[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










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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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