in the event of any kind of a disaster whether it
is a fire for a flood. So I think there are efforts being taken
in that regard but not necessarily looking at the actual
adjusters as you have indicated, Congressman.
Mr. Fitzpatrick. Mr. Chairman, I don't have any further
questions. I do have questions that I will submit to the
committee that hopefully can be addressed by Mr. Maurstad. I
appreciate your convening this hearing in my Congressional
district, and I think that the testimony that we have gotten
from both panels as well as from other interested citizens who
submitted testimony for the record will be extremely helpful as
we work to reform and modernize the National Flood Insurance
Program. Thank you.
The Chairman. I agree completely. It has been an excellent
hearing. And the Chair notes that Mr. Fitzpatrick may have
additional questions for this panel which they may wish to
submit in writing. Without objection, the hearing record will
remain open for 30 days for members to submit written questions
to those witnesses and to place their responses in the record.
The Chair would like to thank the witnesses, the people,
obviously citizens of this area, for participating in this very
important hearing. And this hearing is adjourned.
[Whereupon, at 12:07 p.m., the hearing was adjourned.]
A P P E N D I X
August 15, 2006
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