Flood Insurance Program. We ask the subcommittee to start the process by moving quickly to pass S. 1405.

Thank you for the opportunity to testify today.

TESTIMONY OF KATHLEEN M. MCCAULEY

FOR THE

MARSHFIELD COASTAL ADVISORY COMMITTEE

Mr. Chairman and Members of the subcommittee, my name is Kathleen McCauley. I am testifying on behalf of the Marshfield Coastal Advisory Committee. Our testimony has been endorsed by coastal resident associations from Massachusetts to Florida. I am honored to be here.

I am an appointed member of the Marshfield Coastal Advisory Committee. We are responsible for the administration of National Flood Insurance Program's Community Rating System. Our selectmen appointed our committee because 61 percent of Marshfield's tax base is in the floodplain.1

We support efforts to improve the National Flood Insurance Program. We oppose S. 1405 because it establishes erosion zones that would devastate the economic base of communities all around the country.

Erosion zones will immediately cause the value of real estate along the Nations' oceans, lakes and rivers to plummet. The effect of plummeting real estate values will be the erosion of local tax bases which provide funding for schools, fire and police. Erosion zones will curtail new construction through denial of flood insurance. Existing homes will lose their value by being included in 30 and 60 year erosion zones. The message is: this home won't be here in thirty or sixty years. In most cases this message will be wrong.

Only actual erosion can be measured. Future erosion, or accretion, over 30 or 60 years can't be predicted when the weatherman can't predict next weeks' weather. Experts disagree on the feasibility of predicting erosion over ten years, never mind sixty years.

How do you measure actual erosion? Every Flood Insurance Rate Map references a fixed baseline reference feature. These reference features are medallions set in telephone poles, seawalls or foundations. They are used to measure distances and elevations. S. 1405 does not restrict the measuring of erosion to a fixed baseline reference feature. Erosion measured from a non-fixed baseline reference feature will have homeowners and businesses guessing: 'Where's the erosion line today? Are we in it or out of it?'

Proponents of S. 1405 estimate seventy percent of the Nation's shoreline is eroding.2 If their method is defective, consider the magnitude of the mistake. Errors and injustice will haunt residents. Just consider the possible effect in Marshfield where 11 percent of tax revenues are generated within 1000 ft of the seawall.3

The cost of the mapping and measuring of erosion zones and mitigation grants to communities and States will increase the current costs of running the National Flood Insurance Program by fifty percent. We estimate claims paid by the National Flood Insurance Program to people living on what the U.S. Army Corps of Engineers calls the 'critically eroding coastline accounted for under eight million dollars in losses over a fifteen year period. That is about five hundred thousand dollars a year. This bill would authorize the Federal Insurance Administration to spend more than twenty-five million dollars over just five years for mapping and studies of erosion zones! Five million dollars a year! Obviously, this is not a cost beneficial way to spend policy holder premiums.

Erosion zones will not only hurt communities but also hurt the fund.

As NFIP policy holders we support efforts to assure the soundness of the fund. To that end we recommend the following changes to S. 1405:

1. All structures within the entire floodplain should be required to insure. At present only a portion of floodplain structures are required to have flood insurance.

1Figures supplied by member of Marshfield's Board of Assessors, James Haddad, in letter submitted as part of our written testimony.

2 National Flood Insurance Reform Act of 1993, Senator John F. Kerry, Aug. 4, 1993. Answers to Commonly Asked Questions, p. 72.

3 Figures supplied by member of Marshfield's Board of Assessors, James Haddad, in letter submitted as part of our written testimony.

*Estimate of Cost to NFIP for 'Critically Eroding Shoreline' from 1978 thru 1992. Marshfield Coastal Advisory Committee. This paper is submitted as part of our written testimony.

76-604 - 94 - 5

One third of NFIP losses occur where flood insurance is not required. Unfortunately we have seen an example of undue financial loss in the Great Flood of '93. Much of this loss might have been insured if mandatory coverage had extended to the entire floodplain. S. 1405 provides the opportunity to broaden the insurance base. If your property is in the floodplain, National Flood Insurance should be required.

2. The definition of a 'repetitive loss structure' should be expanded. A property could suffer losses totaling 100 percent of the value of the structure over five years and still not meet the definition of 'repetitive loss' in S. 1405. We have recommended an expanded definition in our written testimony.

However, a unique problem exists for coastal condominium complexes that become 'repetitive loss properties'. In most cases these buildings will not be able to be elevated to meet the FEMA regulations thereby losing their affordable flood insurance. The loss of affordable flood insurance for condominiums is of particular concern to our Nation's retirees.

We support Section 602 which provides for additional insurance for flood victims who must comply with expensive FEMA building regulations when rebuilding after a disaster. However, it is critical that with this new coverage insurance premiums remain affordable.

I am recently unemployed. My husband is employed but could be laid off at any time. My home, the only one I own, represents my financial security. The same is true for my parents, who live two doors away, and my sister in Florida. The well being of my entire family, as well as the economic strength of our communities, is dependent on the value of our homes. We are just like our friends and neighbors; not rich but middle class. I have owned my home, thru Hurricane Bob, the 1991 Halloween Storm and the Blizzard of 1992. I have not suffered a loss. I am one of the millions who pay into the fund, saving other taxpayers, the cost of my disaster assistance. Affordable flood insurance has provided essential financial security and protection from flood disasters for me, my family and neighbors.

In conclusion, I would ask you not to devalue our homes and destroy our local economies by passing S. 1405. It would be a shame for Congress to make changes to the National Flood Insurance Program that would result in harming the very ones it had sought to protect.

Finally, Congress can substantially improve the National Flood Insurance Program if the legislation was modified to:

• most importantly, eliminate erosion zones,

expand the insurance base to include all structures in the floodplain,

• expand the repetitive loss definition,

⚫ and assure that premiums remain affordable.

This concludes my testimony at this time. We may want to supplement the record later. Thank you for the opportunity to present concerns of coastal homeowners.

"Answers to Questions About the Flood Insurance Program. FIA, March 2, 1992, p. 25. Reference 'moderate to minimal hazards'.

WHEREAS, the Town of Marshfield, Massachusetts, is a coastal community in full compliance with the National Flood Insurance Program (NFIP).

WHEREAS, the town of Marshfield, Massachusetts, voluntarily joined the Community Rating System (CRS) of the NFIP in the year 1990, and the Town of Marshfield, Massachusetts, is a Class 9 CRS community, one of just four communities in the State of Massachusetts to achieve such status.

WHEREAS, the Town of Marshfield, Massachusetts, has enacted more stringent flood plain zoning by-laws than required by NFIP.

WHEREAS, bill S.1405, if passed by the Senate as written, would define 60 year erosion zones AND WHEREAS no fixed known benchmark is referenced (such as existing FIRM benchmarks) the delineation of these zones would be open to interpretation. The effect of this uncertainty could have an adverse effect on the taxbase of the Town of Marshfield, Massachusetts.

WHEREAS, bill S.1405, if passed by the Senate as written, would define 60 year erosion zones AND WHEREAS 11.4% of the Town of Marshfield's taxbase is within 1000' of the town's seawalls the existence of these zones and the denial of insurance for new development in these zones could have an adverse effect on the taxbase of the Town of Marshfield, Massachusetts.

WHEREAS, bill S.1405, if passed by the Senate as written, would require participating communities to notify lenders, real estate agents and homeowners of Flood Zone Changes. This requirement on an ongoing basis will constitute a financial burden and possible legal liability that will have an adverse effect on the Town of Marshfield, Massachusetts, and all its residents.

,that

NOW BE IT RESOLVED, on this the oth 1993 day of the year the Town of Marshfield, Massachusetts, is opposed to. The Town of Marshfield, Massachusetts, is opposed to S. 1405 as written.

The Board of Selectmen for the Town of Marshfield, Massachusetts, request a revision of S. 1405 to reflect our concerns.

As an elected official of the coastal town of Marshfield, Massachusetts, I am deeply concerned about the impact this legislation, in its present form, will have on the tax base of this community.

I think it is important for you to know and understand some vital statistics about this community to be considered in your

deliberations.

*Sixty-one percent (61%) of our real estate tax revenue comes from the flood plain.

*Eleven percent (11%) of this revenue is generated within 1000 feet of the seawall. The town has 4.5 miles of seawall protecting its coastline. These seawalls were constructed with

federal money in 1931.

*Waterfront land is currently assessed as one million dollars ($1,000,000) per An inland acre is assessed at

$75,000.

on

acre.

The Town of Marshfield (population 22,876) is highly dependent coastal tax revenue to maintain services and infrastructure, for we do not have a large industrial nor commercial base to help cushion our resources.

I am in agreement that we need to increase the membership of flood insurance policy holders in order to maintain an adequate fund. However, if the government denies homeowners the ability to purchase flood insurance, the land becomes valueless and the tax base decreases. Such denial, through the proposed bill, could come in the form of prohibitive rates or prohibitive regulations.

How is the town to maintain its present level of services from schools, police, fire, etc. if this legislation erodes our already economically-depressed tax base?

We consider ourselves an environmentally-concerned town, having spent millions of dollars on clean water, municipal sewerage etc. For more than one hundred years our coastal residents have lived in harmony with their enviornment, abiding by our stringent local by-laws.

As Chairman of the Board of Assessors I was elected to serve the people of this community by assessing property fairly and equitably. Beyond that I feel impelled to protect my community from proposed legislation that could have an adverse effect on our tax base.

I am speaking for Marshfield, but I am sure other coastal communities around the United States are in the same financial position.

I therefore ask you to vote to defeat this legislation as it is written today.