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Town joins fight to repeal flood insurance act

By Staff | Aug 21, 2013

Town officials are taking immediate action on country-wide flood insurance legislation that negatively affects particular Beach property owners.

The Fort Myers Beach Town Council unanimously approved a resolution that urges the U.S. Congress to take action on the Flood Insurance Reform Act of 2012. Called the Biggert Waters Act, the flood insurance legislation will affect coastal communities, like the Beach, through dramatic increases in flood insurance premiums if the Act is not repealed or delayed. An added clause to the resolution involves a possible alternative of a National Disaster Fund to keep rates lower.

Beach property owners that may be affected include those who have ground level/pre-firm structures for either residence or business. The resolution is being sent to various U.S. Senators, Representatives and Gov. Rick Scott.

“There are concerns about these rules that might go into effect that would cause dramatic increases of flood insurance rates,” said Beach Mayor Alan Mandel, who recommended the National Disaster Fund after attending a Florida League of Cities meeting.

The resolution also states “the new parameters established by the Biggert Waters Act imposes unreasonable flood base elevation requirements and unreasonable increases to flood insurance premiums” by having a “devastating financial effect on the local economy and on real property owners in the Town of Fort Myers Beach and Lee County.”

On Aug. 5, Chris Heidrick of Heidrick & Co. Insurance and Risk Management Services made a presentation to Council by providing background, an overview of the Act and the impacts on individual residents. In it, he stated Section 205 eliminates pre-firm rates that applies to structures built before the flood maps were adopted in August 2008, while Section 207 notes many newer homes will see flood insurance rates increased thousands of dollars per year.

Heidrick’s report also stated residential or commercial ground level/pre-firm structures that were purchased on or after Oct. 1, 2013 will come with a flood insurance bill of at least $10,000 per year, while ones that were purchased between July 6, 2012 and Oct. 1, 2013 will have premiums increased from roughly $2,500 to at least $10,000 per year at next renewal.

The report further states owners of non-primary residences and commercial structures will have flood premiums increase 25 percent per year until the full flood rate of $10,000 is reached. The Act may also affect renters if owners pass along the increased costs to their tenants and residents who live in a ground-level dwellings, like those with disabilities.

The National Flood Insurance Program faces a multi-billion dollar debt due to catastrophic storms such as Hurricane Katrina and Superstorm Sandy.

Prior to Katrina, the program was self-sustaining and re-authorized by Congress every five years. After the 2005 hurricane -listed as one of the five deadliest storms- the program suffered a $16 billion deficit, and members of Congress questioned the program’s ability to re-pay the debt. Then, on July 9, 2012, after a series of short-term program extensions and a rising debt due to Sandy, compromises were added to the reform act to secure a five-year re-authorization of the program. The Act’s purpose is to make the Program financially strong.

Sen. Pat Toomey of Pennsylvania blocked an amendment that would have delayed premium hikes nation-wide because he did not want “citizens in ‘low-risk’ areas to subsidize those located in ‘high-risk’ areas.”

In the resolution, the Beach Council, on behalf of the citizens of Estero Island, expressed “profound disappointment” in the Senator’s blocked vote. The local government also urges Florida Sen. Bill Nelson, Sen. Marco Rubio and U.S. Representative Trey Radel “to take immediate action to delay or repeal those portions of the Act that impose punitive and unjust financial burden on coastal real property owners” as a result of the Act and FEMA’s revised Base Flood Elevation Maps.