If you just walk away you still have an empty house. What do you have then? Squatters? A ghost town?" (NewJersey.com)

Biggert-Waters Act could have far-reaching effect, not just in flood zones, says Little Ferry mayor

THURSDAY SEPTEMBER 19, 2013, 9:54 AM

BY  MARK KRULISH

STAFF WRITER

The Little Ferry Borough Council passed a resolution at last Tuesday's meeting to voice their opposition to the Biggert-Waters Act, which will spike flood insurance premiums on Oct. 1 if it is not delayed by congress. The bill would have far-reaching consequences in both Little Ferry and Bergen County as a whole.

The Biggert-Waters Act was passed in 2012 with the aim making the National Flood Insurance Program solvent after the program racked up billions of dollars in debt due to payouts in storms such as hurricanes Katrina, Wilma and Irene. However, that bill was passed four months before Sandy hit New Jersey.

Mayor Mauro Raguseo said that he wanted to get the borough's position on record and that the increases would be "devastating to Little Ferry as well as Bergen County," at the council meeting last Tuesday.

"[Congress] authorized a new funding mechanism for [the program]," said Raguseo. "They wanted to make the flood insurance program like any other program and that is that its based on the actuarial rate of the possibility of your home flooding. It is based on base-flood elevation, which in Little Ferry is nine."

He went on to use his own home as an example of how rates will increase in Little Ferry. Raguseo said that, looking at the actuarial tables, his flood insurance could go from $1,200 per year to $10,000 per year within the next four years, a 25 percent increase every year.

Many homes in Little Ferry have kept their insurance rates relatively low because the homes received federal subsidies. Essentially, Congress put money into the flood insurance program to keep rates low, but the Biggert-Waters Act would put an end to those subsidies and residents in those homes could be facing huge increases in their flood insurance premiums.

"The problem is congress said we don't have any more money to do this," said Raguseo. "They are saying if people want to live by the water, they will have to take that risk on their own, so [premiums] are going to go up 25 percent each year until they reach the full actuarial rate."

The problem in Little Ferry would also be compounded by the fact that homes may become unsellable, said Raguseo. If the premium spikes are not delayed, homes that were subsidized would have premiums that go to full actuarial rate immediately if they were to be sold to new owners.

Raguseo also said that this bill is a problem that is not unique to Little Ferry. Communities not necessarily in a flood zone will still be affected the Biggert-Waters Act because it is going to create a ratable problem that will affect other municipalities as well as the county as a whole.

For example, in New Milford, Mayor Ann Subrizi said that the town has lost a lot of money in ratables this year due to the elimination of homes from a flood area near theHackensack River.

The town bought five homes through FEMA and Green Acres and three others were taken down for the expansion of the Sanzari's New Bridge Inn restaurant. One other house was bought through an open space trust fund since the house was vacant after being blown into complete disrepair.

Subrizi also said that even though a much smaller percentage of homes in New Milford lie in a flood zone, if the borough were to lose them due to the high insurance rates that would be attached to those homes, it would create a huge tax burden on residents.

"We have 6,000 families, but only 200 are in a flood plain," said Subrizi. "Yet, if we were to eradicate these homes, everyone else would have to pick up the tax burden for the lost money. In Little Ferry, the numbers are far more staggering. From what I've read, if you don't elevate your house, you can't afford the insurance, and new homeowners have to pay the big insurance, it makes houses worth less. If you just walk away you still have an empty house. What do you have then? Squatters? A ghost town?"

Another town even further north, Westwood, has also demolished houses in a flooding area so far with a fourth set to be demolished in the very near future, according to Mayor John Birkner. Those four houses were also bought through FEMA and Green Acres, and the borough is looking to acquire a fifth home as well. Birkner believes that there will be sufficient funds to do so. One of the conditions of the acquisition is that nothing can ever be built on that land again to prevent future development in flood zones.

"The cost is now we lose those ratables," said Birkner. "We also have to maintain the property that we have now claimed and it can never be built upon again. The idea is to have those houses removed and return that land to its natural buffer capacity."

Birkner said that Westwood suffered from five serious floods in 2011 where some homes received "a foot or two" of water, but he believes that those floods can be addressed through flood mitigation. However, like many other towns, the borough does not have the money to take on these projects alone and is looking to coordinate with other municipalities both upstream and downstream to clean, de-silt and de-snag streams common streams and waterways.

"I work in Little Ferry and I lost my car in Sandy," Birkner said. "I've worked there for 30 years, so I'm very sensitive to the problems there and I understand what those residents go through. It's certainly a very difficult situation. Anything I can do up here to help them, we're certainly looking to coordinate with our downstream neighbors to come up with solutions."

E-mail: krulish@northjersey.com