Substantial Damage – You Have Questions, We Have Answers
Cleighton Smith, PE, CFM
Taylor Wiseman & Taylor
Why Are We Doing This?
The National Flood Insurance Program (NFIP) was created in 1968 to allow for previously unavailable flood insurance policies to be written in communities that agreed to adopt and enforce a Flood Damage Prevention Ordinance. The key principles were, and still are:
FEMA requires communities to perform damage assessments after a flood for all structures in their floodplain. If the damages are estimated to be “substantial”, meaning the cost to repair to the pre-flood condition is greater than 50% of the market value of that structure, the structure is required to rebuild in such as way as to meet requirements for new construction. If this process were universally applied, we would not have a repetitive loss problem in the NFIP today.
Whose Job is It?
It is the primary responsibility of the Floodplain Manager, however he or she may use whatever tools, mutual aid agreements, consultants available to them to carry out this work. FEMA recognizes this can be a large undertaking and has created a Desk Reference to be used for this work: https://www.fema.gov/sites/default/files/documents/fema_nfip_substantial-improvement-substantial-damage-desk-reference.pdf.
How Do I Do It?
The actual calculations are facilitated by software created by FEMA found here. This tool can be used to generate damage estimates based on post-flood field work. Data needed are type of foundation, type of building, depth of flooding above the ground outside the house, depth of flooding above the first floor, location of various utilities that serve the building and the estimated extent of damage of these. Checklists can be developed for use by the field team. The software tool has an accompanying field workbook, which is very helpful in developing these estimates. These estimated damages are used to compare with the building’s market value. Tax records are useful, because they separate the building value from the land value (the substantial damage calculation is based on building only, not land value). The damage estimate is divided by the building value to obtain a percentage; if it is over 50%, the building is considered substantially damaged. The Substantial Damage Estimator (SDE) software does a great job of gathering this information and generating a one-page summary sheet to be attached to a letter to the property owner.
What is the End Product?
The substantial damage (SD) letter is the most important part of this process. It typically is a one-page letter, with two paragraphs. The first states that building at this address has been substantially damaged and gives the basis for that determination (e.g. SDE software, community tax records, etc.). There should be a sentence stating that his is an estimate and they have the opportunity to submit actual repair data, which could revise this determination. The second paragraph focusses on what this means to the homeowner. To obtain a new Certificate of Occupancy, the reconstruction must meet current design standards. This paragraph might have information about what steps they should take if they want to be bought out, or information on filing for Increased Cost of Compliance (ICC) if they plan to elevate. Lastly, there should be a point of contact for the recipient of the letter to contact if they have questions (and they will!). The letter should be signed by a high-ranking community official (mayor, administrator, etc.). The one-page summary from the SDE software needs to be attached.
What Does This Mean for the Property Owner?
It depends on the property owner. If they are interested in a buyout, it might prioritize them ahead of others. SD structures can receive waiver of a Benefit-Cost analysis for some FEMA grant opportunities. If they choose to elevate, and they have NFIP flood insurance, they can obtain an extra $30,000 on their insurance, through ICC coverage. The SD letter is a key document the insurance company needs to release the ICC funds. If they believe they are under the 50% threshold, they can submit actual repair bills. One thing to keep in mind, however – if the homeowner did the work himself or herself, we need to factor in the true cost as is a contractor did the work. The same is true of any donated materials.
Is That It?
These are some of the basics of the SD process. One question that comes up is why is one community doing them and not the neighboring community that was hit by the same flood? That is not so easily answered. The process is a basic NFIP community responsibility. However, it is not always the top enforcement priority of FEMA and State NFIP staff. Another item worth noting -- for Community Rating System (CRS) communities, there are credit points involving the SD process. Creating an SD plan (pre-populating the SDE software with properties in your community floodplain), modifying your ordinance to arrive at the SD threshold sooner, either by adding together past storm (cumulative damages), or by lowering the threshold below 50% are credit-worthy activities. See the CRS Manual for more information.
If you have any questions about the SD process or the SDE software, contact the author at firstname.lastname@example.org.
NJAFM exhibited their informational booth at SurvCon 2022 conducted at Harrah’s in Atlantic City on 22 through 25 February 2022. This event was well attended by over 600 Professional Land Surveyors and associates. Our cooperating partner, NJSPLS Director Mark Husik thanked us for our attendance and looks forward to our attendance next year for SurvCon 2023 on 22 through 24 February, 2023
We are planning on attending the NYSFSMA Conference at the Landing Hotel in Schenectedy, New York on 3 to 5 May 2022.
ASFPM provides a mentoring packet downloadable from their website. All New Jersey CFM’s can help increase our membership and make NJAFM stronger by mentoring anyone who is interested in becoming a CFM and help our Association attain our goals.
A big part of NJAFM outreach is to assist in managing floodplains by educating the public about the dangers of flooding. It is very hard to believe that New Jersey suffered 29 deaths directly related to Tropical Storm Ida, and 10 of the 29 deaths were individuals who drove into floodwaters not realizing the depth and the power that these flood flows can release. Outreach will be drawing information from other states “Turn Around Don’t Drown” (TADD) programs to better inform New Jersey residents of this danger.
Anyone interested in helping with the NJAFM Outreach program, please email Chair at email@example.com
Thomas Slowinski, PLS, CFM
NJDEP, Dam Safety & Flood Engineering
Outreach Committee Chair
The NJAFM Training Committee has scheduled several on-line webinar events which will qualify for continuing education credits. Registration links to the upcoming courses will be provided to active NJAFM membership. The webinars are free of charge and open to the general membership of NJAFM and select invited guests. The NJAFM Calendar of Events will include dates for the webinars and topics. Webinars are currently scheduled for April 1, May 13 and May 26. Additional webinars dates will be added and it is expected that the calendar will be full of webinar topics. NJAFM sincerely thanks the effort of the presenters. Topics currently planned range from HEC-RAS discussions, Flood Insurance Topics and Hurricane Outlooks.
Please contact NJAFM if you are able to provide an hour discussion regarding a flood topic important to you. The webinars are an opportunity to express your credentials to community and to get some free advertising for your organization. Should you want to refresh a past NJAFM conference presentation or make a dry run of your 2022 NJAFM Conference presentation during a webinar be glad to host you.
The FEMA Community Rating System (CRS) is a voluntary incentive program that recognizes and encourages community floodplain management practices that exceed the minimum requirements of the National Flood Insurance Program (NFIP). A total of 95 communities in NJ currently participate in the CRS Program. There are a total of 553 communities in NJ that participate in the NFIP.
In CRS communities, flood insurance premium rates are discounted to reflect the reduced flood risk resulting from the community’s efforts that address the following three goals of the CRS program:
How much of discount that flood insurance policy holders can obtain are dependent on the communities CRS Class rating as noted in the table below:
Currently in NJ, there are a total of 95 CRS Program communities and their current class rating is as noted in the table to the right and geographically on the NJ CRS map. As can be seen by the NJ CRS map (courtesy of NJDEP), the majority of the NJ CRS communities and communities with the most discount are generally coastal communities.
The NJAFM CRS committee can assist NJ CRS communities to continue to remain in good standing with FEMA and the NFIP. Over the past few years, the NJDEP has been working with CRS communities to adopt and enforce a new updated code-coordinated model flood damage prevention ordinance at https://www.nj.gov/dep/floodcontrol/modelord.htm. This code-coordinated ordinance aligns the NFIP requirements with the New Jersey Flood Hazard Area Control Act (FHACA) and the NJ Uniform Construction Code (UCC). This has also included working with communities to implement a NJ Model Floodplain Development Permit application form. The NJ model floodplain development permit form can be downloaded here: https://www.nj.gov/dep/floodcontrol/model-floodplain-permit.htm. The NJAFM CRS Committee has supported NJDEP on these efforts and their ongoing training.
If you have a CRS issue that that you would like address or if you would like to participate in the NJAFM CRS Committee, please reach out to the NJAFM CRS Committee at Contact - NJAFM.
Joseph Ruggeri, P.E., CFM, Supervising Engineer
NJDEP, Division of Dam Safety & Flood Engineering, Bureau of Flood Engineering
NJ State NFIP Coordinator's Office
CRS Committee Chair
With the impacts from PTC Ida coming into clearer view and the 10th anniversary of Hurricane Sandy on the horizon, the NJAFM Legislative Committee is accelerating engagement and advocacy efforts to promote sound floodplain management in New Jersey. In January, the Legislative Committee convened its members to discuss engaging legislators to develop a requirement for certified floodplain managers in local government, as well as enhance capabilities of local officials in floodplain management. The Legislative Committee drafted letters to Senate and Assembly leadership asking for consideration of legislation that would formally recognize the Certified Floodplain Manager credential and set educational standards for floodplain administrators in the State of New Jersey. The letter also asks legislators to consider a requirement that FEMA mitigation grants are administrated by certified floodplain managers. The letters highlight the outsized role that NJAFM has in educating floodplain managers and ensuring that the technical proficiency and status conferred by the CFM credential is the baseline for local officials performing floodplain management roles in New Jersey.
NJAFM is also joining forces with the Waterfront Alliance and other advocacy groups to support enhanced flood disclosure requirements for real estate transactions in New Jersey. In early March, Karen Imas and Tyler Taba of the Waterfront Alliance will be presenting the proposed policy framework and action plan for this initiative to the Legislative Committee. The technical knowledge and experience of the Committee will help to inform language for future legislation and ensure that NJAFM's policy goals and priorities are implemented. The accelerating impacts of climate change and recent, deadly flooding events make enhanced flood risk disclosure an imperative for individual and community preparedness. The Legislative Committee believes that enhanced flood disclosure is common-sense and lifesaving.
Interested in floodplain management policy and advocacy? Contact Brian Kempf at firstname.lastname@example.org to join the NJAFM Legislative Committee.
Brian T. Kempf, CFM, AICP, PP
Legislative Committee Chair
Visit our Committee Page for more information on all 8 NJAFM Committees and learn how you can get more involved!
This blog is about NJAFM News and Announcements. Posts can only be made by NJAFM Administrators, however comments to the posts can be made by all registered members. If you have an announcement that you would like posted to this blog, send the request to IT@NJAFM.org