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Cape Coral to address FEMA’s decision to yank its 25% discount for flood insurance


Trees uprooted by Hurricane Ian damaged sidewalks along Southeast 47th Terrace and Cape Coral Parkway. FILE/VALARIE HARRING

The city of Cape Coral will address on Wednesday FEMA’s decision to yank its 25% discount for flood insurance from much of Lee County.

Property owners in incorporated areas of the county, as well as Cape Coral, Fort Myers Beach, Bonita Springs and Estero holding a National Flood Insurance Program policy will collectively pay millions more to protect their homes and businesses as a result of a Federal Emergency Management Agency rating change set to go into effect Oct. 1.

The cities of Sanibel and Fort Myers are not affected.

Cape Coral Mayor John Gunter will speak on FEMA’s Community Rating System rating decision at a noon press conference that the city will stream live on CCTV.

About 699,000 residents live in areas that will be impacted by the FEMA decision, county officials said.

“Without any prior notice, FEMA verbally informed Lee County and some of its municipalities late Thursday that it was altering discounts on National Flood Insurance Program (NFIP) premiums that allow residents to save up to 25%, delivering a blow to the community as it continues to recover from the devastation of Hurricane Ian,” Lee County officials said in a release issued late Friday.

“FEMA has provided no written notification or documentation outlining any specific details that would lead to this sudden rating change, which would take effect Oct. 1. The county’s diligent work in FEMA’s Community Rating System … has resulted in saving taxpayers a collective $14 million to $17 million annually in unincorporated Lee County alone. When considering the cities within Lee County, the savings is in the tens of millions of dollars,” Lee County stated.

“Extensive efforts – particularly after Hurricane Ian – have been made to demonstrate to the federal government that the county and its city partners go above and beyond what’s required to meet and exceed FEMA and NFIP standards,” officials said.

Local officials say residents will bear the direct — and negative — impact.

“For the federal government to have made this decision without any prior discussions seems punitive,” Lee Board of County Commission Chairman Mike Greenwell said in a prepared statement. “Ian was the third costliest hurricane to hit the United States, and many of our residents are still reeling financially from its impacts.”

The Lee Board of County Commissioners on Tuesday discussed the county’s response to the FEMA verbal notification late last week that it would eliminate the Community Rating System current discounts on National Flood Insurance Program premiums.

The board voted to grant “any and all tools needed by County staff to investigate and work to address the FEMA determination.”

FEMA response

According to FEMA, officials sent a letter to the county in December in which permit documentation was sought for 590 sites following a two-week tour of special flood hazard areas in October and November.

The documents requested by FEMA in December were due in January.

“This will demonstrate your community’s floodplain management program meets minimum National Flood Insurance Program requirements to ensure your community continues to be eligible for Community Rating System (CRS) participation,” wrote Jacky S. Bell, division director for FEMA’s Mitigation Division.

Bell warned of a downgrade in the county’s community rating system.

FEMA spokesperson Lea Crager said the agency would be working with municipalities and the county on future discounts.

“We are committed to helping these communities take appropriate remediation actions to participate in the Community Rating System again and work towards future policy discounts,” Crager said.

According to FEMA officials, the community rating system is based on whether municipalities adhere to local regulations to ensure structures are rebuilt to withstand future storms.

Since Hurricane Ian hit Lee County in 2022, FEMA made numerous site visits to several communities to ensure locally adopted floodplain management ordinances were being enforced.

“This retrograde is due to the large amount of unpermitted work, lack of documentation, and failure to properly monitor activity in special flood hazard areas, including substantial damage compliance,” FEMA said.

Local impact

In the Friday statement from Lee County, officials cited the discount as having “resulted in saving taxpayers a collective $14 million to $17 million annually in unincorporated Lee County alone.”

Fort Myers Beach, most of its homes and businesses destroyed when Hurricane Ian overwashed the island on Sept. 28, 2022, said its residents will again, be hard hit.

“Without warning or communication, a rash decision like this will significantly strain our residents struggling to recover from Hurricane Ian,” said Town of Fort Myers Beach Mayor Dan Allers in a prepared statement. “The Town of Fort Myers Beach has always gone above and beyond to maintain our CRS rating and request FEMA suspend their decision.”

City of Cape Coral officials said Friday they had yet to receive any notice or documentation outlining specific details from FEMA.

“I am deeply troubled by the Federal government’s unilateral decision regarding altering Cape Coral’s flood insurance rating,” Mayor John Gunter said in a prepared statement. “The Federal government must provide the support our community desperately needs to ensure they retain the discounts they currently receive on their national flood insurance premiums. The timing of this decision after our community suffered a devastating Category 5 hurricane is just wrong. Make no mistake — FEMA is the villain in this nightmare.”

The city “has diligently responded to all informational requests from FEMA since Hurricane Ian. Despite repeated attempts to obtain written documentation supporting FEMA’s allegations, the city has not received any substantiating evidence,” the city wrote in its announcement of Wednesday’s press conference.

“City staff have consistently fulfilled FEMA’s requests for information within specified deadlines, providing all requested documentation. However, the city has not received any communication from FEMA indicating that the provided documentation would result in a retrograding of the CRS rating.”

The city has begun its efforts to get FEMA’s determination suspended as it jointly works with Lee County, other affected cities and Congressman Byron Donalds’ office, officials said.

“I am partnering with County Administration and our City Council in calling for FEMA to immediately suspend its decision until meaningful discussions can occur, as we have worked hard over many years to attain the rating currently held,” Cape Coral City Manager Michael Ilczyszyn said in a prepared statement. “It’s crucial that the County and its municipalities have opportunities to address FEMA’s concerns. FEMA’s decision was made without providing documented evidence of the alleged noncompliance. Despite the often upsetting and challenging work performed by City staff to enforce the substantial improvement/substantial damage (50% Rule) in the aftermath of Hurricane Ian, this notification doubles down the financial impacts our residents and businesses already suffered.”

Lee County Manager Dave Harner said county efforts were under way.

“County Administration and our Board want FEMA to suspend its decision until meaningful discussion can occur, so the county and its municipal partners have opportunities to address FEMA’s concerns,” Harner said. “This is critical to mitigate the potential impact to our residents. There must be an appeal process.”

Attempts to reach FEMA’s press office were unsuccessful.

Background and how the discount program works

“Lee County for 17 years has had a National Flood Insurance Program (NFIP) rating low enough that flood insurance policy holders in unincorporated Lee County had a 25% discount on standard federal flood insurance policies – a discount collectively valued at $14 million to $17 million annually,” county officials said.

Every three years, NFIP conducts a “field visit” to audit the county’s ongoing floodplain management activities and flood-mapping records. After the audit, Lee County has received notification that the county retains its Class 5 rating to earn the 25% discount.

This year, that did not happen — neither the county, nor the affected municipalities, received a discount, awarded in 5% increased based on rankings from Class 10 (low) to Class 1 (high).

Credits are issued for actions taken, including having written construction certificate management procedures for all new and substantially improved/substantially damaged buildings; higher regulatory standards; stormwater management; drainage system management; various types of community outreach and how flood warning and management are handled.

Credit also is granted for preservation of Special Flood Hazard Areas as open space, protecting open space land with deed restrictions and preserving open space land in a natural state as well as for regulations and incentives that minimize development in the SFHA and protect natural shorelines and channels.

Lee County joined the NFIP program in 1984.

There are 51,103 NFIP policy holders in unincorporated Lee County with collective coverage of more than $13 billion.

Lee County joined the CRS program in October 1991 and achieved a Class 5 rating in 2007.

A Class 5 rating allows for a 25% flood insurance discount.

The value of this discount in unincorporated Lee County is $14 million to $17 million annually.

All jurisdictions in Lee County are members of the NFIP and all participate in the CRS program.

Editor’s note: This story has been updated to reflect an update from the city of Cape Coral that City Manager Michael Ilczyszyn will not be a part of today’s press conference at noon.