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Posted by: Kim_Hamilton on 06/07/2011 08:08 PM
Updated by: Kim_Hamilton on 06/14/2011 05:11 PM
Expires: 01/01/2016 12:00 AM
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Letter to BOS Regarding FEMA~by David Tunno
(Note: Following is a letter read to the Calaveras County Board of Supervisors today, June 7, along with some of the supporting material attached to the letter and delivered as a package to each member of the Board.)
In March of this year, I presented the Board with a research article on examples of FEMA’s flood plain designations in Calaveras County with analysis and recommendations for Board and public actions. I outlined FEMA’s motives in greatly expanding the flood insurance pool and its strong arm tactics in dealing with counties and property owners. I showed examples of properties placed in the flood plain that couldn’t possibly flood and I outlined the abuses of FEMA’s monopoly power. Since then, I have ....
continued researching the subject and aimed my activities at procuring actions from Congressman Dan Lungren’s office to the benefit of property owners in this County and throughout the 3rd District.
In April, three members of the Board attended a meeting with the Congressman’s aide, Bob Elhert, a representative from FEMA and the Corps of Engineers at the Congressman’s office. News accounts of that meeting touted a particular result, FEMA agreeing to “re-do” the County flood map using more accurate topographical data.
Knowing from a meeting I attended on January 26 at the County with some of the same attendees that FEMA had already agreed to “re-do” the map, I saw no progress from the April meeting, barring other possible concessions to which the public was not made aware.
Further, continued research into the problems with FEMA led me to understand that, after protests from officials and citizens, agreeing to “re-do” flood maps in the same way FEMA represented to our County has been a stock FEMA response nationwide. I can find no evidence of that action resulting in actual change. Instead, it appears to be primarily a delaying tactic while FEMA continues to collect flood insurance premiums.
A presentation I made based on my article was attended by Dixon Collins of Angels Camp, who convinced Lungren to schedule a meeting in May with Bob Elhert and FEMA in spite of the April meeting described above. The day after I made the same presentation to the West Calaveras County Rotary Club, during which I mentioned the upcoming meeting and what I hoped to accomplish, the meeting was abruptly cancelled by Bob Elhert. Undeterred, I focused my efforts directly on Congressman Lungren and, through continued research, also learned what this County’s Board of Supervisors can do.
Attached are several articles found on the internet. Some show actions by Congressional Representatives and Senators whose efforts I hope Congressman Lungren will support and duplicate in this district and beyond.
Attached also is a list of recommendations for the Congressman that are included in a similar package sent to him and copied to Congressmen Tom McClintock and Jerry Costello of the 12th District of Illinois. Also included is a document with the heading “Insurance,” which includes notes that support the insurance portion of the recommendations. I ask this Board for a resolution to be sent to Congressman Lungren in support of those recommendations.
As for actions this Board can take directly on behalf of its citizens, I call your attention to the articles that describe suits brought against FEMA by several counties. Collectively, the stories reveal much of the same analysis as in my March article.
With respect to the suit filed by the counties of St. Clair, Madison and Monroe in Illinois (Costello’s District), a call to Les Sterman, Chief Supervisor of the Southwest Illinois Flood Prevention District Council was very informative. It revealed that attempts by those counties to force FEMA to reveal its engineering methodology failed inasmuch as FEMA could show no engineering methodology, just as they apparently have none upon which to support their flood designations in our County. I encourage this Board to make contact with Mr. Sterman and the individuals knowledgeable about that suit. I’m sure the call would be well received. So too would be a call to Finney County, Kansas. Elected leaders in those counties have taken an active, not passive interest in the problems FEMA is causing their residents and businesses.
Though many of the specific flood issues in those regions differ from our own, the underlying rationale for the suits is the same. FEMA is greatly expanding the flood insurance pool without competent engineering, or any engineering to justify its flood maps; thus fraudulently forcing thousands in this County and millions nationwide to purchase flood insurance they do not need in order to replenish the billions of dollars FEMA has previously lost.
It appears that FEMA’s schedule has resulted in western states feeling the effects long after eastern states. As described in two of the attached articles, this piecemeal approach by FEMA has worked to its advantage in that it has contributed to an absence of organized opposition. The flip side of that effect is that we in the west have the advantage of observing the histories other counties have had with FEMA. FEMA’s behavior has been consistent and it will not change until it is forced to change.
No one likes litigation, with the possible exception of attorneys; however, the above county officials have taken that bold, but necessary action to protect their citizens against a powerful federal bureaucracy the citizens could not realistically fight on their own. That is a legitimate role of county government and one might argue it is also its job.
For that reason, I ask that this Board take the same action - sue FEMA. As mentioned above, I believe Calaveras County would find friends in the other five counties who are leading by example. Their suits could be the model for ours. More counties taking that action will produce even more interest in reforming FEMA at the federal level, the results of which could well be dispositive of the various suits at the state level.
In addition to and in parallel with that action, I ask this Board to reject FEMA’s flood maps, including the one they will allegedly produce with more detailed topographical data, inasmuch as the topographic data was never the problem. In so doing, it is recognized that FEMA is authorized to deny flood insurance to all county residents; even those with actual flood risk exposure (see explanation below). There are two points to consider in that regard.
The first is that this Board should not sacrifice the millions of dollars of unnecessary flood insurance premiums from the thousands of property owners fraudulently placed in flood zones in order to protect the needs of the far fewer owners who actually need it. Additionally, while The National Flood Insurance Act of 1968 and The Flood Disaster Protection Act of 1973presumably empower FEMA to deny coverage where a county does not cooperate with FEMA, there is at least the question as to whether FEMA would so deny it. In that eventuality, those who need and want it can purchase it from an overseas underwriter (Lloyds of London); albeit probably at higher rates (not subsidized rates).
Secondly, the legality of the provisions of those Acts, which together empower FEMA to both force the purchase of insurance and deny that same service (under the above scenario) has never been challenged in court. If so, I believe both would fail and the denial provision is the far weaker of the two. Such a denial would also send up a red flag that Congress could not ignore.
(Following are the recommendations sent to Congressmen Lungren, McClintock and Jerry Costello, referenced in the letter above.)
Recommendations for Congressional Action
I. Amend 1968 National Flood Insurance Act as follows:
1. Remove vertical control and monopoly power from FEMA.
A. Establish a new, realistic and practical definition of “flood” based on predictable financial loss to the structures (based on historic local knowledge and engineering) covered by federally-owned mortgages.
1) For compliance, offer a minimum policy based on the amount of the balance of the mortgage where payout goes to the fed mortgage holder up to the amount of the balance – “Flood Mortgage Insurance.” Premiums to decrease with mortgage balance.
2) “Flood Home Insurance” covers the home itself, so payout goes to repair or replace the home. Owner’s equity is protected to the level the owner chooses with premiums calculated accordingly. Consider 25% deductible/co-pay component for lowest cost version of this insurance.
3) At section 4121(a) (7), the Act includes a precedent for a definition of flood that includes a property damage component of 25%. This was to define a “repetitive loss structure,” but could be justifiably attributed to any “flood.”
B. Return control of flood maps to the counties. Eliminate all control by FEMA including requirements for federal assistance re: mitigation measures.
C. Limit FEMA to providing flood insurance until private companies enter the market sufficiently to produce a competitive market.
D. Require FEMA premiums to be commensurate with risk (Private insurers can’t replace a government program that includes subsidized rates).
E. Remove requirement for insurance for properties with mortgages with other than federal entities. Also exclude mortgages that do not originate with the feds.
F. Grandfather all mortgages made pre-FEMA-flood-zone status. Insurance should be offered, but not required. No FEMA (taxpayer) funding for losses without insurance.
2. Place moratorium on all insurance requirements for parcels added by FEMA while amendment is being debated.
3. Void all FEMA FIRMS, as FEMA cannot show engineering to justify them. Demand a letter from FEMA to all property owners added to the flood maps from previous county designations. Notwithstanding the provision of I.1.F., the letter must state that the flood status of the property in question was arrived at prematurely and that no flood insurance is required by FEMA/NFIP pending further notice. The letter would be for use by property owners to show their lenders. Since the lenders are only able to require insurance due to the provisions of the Act, their authority to do so would then be stripped and only the requirements of the original loan (and therefore the original disclosures) would be in effect. The banks could not then require the insurance, nor could they foreclose on those property owners.
II. Form caucus of, at the minimum, California Congressional reps - better still would be western state Congressional reps.
1. Caucus should support the Delta caucus, but western states have different issues. The success or failure with respect to one set of issues should not affect the other.
2. Caucuses needed to counter the piecemeal approach by FEMA which has, so far, effectively limited organized opposition in D.C.
3. Caucus should work cooperatively with western states county governments as, it appears, Delta is doing.
(Following is a document on FEMA insurance also included in the package to the BOS and the Congressmen written in support of the changes recommended to FEMA’s insurance program described above. This was generated as a page of notes to be used in the cancelled meeting with Bob Elhert, also described above.)
Insurance
There are two groups of lenders, FED and private.
FEMA protects FED’s interest by requiring insurance, which is justified, but how is the insurance structured? An owner should only be required to insure the amount of the loan balance and, since NFIP has a monopoly (or virtual monopoly) on the underwriting, Congress should be able to regulate the premiums (just like monopoly power companies have regulated rates by the state).
If coverage is for the loan balance only, premiums should go down with the loan balance.
Private loans are something else. Fed’s should not be able to require the insurance. Feds have no exposure. If “Obamacare” justifies itself via the “Commerce Clause” in the Constitution, how is FEMA’s insurance requirement justified?
Requirement due to banks being “regulated” is a very thin rationale. No exposure is attached.
Requirement due to banks being “insured” doesn’t work either, since the insurance is FDIC, which covers the deposits not the loans. Again, no exposure.
Banks take the risk for the loans. The only way the bank goes down completely is if its loan portfolio is heavily weighted with home loans in flood areas AND the owners don’t have insurance AND a flood takes them all out AND everyone walks from their home and loan. Even then, the Feds have no exposure because bailouts are discretionary and will (should) never happen again.
So, at best, banks should be able to require it (and, again, for balance of the loan only), but not the feds, and since the NFIP has a monopoly on the insurance, Congress should regulate what it can charge, just as with Fed-held loans (see above).
The above two scenarios do not address yet another issue, that being the situation where a property was purchased when it was not designated in a flood zone, but is subsequently so designated by FEMA. The buyer made his contract for the home and with the lender based on the totality of the disclosures and flood-zone status is a huge element in those disclosures. My belief is that nowhere in those loan papers would anyone find a disclosure to the effect that the property may at some time in the future be placed in a flood zone with ramifications re: insurance in that eventuality.
So, if a contract is a contract, then the mandatory requirement by the Feds for Fed loan properties and for the banks re: bank loan properties, should only apply upon transfer of the property whereupon the flood zone status would be disclosed.
(Finally, the document that follows was the list of questions for FEMA prepared for that same cancelled meeting. I maintain these are questions to which FEMA would not have had the answers, exposing the complete absence of engineering used to subject many additional thousands of County residents to forced flood insurance.)
Questions for FEMA
1. How could parcels designated as flood zone increase from 2200 to 7270 after FEMA revised the map?
a. What was wrong with previous engineering by the County, presumably with DWR information and Corp of Engineers, plus local knowledge?
2. Was the difference in data, methodology or criteria or all three?
a. If data, what was the difference? Where did the new data come from?
b. If methodology, what was the methodology used by FEMA and how was it different than the previous methodology?
c. If criteria, what was the new criteria and what was the difference from the previous criteria?
3. What specific internal directives from FEMA exist that would shed light on FEMA’s approach to drawing flood maps?
a. What “marching orders,” including memorandum - not just what might be found on the websites for FEMA or NFIP or Floodsmart.
4. What financial and/or in kind incentives await Calaveras County if they adopt FEMA’s flood map?
5. With respect to “participation” [section 4002 (b) (3) in this case, by the County], as that term is used in the 1968 National Flood Insurance Act, what is FEMA’s interpretation of the requirements of that term?
a. If “participation” means to adopt FEMA’s flood map unilaterally, then why does the Act say FEMA is to “encourage” various measures by state and local governments?
6. With respect to section 4012 (c), what has the Director determined to be a “positive interest in securing flood insurance coverage under the flood insurance program?”
a. As with 5 a, is unilateral acceptance of FEMA’s FIRMS also the answer?
7. What were the “approximate methods” used to identify properties in Zone A and what were the “detailed methods” used to identify properties in Zone AE?
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