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Editorial

Our View: The reason we're near the water

August 05, 2013

Local citizens and leaders shouldn't be afraid to let federal delegates know we expect them to support federal legislation to extend discounted flood insurance.

The "preferred risk policy" for property within special flood hazard zones has been extended many times, but the Biggert-Waters Flood Insurance Reform Act of 2012 would end it this October. If that happens, premiums for affected Sutter County property — most of nearly 5,000 parcels in unincorporated areas, it's been reported — would climb about $2.6 million annually for the owners.

That means the present total, for those parcels, of about $2.3 million would increase to about $5 million. Per year. Year after year.

There are no special flood hazard zones within Yuba City limits, so residents there aren't affected. Neither are the communities of Sutter nor most of Meridian. Marysville, it appears, would not be impacted. At this point, we're not sure about other parts of Sutter and Yuba counties. There's still a fair amount of uncertainty about what would happen if Congress does nothing, or what Congress might do to make it not happen.

It wouldn't be a bad idea for county and city leaders and agencies to keep a lookout.

What's the deal?

The arguments for dropping flood insurance subsidies seem logical to those who support the reform. People from higher ground can't understand why people continue to live in flood-prone areas of the country. When you live somewhere that never floods, you start wondering why U.S. taxpayers pay to rebuild communities over and over again.

At the very least, it seems to them, the National Flood Insurance Program should charge rates that accurately reflect the risk and costs of rebuilding.

It's just as if they've lopped off the first couple hundred years of U.S. history, when trade was built around water, when agriculture had to be where water could flow. The U.S. participated in that development; now they want to pull out of a long-standing arrangement.

It's been economically expedient for the U.S. to help various communities cope with various forces of nature: relief for areas devastated by hurricanes or tornadoes or earthquakes, subsidized crop insurance for areas prone to hail and drought… subsidized flood insurance for areas that developed in flood plains makes just as much sense.

We understand the intent of the reform — to reduce reliance on subsidies and to allow for reduction of the national budget. We can't argue that away; but to implement the reform in a year's time after more than a century of development ... it disrupts the economy of an area that literally feeds the world. There's a good reason we're where the water is.

The really smart thing would be to mitigate future damages by continuing on a faster pace the improvement of levees.

Biggert-Waers Flood Insurance Reform Act of 2012

This from the Federal Emergency Management Agency Website (go to: www.fema.gov/flood-insurance-reform-act-2012.)

• In July 2012, the U.S. Congress passed the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12) which calls on the Federal Emergency Management Agency (FEMA), and other agencies, to make a number of changes to the way the National Flood Insurance Program (NFIP) is run. ... Key provisions of the legislation will require the NFIP to raise rates to reflect true flood risk, make the program more financially stable, and change how Flood Insurance Rate Map (FIRM) updates impact policyholders. The changes will mean premium rate increases for some-but not all-policyholders over time.

• About 20 percent of all NFIP policies pay subsidized rates. Only a portion of those policies that are currently paying subsidized premiums will see larger premium increases of 25 percent annually starting this year, until their premiums are full-risk premiums. Five percent of policyholders — those with subsidized policies for non-primary residences, businesses, and severe repetitive loss properties — will see the 25 percent annual increases immediately.

• Subsidies will no longer be offered for policies covering newly purchased properties, lapsed policies, or new policies covering properties for the first time. The 80 percent of all NFIP policies that already pay full-risk premiums will not see these large premium increases. Most policyholders will see a new charge on their premiums to cover the Reserve Fund assessment that is mandated by BW-12. Initially, there will be a 5 percent assessment to all policies except Preferred Risk Policies. The Reserve Fund will increase over time and will also be assessed on PRPs at some undetermined future date.

• Additional changes to premium rates will occur upon remapping, the provision calling for these premium rate changes will not be implemented until the latter half of 2014.