5/25/2017. Substantial Damage Determinations. The Tax Day Flood. The National Flood Insurance Program (NFIP)

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1 Substantial Damage Determinations Tax Day Flood Rapid Data Collection and Delivery in Harris County, TX Presented by: Charles Cook, FM&I Branch Chief, FEMA R6 Seth Bradley, Dewberry The Tax Day Flood 2 The National Flood Insurance Program (NFIP) 3 1

2 Pre-FIRM/Grandfathered Structures BFE 10' NGVD LOWEST FLOOR 5' NGVD Repetitive Loss Property s are Problematic NFIP Repetitive Loss At least two paid flood losses of more than $1,000 each in any 10-year period Costs of repeatedly repairing flood-damages in the same location continue to rise. Lives are threatened and disrupted, belongings are ruined and hard earned money is lost. Owner of RL properties are often locked in a cycle of damage and repair. 5 Repetitive Loss Situation for NFIP RLP - NFIP Policies RLP vs Total NFIP Claims 1% 28% 6 2

3 Put into Perspective NFIP Repetitive Loss Since 1978 Texas RL Claims have cost the NFIP $2.5 billion dollars. Nationally, Since ,415 total RLP s have been documented with 599,012 claims costing the NFIP $16.8 billion in nominal dollars (as of 02/28/17). 7 Texas Repetitive Loss Totals Texas has 24,703 RL properties, this is 13% of the nations total as of 02/28/2017 Texas 24,703 13% Nation 165,683 87% 8 NFIP Debt Continues to Climb 9 3

4 NFIP Reauthorization Congress must reauthorize the NFIP by September 30, 2017 to allow FEMA to continue selling and renewing policies In 2017 and beyond, Congress will face significant policy questions about the tradeoffs involving insurance affordability, allocating risk, achieving a sound financial framework, and greater private sector participation in flood insurance markets. The NFIP is currently $23 billion in debt to the U.S. Treasury because the program is not generating sufficient revenues to cover catastrophic losses like the billions of dollars paid on claims from the 2005 and 2012 hurricanes. 10 Substantial Damage Damage of any origin sustained by a structure whereby the cost of restoring the structure to its before-damaged condition would equal or exceed 50 percent of the market value of the structure before the damage occurred. Cost of Restoration Market Value before Damage 11 Substantial Damage Communities must adopt a Substantial Damage ordinance to be in compliance with the NFIP Some communities may adopt stricter definitions to boost CRS credits Communities must enforce SD elevation/demolition requirements in order to bring the structure into compliance 12 4

5 Substantial Damage Estimator (SDE) Tool 13 SDE Purpose To prepare data and calculate Substantial Damage determinations in a formal, organized manner To help determine substantial damage in accordance with the requirements of the NFIP SDE Purpose To assist State and local officials in using on-site, rapid visual inspections to estimate damage costs and building values for residential and nonresidential structures To allow local officials with limited appraisal or construction backgrounds to develop reasonable estimates of building values and damages

6 Calculating Percent Damaged COST OF REPAIRS BUILDING VALUE PERCENT DAMAGED Based on standard FEMA definition, if percent damage is equal to or greater than 50%, then structure is considered substantially damaged. 16 NFIP Regulatory Requirements Options for determining the cost of repairs: Computed damages from SDE tool Contractor s cost estimate Community cost estimate Options for determining building value: Computed Actual Cash Value (ACV) from SDE tool Professional Market Appraisal Adjusted Tax Assessed Value 17 Tax Day Flood st Round 7 pm to 1 am 11 pm 2 nd Round 1 am to 8 am 18 3 am 6

7 Tax Day Flood Pre-Field Deployment Identify available data sources NFHL Harrison County Appraisal District (HCAD) Identify Area of Interest FEMA Community Officials Use GIS to prep property records for import into SDE tool 20 Overview Map 21 7

8 Field Deployment Prepopulate data Allows inspection teams to focus on collecting field data Minimizes data entry errors Constant communication between management and field teams to ensure consistent data collection Collecting DATA for the community, NOT making final determinations 22 Structure/Damage Info 23 Cost Info 24 8

9 Element Percentages 25 Output Summary 26 Quality Assurance & Control Compare all daily assessments to ensure consistency between teams Checks done by depth of flooding above first floor Check by street/neighborhood Spot check assessments in field 27 9

10 Deliverables Summary Assessments from May 11 to May 23 2,600 properties 4 delivery folders ~ 1 hour to import each folder into SDE Non Residential, 435, 17% Delivery Assessment Count Residential, 2165, 83% 28 Community Receives Deliverables Deliverables are strictly DATA that will be used by the community to make Substantial Damage determinations Determinations are finalized by community using accepted FEMA methods Determination letters are issued to property owners 29 Community Considerations 1. Consistent Application of Community-Wide Approach 2. Prepare for Appeals of Determinations 3. Establish Process to Review Appeals 4. Adjustments to SDE Determinations Based on Appeals 5. Re-Issue Determination Letters 6. Maintain Records of Appeals and Determination Adjustments 30 10

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