Minn. Natural Resources Department Issues Public Comment on FEMA Notice

WASHINGTON, Oct. 28 -- Ceil Strauss, state coordinator for national flood insurance program at the Minnesota Natural Resources Department, 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 Minnesota Department of Natural Resources (DNR) is very supportive of changes to the Community Rating System (CRS). We are pleased to submit the following comments to help influence "CRS Next."

Minnesota does not take advantage of CRS to the extent that many other states do. However, it is not because our communities wouldn't qualify. In fact, every single mapped participating community in the state would be eligible to qualify as a Class 9 or 8 community just by implementing the state's minimum standards. Most Minnesota communities just don't have the policy numbers to justify the time commitment that CRS demands.

If CRS is going to be redesigned to reduce future risk and incentivize responsible floodplain management, FEMA should strongly incentivize meaningful higher standards - such as keeping development out of Special Flood Hazard Areas, freeboard, and other measures that truly work. FEMA should also take a more holistic view of floodplain management and offer incentives for risk reduction to communities who are driven by things other than policy numbers.

Complexity of the CRS Program is a Deterrent for all Communities Except those With the Most Flood Insurance Policies (Addresses Questions 2, 3, 6, 8, 10, 11a)

The RFI stated though only 7% of NFIP communities participate in the CRS program, they make up over 70% of the total NFIP flood insurance policies. This means that the other 93% of communities are effectively subsidizing these 3.6 million policyholders. CRS enrollment and reporting requires a significant learning curve, and communities are only motivated to pursue it if they support a large staff and have the policy numbers to justify the time. Minnesota only has 8 CRS communities, and has policy counts much lower than many states. Only 20 of Minnesota's 625 participating communities have more than 30 A-zone policies. These numbers used to be higher, but have been reduced due to our mitigation efforts. We have communities who set the gold standard for risk reduction, and would be eligible for significant CRS discounts, but the incentive just isn't there.

FEMA needs to figure out a way to reward these smaller communities who have adopted higher standards or are active in mitigation. Perhaps some version of a "CRS lite" could accommodate simple reporting of effective higher standards or flood damage reduction activities. Perhaps the higher standards reporting in CIS could be leveraged to automate this reporting.

CRS Should Take a More Targeted Approach to Rewarding Higher Standards (Addresses questions 2, 4, 9)

FEMA's minimum federal standards do not go far enough to minimize future risk. Climate change is expanding risk everywhere, yet there are CRS communities with few higher standards. The most significant credits should be given for activities that keeps development dry. The number of credits for freeboard is far too low. No community should be in CRS unless they enforce at least a 1' freeboard standard. No community should be in CRS if they permit insurable structures in the floodway.

CRS for States (Addresses Questions 2, 6, 10)

States have a significant role in floodplain management, and CRS should be restructured to incentivize state action. States need more incentive to implement standards above and beyond these federal minimums. When the state has higher standards, those standards trickle down to every community within - whether or not they participate in CRS.

Minnesota has had some very significant statewide higher standards in place for 50 years - those that promote clean water, preserve open spaces, and promote protection. Since 1987, our state funded flood mitigation grant program has invested over $560 million in state cost share funding towards flood damage reduction projects. Our higher standards, combined with aggressive mitigation, has led to lower risk, fewer mandatory policies in the SFHA, and more resilient communities. 2020 was our wettest year on record with a number of intense rain events, yet our damages were minimal compared to years past. We've only had one flood event qualify for individual assistance since 2009, in spite of over a dozen years with major flooding. And major flooding has occurred several years that would have triggered a Presidential Disaster in the past, but due to past mitigation did not cause as much damage. As such, a greater portion of disaster recovery costs has shifted to local governments and individuals. This seems backwards.

What Minnesota does works, and there are other states doing great work as well. FEMA should consider utilizing "CRS Next" to offer statewide discounts for higher standards or mitigation efforts. There are countless other ways FEMA could utilize "CRS Next" to further incentivize state action.

CRS Should Consider Community-Wide Benefits Instead of Individual Benefits (Addresses Questions 3, 7, 12)

Instead of offering discounts to policyholders, FEMA should explore community-wide benefits instead. Under the current system, financial benefits are provided to the policy-holder and only further incentivizes bad development. Community-wide benefits could be allocated in the form of mitigation grants, financial resources for more resilient infrastructure, or lower deductibles for Public Assistance. Providing community-wide benefits instead would offer a more direct incentive for communities to pursue credit-earning activities.

Shifting the financial benefits to the community may better enable community or neighborhood risk reduction projects. We know that renters are very under-insured and do not realize the same benefits of CRS participation that homeowners do. Community-wide benefits would offer a more equitable way to allocate resources to under-represented populations.

I am very optimistic that FEMA will influence positive change in this initiative. Thank you for giving us the opportunity to share our thoughts.

Sincerely,

Ceil Strauss

State Coordinator, National Flood Insurance Program

c: Randall Doneen, DNR CAR Section Manager

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

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