Fears surface over proposed flood insurance rule changes [Appeal-Democrat, Marysville, Calif.]

Aug. 25--Sutter County leaders fear a Congressional bill to renew the national flood insurance program could take away as much as it gives to Mid-Valley property owners.

HR5114, which the U.S. House of Representatives passed last month, would extend the National Flood Insurance Program from this year to 2015. But two provisions would remove rules that have cushioned the arrival of mandatory and higher-priced flood insurance in Sutter County -- lower rates for those who buy policies earlier, and larger annual hikes for insurance premiums.

"To me it's a slap in the face to the people of Sutter County," said Supervisor Larry Montna. "It's like big brother saying they spent too much money in New Orleans, (and) they're gonna stab the rest of the United States with this flood mapping. ... I don't see how they can squeeze more blood out of the turnip than they already have."

Tuesday night, the Board of Supervisors unanimously approved a county letter to California's two senators and Rep. Wally Herger, R-Chico, urging removal of sections of the bill they said would make the financial burden of flood control intolerable for many.

Passing the bill in its current form could make the county an unwitting victim of the federal expense of armoring New Orleans against a repeat of Hurricane Katrina, according to Dan Peterson, county chief of water resources.

The Federal Emergency Management Agency "is under pressure from Congress to get the new (insurance) rate maps in effect, because the program is running in the red," he told supervisors in Yuba City.

The Flood Insurance Reform Priorities Act passed through the House on July 15 on a 329-90 vote and goes next to the Senate Committee on Banking, Housing and Urban Affairs. It would continue the federal program to extend policies to property owners in areas where high flooding risks have driven private insurers from the market.

Besides renewing the program for five more years, the House bill would create a 10-year transition period for most residents of areas newly declared flood-risk zones by FEMA. In the first five years flood insurance would not immediately be required and the move to higher premiums would be delayed; in the next five years, insurance rates would rise to their final level gradually rather than in one bound.

But buried within those benefits are other clauses that could cost Sutter County residents another $3.5 million to $8 million in flood insurance premiums, warned Dan Peterson, county water resources chief.

HR5114 would eliminate the lower tier of insurance premiums offered to those buying policies before an area is declared a flood hazard zone. A property owner "grandfathered" into a policy gets nearly a 50 percent discount on flood insurance compared to those buying policies later -- $1,484 a year versus $2,647 to insure a home valued at $250,000, with $100,000 worth of belongings.

In addition, a 10 percent cap on annual premium hikes would be raised to 20 percent. Also, owners of nonresidential buildings and second homes would not receive temporary insurance exemption and would have to start paying for policies, their rates reaching the maximum in five years.

New flood-hazard maps FEMA issued for the county south of Yuba City in 2008 tripled insurance rates for many property owners. Peterson said similar increases are on track in the north county as that area is remapped -- marking about 85 percent of the county as a flood risk -- with the higher rates possibly taking effect in early 2012.

A project to overhaul 44 miles of Feather River levees in Sutter and Butte counties by 2015 is expected to be the area's long-term solution to high flood insurance rates, and the Congressional bill explicitly allows areas to be removed from flood-risk zones if their levees are sufficiently improved. Voters in June approved a $72.5 million property assessment to cover part of the plan's estimated $250 million cost, with state bonds paying for the rest.

But in the meantime, higher premiums will pressure budgets in the Mid-Valley despite its best efforts to make the region safer, said Supervisor Larry Munger.

"The U.S. is letting down its rural communities," he said. "We're paying to fix our own levees, and they're not even considering that."

ONLINE

House of Representatives Bill 5114

Sutter County letter to California's Congressional delegation

CONTACT Howard Yune at 749-4708 or [email protected].

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