City Administrator Dale Neiman told the Clearlake City Council at its Thursday, Oct. 25, meeting that if FEMA goes forward with penalizing the city, it could result in raising flood insurance premiums for city residents by thousands of dollars annually.
According to Neiman's written report to the council, FEMA developed regulations allowing property owners to purchase flood insurance at reasonable rates if the community adopted and enforced regulations to minimize flood damage.
FEMA, Neiman said, is responsible for determining areas that flood during 100-year storm events. Under its National Flood Insurance Program, FEMA requires homeowners in those areas to have flood insurance, and that all loans to purchase property – with the exception of private loans – must be covered by flood insurance.
Neiman reported that FEMA's primary regulations include requiring that all structures be elevated about the 100-year flood zone, buildings elevated on foundation walls must have minimum openings for venting, all mechanical equipment must be located above the 100-year flood zone and no structures may be built in the floodway.
In 1978, before the city was incorporated, the area entered the National Flood Insurance Program, Neiman said.
FEMA and the California Department of Water Resources periodically visit cities in the program to ensure they are following the program's minimum requirements, according to Neiman.
In April 2005, a Department of Water Resources visit to the city revealed 46 serious violations with Clearlake's regulations, administrative procedures and enforcement procedures between 2000 and 2005, Neiman said.
A copy of a December 2005 letter from Interim City Engineer Bob Galusha to FEMA,which was included in Neiman's report, said that the city adopted FEMA's model floodplain ordinance the previous month and was investigating the violations.
Most of the violations were fairly easy to fix, said Neiman. Four, however, required venting to be added to foundations, and eight homes were found to be built below the 100-year flood zone, which means the homes and their foundations would need to be raised.
The city asked for more time to see if they could rectify the violations, said Neiman. He added that Galusha has worked hard to get information from property owners, including flood elevation certificates. However, he said most of the property owners haven't responded.
FEMA responded with an Oct. 12 letter to Mayor Judy Thein, telling the city that it was no longer compliant with the National Flood Insurance Program, which is required as a condition of the Community Rating System. That system allows for city residents to buy flood insurance at affordable rates.
The letter also included a list of 51 current violations of the program's rules.
In the letter, Gregor Blackburn, branch chief of the Floodplain Management and Insurance Branch, told Thein that he was recommending to the Federal Insurance and Mitigation Administration that Clearlake be retrograded from a class 9 to a class 10 level. That means that, effective May 1, 2008, flood insurance policy holders in Clearlake won't qualify for a 5-percent discount.
Blackburn said the city also may be subject to a probationary process, which would cost flood insurance policy holders an extra $50 fee for each new policy and renewal.
If, after that, the violations still aren't addressed, the city could be suspended from the National Flood Insurance Program altogether, Blackburn wrote.
The consequences for policy holders would be that their policies could not be renewed, wrote Blackburn. If homeowners in the area were required by their lenders to have flood insurance, they would then have to go out to secondary insurance markets, buying policies at much higher rates.
Neiman said flood insurance policies under the National Flood Insurance Program now cost local policy holders about $600 a year. That could go up to $1,800 a year if FEMA follows through with its enforcement actions, he said.
He attributed the violations to improper surveying of home sites, which led to the homes not being built to flood program specifications.
Councilmember Joyce Overton, who works in the insurance industry, said she was concerned about the threatened suspensions, because she has seen flood insurance priced as high as $4,000 a year.
Thein was particularly concerned that a number of newer homes in the Lake Glenn Subdivision were included on the most recent list of violations, and asked how they were not built to well-known specifications.
She questioned how an entire subdivision could have been done wrong. “Something isn't right here.”
“It wasn’t done the way it was supposed to be done,” replied Neiman.
The council directed Neiman to send a letter to property owners listed by FEMA as being in violation. The letter will explain the consequences of failing to correct the violations, including what Neiman guessed will be “substantially higher” flood insurance rates.
E-mail Elizabeth Larson at
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