Monday, March 28, 2011

REP-Radiological Emergency Preparedness-Can you find this program in FEMA?

If you think the new FEMA organizational charts make sense try and locate Radiological Emergency Preparedness (REP) as an example.

Congress has three times mandated an Earthquake Office in FEMA and perhaps that is why FEMA no long leads the National Earthquake Hazards Reduction Program (NEHERP) for which leadership transferred in 2004 to NIST!  But hey NIST is in what Department? Hint! The Department about to be broken up President Obama's first reorganization project.

And looking like any DHS programs for which oversight is given by the Science Committees of Congress might well become part of a new Science based department that also deals with climate and natural resources.

The Obama Administration first cut will concern making sure that trade and sensitive technology transfers to other nation-states and their corporations is finally policed.

Remember I long advocated that FEMA be largely a science and engineering and research organization and let others do grants and funding of STATES and their local governments for recovery. This suggestion picking up steam as the recovery mission looking good to be out of FEMA this first term of the Obama Administration.

Footnote 19 of a 2005 CRS report stated specifically that FEMA had no recovery legal authority. I disagree but it is pretty thin gruel. When disaster ops transferred to HUD from OEP in 1973 by Richard M. Nixon in Reorganization Plan No. 1 of 1973 the focus was on housing and community development. Looking now like that might happen but in a new form--economic aid to States and their local government taken out of FEMA and HUD and EDA at the Department of Commerce. In short DOC of which 2/3 of staff and funding is NOAA is in the cross-hairs of Presidential Reorganization.

Quick Take on Current Events

My periodic take on current events will no longer appear on this blog but is being transferred to

Sorry for any inconvenience!

Sunday, March 27, 2011

Intergovernmental Affairs in DHS and FEMA

In the "new" FEMA [that means the FEMA post March 31,2007 when PKEMA 2006 became fully effective] there once was an Intergovernmental Affairs Office! That office was moved to a direct report to the Secretary DHS by a DHS appropriations statute. The importance of that office to the overall success of FEMA and DHS is worthy of comment, study and Congressional oversight. Juliette Kayeem has returned to Harvard. I have posted on her on this blog before. Now a defeated Democratic Congresswoman has taken over the position. I have now located a position paper issued by the Project on National Security Reform that articulates the importance of that job and office far better than I could so please go to the following:

White Paper: Proposed DHS Office of Intergovernmental Coordination

It would be of interest to know what Juliette Kayeem thought of this paper issued prior to her joining FEMA and if she ever saw it before taking that job or afterwards.

Friday, March 25, 2011


FEMA Adminstrator W. Craig Fugate is scheduled to give testimony on Friday next of NFIP reform.  His prefiled testimony from March 11th was postponed by the Japanese earthquake and tsuanami.

I have taken the liberty of rewriting that prefiled testimony and wondering what readers of this blog think about my rewrite? If you like it write to your Congressional members and if not ignored it.  

Here it is:

VLG Version

I. Introduction
Good afternoon Chairwoman Biggert, Ranking Member Gutierrez, and distinguished Members of the Subcommittee. My name is Craig Fugate, and I am the Administrator of the Federal Emergency Management Agency (FEMA). It is an honor to appear before you today on behalf of FEMA to discuss the National Flood Insurance Program (NFIP).

The National Flood Insurance Program serves as the foundation for national efforts to reduce losses of property from flood disasters, reduce free disaster relief expenditures, and has been estimated to save the nation $1.6 billion annually in avoided flood losses. By encouraging and supporting mitigation efforts, the NFIP leads our nation in reducing the impact of flood disasters that are 80% of all disasters declared by the President. In short, the NFIP saves money.[note that no study ever indicated the NFIP saved lives.] While the NFIP has experienced significant successes since it was created 42 years ago, there are a number of challenges currently facing the program. The most significant challenge is making the program fiscally supportable.. The NFIP must continue to offer available and affordable insurance in the absence of a private market that will properly identify those at risk and provide them adequate coverage, while reducing the need for taxpayer-financed disaster assistance. Those who occupy the flood plain should bear the full costs of that occupancy including environmental costs which should be fully documented and understood.

In my testimony today, I will provide a brief history and overview of the NFIP and discuss critical changes FEMA or Congress have made to the program over the years. I also plan to discuss the recent efforts of FEMA’s NFIP Reform Working Group, which is developing  policy recommendations for comprehensive NFIP reform for the Secretary of Homeland Security. It is important to note, however, that the Administration has not taken a position on the preferred course of action for NFIP reform and that these are currently draft proposals from the NFIP Reform Working Group. Congress has been a valuable partner in all of our NFIP efforts, and we appreciate your attention to this important matter.

One major recent decision on the NFIP was made in full consultation with Congress and that is to credit levees that may never be built for lower rates for policy coverage. This decision may be challenged by Environmental groups in the federal courts and does not promote fiscal soundness.

II. Overview of the National Flood Insurance Program
The NFIP is designed to insure against, as well as minimize or mitigate, the short and long-term risks to property from the effects of flooding, and to reduce the escalating cost of flooding to taxpayers. Flooding can occur along river banks, or result from weather-related coastal hazards, such as cyclonic storms, related storm surge, tsunamis,, flood related erosion or mudslides. More than half of the U.S. population lives in coastal watershed counties or floodplain areas. Flooding was the most costly and prevalent natural hazard in the United States in the last century.

History of the NFIP
Major flood disasters in the United States in the 1920s and 1930s led to federal involvement in the effort to protect lives and property from flooding. Even though Congress enacted the 1936 Flood Control Act to reduce the overall risk of flooding, there were still significant at-risk communities that lacked insurance. In the 1950s, it became evident that private insurance companies could not provide flood insurance at an affordable rate. At that time, the only relief available to flood survivors was disaster assistance through the Federal Disaster Assistance Program. In 1968, Congress established the NFIP to make affordable flood insurance available to the general public, and to protect communities from potential damage through floodplain management, which is the implementation of corrective and preventive measures to reduce flood damage.

When Tropical Storm Agnes struck the Nlorth Eastern US and in particular the Lycoming and the Cheaspeake Bay tributaries in June 1972, many communities were either unaware of the serious flood risk they faced or were unwilling to take the necessary measures to protect residents of the floodplain. Very few of the communities affected by the storm had applied for participation in the NFIP. Even in participating communities, most owners of flood-prone property opted not to purchase flood insurance; instead, they chose to rely on federal disaster assistance to finance their recovery. As a result, Congress enacted the Flood Disaster Protection Act of 1973 to establish a mandatory flood insurance purchase requirement for structures located in identified Special Flood Hazard Areas (SFHAs) that have a federally backed insurance or mortgages.
The next year, Congress enacted the Disaster Relief Act of 1974, Public Law 93-288, reflecting passage of the
Flood Disaster Protection Act of 1974. that contained several preparedness and mitigation provisions to reduce disaster-related losses. The Flood Mitigation Assistance program (FMA)  was created as part of the National Flood Insurance Reform Act of 1994 to reduce NFIP claims. This law established a FMA Grant Program to assist states and communities to develop mitigation plans and implement measures to reduce future flood damages. It also authorized the ICC coverage under the NFIP. This Increased Cost of Construction provision was a rider so those rebuilding in place post flood could mitigate future losses.

The federal government is underwriter of the NFIP, meaning that it determines what risks will be covered and the price of the premium to be paid for assumption of those risks. The private WYO companies that sell and service NFIP policies do not underwrite the program. And with the inherent risk that it assumes, the NFIP requires mitigation actions designed to break the cycle of repeated disaster damage and reconstruction. To mitigate against repeated losses and damage to properties associated with flooding, Congress established two programs in the Flood Insurance Reform Act of 2004 – the Severe Repetitive Loss program and the Repetitive Flood Claims program.

Today, more than 21,000 communities in 56 states and territories participate in the NFIP, resulting in more than 5.6 million NFIP policies providing over $1.2 trillion in coverage. However, only 8,000 communities have detailed Flood Insurance Risk Maps and many do not have designated floodways. Coastal communities are mapped with different mapping models for riverine/inland communities. Some communities do have both hazards.  To directly respond to the flood-risk reduction needs of communities, FEMA has produced digital flood hazard data for more than 88 percent of the nation’s population. This effort was largely based on improved contour interval data including that derived from LIDAR. The NFIP floodplain management standards in each participating community if correctly adopted and enforced can help to reduce flood losses in newly constructed buildings by more than 80 percent.

Prior to 2003, more than 70 percent of FEMA’s flood maps were at least ten years old. These maps were developed using what is now outdated technology, and more importantly, many maps no longer accurately reflected current flood hazards. Over the last eight years, Congress has provided over $1 billion to update and digitize our nation’s flood maps so we better understand the risks that our nation faces from flooding. Since the start of FY 2009, we have been implementing the Risk Mapping, Assessment, and Planning (Risk MAP) program, which not only addresses gaps in flood hazard data, but uses that updated data to form a solid foundation for risk assessment and floodplain management, and to provide state, local, and tribal governments with information needed to mitigate flood-related risks. Risk MAP is introducing new products and services extending beyond the traditional digital flood maps produced in Flood Map Modernization, including visual illustration of flood risk, analysis of the probability of flooding, economic consequences of flooding, and greater public engagement tools. FEMA is increasing its work with officials to help use flood risk data and tools to effectively communicate risk to citizens, and enable communities to enhance their mitigation plans.
This past fiscal year, the NFIP reduced potential flood losses by an estimated $1.6 billion and increased flood insurance policies by 47,992. FEMA also initiated 600 Risk MAP projects affecting 3,800 communities and addressed their highest priority engineering data needs, including coastal and levee areas.

As the Agency moves forward with our mapping program, we remain mindful of the challenges that flood mitigation efforts can pose for many families and communities. To that end, FEMA has used the flexibility it has under the NFIP to implement several important reforms that recognize these challenges. Two of the most notable of these reforms are the creation of Preferred Risk Policies and Scientific Resolution Panels.

Scientific Resolution Panels
Flood hazards are constantly changing. For that reason, FEMA regularly updates Flood Insurance Rate Maps (FIRMs) to reflect those changes. When changes to the FIRMs are met with conflicting technical and scientific data, an independent third-party review of the information may be used to ensure the FIRMs are updated correctly.

FEMA’s new Scientific Resolution Panel (SRP) process, established in November 2010, serves as an independent third party in order to work with communities to ensure the flood hazard data depicted on FIRMs is built collaboratively using the best science available. A community, tribe or political entity that has the authority to adopt and enforce floodplain ordinances for its jurisdiction can request that FEMA use the SRP when conflicting data are presented.

The SRP is composed of technical experts in engineering and scientific fields that relate to the creation of Flood Hazard Maps and Flood Insurance Studies throughout the United States. Based on the scientific and technical data submitted by the community and FEMA, the SRP renders a written recommendation that FEMA either deny the community’s data or incorporate it in part or in whole into the FIRM. For an appeal or protest to be incorporated, the community’s data must satisfy the NFIP standards for flood hazard mapping. The SRP process is reflective of the value FEMA places on the importance of community collaboration to create accurate and credible flood maps.

Preferred Risk Policy
In 2003, with the support of Congress, FEMA began to implement several initiatives to update our flood maps, especially in those areas that are subject to a high risk of flooding. These initiatives include the Flood Map Modernization program (called MapMod), risk mapping, assessment and planning (by way of Risk MAP), and the Provisionally Accredited Levee (PAL) program.
These flood map updating efforts have yielded maps that more accurately calculate the flood risk. As a result of these efforts, many buildings that were previously considered low-risk have been designated as Special Flood Hazard Areas (SFHAs). The flood risk is real and many property owners now find themselves in high-risk areas, and subject to a flood insurance purchase requirement. Notably, approximately the same number of structures have been removed from the SFHAs as have been added as a result of FEMA’s updated mapping program.

While these map changes provide a more accurate reflection of a community’s flood risk and will minimize the long-term risks and costs to people and property from the effects of flooding, FEMA recognizes the financial hardship that SFHA designation may place on individuals in newly identified SFHAs. Consequently, last year, FEMA announced a policy that went into effect on January 1, 2011, extending eligibility of low-cost preferred risk policies (PRPs) for individuals newly mapped into an SFHA.

Pursuant to the new PRP eligibility extension, owners of buildings newly mapped into an SFHA on or after October 1, 2008, and before January 1, 2011, are eligible to receive a reduced premium for up to two policy years beginning January 1, 2011 through December 31, 2012. Owners of buildings that will be added to an SFHA because of a map revision on or after January 1, 2011, are eligible to receive up to two policy years of reduced premiums after a map revision.
Eligibility extension of PRPs should help to ease the financial burden on affected property owners in this difficult economic environment. With this change, property owners should also have adequate time to understand and plan for the financial implications of the newly communicated flood risk and the mandatory purchase requirement. Finally, this two-year extension provides more time for the affected communities to upgrade or mitigate flood control structures to meet FEMA standards and reduce the flood risk. This reduces the financial impact on residents and businesses in the long term while making their communities safer and stronger.

The NFIP has successfully reduced flood risk across the United States since its inception in 1968. Evidence of its success can be seen in the more than 21,000 participating communities, more than 5.6 million flood insurance policy holders, a modernized flood hazard data inventory, and a suite of incentives driving risk reduction across the nation. Clearly, the program has improved the resistance of existing and new construction to flooding through building standards, and has helped individuals and businesses recover more quickly from flooding through the insurance process. However, after 42 years of program operation, concerns about the program remain.

III. NFIP Reform Working Group
After more than a decade of seeking input, identifying issues, and undergoing studies, FEMA believes that the time has come to undertake a critical review of the NFIP. As Members of this Subcommittee and others in Congress consider NFIP reform, the Department of Homeland Security (DHS) and the Administration is prepared to assist those efforts as appropriate.
In 2009, I asked staff to begin a comprehensive review of the NFIP. This review has involved three important phases designed to elicit policy recommendations and engage a broad range of stakeholders, including floodplain managers, emergency managers, lenders, the insurance industry, the environmental community, federal agencies and private non-profit organizations. With so many diverse interests, stakeholder engagement has been a critical foundation of the review process.
Phase I of the NFIP review effort began in November 2009 with a listening session designed to capture and analyze stakeholder concerns and recommendations. The session included more than 200 participants and resulted in nearly 1,500 comments and recommendations from stakeholders.
Phase II began in March 2010, when FEMA formally established the NFIP Reform Working Group, tasked with identifying the guiding principles and criteria for potential proposals to reform the NFIP. This internal Working Group is comprised of a cross-section of FEMA’s NFIP staff. As a means to conduct the analysis, FEMA chose a participatory policy analysis framework to guide the NFIP review effort. This Phase II effort incorporated the recommendations and themes resulting from the NFIP listening session and web comments. The NFIP Reform Working Group concluded this phase in May 2010 and released a final report entitled “NFIP Reform: Phase II Report.” The results of both Phases I and II are now available on FEMA’s website.

As part of Phase III, which is ongoing, the NFIP Reform Working Group is reviewing a comprehensive body of work offering a critique of the NFIP, including reports by the Government Accountability Office, the Congressional Research Service and the DHS Office of the Inspector General; testimony before Congressional committees; proceedings of various policy meetings; policy papers published by industry, advocacy and professional associations; and review and analysis of scholarly works. We have been reaching out and coordinating our reform efforts with other federal agencies. One example is through The Federal Interagency Floodplain Management Task Force which is comprised of twelve federal agencies and whose purpose is to promote the health, safety, and welfare of the public by encouraging programs and policies that reduce flood losses and protect the natural environment.
Based on this research and stakeholder input, the NFIP Reform Working Group drafted a number of policy options for deliberation and public comment. In December 2010, FEMA held two public meetings and initiated a public comment period in order to solicit input from stakeholders on the policy options. Public input from these efforts served as a source for the refinement of the policy alternatives. Over 150 stakeholders attended the public meetings and we received 84 additional comments on specific policy options.

The NFIP Reform Working Group has identified several important issues that Congress may wish to address in the context of reform. They include, but are not limited to, actuarial soundness and program solvency, cost and affordability of flood insurance, mandatory purchase requirements, accuracy of mapping, economic development and environmental protection. I would like to briefly discuss each of these issues.

Actuarial Soundness and Program Solvency
Current subsidies reflect the challenge to implementing the NFIP under the legislative mandate that flood insurance “is available at reasonable terms and conditions to those who have need.”1While the current program collects more than $3 billion in premium revenue annually, estimates indicate that an additional $1.5 billion in premium revenue is foregone due to the current subsidized rate policy. This annual premium shortfall has at times required FEMA to use its statutory authority to borrow funds from the Treasury. These funds were used to pay flood damage claims to policyholders. Although payments have been made to reduce this obligation, $17.75 billion in debt remains and FEMA is unlikely to pay off its full debt, especially if it faces catastrophic loss years. The NFIP review effort is exploring fiscal soundness by analyzing inherent program subsidies and examining potential methods to further reduce the loss of life and property. Mandatory Purchase Requirement, Affordability and Cost The cost of an NFIP policy, and the affordability of flood insurance, is a topic of frequent discussion. In some communities, the introduction of updated flood hazard mapping results in new requirements for the purchase of NFIP policies. These premiums represent an unbudgeted and often unanticipated expense to property owners. To some, the insurance is unaffordable. While FEMA has implemented some measures to address affordability concerns – including the Preferred Risk Policy – the program offers no means-based test that prices premium to income level. Affordability concerns are explored in the NFIP review effort with a variety of measures examined, ranging from credits and vouchers to high-deductible policies. Accuracy of Mapping When the new and more accurate map expands the flood hazard area based on the latest science and information on flood risks, property owners newly added to this area, and thus required to purchase an NFIP policy, are understandably concerned. In some instances, this concern leads to questions about the scientific credibility of our mapping process. As noted above, we have created Scientific Resolution Panels to resolve these questions. And while FEMA is committed to working closely with communities to develop the most accurate flood maps possible, the current “in or out” nature of the SFHAs (one is either in an SFHA or not) has left the program with a perceived credibility problem, as there is no gradation of risk identified within a flood zone.

Economic Development and Environmental Protection
1 Title 42 USC Chapter 50 4001(a)

The impact of the NFIP on economic development is another matter of debate among stakeholders. Areas prone to flooding may have unique resource advantages such as proximity to waterborne transport, as well as environmental or recreational value. However, these advantages, which may be revenue positive for a property owner or community in the short term, may become liabilities during a severe flooding event. As written by the Association of State Floodplain Managers: “[l]and use decisions are made by communities and tend to be based on local short-term economic factors in the form of community growth and resultant increases in the local tax base. These decisions often favor using floodplains for economic development, with the fact that the area is subject to flooding being a much lower priority in the decision.”2The challenge of balancing economic development with floodplain management and risk reduction is explored in Phase III of the review effort. The extent to which the NFIP encourages or accelerates floodplain development, and the adverse environmental consequences that often result from that development, remains a significant source of concern. Recently, a number of Endangered Species Act (ESA) lawsuits have been filed across the country based on the Agency’s implementation of the NFIP. Several environmental groups have alleged that FEMA incentivizes and encourages development in floodplains that jeopardizes the continued survival of endangered species and results in the adverse modification of critical habitat. These lawsuits allege that FEMA has failed to adequately assess and address the potential effects of the NFIP on endangered species and habitat, and that FEMA has failed to use its authority to carry out programs to preserve certain species, as required by the ESA. ESA litigation against the agency based on implementation of the NFIP is currently ongoing in several states. As a result, concerns about the impact of the NFIP on the environment are a prominent element of the public debate about the program. Of course, these are not the only near-term issues that comprehensive NFIP reform should address. The NFIP Reform Working Group is examining other issues, which include certification of levees, properties that incur repeated loss and damages that significantly drain the NFIP, subsidies, insurance ratings, building standards, and incentives and disincentives for mitigation.

IV. NFIP Reform Policy Alternatives In January 2011, FEMA’s NFIP Reform Working Group completed the refinement of policy alternatives and began the policy evaluation phase. The policy options are intentionally provocative and designed to represent the broadest range of policy options. The four policy alternatives moving forward to the evaluation phase each represent a unique policy theme. I would like to briefly discuss each policy option. The Administration has not taken a position on the preferred course of action for NFIP reform. These are currently draft proposals from the NFIP Reform Working Group. At this time, I view our role as helping to facilitate a needed conversation on identifying an effective path forward.

Community Based Insurance Policy Option
2 Association of State Floodplain Managers Whitepaper, Critical Facilities and Flood Risk; November 10, 2010.

The NFIP uses two mechanisms for implementing the floodplain management, mapping, and insurance elements of the program. States and communities administer floodplain management requirements, including permitting and regulating land use. Communities also adopt Flood Insurance Rate Maps. However, the insurance element of the program is administered by “Write Your Own” insurance companies that participate in the program or by FEMA directly. Thus, while the community issues permits for construction in the floodplain, the policyholder bears the cost of insuring against flood risk through the payment of an annual flood insurance premium. Community land-use decisions do not account for the full cost of flood risk.

Based on what we have heard from stakeholders, we are exploring community-based flood insurance, whereby risk assessments would be performed on individual buildings and the insurance premium payment would be made by the community. As part of this option, the federal government would continue to back flood insurance contracts in exchange for the adoption and enforcement of minimum floodplain management standards and would provide an assessment and calculation of flood risk. The sum in dollars of the risk assessment for all buildings in the community would constitute the required premium. Incentives could be structured to encourage communities to implement flood mitigation measures in order to reduce their overall premium assessment.

Privatization Policy Option
The NFIP was created in 1968, in part because of the absence of any substantive means, by insurance or otherwise, to mitigate the risk of flood hazards on the private insurance markets. Many hurdles stood in the way at the time: areas prone to flood hazards and the likelihood of flooding had not been identified; building practices and codes that mitigate the flood hazard were neither known nor enforced; and the financial risk of insuring properties with the potential for large catastrophic losses posed an unmanageable threat to the solvency of insurers.
In the more than 40 years since NFIP was created, a number of our stakeholders have indicated that the landscape has changed: flood risk has been digitally mapped and identified for 88 percent of the population; private and public sector modeling tools are available to model riverine and coastal flooding; the 21,000-plus communities participating in the NFIP have adopted building codes and practices to mitigate flooding; and the insurance and financial markets have developed a variety of means to spread risk from traditional reinsurance to more recent innovations of catastrophe bonds, risk markets, and financial derivatives.

Historically, the private insurance market has taken the position that flood is either un-insurable or prohibitively expensive. With that in mind, in January 2011, we brought in Chief executives from several Write-Your-Own companies to discuss the optimal balance in flood coverage between the private and public sectors. This preliminary discussion served to initiate the conversation with the private flood industry to better understand what’s possible in the future.

Federal Assistance Policy Option
Under the federal assistance option, we are exploring a new framework for flood loss reduction in which the federal government would provide financial assistance through all federal flood management programs only in communities in which specific flood mitigation and preparedness measures have been enacted. Failure of a community to enact such measures would result in a significant reduction in federal flood-related disaster assistance, ineligibility for pre- and post-disaster grants for floodplain relocation, and could include limitations for flood control works.In this option, the program could create a rating system similar to the NFIP’s Community Rating System. The community rating could correspond to a cost share structure for federal flood disaster and mitigation programs. Communities with higher ratings could be given more favorable cost share arrangements, whereas those with lesser rating could receive a significantly reduced cost-share from NFIP.

Optimization of Current Program Policy Option
The NFIP optimization policy option outlines potential enhancements to the existing program to address programmatic weaknesses and current challenges while optimizing the existing achievements, strengths, and benefits of the program. The options for modification address many areas of the program such as Pre-FIRM subsidies, grandfathering, rating freedom, properties that are a significant drain on the NFIP (e.g. repetitive loss properties), coverage limits, mandatory purchase, assistance to low-income citizens, floodplain management standards, levees, flood hazard data, mitigation programs and grants, natural and beneficial functions of floodplains, and the NFIP debt.
These four policy proposals present a broad spectrum of the options available to enact comprehensive NFIP reform, but they are not the only ones. All policy options, however, acknowledge that even an extremely successful flood mitigation effort cannot eliminate flood risk. Flooding will continue to cause economic loss, which begs the question: who should bear that loss? The NFIP Reform Working Group heard varying opinions on this matter, which are reflected in the four draft policy options. Economic loss from flood could be borne by local economies, charitable organizations, individuals who experience the flood loss, taxpayers through disaster relief and individual assistance programs, or the private insurance market.

FEMA believes that the nature of the NFIP demands that it be looked at holistically for reform rather than piecemeal; as changing one facet impacts other aspects of the reform process. A successful outcome of NFIP reform will include a multi-year reauthorization of the NFIP to provide program stability, and a reform proposal that addresses short term issues; considers expert judgment and best practices; establishes the long term program direction; and incorporates the incremental reforms necessary to achieve that target state. The single most effective overall reform step that could be taken is to allow only those in mapped 1% annual occurrence flood plains to buy NFIP coverage leaving to the STATES, their local govenments, and the private business of insurance coverage for the flood peril outside of the so-called hundred year flood plain. Also FEMA and the NFIP should have a clear statutory mandate that no hazard unmapped should be covered under the NFIP unless specifically authorized in statute.

V. Conclusion
FEMA uses the NFIP to help communities increase their resilience to disaster through risk analysis, risk reduction, and risk insurance. The NFIP helps individual citizens recover more quickly from the economic impacts of flood events, while providing a mechanism to reduce exposure to flooding through compliance with building standards and encouraging sound land-use decisions.
While the NFIP has been an extremely successful program through its 42 years of existence, we know we can do better. Through the NFIP Reform Working Group, we have engaged stakeholders of various disciplines from across the nation to help us guide the NFIP review11 effort. We look forward to sharing the findings from this on-going effort with you as we continue to work together to ensure a strong NFIP.

Thank you again for the opportunity to appear before you today. I am happy to answer any questions you may have.

Thursday, March 24, 2011

REP-Radiological Emergency Preparedness CORRECTION

I believe I mentioned the Rasmussen report several times on this blog. I indicated it was published by NRC as WASH 1100 but in fact it is WASH 1400.

Apologies for the error!

Wednesday, March 23, 2011

National Flood Insurance Program Reform

House Moving Forward on Flood Insurance Reform

The House Financial Services Subcommittee overseeing Insurance will hold a hearing on April 1 to obtain the views of FEMA on the legislative proposals to reform the National Flood Insurance Program. The panel’s only witness will be The Honorable Craig Fugate, Administrator of FEMA.
Fugate will present FEMA’s strategy for improving the NFIP, including its flood map modernization plan. He will also report on the preliminary findings of FEMA’s three phase NFIP Reform Working Group that began in 2009 and is set to conclude in 2011. 
The same House subcommittee has scheduled April 6 to vote on Chairman Biggert’s NFIP Reform proposal. NAMIC supports this proposal and has been instrumental in the inclusion of several important provisions including actuarially sound rates, updated flood plain maps and incentives for pre-disaster mitigation through building codes. NAMIC Chairman Sandy Parrillo presented these views at a March 11 legislative hearing.
After subcommittee markup on April 6, the full House Financial Services Committee is expected to consider the bill in early May. It is the goal of Chairman Biggert and her Republican colleagues to pass a bill out of the House by Memorial Day so the Senate may begin consideration well in advance of the September 30 expiration date of the NFIP. 
I will be posting the testimony of Craig Fugate with my analysis on in the next few days. 

Tuesday, March 22, 2011

Executive Order 12657

The text of this Ronald Reagan Executive Order officially adopting the so-called Legal Realism Doctrine so that the Shoreham Nuclear Power Station and Seabrook Nuclear Power Station could be liscensed and not subjected to STATE veto is set forth below:

Executive Order 12657--Federal Emergency Management Agency assistance in emergency preparedness planning at commercial nuclear power plants

Source: The provisions of Executive Order 12657 of Nov. 18, 1988, appear at 53 FR 47513, 3 CFR, 1988 Comp., p. 611, unless otherwise noted.

By the authority vested in me as President by the Constitution and laws of the United States of America, including the Federal Civil Defense Act of 1950, as amended (50 U.S.C. App. 2251 et seq.), the Disaster Relief Act of 1974, as amended (42 U.S.C. 5121 et seq.), the Atomic Energy Act of 1954, as amended (42 U.S.C. 2011 et seq.), Reorganization Plan No. 1 of 1958, Reorganization Plan No. 1 of 1973, and Section 301 of Title 3 of the United States Code, and in order to ensure that plans and procedures are in place to respond to radiological emergencies at commercial nuclear power plants in operation or under construction, it is hereby ordered as follows:

Section 1. Scope. (a) This Order applies whenever State or local governments, either individually or together, decline or fail to prepare commercial nuclear power plant radiological emergency preparedness plans that are sufficient to satisfy Nuclear Regulatory Commission ("NRC") licensing requirements or to participate adequately in the preparation, demonstration, testing, exercise, or use of such plans.

(b) In order to request the assistance of the Federal Emergency Management Agency ("FEMA") provided for in this Order, an affected nuclear power plant applicant or licensee ("licensee") shall certify in writing to FEMA that the situation described in Subsection (a) exists.

Sec. 2. Generally Applicable Principles and Directives. (a) Subject to the principles articulated in this Section, the Director of FEMA is hereby authorized and directed to take the actions specified in Sections 3 through 6 of this Order.

(b) In carrying out any of its responsibilities under this Order, FEMA:

(1) shall work actively with the licensee, and, before relying upon its resources or those of any other Department or agency within the Executive branch, shall make maximum feasible use of the licensee's resources;

(2) shall take care not to supplant State and local resources. FEMA shall substitute its own resources for those of the State and local governments only to the extent necessary to compensate for the nonparticipation or inadequate participation of those governments, and only as a last resort after appropriate consultation with the Governors and responsible local officials in the affected area regarding State and local participation;

(3) is authorized, to the extent permitted by law, to enter into interagency Memoranda of Understanding providing for utilization of the resources of other Executive branch Departments and agencies and for delegation to other Executive branch Departments and agencies of any of the functions and duties assigned to FEMA under this Order; however, any such Memorandum of Understanding shall be subject to approval by the Director of the Office of Management and Budget ("OMB") and published in final form in the Federal Register; and

(4) shall assume for purposes of Sections 3 and 4 of this Order that, in the event of an actual radiological emergency or disaster, State and local authorities would contribute their full resources and exercise their authorities in accordance with their duties to protect the public from harm and would act generally in conformity with the licensee's radiological emergency preparedness plan.

(c) The Director of OMB shall resolve any issue concerning the obligation of Federal funds arising from the implementation of this Order. In resolving issues under this Subsection, the Director of OMB shall ensure:

(1) that FEMA has utilized to the maximum extent possible the resources of the licensee and State and local governments before it relies upon its appropriated and lawfully available resources or those of any Department or agency in the Executive branch;

(2) that FEMA shall use its existing resources to coordinate and manage, rather than duplicate, other available resources;

(3) that implementation of this Order is accomplished with an economy of resources; and

(4) that full reimbursement to the Federal Government is provided, to the extent permitted by law.

Sec. 3. FEMA Participation in Emergency Preparedness Planning. (a) FEMA assistance in emergency preparedness planning shall include advice, technical assistance, and arrangements for facilities and resources as needed to satisfy the emergency planning requirements under the Atomic Energy Act of 1954, as amended, and any other Federal legislation or regulations pertaining to issuance or retention of a construction permit or an operating license for a nuclear power plant.

(b) FEMA shall make all necessary plans and arrangements to ensure that the Federal Government is prepared to assume any and all functions and undertakings necessary to provide adequate protection to the public in cases within the scope of this Order. In making such plans and arrangements,

(1) FEMA shall focus planning of Federal response activities to ensure that:

(A) adequate resources and arrangements will exist, as of the time when an initial response is needed, given the absence or inadequacy of advance State and local commitments; and

(B) attention has been given to coordinating (including turning over) response functions when State and local governments do exercise their authority, with specific attention to the areas where prior State and local participation has been insufficient or absent;

(2) FEMA's planning for Federal participation in responding to a radiological emergency within the scope of this Order shall include, but not be limited to, arrangements for using existing Federal resources to provide prompt notification of the emergency to the general public; to assist in any necessary evacuation; to provide reception centers or shelters and related facilities and services for evacuees; to provide emergency medical services at Federal hospitals, including those operated by the military services and by the Veterans' Administration; and to ensure the creation and maintenance of channels of communication from commercial nuclear power plant licensees or applicants to State and local governments and to surrounding members of the public.

Sec. 4. Evaluation of Plans. (a) FEMA shall consider and evaluate all plans developed under the authority of this Order as though drafted and submitted by a State or local government.

(b) FEMA shall take all actions necessary to carry out the evaluation referred to in the preceding Subsection and to permit the NRC to conduct its evaluation of radiological emergency preparedness plans including, but not limited to, planning, participating in, and evaluating exercises, drills, and tests, on a timely basis, as necessary to satisfy NRC requirements for demonstrations of off-site radiological emergency preparedness.

Sec. 5. Response to a Radiological Emergency. (a) In the event of an actual radiological emergency or disaster, FEMA shall take all steps necessary to ensure the implementation of the plans developed under this Order and shall coordinate the actions of other Federal agencies to achieve the maximum effectiveness of Federal efforts in responding to the emergency.

(b) FEMA shall coordinate Federal response activities to ensure that adequate resources are directed, when an initial response is needed, to activities hindered by the absence or inadequacy of advance State and local commitments. FEMA shall also coordinate with State and local governmental authorities and turn over response functions as appropriate when State and local governments do exercise their authority.

(c) FEMA shall assume any necessary command-and-control function, or delegate such function to another Federal agency, in the event that no competent State and local authority is available to perform such function.

(d) In any instance in which Federal personnel may be called upon to fill a command-and-control function during a radiological emergency, in addition to any other powers it may have, FEMA or its designee is authorized to accept volunteer assistance from utility employees and other nongovernmental personnel for any purpose necessary to implement the emergency response plan and facilitate off-site emergency response.

Sec. 6. Implementation of Order. (a) FEMA shall issue interim and final directives and procedures implementing this Order as expeditiously as is feasible and in any event shall issue interim directives and procedures not more than 90 days following the effective date of this Order and shall issue final directives and procedures not more than 180 days following the effective date of this Order.

(b) Immediately upon the effective date of this Order, FEMA shall review, and initiate necessary revisions of, all FEMA regulations, directives, and guidance to conform them to the terms and policies of this Order.

(c) Immediately upon the effective date of this Order, FEMA shall review, and initiate necessary renegotiations of, all interagency agreements to which FEMA is a party, so as to conform them to the terms and policies of this Order. This directive shall include, but not be limited to, the Federal Radiological Emergency Response Plan (50 Fed. Reg. 46542 (November 8, 1985)).

(d) To the extent permitted by law, FEMA is directed to obtain full reimbursement, either jointly or severally, for services performed by FEMA or other Federal agencies pursuant to this Order from any affected licensee and from any affected nonparticipating or inadequately participating State or local government.

Sec. 7. Amendments. This Executive Order amends Executive Order Nos. 11490 (34 Fed. Reg. 17567 (October 28, 1969)), 12148 (44 Fed. Reg. 43239 (July 20, 1979)), and 12241 (45 Fed. Reg. 64879 (September 29, 1980)), and the same are hereby superseded to the extent that they are inconsistent with this Order.

Sec. 8. Judicial Review. This Order is intended only to improve the internal management of the Executive branch, and is not intended to create any right or benefit, substantive or procedural, enforceable at law by a party against the United States, its agencies, its officers, or any person.

Sec. 9. Effective Date. This Order shall be effective November 18, 1988.


It should be noted that the FEDERAL EMERGENCY MANAGEMENT AGENCY was never given the opportunity to comment on this order and in fact the ORDER was proposed by the US Department of Energy with the concurrence of the NRC [Nuclear Regulatory Commission]!

There are NO implementing regulations by any Executive Branch agency. One or more of its citations for legal authority for the order are obsolete.

This order may have a crucial role to play should the STATES and their local governments go into bankruptcy or otherwise decline or fail to prepare around nuclear power plants in the USA.

Some may find it strange that almost 23 years after its issuance I am in favor of this order, believe it states correctly an assumption made on federalism underlying the US Constitution but badly needs updating and enforcement when rewritten. Why? Federalism is in peril on finances alone. Also recent reports including one by the American Medical Association reveals that 45% of the STATES and their local governments are not , repeat NOT, prepared for a radiological incident or event.

Congress should immediately hold hearings to confirm or rebut what I have written in this post. The CRS and GAO and DOJ/OLC have never opined on this Executive Order although obviously it was cleared by DOJ/OLC before Presidential signatures as must all Presidential Executive Orders under E.O. 11030. The implications of this order are profound in light of the recent events in Japan.

Time for Congress to get to work.

Sunday, March 20, 2011

FEMA and Japan--The Future is NOW?

Today's post has some useful statistics!
As of Sunday evening in Japan:

Dead: 8133 Missing: 12, 272 (Kyodo)

Injured: 2611 (OCHA)

Evacuees in public shelters: 360,000 (Kyodo)

Buildings damaged or destroyed: 117,000 (USAID)

Without regular water service: 2.3 million people (COE)

Without electricity: 289,000 households (713,000 plus people) (OCHA)

Aftershocks: 290 and at least one separate 6.1 earthquake (USGS)

Translating two of the above statistics to FEMA (and of course these numbers will change over the days, weeks, and months ahead) I focus on two of them.

The number dead would exceed any historic record in the US of dead from any kind of disaster except for plague or flu. Galveston early in the last century and the barrier islands of S.Carolina in the 1880's both had somwhere around 6-8,000 dead from Hurricane Storm Surge.

Still FEMA should conduct mortuary planning for at least 10,000 dead in a single event and perhaps more. Also 50K is not a bad planning number for injured in the event. Today, HHS is accountable for mortuary services under E.O.12656 but FEMA was blamed for problems in that area in Katrina. Perhaps HHS refused a mission assignment?

The second issue is drinking water! Who is accountable for provision of drinking water is under active consideration currently in the Executive Branch. Again E.O. 12656 assigns drinking water to EPA and DOD/USACOE but the relationship has been unclear and opaque since that order was signed in late 1988. This needs prompt FEMA attention now but not sure who or how FEMA would assign resolution without WH support since no longer an independent agency. Hoping this issue gets high priority NOW?

Friday, March 18, 2011

A Confusing Senate Hearing Yesterday!

The Senate Committee on Homeland Security and Governmental Affairs held a hearing yesterday on FEMA's readiness to deal with a catastrophic situation as currently underway in Japan. It should also be noted that Congressman Ed Markey sent a letter to the President asking who would lead the charge in a similar event in the USA. As facts drain out of Japan and the first week of effort has elapsed some data sets are now becoming obvious.

Perhaps up to 10 million Japanese citizens and residents directly impacted by the earthquake, tsunami, and radiation emanating from the nuclear power plants that lost coolant due to the tsunami. Although shut down after the earthquake none of the reactors had problems until the waves came ashore.

First, neither FEMA nor any of its predecessors has dealt with an incident or event where mass care and evacutions of the size now evident in Japan is occurring. Even medical care in short supply throughout HONSHU the world's sixth largest Island, larger than Great Britain including England, Scotland and Wales, so this is a large event for that large island. Really the heartland of Japan.

Certainly the trigger event of a major earthquake in Southern California or perhaps a New Madrid could involve a population of 10 million although that has not been specifically studied to my knowledge. A vulcano might just impact through its release into the atmosphere of a dust cloud a wide swath of the USA and also that large a population.

The bottom line is I am not quite certain what the Senators were asking and what their definition of castrophic was in fact. If Japan is the defining type of event there are some reasons why that particular event is unlikely to occur in the USA. Remember that Chernobyl was a coremelt accident and has impacted for perhaps the next 500 years (well now 475)an area that if that plant was overlayed on STATEN ISLAND would impact the area from Boston to Washington,D.C. easily encompassing the 10 Million criteria. Indian Point Nuclear Power station would never be sited today in such a large population center for example.

The spent fuel pools are increasingly the problem for the Japanese. This situation also exists in the USA because of the YUCCA mountain contretemps and its deficiencies geologically speaking for a 10,000 year repository.

But most of what concerned me was the fact that whenever possible Administrator Craig Fugate testified as to the responsibility and accountability of almost everyone and every organization but FEMA. I am not sure if he as read closely HSPD-5, the NRF, the NRP, the FRERP and Executive Order 12657 but he is directly accountable for evacuations around nulear power plants if they go to General Alert and the NRC is NOT repeat not responsible for anything involving mass care of offsite saftey.

What is a key issue missed by all in the hearing that should have been asked and answered is the relationship between the so-called Price-Anderson Act guaranteeing a federal limit on liability for the nuclear power industry and now up for revision and the Robert T. Stafford Disaster Relief and Emergency Assistance Act. That relationship is not actually FEMA's to determine but should be analyzed by OLC of the Department of Justice.
A Presidential Commission on Respone to a Catstrophic Nuclear Accident concluded that there was no duplication or overlap between these statutes because in fact the Robert T. Stafford Act had no application to a nuclear incident or accident. This lead NEMA and others to suggest that radiological incidents/events be specifically added to the Stafford Act. This approach was rejected by Congress and several administrations. Why because FEMA and NRC issued a joint document I believe numbered NUREG 1437 saying the Stafford Act could be utilized in a severe catstrophic radiological emergency. So that is where it stands today. And who knows, none know and apparently that is what is wanted. This directly undermines the notion that tough issues are worked out in advance of the catastrophe to the extent know. Each GC of FEMA I worked for I asked to formally resolve this issue by asking OLC to address it. By this post I again ask the FEMA Chief Counsel Brad Keiserman to address it. It probably will take several years for OLC to decide how and what it will answer but at least it will be off FEMA's back. Perhaps the Congress could also ask for a ruling? Or the Union of Concerned Scientists could ask the courts for a declaratory injuction.

And of course as always and now demonstrated in Japan fate might just intervene.

Sunday, March 13, 2011

A FEMA Leaning Forwards? Japan?

Well FEMA's international efforts are controlled by its relationship with OFDA {Office of Foreign Disaster Assistance] which are often iffy on one side or the other.

So it is uncertain as to how FEMA might be utilized in the current crisis in Japan. There we are seeing what a tightly coupled culture and economy can do to help its people when there is a catastrophe.

From here it looks like food, shelter, energy, medical care and monitoring and decontamination will be huge issues over the next 30 days and perhaps much much long!

Former FEMA Director James Lee Witt when interviewed this AM on TV stated that the New Madrid earthquake might well present similar issues for FEMA and the state of US preparedness. That scenario is scheduled to be played in NLE 2011 next month.
Strangely, James Lee Witt after several visits to Japan as Director of FEMA found him quite interested in that country. He was highly regarded and respected in Japan in part because he did NOT display the usual know-it-all attitude and was helpful to the Japanese leadership and in no way critical of their response and recovery from the KOBE earthquake.
FEMA is no longer the technical and funding lead for the National Earthquake Hazards Reduction Program [NEHRP]having lost that role to NIST by statute in 2004. There is no dedicated Earthquake or Tsunami office in FEMA but the Insurance and Mitigation Office/Directorate does its best.

Strangely in 1980 as Mt. St. Helens lit off, FEMA got a Presidential tasker to its role as emergency preparedness advisor to the NSC [National Security Council]! President Carter and his National Security Advisor when flying over the devastation of Mt. St. Helens started a discussion about the impacts of natural disasters on National Security. They dicussed the "big one" that might impact Silicon Valley and the California defense industry. This resulted in a tasking to NSC and FEMA for a discussion of the impacts and both a classified and unclassifed study of the issue were prepared. FEMA's unclassified version was published as a document which if memory serves had the coding of M&R 20. I am sure that no one in FEMA still has a copy--the FEMA library destroyed by the book burners in the Bush 43 Administration no longer exists--but perhaps it could be found. My belief is that no copies of the classifed version, a much more interesting document still exist and that all are destroyed. Why? Well no President of the USA will allow the "big one" to take place on his or her watch.

But I am beginning to wonder about the National Security implications of the current catastrophic event in Japan, a tightly coupled culture and economy. FEMA ability to economic model was totally destroyed in the REAGAN adminstration which "knew" that nuclear war would never impact its administration.

So here is a hypothetical! What if CHINA knowing that Japan was out of the national security picture for up to two years decided it was time to takeover Taiwan? Or North Korea deciding the same for both Japan and US and trying to take over the territory of S. Korea? Hoping neither of these things occur of course. But it will be interesting to see how other East Asian countries decide to help Japan.

Right now the basics are needed in Japan for the next 90 days so perhaps FEMA can lend OFDA blankets, and meals ready to eat, and dosimeters. Or that's right FEMA lost its dosimetry capability and program under Director James Lee Witt. Over the objections of the NSC staff by the way. But hey perhaps President Clinton was busy with other things and he also "knew" that nuclear war would not occur on his watch.

So FEMA let's just see how you can help OFDA help Japan?

Saturday, March 12, 2011

FEMA Administrator Fugate Mandates Further Insolvency for the NFIP

One day before a hearing in the Congress on NFIP reform held largely to address solvency issues for the NFIP and the drain on the federal fisc, Administrator Fugate of FEMA issued the following mandatory directive to the NFIP mapping staff and its contractors:



Agency to Account for Existing Levees, Flood Control Structures in Assessing Risks


March 10, 2011

WASHINGTON, D.C. – U.S. Senators Thad Cochran (R-Miss.) and Roger Wicker (R-Miss.) today praised the Federal Emergency Management Agency (FEMA) decision to end its current policy of disregarding some levees and flood control structures in the process of updating Flood Insurance Rate Maps (FIRMs).

FEMA Administrator Craig Fugate today informed the Senators that he has directed his agency to discontinue the practice of using “without levee” modeling in the FIRM modernization process. Early last month, Cochran, Wicker, and U.S. Senators Dick Durbin (D-Ill.) and Mark Pryor (D-Ark.) spearheaded a letter to Fugate that was signed by 27 Senators—14 Republicans and 13 Democrats in all—asking that “without levee” modeling be terminated because it completely wiped some flood control structures off the map instead of more precisely determining their effectiveness.

“I appreciate Administrator Fugate’s common sense decision to use modeling methods that more accurately reflect existing flood protection around the country. Recent heavy rains in Mississippi remind us that flood risks are real and that the flood map modernization process is a necessary part of protecting ourselves. Those at risk should purchase flood insurance,” Cochran said. “This is just the beginning of our effort to find more practical solutions that protect communities and jobs as Congress considers a broad reauthorization of the National Flood Insurance Program.”

“I am glad that FEMA was willing to work with us and take another look at the methodology so all communities receive fair treatment in determining their flood zone status,” said Wicker. “It makes sense to take existing flood control structures into account. This should be a significant help to residents in areas that faced higher insurance rates.”

In correspondence delivered to Senators today, Fugate announced that he has directed FEMA staff to end the use of the “without levee” standard, agreeing with the Senators that his agency has the technical ability to affordably and efficiently produce more accurate flood maps.

“In order to increase the credibility of our Flood Insurance Rate Maps in areas where levees are not accredited, I have directed my staff to replace the ‘without levee” modeling approach with a suite of methodologies that are technically-sound, credible and cost-effective,” Fugate wrote. “The approach will better meet the needs of our citizens while providing more precise results that better reflect the flood risk in areas impacted by levees.”

Fugate also indicated that FEMA “will temporarily withhold issuing final determinations for those communities whose levees do not meet accreditation requirements and would clearly benefit from this new approach.”

FEMA indicated that mapping will be delayed by a matter of months in these situations as it determines the methodologies and policies it will have to put in place to replace the “without levee” approach. As it moves forward in making these determinations, FEMA has said it would engage the public to ensure the new approach is suitable for those affected.

The FEMA Administrator’s decision addresses the concerns raised by the Senators, who argued that discounting the existence of uncertified levees and flood control structures ignored actual flood protection and could require property owners in those areas to purchase National Flood Insurance Program policies unnecessarily.

If FEMA determines an area has a 1 percent annual chance of flood, property owners in that area are required to purchase National Flood Insurance Program coverage to protect against such hazards if their mortgage is backed by the federal government. Communities across the country have complained that FEMA and the Army Corps of Engineers have disregarded locally-funded flood control projects and repairs that may provide some level of actual protection in the development of the new flood maps.

Cochran, Durbin, Pryor and Wicker have joined forces to continue to seek out bipartisan, responsible and cost-effective solutions to the challenges facing communities protected by flood control infrastructure.

In addition to Cochran, Durbin, Pryor and Wicker, the February 3 letter to Fugate was also signed by Senators Lamar Alexander (R-Tenn.), John Boozman (R-Ark.), Roy Blunt (R-Mo.), Mike Crapo (R-Idaho), Mike Enzi (R-Wyo.), Kirsten Gillibrand (D-N.Y.), Tom Harkin (D-Iowa), Kay Bailey Hutchison (R-Texas), Mike Johanns (R-Neb.), Mark Kirk (R-Ill.), Amy Klobuchar (D-Minn.), Mary Landrieu (D-La.), Frank Lautenberg (D-N.J.), Claire McCaskill (D-Mo.), Jeff Merkley (D-Ore.), Jerry Moran (R-Kan.), James Risch (R-Idaho), Pat Roberts (R-Kan.), Charles Schumer (D-N.Y.), Jon Tester (D-Mont.), David Vitter (R-La.), Jim Webb (D-Va.) and Ron Wyden (D-Ore.).

An identical letter from the House of Representatives to Fugate on Feb. 18 was signed by 49 Members of Congress."

This mandate directly undermines Congressional efforts to reform the NFIP and limit taxpayer exposure to the NFIP.

Personally after a cursory review of the Administrators position I find no legal basis in the NFIP statutory scheme for such a decision. See 42 U.S.C. 4001 et seq.

If I am correct this direct undermining of program objectives should be thoroughly reviewed by the WHITE HOUSE and other impacted federal agencies. During my time in FEMA 1079-1999 OMB understood the NFIP and made sure that NO, repeat NO credit was taken in advance for structural protection works that were substandard, non-federal, and only projected to be completed some day. Once again FEMA's failure to understand federal water policy and the Principles and Standards that guide water resource issues has reared its ugly head.

Since I no longer in the practice of Law and have not been since October 1, 1999, I can champerously recommend a massive declaratory injunctive action against FEMA and DHS and permanent injunction against this decision by Administrator Fugate.

It would be interesting to see the adminstrative record behind this decision, lack of public comment, internal dissents, legal opinions etc in the administrative record. If none of the above the decision may be a classic arbitrary and capricious decision by a high school grad with EMT background that has no understanding of the NFIP or administrative law.

To all those who may well drown or suffer loss from incomplete substandard levees credited by the NFIP I am so sorry in advance for your suffering.

Follow-up To NFIP Hearing

The NFIP was unusally substantive but without many answers. Almost no discussion of mapping issues except that maps need to be accurate. What is fascinating is that the day before Craig Fugate issued a decision on crediting levees that I believe is Ultra Vires, meaning he had no authority to issue such a decision. It directly undermines the whole philosophy of the hearing which was focused on fiscal solvency of the NFIP.

The hearing record is open for 30 days while Members questions are answered for the record. Many of those questions appear substantive.

One note is that it looks like a heavy year for spring runoff and the New York City area and New England is already experiencing heavy flooding.

I thought the ASFPM witness did a good job but she also apparently earns her living off of the NFIP as did several other members of the panels, although some may well be de minimus and of course Frank Nutter of the RAA [Reinsurance Association of America] does not since no portion of the NFIP risk portfolio is laid off with reinsurance coverage, a strategy that is already legal IMO. The international reinsurance capacity however looks like it will be heavily compromised due to flooding and earthquakes for at least the next several years so doubtful that strategy will be utilized by the NFIP in next few years.

Craig Fugate scheduled to testify did not due to the Japanese events.

Wednesday, March 9, 2011


ON Friday the Banking Committee will hold an oversight hearing on the subject of reform of the NFIP [National Flood Insurance Program] that has a statutory sunset date of September 30, 2011. The driver for reform is claims outlays.

But it appears the hearing is turning into a lobbying effort by groups who benefit directly or indirectly from the NFIP's current methods of administration.

I have posted on this issue before but when asked for some nuggets of real reform provided the following:

"First confine federal flood insurance only to FIRM mapped V and A zones.
Second, force the states to use the entirety of state premium taxes for FPM!
Third, turn over all coastal zone flood mapping to NOAA.
Fourth, turn over insurance aspects of the program to Treasury which already sets the policy for last three administrations for NFIP and all federal insurance programs and
Fifth: Allow public flood adjusters.
Sixth: Allow STATE and LOCAL governments to sell NFIP insurance.
Seventh: Charge full actuarial rates for all repetitive loss structures and eliminate the so-called emergency program.
Eighth: Make void ab initio all NFIP policies in violation of FPM ordinances and building codes at time of loss--Yes allow post claim underwriting by the program.
Ninth: Train whomeever it takes to adjust flood claims including determination of FPB compliance and whether prior losses aggregating ACV.
Tenth: Eliminate all coverage for hazards not mapped."

Note that I submitted 25 suggestions to the NFIP reform website.
What most don't understand is that the NFIP is a highly difficult land use program to administer, not really an insurance program. Scientists and engineers should have been the key administrators of the program but instead mostly lawyers with some insurance background have administered the program. This faulty reform effort will be documented by the few Scientists and Engineers who will be giving testimony on the NFIP on Friday. Correction--Key testimony by ASFPM will be presented by an Professional Engineer. And of course the Committee itself is the wrong committee to be holding NFIP reform hearings even thought it has technical oversight. The Science Committees in both houses of Congress should in fact be the oversight committees. So instead of helping to cut back on "free" federal disaster outlays as the NFIP was intended to do, the NFIP has to some degree become a recklessly administered "fake" insurance program where risk reduction, moral hazard issues, and other true spreading of risk principles including avoiding cross subsidization have been ignored.

But hey some think the NFIP is a terrific program. And while reforming how about eliminating all coverage for installed or uninstalled coverage that averages as much as 10-25% of claims outlays?

The witness list is now public and will check for any Scientists or Engineers or other technical disciplines, even actuaries! Initial inspection shows many Craig Fugate former fire fighter and lots of lawyers.

Witness List

Panel One

The Honorable Craig Fugate, Administrator, Federal Emergency Management Agency

Orice Williams Brown, Managing Director, Government Accountability Office

Sally McConkey, Vice Chair, Association of State Flood Plain Managers and Manager, Coordinated Hazard Assessment and Mapping Program, Illinois State Water Survey
Panel Two

Stephen Ellis, on behalf of the SmarterSafer Coalition, and Vice President, Taxpayers for Common Sense, Washington D.C.

Terry Sullivan, Chair, Committee on Flood Insurance, National Association of REALTORS® and Owner, Sullivan Realty, Spokane, Washington

Spencer Houldin, Chair, Government Affairs Committee, Independent Insurance Agents and Brokers of America and President, Ericson Insurance Services, Washington Depot, Connecticut

Franklin Nutter, President, Reinsurance Association of America, Washington D.C.

Sandra G. Parrillo, Chair, National Association of Mutual Insurance Companies and President and CEO of Providence Mutual Fire Insurance Company, Warwick, Rhode Island

Donna Jallick, on behalf of the Property Casualty Insurers Association of America, and Vice President, Flood Operations, Harleysville Insurance, Harleysville, Pennsylvania

Barry Rutenberg, First Vice Chairman, National Association of Home Builders, Washington D.C.

Wednesday, March 2, 2011

The Condensed Version of NFIP Reform

The National Flood Insurance Program [NFIP] apparently is going to have statutory changes this year. It is almost never amended substantively in any election year reflecting the fact that it is a program that favors those who have property in the flood plain and want insurance to cover that proeprty preferably subsidized by the taxpayer.

The reform movement is driven by claims payments during Hurricane Katrina and in particular the area in and around NOLA {New Orleans/Orleans Parish]. The driver is that no one knows what NFIP costs will be over the next 40 years and whether the last 40 since it started in 1969 is prologue. The period of record is just too short to determine probability.

So after suggesting over 25 "reform" items to the program manager I have resolved to condense that list into a single item. It may seem a simple or even minor change but believe me it would have huge repercussions for the entirety of the NFIP including the mapping effort.

Here is the suggestion: NO NFIP INSURANCE FOR ANY AREA NOT ALREADY OR TO BE DESIGNATED THE FLOOD PLAIN FOR THE 1% ANNUAL OCCURRENCE FLOOD [the so-called 100-year flood] that are depicted as "V" and "A" zones on the NFIP maps. I have written several members of Congress and there is some interest in this change. I did point out that total elimination of the NFIP would drastically increase "free" disaster outlays and destroy mitigation efforts nationally.

So I will let readers mull over the impacts of this suggested change and its costs and benefits and political liklihood of success. Looking forwards to the analysis of many others!

Tuesday, March 1, 2011

DHS 8th Birthday

Today is DHS' Eighth (8) birthday as it doors opened for real on March 1, 2003. Still a child.

FEMA's 32 Birthday is actually on April 1, 2011 so still a month off.

I am no longer willing to predict that FEMA in some form will outlast DHS. Why? Betting both are gone by the end of the 2nd decade of the 20th Century.
Basic reasons: First, not learning organizations. Second, not agile organizations.

Hoping I am wrong of course because both have day jobs and nighttime jobs in the Executive Branch.

The departure of Senator Joesph Lieberman in 2012 from the US Senate and the likelihood of Republican control of that body almost ensure that a total re-evaluation of the DHS/FEMA paradigm will occur.