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Uncle Sam wants $50 a week from homeowners

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POSTED December 21, 2013 1:33 a.m.

Back when I was still driving a 1993 Chevy S-10 Blazer I was irked one year to discover my DMV renewal said I had to have a more expensive smog check done.

It cost about $40 more.

When the smog check shop owner handed me the results that the Blazer passed with flying colors, I asked why the state had required the more extensive smog check.

He explained the state had lost a lawsuit with an environmental group regarding how clean certain GMC V-6 engines burned. My engine, he noted, was not among the dirtier V-6 engines. In fact he said the state never had problems with the particular model and that it was one of the cleanest V-6 engines on the road. He then pulled out charts supplied by the state that backed up his point.

So why was I subjected to a more extensive and costlier smog check? The reason was the group suing wasn’t pleased that the actual number of vehicles that would be subjected to the tougher smog check wasn’t higher. The wanted move covered. So in order to settle the state had to agree to toss in other V-6 engines.

The same general rationale is being applied in Washington, D.C., when it comes to flood insurance. The Federal Emergency Management Agency, in order to spread the pain of covering claims through the National Flood Insurance Program is essentially “redrawing” floodplain lines. This would be a “who cares” thing for most Manteca, Lathrop, Ripon, and Weston Ranch residents if it wasn’t for the fact they are redefining flood potential as 200-year events and not 100-year events.

The labels are a little misleading as you can theoretically have seven 100-year flood events in 20 years. Simply put, a 100-year event represents a flood that is likely to happen every 100 years.

That means redrawing floodplain lines to reflect what a mega-flood would inundate such as a dam like New Melones on the Stanislaus River being breached.

What that means is that any homeowner whose mortgage insurance is backed by a federal program such as FHA would be required to obtain flood insurance.

It is an issue that alarms Councilman Steve DeBrum. In his travels related to his job in the dairy industry, he has seen cases where lands that have never flooded in the southern San Joaquin Valley that are now being placed in the federal flood zone. And as such homeowners — including many in high and dry cities —  are facing the prospect of $2,300 plus a year flood insurance policies.

This is all because Congress — reeling from a record $16.38 billion in flood insurance claims from Katrina followed by $7.36 billion in Superstorm Sandy claims — wants to make the national flood insurance program more self-sufficient. It currently has a $24 billion debt to the Treasury. Not only do more losses occur each year but the pool of homeowners who pay into the pot isn’t growing fast enough.

The only way to grow the pot is to spread the risk over more homes.

Much like more extensive smog tests for engines that don’t need it the federal government is pushing to require flood insurance on homes that don’t need it in order to meet their objective.

So why not just increase the rates of those in highly prone flood areas? The government has done that already. Hundreds of thousands of homeowners with federal insurance mortgages in flood areas have already been notified to expect rate hikes. Owners of one typical home in Georgia valued at $125,000 with a current $3,000 annual flood insurance premium has been notified that it will jump to $5,875 a year.

Even with a significant jump in premiums for existing policies, there are not enough insurees to generate needed money. That’s where the 200-year floodplain comes in.

Manteca deployed its Washington, D.C., lobbyist and worked with valley Congressional members to help fight off implementation of the new maps last year. The plan is now back on the table.

Manteca and its neighbors could get out of the clutches of the federal government when it comes to flood insurance by taking a cue from River Islands at Lathrop.

Cambay Group created super 300-foot wide levees certified to withstand the worst flooding by FEMA standards. They did so by building a parallel dry levee and then filling it in to avoid a painstakingly long process to apply for no less than a dozen state and federal permits required to enhance traditional levees.

Such a solution isn’t cheap. It cost River Islands $70 million. They also used dirt on the project site by creating massive interior lakes.

While the price tag seems staggering, it is minuscule compared to what it would cost current Manteca homeowners that could be impacted by the FEMA change. A quick analysis last year put the collective cost to private property owners  in Manteca at $17 million a year in insurance premiums.

That’s $340 million in 20 years in constant dollars.

The question now is whether Manteca should step up its game and start exploring possibilities including joint ventures with reclamation districts or wait for Uncle Sam to slam city residents with what could amount to $50 a week in insurance premiums.

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