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APPENDIX D: MINORITY OPINIONS (1) Counter Argument Favoring Recognition of New Levees Built to 25-Year Flood Level ^~~~~ by F. Webster, F. Wetmore, R. Platt, and P. Swift This minority opinion favors recognition for the purpose of reducing insurance premiums of new levees that provide protection at the 25-year or greater level. It is the opinion of this minority that (1) to exclude this group of levees from the NFIP while recognizing existing levees in this same category is inconsistent, and (2) the purpose of the NFIP being to mitigate flood hazard for existing structures wherever possible, is best furthered by not discouraging the construction of engineered levees to provide whatever level of protection is economically justified. This opinion is based on the assumption that new buildings behind such levees would, as practiced and recommended by this committee, be required to meet the 100 year base elevation requirement. Other expressed reasons for adopting this position include the fact that additional land must be used to construct larger levees; the visual impact of a larger levee may be objectionable; and a mixture of structural and nonstructural measures should be encouraged, rather than simply relying on structural solutions. (2) Counter Argument to Requiring Flood Insurance Purchase Behind Levees With a Level of Protection Between the 100- and 500-Year Floods and for Properties Below the 100-Year Flood Elevation by L. Eisel, D. James, S. Tucker, and F. Wetmore This is an issue in which there is no absolute right or absolute wrong, but the balance of evidence seems to be on the side of not requiring insurance to be purchased. The minority makes the following counter arguments: 1. The cost of insurance to the property owner is unknown. If the rates are high it could be an onerous burden. The property owner should have the opportunity to decide whether or not he wishes to buy insurance. 2. Occupants in levee protected areas according to committee recommendations would be advised periodically that their properties -96-
are so situated. They can then be also advised that insurance is available and how it can be purchased. The property owner can then make an informed decision on whether or not to buy. 3. The standard of the NFIP is the 100-year flood, which has over time become an acceptable standard. Larger floods can and do occur, but the cutoff has to be reasonable; the test of experience has proven the 100-year flood an acceptable standard. This committee recommendation will create the only situation in the FIA program in which insurance is required for areas that are outside the 100-year floodplain. This is inconsistent with the rest of the program and represents a quantum policy leap for FEMA. 4. The committee is recommending standard criteria for levee acceptance and retention as recognized by NFIP. Enforced compliance with these standards will make levees more dependable on the average than in the past. Until recently FEMA has accepted levees that are at an elevation equal to the 100-year water surface elevation (without freeboard) as providing sufficient protection to obviate the mandatory insurance purchase requirement. The interim levee policy (Appendix B) and the standards recommended by this committee add 3 feet of freeboard plus geotechnical considerations plus operation and maintenance requirements that will tend to upgrade the level of protection of "100-year levees." It is unreasonable to require communities to adopt higher levee standards and then add insurance requirements to the burden. 5. During flooding events, considerable effort is typically developed to fight the flood. Sand bags are added to levees, sand boil problems are fought, pumps are activated, etc. In the recent Fort Wayne, Indiana, flood it was reported that 25,000 people participated in the flood fight. While this considerable effort did not prevent the flood, it certainly served to reduce damages. Such intense flood fighting efforts tend to counterbalance some of the other deteriorating effects that can reduce the effectiveness of a levee. 6. An argument used to support mandatory insurance is that "Congress will bail out the unfortunates when the disaster occurs." Mandatory insurance makes this unnecessary. This has happened, but it is not right. If it is not right, the situation should be addressed directly and not solved by requiring everyone -to buy flood insurance even though they are already paying for flood protection from a 100-year levee of acceptable standards. The floodplain occupant should have a choice in this situation. Also, most federal aid available is in the form of Small Business Administration 8 percent loans (or as much as 15 percent loans, depending upon the financial standing of the applicant)ânot exactly "bailouts. -97-
(3) Counter Argument for Requiring Mandatory Insurance Purchase for Land Levels Less Than the National 100-Year Flood. Protected by Levees Greater Than Either the SPF or 500-Year Level by F. Webster It is my opinion that insurance purchase should be based on the expected consequences of flooding rather than just the probability of flooding. Although the chance of flooding a protected area under these circumstances may be less than that for 100-year protection by a factor of 5 to 10, the resulting damage during an overtopping or breach event can be catastrophic and result in larger expected damages than for a similar event in a normal B or C Zone. There is a difference between water lapping at your door step and water lapping at the eaves of your roof during a 500-year event. (4) Counter Argument to Requiring Elevating New Buildings Behind Areas Protected by Less Than 100-Year Flood Levees (AL Zones) by F. Wetmore Consider the following points: 1. In some areas the elevation requirement will be the equivalent of prohibiting all new building construction. There are many areas protected by substantial but less than 100-year levees where 100-year flood levels will require elevation of new buildings 10 to 18 feet above the ground. Small lots in existing built-up communities prohibit building or fill at this elevation. While it is technically possible to build buildings this high, it is economically infeasible for new houses to be so elevated. 2. Large areas will be affected by this construction prohibition. On the Mississippi River and lower Illinois River in Illinois, the Illinois Department of Transportation (IDOT) has identified over 900 square miles of areas protected by substantial levees that will not be rated as 100-year levees according to the new criteria. In these areas, the IDOT has identified nine small cities and villages, some of them located as much as 4 miles from the nearest high ground. These incorporated areas have an estimated total population of 3,600 people. We have not attempted to estimate the population in the remaining unincorporated areas, although they include numerous small unincorporated communities. -98-
3. Where there are substantial levees, the proposed standard will have to be defended against the following common sense arguments: Some of the levees that will not qualify as 100-year levees were not overtopped and did not fail during the 1973 flood. This flood has been rated by the Corps as being at least a 100-year flood upstream of St. Louis. - To those who are protected to the 80- or 90-year flood, the 100-year standard and its additional prohibitory requirements will be declared arbitrary. If the committee recommends that existing buildings can have flood insurance rates that reflect the actuarial risks adjusted for the protection provided by the levee, why cannot new buildings be given that opportunity? The tough standard makes more sense when property owners have alternate construction sites outside of the floodplain. Communities that are located up to 4 miles from high ground do not have any alternate construction sites. The elevation requirement will make very little sense to those who are told to elevate a building even though the flood protection elevation is not as high as the tops of their levees. Conclusion: It should be evident that requiring new buildings to be elevated above the 100-year flood level in areas protected by levees that have successfully withstood 100-year floods will result in serious political repercussions. The rule will seem grossly unfair to those who own property, whose taxes are paying to operate and maintain the levees, and who want to see their community continue to exist. This committee must recognize that implementation of the proposed rule is equivalent to telling a community that the government has decided that it should not have a future in spite of its investment in flood protection. Alternative proposal: The proposed rule makes sense in theory but cannot be defended where there are substantial levees protecting entire communities. This alternative proposal is an attempt to modify the extreme effects of the proposed rule in the areas which will be hardest hit. It is based on the following conditions: 1. Since these areas will be rated as A Zones, there will still be an insurance purchase requirement. 2. This alternative is only proposed for areas protected by levees that are operated and maintained by a government agency. 3. This alternative could be limited to those areas where flood depths are at least, say 4 feet (i.e., those areas hardest hit by the elevation requirement). 4. A local ordinance should require mandatory notification of and purchase of flood insurance by all buyers (not just those who have to get mortgages from banks). 5. This proposal assumes that flood insurance rates will be actuarial. Proposal: Builders of new construction should be allowed to make their own cost benefit calculations and decide whether it is cheaper to elevate the -99-
building or pay the true actuarial insurance rates. In areas where there are substantial levees providing protection from all but the 100-year flood level, the actuarial rate may be low enough to permit construction of the building at grade. Example of a cost-benefit analysis: 1. Annual costs to elevate on stilts in an AL Zone: For a builder of a $50,000 house, the cost of the same house built on open pilings (the cheapest method) 15 feet above the ground (so the first floor is at the 100-year flood elevation) is $55,000-$60,000. At 13 percent interest adding $5,000 to a 30-year mortgage means $664 in additional annual mortgage payments. Adding $10,000 to the 30-year mortgage increases the mortgage payments by $l,327 per year. Flood insurance for structural coverage on that house in Zones A8-A14 (the zones for the Mississippi River at Quincy and the lower Illinois River) costs $0.16 per $100 for the first $35,000 coverage and $0.05 per $100 for the rest. The cost for a 3-year policy (again the cheapest method) $0.16 x 350 + $0.05 x 150 = $63.50 x 3 = $190.50 + $20 expense constant = $210.5 or $71 per year. Annual costs = ($664 to $1327) + $71 = $735 to $1398. 2. Annual costs on a building that is not elevated: Flood insurance for structural coverage on a $50,000 house not elevated but in an AL Zone protected by a substantial levee is unknown. Assume that the building is rated as if it were flood-proofed (there are a lot of similarities between a flood-proofed building and one protected by a levee). The rating would then be the same as for a building elevated to less than a 100-year flood level in the A8-A14 Zones. For a building elevated to 2 feet below the 100-year flood level,.the rate is $0.55 per $100 coverage. For a 3-year policy the annual payment would be $282. Assume an arbitrarily chosen but high rate of $1.00 per $100 coverage. For a three year policy the annual payment would be $506. Annual costs = $282 to $506. It can be seen that in areas where buildings have to be elevated very high, but, where the levees provide a lot of protection, it will be much cheaper for the buildings to build at grade and pay the extra insurance premiums than to pay the lower insurance and additional mortgage costs. However, in areas with insubstantial levees, the levees will not provide much assistance in actuarial rating. Therefore, it will be cheaper for the builders to elevate. This committee wanted to avoid the all or nothing requirements of the Flood Insurance Program for insurance rating purposes. This proposal follows that direction by providing an alternative to the all or nothing, elevate/do not elevate, requirement. -100-
(5) Counter Argument for Requiring Floodplain Management Restrictions Within the ^Natural" 100-Year Floodplain Behind Sub-SPF Levees by R. Platt and E. Wood This minority opinion addresses the need for floodplain management measures in areas within the "natural" 100-year floodplain and protected by a levee of less than the "Standard Project Flood" design. The reasons for this position are: 1. Estimation of levels of protection is an inexact science. A levee considered to provide protection against a 100-year flood may in fact fall short of this goal due to miscalculation of the 100-year flood discharge or stage. 2. Levels of protection are diminished by increases in the frequency of flooding of a given magnitude due to land use changes (e.g., increased urban runoff, storm sewer discharge) in the watershed upstream. 3. Design levels of protection of a levee on one side of stream may be diminished by activities across the stream (e.g., filling, channel alteration, or construction of a levee). Frequently, floodplains on opposite sides of streams are in different political jurisdictions, they have little or no control over each other's actions, but both influence flood heights in leveed reaches. 4. Even recently built and well-designed levees are subject to (a) overtopping due to floods of greater than design magnitude and (b) failure due to unforeseen deficiencies in design, maintenance, or operation. The new Corps levee system on the Pearl River at Jackson, Mississippi, for instance, failed to completely withstand a discharge of less than its design magnitude due to design defects (unplugged sewer pipe extending under levee from river side to "protected area" and low point where levee met interstate highway embankment). 5. Urban levee systems often involve levee segments of varying age, quality, design level of protection, and general reliability. Fort Wayne, Indiana, for instance, has a levee system constructed between 1913 and 1980. Newer portions are designed to withstand a 100-year flood; older portions are not. The public, however, may not realize that the entire levee system is of uneven reliability and will not know which areas require special precautions. The majority opinion would apparently require floodplain management behind sub-100-year levees but not behind greater-than-100-year levees. This creates a confusing and inequitable situation. Problems of mapping the area protected by each segment of the levee system are obvious. The minority believes that floodplain management should apply to the entire natural 100-year floodplain behind the levee. 6. Floodplain management under the NFIP operates prospectively and selectively. In the flood fringe, residential dwellings must be elevated to the "base flood" (100-year) elevation while commercial facilities may be elevated or flood-proofed to that level. The minority believes these constraints are reasonable for new construction. Public investment in a levee is largely to protect existing development and should not be permitted to encourage new construction in the natural floodplain. Elimination of all restrictions on private land use behind a less-than-SPF levee would induce new construction in areas subject to catastrophic flooding, without appropriate design safeguards. -101-
