Several Metro Council members have filed an emergency ordinance to amend language from a 2006 law that has prevented what is estimated to be hundreds of Louisville homeowners from repairing their homes damaged in recent flooding.
The language at issue is a rule that prohibits repairs on homes in the floodplain that have had total flood damage claims amounting to over 50 percent of the home’s value over a 10-year period — which has caused many to be displaced from their homes with the prospect of losing their entire investment. The new emergency ordinance, which could be passed as early as Thursday, would temporarily rescind the 10-year clause of that rule and replace it with a per-incident basis over a rolling one-year period.
Councilman Steve Magre, D-10, initiated the proposed emergency ordinance, saying effected homeowners could not wait for recommendations from the work group recently assembled by the Metropolitan Sewer District, Metro Council and Mayor Greg Fischer. The ordinance also is sponsored by Republicans Angela Leet and James Peden, and Democrats David Yates, David James, Dan Johnson and Barbara Shanklin have indicated they will add their names to it.
But MSD has warned council members that by making this rule less restrictive, FEMA might lower Louisville’s community rating system, which would increase federal flood insurance premiums for over 5,000 homeowners. Such a threat has caused Councilman Tom Owen, D-8, and Fischer to say the council should wait for the work group to finish its recommendations before passing such an ordinance. However, supporters of the amendment argue the threat is either speculation, or that premiums going up roughly $50 a month for those in the floodplain is a necessary pain to endure for the benefit of those who would now be permitted to repair and live in their homes.
At the first meeting of the work group on Monday, MSD repeated much of the information previously presented to Metro Council’s Public Works Committee on April 28, and effected homeowners shared their current plight. But one new detail shared by an MSD official was that the information about the 2006 ordinance presented by their chief engineer Steve Emly in April was not just incorrect, but completely backwards.
Emly previously told the committee that the 2006 ordinance had changed the city’s 50 percent rule from a one-year to 10-year period, making it more restrictive. But MSD spokesman Steve Tedder conceded Monday that before this ordinance, the city did not have a one-year rule, but a lifetime rule — the most restrictive possible, in that it would factor in claims over the entire history of a flood-damaged home. So instead of putting in place more restrictive rules that are the most favorable to FEMA, the 2006 ordinance greatly relaxed the 50 percent rule.
Following Emly’s comments in April to the committee, he detailed how Louisville’s FEMA rating has greatly improved since the 2006 ordinance and led to more significant discounts in federal flood insurance premiums, “through the efforts of this council, Metro Government and MSD.” This implied to some that a more restrictive 50 percent rule resulted in a FEMA rating upgrade and decreased premiums, but neither of which was the case — it was made less restrictive, and the FEMA rating did not improve until years later.
Emly used the same language when describing the 2006 ordinance to the MSD board the day before that presentation. Additionally, Councilman Owen told the council’s Democratic caucus last week that after conferring with MSD, he was concerned that if Louisville “went back” to a one-year rule, its FEMA rating would fall and insurance premiums would go up. Through Democratic caucus spokesman Tony Hyatt, Owen says MSD has not contacted him with any kind of correction, and he is not sure where that puts him in regard to Thursday’s vote on the emergency ordinance.
“When it switched from lifetime to 10 years, our category didn’t change at that time,” Tedder told Insider Louisville on Monday. “It stayed the same. And then we subsequently have done other things where our category has improved,” adding that there were many other positive features in the 2006 ordinance that led to FEMA improving Louisville’s rating.
All of which raises the question: If making this rule less restrictive in 2006 did not lower Louisville’s FEMA rating, why would making it less restrictive in 2015 lead to a different result?
“The truth is we don’t know, until we talk with FEMA, what the implications for changing the ordinance would be,” said Tedder, later adding that MSD hopes to increase its FEMA rating soon — with an accompanying 5 percent drop in premiums — but moving from a one-year to 10-year rule would make that implausible.
Councilwoman Leet — a sponsor of the proposed emergency ordinance and also a member of the work group — says she has the same questions about the rationale and lack of solid evidence that switching to a one-year rule would necessarily lead to FEMA dropping Louisville’s rating.
“When I point blank ask that question to MSD officials, they cannot say with certainty whether it will impact the overall (community rating system) rating from where we are now at 4,” Leet tells Insider Louisville. “They’ve basically indicated that they don’t know. And if we ask will it drop us any further back than 5, they give the same answer, that they don’t really know. I think that’s factual, they don’t know.”
At the work group, Leet asked if MSD would provide a full history of the changes in Louisville’s FEMA rating. MSD said they did not have that information but would try to provide it at a future meeting. Leet says it is important for the council to have that information before they debate the matter at Thursday’s council meeting, as some have legitimate concerns about about a negative impact on their insurance premiums.
“That’s a valid concern, and I think we need to have as much information as possible to consider the risks,” says Leet. “People don’t live in an environment where we can make 100 percent certain decisions; they’re based on risk and benefit.”
Metro Council is expected to debate and vote on the proposed emergency ordinance at Thursday night’s council meeting, though the sponsors must gain 18 signatures before the meeting in order for it come to the full council.