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Cape counters rating eliminating flood insurance discounts

By MEGHAN BRADBURY - | Apr 4, 2024


FEMA has placed a 30-day pause on its decision to eliminate the 25% discount on National Flood Insurance Program policies currently awarded in unincorporated Lee County and four of its municipalities, including Cape Coral and Fort Myers Beach.

The “retrograding” of FEMA’s Community Rating System class from a five to a 10, thereby removing benefits residents receive for the National Flood Insurance Program policies, will be revisited as the federal agency works with the affected local governments, FEMA announced today.

“We are committed to helping communities take appropriate remediation actions to participate in the Community Rating System and remain in good standing with the National Flood Insurance Program,” FEMA said in a release. Each of the five communities will have an additional 30 days to gather requested documentation to help retain their standing in the Community Rating System.”


Media Toolkit – FEMA Insurance Rating

The city of Cape Coral has vowed to “fight the fight” and change a FEMA decision that would eliminate a 25% discount to property owners with a federal flood insurance policy.

The Federal Emergency Management Agency has “retrograded” the Community Rating System class from a five to a 10, thereby removing benefits the Cape Coral residents receive for the National Flood Insurance Program policies.

The city was notified via a phone call form FEMA last Thursday.

Mayor John Gunter said the post Hurricane Ian permitting for 54 homes is in question, as FEMA has determined they were not compliant with its regulations.

There are 100,056 residential dwelling units in the city, Gunter said.

“That is a very important number to soak in. There are 54 questionable houses they are trying to do a blanket approach on,” he said. “The magnitude. We will definitely dive into those 54 units to see exactly what is going on with them.”

City Manager Michael Ilczyszyn said during Wednesday’s Council meeting that FEMA alleges that there was inadequate substantial damage review, evidence of unpermitted work and non-responsiveness to information requests from the city.

“Since last Thursday a lot has evolved in and around the National Flood Insurance Program — the Community Rating System that we participate in to avail insurance discounts on flood insurance for residents and business owners,” he said. “I know first-hand what our community went through from the government side and business and homeowners’ side. We did not fail them. As of today, we do not have any documentation from FEMA on exactly what caused them to get to their determination to consider removing our rating of a five in CSI.”

Ilczyszyn said the rating system starts at 10 at the bottom. For all the requested activities a governmental agency does, they receive a 5% discount on the insurance policy holder premium. Discounts are awarded for such things as providing maps, education awareness programs and cleaning and maintaining stormwater systems.

“You are able to ‘buy down’ your community rating score. We were at a level 5,” he said of the 25% discount that they had earned.

Although FEMA retrograded the city of Cape Coral to a 10, it remains in the program.

During the conference call with FEMA, Ilczyszyn said the city asked for documentation that got them to that decision making, adding none was provided.

“We were advised that we would be getting a formal letter in April and that letter should have more information,” he said.

The new rating is effective as of Oct. 1.

Ilczyszyn took Council through a more than hour presentation that began when Hurricane Ian made landfall here on Sept. 28, 2022, through present day. The Hurricane Ian recovery timeline included a detailed explanation of all the efforts put in by the city.

The city requested eight to 12 inspectors and certified floodplain managers in January 2023, a request that has yet to be filled.

On Feb. 18, 2023, FEMA provided the city with a list of 583 damaged properties, resulting in numerous mass mailings from the city to property owners along the Caloosahatchee River.

In April 2023, two rounds of letters were also mailed out to 419 condo unit owners near Atlantic Court and Victoria Drive.

Ilczyszyn said the mailing told the property owners in the affected area — a special flood hazard area — that they are subject to substantial damage requirement if their property was damaged beyond 50%.

“When a property in a special flood hazard area is damaged by any cause, we must determine whether the amount of damage meets the National Flood Insurance Program definition of substantial damage. This number is determined by comparing the estimated cost to repair the building to its pre-damaged condition to the estimated market value of the building before the damage occurred,” the letter stated. Ilczyszyn said the letter also stated that failing to report floodplain damage requirements could jeopardize their participation in the program.

On Dec. 6, 2023, the city received a request for information from FEMA regarding 238 properties “alleged to having unpermitted work by FEMA teams during the floodplain tours that were conducted in October and November 2023.”

“We have to provide them information in order to demonstrate our community’s commitment to enforcing substantial improvement aspect of the National Flood Insurance Program,” he said.

The following month, targeted mail letters were sent to 54 property owners who were identified by FEMA of having alleged unpermitted work done.

Ilczyszyn said of the 238 alleged properties with unpermitted work, 29 were found to have been new construction with permits, two were in the process of demolition and five were not subject to substantial improvements/substantial damage (SI/SD) due to being compliant with floodplain regulations. He said another 139 were found to not be SI/SD with permit numbers and damage calculations.

In addition, he said four properties were found to potentially be SI/SD, which put permit holds on those properties. It was later determined that two had independent appraisals to bring the structure damage under 50%, which removed them from the substantial damage determination.

Ilczyszyn said 59 properties or structures did not have a permit history since Hurricane Ian, which was later reduced by five due to building activity. The remaining 54 properties “are deemed by FEMA to have unpermitted work,” which he said they believe is to justify their actions last week.

“That is where we stand today. The numerous mass mailings and inspections put forward. All the requests they sent to us, we responded. We have done everything that we think is available to us to do,” he said.

Ilczyszyn said he and his entire staff, worked tirelessly to enforce the substantial damage determinations, feel frustration. They have put people in tears delivering the news to homeowners who have a home over 50%.

“We have not been silent about any of it,” Ilczyszyn said.

Gunter who has been on many of the phone calls with FEMA, said he reached out to Congressman Bryon Donalds, State Rep. Mike Giallombardo and U.S. senators Rick Scott and Marco Rubio.

“Donalds pledged that he will fight along with Scott, Rubio and (Greg) Steube to do whatever it takes to make sure there is a due process. We are going to diligently work through this. I will work with elected officials at state and federal levels. This could be another catastrophic event. This could cause other families to not live in their homes because of the cost of premiums,” he said, adding that he will continue to work with FEMA and all of their representatives to make sure that does not happen.

Gunter said that Donalds told him he will utilize any available means that they have to fight the fight, which is extremely important for the city and Lee County as a whole.

“They understand and don’t agree with what has happened,” he said.

Ilczyszyn said city staff fully intends to continue to do all the things they do on an annual, weekly, and monthly timeline to earn the level 5 rating.

Council gave its approval for Ilczyszyn to begin writing letters and statements requesting meetings with FEMA and the Florida Department of Emergency Management to show they are diligent in trying to resolve the issue. Some of the council gave pause in including other Lee County cities in the letter.

“I don’t mind five coming together and going forward as one. With the amount of time and effort staff have put in, I don’t think that is the only letter we send. I think we need to send a letter as Cape Coral. Other municipalities want our help, I don’t mind signing on the line with them. I want the efforts made by our city to stand out first. We can cosign with others to have more strength,” Councilmember Robert Welsh said.

Gunter agreed that it should be a two-pronged approach.

City Attorney Aleksandr Boksner also asked for approval to take legal action if need be. He said the concern is they may have to move quickly in terms of initiating any type of legal challenge regarding FEMA’s actions.