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Ocean City

They beat FEMA on their own

(Sept. 26, 2014) Not very often do you hear of someone fighting a federal agency at its own game, and winning – but a group of north Ocean City property owners appear to have achieved a partial victory.

An appeal by a group of north-end buildings against the Federal Emergency Management agency’s new flood map revisions has resulted in two of those buildings being pulled from the higher-risk “AO” flood designation and into the “X” zone, meaning cheaper, non-compulsory flood insurance for owners.

“They basically came back and said they would re-designate our building [on 146th Street] and one other building on 143rd as ‘X’ zones,” said Ron Deacon, President of the owners’ board at the Ocean Place condominium.

“The reason, they said, was that they had looked again at the data and the elevation of our building was above 12 feet, which is what they were using as a criteria,” Deacon said.

“We did get the chance to see the model they used, and it was surprising how accurate their post-storm profile was to what we had actually found up at the north end of town after Irene and Sandy,” said City Engineer Terry McGean.

Over this past winter, Deacon and many other north-end residents discovered that they wouldn’t be receiving quite the break they thought they would under the National Flood Insurance Program, which FEMA administers.

In 2012, Congress authorized a reform of the NFIP, which was losing billions of dollars due to relatively high flood damage payouts in areas where policy premiums were relatively low. This involved FEMA re-mapping the flood-risk zones which determine a property’s level of coverage.

Most of Ocean City, under the current flood maps, is in a “V” zone, which indicates a risk of flooding as well as high-velocity wind impacts during storms, and comes with the highest premium in the NFIP.

What the city had lobbied for was to have FEMA take the city’s man-made dunes and beaches into account as a defense against seaborne impacts, presumably downgrading the city’s risk zone from “V” to “A” or “AO,” which indicate flood but not impact risk and come with a significantly lower policy cost for property owners.

But much to everyone’s surprise, FEMA downgraded the majority of the resort to an “X” zone in the proposed flood maps released earlier this year. “X” zoning indicates a low risk of flooding and does not require property owners to purchase federally-backed insurance, even if they do not fully own their homes.

While the city has voiced concern that too many buildings in the “X” zone may drop their flood coverage, those left in higher designations were left wondering why they were paying more than their neighbors.

One of those zones that was scheduled to remain “AO” was the ocean block between 146th and 143rd Streets, where the dune line experiences a “hot spot” of increased erosion.

“We build that dune up to the highest level possible, but it’s a dynamic system,” McGean said.

The main issue with the area near the Ocean Place, McGean noted, is the reverse littoral drift caused by the Indian River Inlet. On the East Coast, currents typically move north-to-south, taking sand with them. But at points where seawater flows inland, the drift is pulled toward the inlet, creating a sort of vacuum just south of the site.

“That’s primarily what all the research has shown as to why we have a hot spot there,” McGean said. “One current is going north [toward the inlet] and the other is going south, and nothing’s coming back in.”

But despite the weakness of their location, Deacon and his neighbors were not fully convinced that they were at risk.

Although willing to help, the city was reluctant to assume the liability of doing the appeal itself, and suggested that property owners in the affected area hire their own consultant to contest FEMA’s ruling – which is exactly what they did.

“I provided them with a whole bunch of data that we had, and their consultant used that data and some additional information he had to create the appeal,” McGean said.

“The problem is that when you’re working with FEMA, your hands are tied,” Deacon said. “They’re very formal, and they tell you that you have to submit evidence to prove them wrong. After a while, you just don’t want to spend any more money on throwing stuff at them.”

But Deacon and his neighbors turned out to be right.

“If your dune is a certain size, they use one formula, and if it’s smaller, they use a different formula,” Deacon said. “Ours just barely did not meet the criteria, so when they did their calculations it looked like the water would breach the dunes.”

“But in that case, they’re supposed to factor in building elevation. When we did the appeal, they came back and said ‘yes, it will breach, but you’re above 12 feet so you’re actually okay.”

However, only two buildings were found to have the requisite height. A second appeal was filed to have the whole three blocks re-zoned, but it was denied.

“It looks strange to have two buildings carved out, but I guess that’s how it’s going to be,” Deacon said. “We could probably spend thousands arguing this, but after a while it’s not worth the flood insurance premium we would save.”

In “V” and “AO” zones, property owners who still have mortgages are required to purchase flood insurance. Not only are rates lower in an “X” zone, but insurance is not required even for those with mortgages.”

“We still plan to have flood insurance for the whole building, because we believe in it,” Deacon said.

The proposed maps, once all appeals have been processed, will be finalized by FEMA for adoption by state and local agencies.

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