After publicly opposing a Metro Council emergency measure last week that would have allowed some residents to repair their flood-damaged homes, the Metropolitan Sewer District’s executive director told homeowners on Monday the outcome he feared from such an ordinance was actually unlikely.
In opposing the ordinance, MSD had argued the Federal Emergency Management Agency might downgrade the city’s rating, causing federal flood insurance premiums to increase by $53 annually. But MSD executive director Greg Heitzman said in the city’s flood mitigation work group on Monday that such an ordinance is “unlikely to change” that rating.
The emergency ordinance fell two votes short of the 18 needed to begin debate last week. The measure would have amended a 2006 ordinance that prohibits hundreds of homeowners from using flood insurance claims to repair homes with damage amounting to more than 50 percent of their total value over a 10-year period.
MSD warned council members over the past two weeks that such a move would put the city at risk of lowering its FEMA-designated class, which would increase flood insurance premiums for the more than 5,000 local homeowners who purchase such insurance. Those warnings led five council members to vote to block an official vote on the ordinance.
MSD officials have said FEMA told them the city’s rating will improve from Class 4 to Class 3 in October, which will lead to a 5 percent decrease in insurance premiums. While MSD never said a downgrade would be certain with the ordinance — as it awaited official word from FEMA — Heitzman explained at the work group meeting on Monday that he did not think it would trigger a downgrade, nor would it be likely to block the upcoming rating upgrade.
Heitzman explained that if the ordinance was approved — changing the 10-year period to a 1-year per-incident measurement — FEMA would likely deduct only 40 points from MSD’s overall score. Heitzman said remaining at a Class 4 would be “the absolute worst-case scenario.”
“Here’s MSD’s position,” said Heitzman. “If we receive something from FEMA that says it would not affect the class rating by removing these 40 points, then we would support the amendment to the ordinance, at least on a short-term basis.”
Lori Rafftery of MSD said FEMA has not revealed MSD’s current score due to “IT issues” at the federal agency, but Heitzman said he expects to receive that information any day.
While 19 homeowners have had building permits blocked by MSD due to the 50 percent rule, MSD has estimated that there could be hundreds more who would have also been blocked, meaning they either made repairs without applying for a permit or are living in flood-damaged homes while risking dangerous mold exposure.
Roughly a dozen homeowners affected by the recent flooding attended the work group’s second meting on Monday, once again venting anger and at times tearful frustration at MSD officials for being slow to rectify their situations. Multiple homeowners said while they want to be able to use their flood insurance to repair their homes and move back in, they would prefer that those claims go toward a local buyout of their homes. When Heitzman asked who preferred that scenario, all raised their hands.
MSD presented one chart showing the PVA assessment of the 19 homes blocked from making repairs, along with the value of their current damage claims. Together, the homes are worth more than $2 million, with damage claims of $678,000. Heitzman said if those insurance claims could go toward a buyout instead of repairs, local government and federal agencies would have an easier time making up the difference if they came up with $1.3 million — though there are likely many more than 19 homes that would need this in the future.
“There are many other individuals who have either not hit that 50 percent limit or have not applied for a building permit,” said Heitzman. “So understand this is a much bigger issue. We just don’t know whether there are 20 of these homes, 100, 200 or 300.”
Rafftery later said MSD estimates that approximately 125 homes currently have cumulative flood damage claims in the past 10 years amounting to 25-50 percent of their total value.
While neither MSD nor FEMA have the funds available to buy these homes out quickly, part of the work group’s task is to develop a local buyout program for the most damaged of the 12,500 homes in the floodplain. So far, there has been no detailed discussion of exactly where those funds would come from, or how much would be needed.
Multiple homeowners at the meeting expressed frustration with the slow manner in which MSD is addressing the situation, as most are effectively homeless with the prospect of losing their entire investment. Some specifically blamed MSD for approving recent developments near their home that have exacerbated flooding issues where there was never a problem before.
Renee and Joe Baker, who are prohibited from repairing their flooded home in the Whispering Hills neighborhood, excoriated Heitzman for not working fast enough to alieviavate their current dillema, bristling when he said he understands their situation.
“No you don’t, because where do you go home tonight?” asked Renee Baker. “You go home to your house, your bed, your clothes. Do you know where I go? A two-bedroom apartment sleeping with pillows and blankets on the floor. And I still get up and work 60 hours a week.”
Justin Brock, a homeowner in the hard-hit Riviera neighborhood who said he was not notified of the 50 percent rule before buying his $200,000 home recently, said homeowners are “being treated like animals.” He also claimed an MSD official recently told him to “stay out of the news.”
“That is not what I am going to do … I’m going to keep pushing forward for disclosure, to make sure that people don’t go through this crap anymore,” said Brock. “I know you have 12,000 that are in the floodplain, but you don’t have 12,000 people out on the streets. And the people who have been kicked out of their homes need assistance immediately.”
MSD spokesman Steve Tedder told Insider Louisville that homeowners are free to speak to the media as well as voice their concerns in the work group, adding that “the more we provide and exchange accurate information between elected officials, public agencies and the residents (both those directly affected and the general public), the better for all.”
While the emergency ordinance to amend the 2006 rule failed before Metro Council last week, an ordinance with the same language — and now nine cosponsors — will be debated and voted on in Tuesday’s Public Works Committee. If the ordinance passes, it could be voted on in next Thursday’s council meeting.
***** UPDATE 4:06 p.m. *****
Metro Council’s Public Works committee passed an ordinance this afternoon with nearly identical language to last week’s emergency ordinance by a 4 to 1 vote, with Councilwoman Marianne Butler abstaining. The ordinance can now be taken up by the full council at next Thursday’s meeting, where it could be passed by a majority vote. MSD expects to have an official word from FEMA on the city’s current score by next Wednesday’s work group meeting.