AGENDA PACKET BOARD OF SELECTMEN APRIL

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3 AGENDA PACKET BOARD OF SELECTMEN APRIL 1, 2014 Licensing 1. Public Hearing New Annual All Alcohol Common Victualer, Weekday and Sunday Entertainment licenses for Chez Franck Catering LLC dba Chez Franck-Kings Way, 81 Kings Circuit, Yarmouth Port Application Packet Discussion Updates 2. FEMA Maps Memo from Kathy Williams to BOS, dated March 25, Re: Legislative Update on HR 3370 Homeowner Flood Insurance Affordability Act Board of Selectmen 2. Board and Committee Actions Memo from Jim Quirk to BOS, dated March 31, Re: Cape Cod Regional Bicycle/Pedestrian Committee - Reappointment Town Administrator s Items 1. Consent Agenda Donations 2 memos from Kathy Bailey to WGH, dated March 17 & 24, Re: Gifts to the Division of Senior Services Memo from Acting Chief Simonian to WGH, dated March 21, Re: Gifts.

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34 T O W N O F Y A R M O U T H 1146 ROUTE 28, SOUTH YARMOUTH, MASSACHUSETTS Telephone (508) , Ext. 1276, Fax (508) Planning Division MEMORANDUM To: From: Erik Tolley, Chairman Board of Selectmen Kathy Williams, Town Planner Date: March 25, 2014 Subject: Legislative Update on HR 3370 Homeowner Flood Insurance Affordability Act. This memo is an update on the passage of the Homeowner Flood Insurance Affordability Act and the adoption of the FEMA Flood Insurance Rate Maps (FIRMS) at the 2014 Annual Town Meeting. Flood Insurance Rate Relief: On March 21, 2014, President Obama signed into law the Homeowners Flood Insurance Affordability Act (Affordability Act). This law amends the Biggert Waters Flood Insurance Reform Act of 2012 (Biggert Waters) and delays or tempers the implementation of flood insurance rate hikes for some properties. The law does not benefit Pre-FIRM second homes or commercial properties, or repetitive loss properties, which will all continue to see annual 25% rate increases per Biggert Waters. Although this law provides for a slower rate of flood insurance increases for other properties, the intent is to continue to move toward actuarial flood insurance rates for all properties located in Special Flood Hazard Areas (SFHAs). A detailed summary of the Affordability Act is outlined in the attached Fact Sheet. In general, the Affordability Act strives to: Soften the impact of increased flood insurance rates by slowing implementation and providing time and money to complete an affordability analysis to better understand the true financial impacts and long term affordability of actuarial flood insurance rates. Obtain overall affordability by minimizing the number of flood insurance policies with annual premiums that exceed 1% of total coverage (i.e. $2,500 annual premium for a $250,000 flood insurance policy). Softens the impact for properties being mapped into a SFHA by rating them at the lower cost Preferred Risk Policy rate. Provide for more flexibility when calculating flood insurance rates including exclusion of detached structures, taking into consideration flood mitigation measures undertaken on a property, development of guidelines for alternate mitigation methods (besides elevation increases) and retaining the exclusion of flood-proof basements from rate calculations. Allow for flexibility by including higher deductibles ($10,000) and alternate payment methods (annual, monthly, or escrow). Increase reporting requirements and oversight for FEMA to ensure accuracy, and to closely monitor affordability issues and the flood insurance reserve fund.

35 Erik Tolley, Board of Selectmen Chairman Flood Insurance Update March 25, 2014 Improve map accuracy by requiring modeling certification and oversight, including notification to communities about the model methodology being used. (Unfortunately, this will not help Yarmouth as our Letter of Final Determination has already been issued by FEMA.) Assist communities and policyholders by providing more guidance and information through the creation of a Flood Insurance Advocate. All property owners in SFHAs, or moving into SFHAs based on the new Flood Insurance Rate Maps which are effective on July 16, 2014, are encouraged to contact their insurance providers for how this new law specifically relates to their property. Adoption of FEMA FIRM Maps: There have been concerns expressed about the methodology used to develop the Flood Insurance Rate Maps (FIRMs) for Massachusetts and concerns from the Board of Selectmen about adopting flood maps that may be based on faulty data. It is unclear as to whether a faulty model was used or not, but the mapping contractor did use one of the models approved by FEMA for the Atlantic Coast as outlined in the guidance document entitled, The Atlantic Ocean and Gulf of Mexico Coastal Guidelines Update. In addition, in June of 2013, Karl von Hone from Natural Resources, Kerry Muldoon from Conservation and Kathy Williams, Town Planner conducted a staff level review of the FIRM maps for general accuracy with regard to the limits of Special Flood Hazard Areas (SFHAs). The limits of the SFHAs appeared to be reasonable based on staff knowledge of the various locations in town. I have also made inquiries to my counterparts in other Cape Cod Towns. Dennis and Chatham have indicated they also conducted a review of the new FIRM maps based on historic data and community knowledge, and felt the new maps reasonably reflected the flood hazard risks for their communities. It is important for the Town to support the adoption of the new FIRM maps. If the maps are not adopted prior to the effective date of July 16, 2014, the Town will be suspended from the National Flood Insurance Program (NFIP). Suspension from the NFIP would have many impacts for properties located within flood hazard areas including: No resident would be able to purchase National Flood Insurance Program flood insurance policies; Existing flood insurance policies would not be renewed; No Federal grants or loans would be available for developments under programs administered by Federal agencies such as HUD, EPA and Small Business Administration (SBA). No Federal disaster assistance would be provided for flood damage; and No Federal mortgage insurance or loan guarantees would be available. Banks and credit unions must notify applicants seeking loans for insurable buildings in flood hazard areas that there is a flood hazard and that the property is not eligible for Federal disaster relief. In addition, not adopting the new maps does not allow the Town to continue to use the old maps. The new maps will be used by banks and mortgage companies and by Town Staff when implementing the State Building Code, State Wetlands Protection Act and State Title 5 wastewater regulations. Page 2 of 3

36 Erik Tolley, Board of Selectmen Chairman Flood Insurance Update March 25, 2014 Things the Town can do to help: There are some things that the Town can do that will have concrete benefits for properties located within Special Flood Hazard Areas (SFHAs) including: 1. Multi-Hazard Mitigation Plan: Continue working with the Cape Cod Commission to develop a certified Multi-Hazard Mitigation Plan which will make Yarmouth eligible for FEMA s Hazard Mitigation Grant Program funds and other federal hazard mitigation funds. 2. Community Rating System (CRS): Participating in the CRS will allow for a reduction in flood insurance rates for the entire town. The reduction ranges from 5% to 45% depending on the level of floodplain management measures implemented by the town and the total number of credits earned. A 5% reduction in insurance rates would appear feasible for Yarmouth based on the completion of the Multi-Hazard Mitigation Plan. To join this program requires the completion of an application and assignment of a CRS Coordinator to monitor and document the program. The Cape Cod Commission is investigating grant funding for a CRS coordinator for all Cape Towns, which would ease the burden of implementing this program. 3. Public Awareness: Continue to promote public awareness of the new FIRM maps, and encouraging homeowners newly mapped into Special Flood Hazard Areas to investigate obtaining a lower rate Preferred Risk Policy prior to the effective date of the new maps of July 16, Monitor Appeal of Plymouth County FIRM Maps: The appeal for the Plymouth County maps is related to the model used to develop the limits of the Special Flood Hazard Areas. If the appeal is won, it may result in a re-evaluation of the model used throughout Massachusetts, including Barnstable County. Page 3 of 3

37 T O W N O F Y A R M O U T H 1146 ROUTE 28, SOUTH YARMOUTH, MASSACHUSETTS Telephone (508) , Ext. 1276, Fax (508) Planning Division HR 3370 Homeowner Flood Insurance Affordability Act Fact Sheet President Obama signed into law the Homeowners Flood Insurance Affordability Act on March 21, This law amends the Biggert Waters Flood Insurance Reform Act of 2012 and delays or softens the implementation of some of the flood insurance rate hikes required by Biggert Waters. Although Biggert Waters was originally put into place to improve the financial stability of the National Flood Insurance Program which was running in a deficit after multiple major storm events, it had the unintended financial consequence of excessively high flood insurance rates for many properties. The Homeowners Flood Insurance Affordability Act provides for temporary relief for some properties as outlined in the following general summary prepared by the Yarmouth Planning Department. Although it provides for slower rate increases, the intent is to move toward full actuarial flood insurance rates for properties located in Special Flood Hazard Areas (SFHAs). All property owners in SFHAs, or moving into SFHAs based on the new Flood Insurance Rate Maps which are effective on July 16, 2014, are encouraged to contact their insurance providers for how this new law specifically relates to their property. Highlights of the Homeowners Flood Insurance Affordability Act: Repeals the property sale/new policy trigger that required buyers to immediately pay the full-risk premium rate at the time of purchase and allows for the transfer of existing policies at current rates to new owners. Retains grandfathering of rates for property owners mapped into higher risk area when properties were originally built to code. Sets an average increase limit of 15% per rate classification (reduced from 20% in Biggert Waters). Limits future annual increases on individual policies for Pre-FIRM primary homes to no more than 18%, but not less than 5%, for primary homes built before May 2, 1977 (Yarmouth s Pre-FIRM date). Retains 25% annual increases on individual policies for Pre-FIRM second homes or commercial properties, and for repetitive loss properties until full risk rate reached per Biggert-Waters (no change). Limits future annual increases on individual policies for Post-FIRM primary home, second home and commercial properties to 18% on properties built after May 2, 1977 (Post-FIRM properties). Sets affordability goal to strive to minimize the number of policies with annual premiums that exceed one percent of the total coverage provided by the policy (i.e. $2,500 annual premium for a $250,000 policy) and requires FEMA to report on all policies where the premiums exceed 1% of the total coverage. Develops a rate change implementation process requiring new rate tables in 8 months with an addition 6-8 months to implement the changes required by the rate tables. Refunds premiums paid in excess of the new rate tables (once they are developed). Increases payment options by allowing for flood insurance to be paid annually, monthly or escrowed. Page 1 of 2

38 HR 3370 Homeowner Flood Insurance Affordability Act - Fact Sheet Applies an annual surcharge to every policy of $25 for primary residences and $250 for commercial or non-primary residences, until full-risk rates are reached. Requires completion of the affordability study required under Biggert Waters within 18 months and increases the study funding to $2.5 million, up from $750,000. Allows the option of a larger deductible up to $10,000 for homes (up from present maximum of $5,000). Clarifies that properties newly mapped into a flood hazard zone for the first time will be rated as a Preferred Risk Policy for the first year, and upon renewal will be calculated using an annual increase based on the type of property (primary residence, second home, commercial, pre or post FIRM) until full risk rates are reached. Retains the exclusion of flood-proofed residential basements from rate calculations. Allows rate calculations to reflect flood mitigation measures undertaken on a property, such as floodproofing. Allows for the exclusion of detached structures from mandatory flood insurance purchase requirements. Although NFIP will no longer require coverage, mortgage lenders may. Requires FEMA to establish guidelines for alternate mitigation methods, other than elevation, for buildings that cannot be elevated due to their structural characteristics, which can be taken into account in the calculation of risk premium rates. Raises the threshold from 30% to 50% of structure value before home improvements trigger a rate increase. Improves mapping accuracy by requiring FEMA to certify its mapping process is technologically advanced and to notify and justify to communities that the mapping model it plans to use to create the community s new flood map are appropriate. Funds reimbursement to property owners or communities for successful flood map appeals. Establishes a Flood Insurance Advocate to educate and assist property owners with flood mapping process, appeals and flood insurance rates and options; and improve outreach and coordination with local officials. Provides for a study to assess options, methods, and strategies for making available voluntary communitybased flood insurance policies through the NFIP. Requires FEMA to clearly communicate full flood risk determinations to policyholders even if their premium rates are less than full risk, to inform policyholders as to their true flood risk. Requires reporting on the impacts of rate increases on small businesses, non-profit entities, houses of worship, and low income homes (value 25% of the area median home value). If FEMA determines there is an effect on affordability for these properties, it must provide recommendations to Congress within 3 months after making the determination. Requires rate increases from this Act to be made public at least 6 months prior to implementation. Authorizes FEMA to buy reinsurance from the private market. Page 2 of 2

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