Association of State Floodplain Managers Issues Public Comment on FEMA Notice

WASHINGTON, Oct. 28 -- The Association of State Floodplain Managers, Madison, Wisconsin, has issued a public comment on the Federal Emergency Management Agency notice entitled "Request for Information: National Flood Insurance Program's Community Rating System". The comment was written on Oct. 22, 2021, and posted on Oct. 25, 2021:

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The Association of State Floodplain Managers (ASFPM) is pleased to provide the comments in response to FEMA's Request for Information (RFI) on transforming the Community Rating System (CRS) under the National Flood Insurance Program (NFIP). The Association's members are dedicated to the reduction of flood risk in the country. We feel changes to CRS program could better help achieve that goal.

Major Issues to be Addressed

1. CRS discounts must be shown to clearly reduce the liability of the NFIP. CRS costs all NFIP policyholders about $400 million/year. That means every policyholder pays 15% more for their policy in order to cover the cost of CRS to the NFIP. A community must be at least a class 7 before the policyholders in their community actually break even and only see a financial benefit when they reach class 6. This is simply a fact that too many communities and policyholders do not understand. Because the cost to the program is high, credits must be given carefully and enforcement of community compliance with their promised activity must be done thoroughly. Creditable activities should be limited to those activities that actually lower long term risk and result in development that is no longer at risk or is less susceptible to flooding.

Recommendations: Require all Class 7 and better CRS communities to consider and plan for anticipated climate change in their floodplain management plans. The top Class communities should prepare maps and regulations using best available data to address the impacts of changing climate to be prepared for future conditions.

A strong NFIP program is critical to make sure the CRS program works now and into the future. The responses to FEMA's three recent Request for Information related to the NFIP should be considered as changes to the CRS program are formulated.

2. CRS credits should be at least shared with the community, if not totally provided to the community instead of the policy holder. Policy holders are not the ones doing the work to reduce risk, the community is. Providing the credit to the policyholder with a reduced rate is a perverse incentive which encourages development in the high flood risk area - the more insurance policy holders you have (i.e. the more development you've allowed in your floodplain and continue to have in your floodplains), the more it makes sense to participate in the program.

Recommendation: Allow the community to decide how to use the available CRS credits. The community could use a portion of the credit as a cost share to support staff to manage the CRS program however, the greater majority of the funds should go toward mitigation projects that reduce flood risk in the community.

3. The largest credits in CRS should go for activities that "avoid" or "remove" development for high flood risk area (SFHA), higher standards, and community programs. This includes community use of natural nature based systems that provide either conveyance or storage of flood water. With flood risk increasing due to climate change and watershed development, this issue is even more critical to the nation's effort to reduce loss of life and property damage from flooding. Vermont has a program where communities who do the most to avoid or remove building from SFHA receive a sliding scale increase in Public Assistance funds for the nonfederal share after a disaster.

Recommendation: This concept should be a model for FEMA CRS and mitigation programs. Additionally, communities could be provided some type of benefit (reduced match requirement) or priority with FEMA's mitigation grants programs. A tiered incentive based on CRS ranking on key activities, especially those that reduce the number of at risk structure in the SFHA, would both incentivize and reward those communities for the extra measures they are taking.

4. Regional coordination amongst communities should be recognized and easily credited to all cooperating communities. Getting adjacent communities to work together and/or communities work with their counties to reduce flood losses is increasingly important to accomplish larger scale mitigation. CRS has supported some of these relationships in the past however this option needs to be more well known, should be provided increased credit, and made easier to document.

Recommendation: Pre-determined points should be established for communities that enter into cooperative agreements or mutual-aid type agreements for activities that result in safer development or better identification and reduction of flood risks

5. CRS should be fully integrated into the NFIP. A truly transformational change would be to reimagine the rating concept.

Recommendation: Every community would be enrolled in the CRS as part of NFIP participation. Every community would start at a class 0 - if they do nothing more than participating in and apply the NFIP minimum standards and program requirements. Communities can then apply for CRS credit and move up from a class 1 and as far as a class 10 (up to a 50% discount); however, a community can also be penalized for actions (such as allowing violations of adopted regulations or granting inappropriate variances) that would increase flood risk in the community down to a class -1 and as far down to a class -10 (encountering up to a 50% surcharge on all flood insurance policies). A new cooperative monitoring system could be developed (currently state floodplain management offices do CAVs and ISO does CRS rating visits) which would be more efficient and integrated This concept could also allow FEMA to do away with probation, which has largely been ineffectual.

6. The new CRS program must be streamlined to administer and have substantially improved reporting efficiency. The extreme detail and complexity are significant hurdles to participation in the CRS. The program must be accessible at the entry levels to any community if they are willing to put in a level of effort commensurate with the realized benefits. The to do this the application, reporting and certification system must allow the focus to be on action more than paperwork. Technology should be able to assist here. A system that recognizes regional cooperation on appropriate activities and facilitates encouraging adjacent communities to hire the same person to work with them on CRS would help this effort.

Recommendations on CRS program streamlining and efficiencies can be found under the Reduce Program Complexity heading.

7. Communities attempting to reduce flood damages and better manage flood risk need data on current flood losses to best accomplish this. For example, if flood insurance claim data is not available through PIVOT, the community is handicapped on addressing repetitive losses and managing flood risk.

Background: The recent tightened requirements and limitations for information sharing between state and local governments and DHS in order to obtain repetitive loss data have been problematic for many CRS communities. Concerns about the Information Sharing Access Agreement (ISAA) have been raise by counsel in several states and many communities and they have not been able to execute the agreement. Restricted access to records that previously were provided to community officials freely and on a regular basis is now difficult or not practical and can be a burden on staff time and resources. While FEMA has tried to develop solutions to provide access to the data, there have been significant delays and changes in the process and it is not working.

The restriction in the ISAA of sharing data between State NFIP coordinators State Hazard Mitigation Officers communities limits the states' ability to provide technical and mitigation assistance to their communities. Additionally, a community must have access to the repetitive loss data in order to join the CRS as outlined in the Program Prerequisites under Section 211 of the CRS Coordinator's Manual and for program required documentation for annual recertification. This data is crucial in identifying properties that would benefit from mitigation activities - activities encouraged and highly rewarded by the CRS program under Activity Section 500: Flood Damage Reduction Activities.

Recommendations: While it is understood that some of this data is of a sensitive nature and should be kept private, not all of the data included with Repetitive Loss records is necessary for a local government to perform the activities credited by the CRS. Insurance policy numbers and claims amounts are not needed by a local official when evaluating ways to mitigate a repetitive loss property. The bare minimum information like property address and CID number are usually all that's needed. If access to the more non-sensitive data like address and CID could be streamlined, this would improve and incentivize more of the mitigation activities promoted by the CRS program.

Alternatively, updates to the CRS program should adapt requirements related to Repetitive Loss (RL) data to assume communities have limited or no access to the information.

Additional Comments

Reduce Program Complexity

An updated CRS program needs to substantially improve reporting efficiency while keeping and strengthening incentives for higher standards/programs.

Solutions: The program could be simplified by significantly adjusting what activities receive credit.

Reducing the number of credits would allow communities to focus on the activities that provide the largest benefits toward risk reductions. Some broad categories for these changes could be...

* Higher standards

* Limiting continued development in the floodplain

* Removing structures from the SFHA and repetitive loss properties.

Simplify the CRS Manual and formulas to improve understanding. In the majority of communities participating in CRS the program is managed by part time by staff that wear many hats. As the CRS program becomes more complex, local floodplain managers need to spend an increasing amount of time with paperwork and recordkeeping. Streamline documentation of creditable activities simpler and less time-consuming. This could be done by creating a portal/software to that lessens the administrative burdens on both the community and the ISO representatives reviewing the information. If the administration efficiency is improved dramatically, communities can focus on the CRS program objectives rather than spending an increasing amount of time with paperwork. Additionally, the concept could be used to provide access to flood insurance claims data without and Personally Identifiable Information, thereby limiting the need for a community to execute an ISAA.

The complexity of the CRS documentation process is especially daunting for smaller, less well-resourced communities. Many of the existing CRS activities require almost as much effort for a community in which only 5 policies get the CRS discount as for those with hundreds of policies. The number of points required for each class could be scaled based on the total NFIP coverage per capita within the jurisdiction. A community with a lot of policies (because of mandatory purchase in the SFHA or recent flood damage that triggers Zone X policies) and/or policies for high value buildings gets much more financial benefit from CRS discounts and should therefore have a higher bar to qualify for those discounts (and protect the larger amount of risky development). A community that has historically done a good job of preventing or removing buildings in flood-prone areas could be rewarded by earning comparable discounts for implementing less traditional activities (focusing on those that still provide value).

Another efficiency in the CRS program that could incentivize smaller communities to join would be allow multi-jurisdictional or regionalized activities/elements where communities to work together to submit regional documentation. An example is the many counties that manage floodplain regulations or other projects in municipalities within the watershed that reduce risk. This concept would also allow all cooperating communities to be given credits for programs and work they perform that will reduce risk even if the work is outside their jurisdiction. The municipality could then participate in CRS by fulfilling the program prerequisites, getting credit for activities that are implemented/documented/audited at the state/regional/county level, and documenting any additional activities implemented by the community.

If building codes, stormwater standards/permitting, real estate disclosure, and other activities are implemented by states, then ISO should verify statewide implementation and make those points uniformly available for every local municipality (without the need for local adjustments unless an audit shows noncompliance). The CRS portal concept could facilitate this process as the credits could be preloaded for every participating community in the state. The community may still need to provide minor documentation (such as local adoption of the state building code) and could document any higher standards that qualify for additional credits.

Additional or Adjusted Credits

Consider a much greater insurance premium reduction (50%) for application of flood loss activities involving future condition standards.

Buyouts to remove development from the SFHP are the most effective mitigation action. However, CRS should consider an adjustment to Activity 520 Acquisition and Relocation when all of a community is in a floodplain. Currently, credit here is only awarded for the acquisition of buildings and their relocation outside the floodplain, or the demolishing of said building, and leaving the building site as "open space". Consider providing some credit for demolition of a structure and then rebuilding it on-site to the flood protection standards mitigation in-place), when there is little to no open space available for relocation. However, the credit for mitigation in-place should lower than the credit for acquisition and relocation as there is still residual risk associated with this activity.

Consider restoring credit for volumetric-based stormwater storage basins when the community demonstrates they provide more flood attenuation than pre vs. post basins. Currently, only stormwater storage basins based on pre vs. post hydrology are fully creditable, even though this requires far more engineering. In some cases, volumetric-based basins provide more flood attenuation than pre vs. post basins. This credit was withdrawn in the 2021 addendum to the 2017 CRS Coordinator's Manual.

In some cases, larger "flood control" projects can provide as much or more flood risk reduction than smaller ones that get credit under Activity 530. Flood protection projects that remove areas from the flood zone should receive credit in some cases. Specifically, when these projects account for the big picture and demonstrate they reduce flood risk even when the design event is exceeded (i.e. regulations behind a levee, etc.).

Consider changes in credits for Activity 610--Flood Warning and Response. Currently, zero credit is given for any of the required first four elements of a Flood Warning and Response Plan. This was first implemented in the 2017 CRS Coordinator's Manual. While the goal of the CRS Task Force was to stress the importance of having a comprehensive plan, the result has been the opposite. Many communities do not bother doing any of these first four elements if they don't plan to or can't do all four, because they will not get any credit for it. One of these first four required elements has a requirement that there be three inundation maps and specific plans for each level of inundation. This is difficult in urban flash flooding. Consider an alternative approach to provide credit for each of the seven creditable elements of a plan, and to provide bonus points for communities who are able to implement a comprehensive plan.

One of the most difficult issues in floodplain management is in permitting. Every property should be researched to determine if it lies in a flood zone or is adjacent to a property that is. Many violations are homes purchased with cash and some improvements are made without permits. Credits should be awarded to a community that adapt its flow chart to be comprehensive and go beyond expectations to ensure final inspections catch everything. This is the only time a community can stop these type of violations and going beyond minimums should be encouraged.

Having trained staff that have extensive knowledge expertise with the various issues involved in floodplain management helps assure that communities effectively carry out their responsibilities under the NFIP and take appropriate risk reduction measure to protect the community. Becoming a Certified Floodplain Manager (CFM) demonstrates a level of knowledge in key areas of floodplain management and is a benchmark that should be recognized in the CRS program. A substantial credit should be given to communities that have a CFM on staff.

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The notice can be viewed at: https://www.regulations.gov/document/FEMA-2021-0021-0001

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