OCEAN CITY – The City Council expressed a consensus this week to amend the Code to make up for a potential lack of flood insurance once new flood maps for Ocean City are approved.
“A couple of years ago, the federal government through FEMA began the process of remapping the Town of Ocean City Flood Maps. Primarily the purpose of the Flood Maps is to determine what level of insurance is required for a particular property. I want to stress, they are actuarial. They are not a building code,” City Engineer Terry McGean said.
According to McGean, FEMA notified the city that the proposed Flood Insurance Study for Ocean City has been completed, all public comments have been addressed and the appeal process for the proposed new Flood Insurance Rate Maps has ended. The new maps will become effective on July 16.
Changes to the maps impact the city’s Flood Damage Prevention Ordinance and the city’s Building Code, and staff is recommending changes to the Code that adopts the maps while maintaining the city’s high standards of storm resistant construction. Either the existing Code or proposed draft Code revisions must be submitted to the State National Flood Insurance Program Coordinator within the next month.
McGean furthered, based on the new maps, many oceanfront properties should see a significant reduction in their flood insurance rates while some bayside properties are likely to see an increase. However, the cost of construction should not be impacted by the proposed Code changes.
“The point where we are now is we are going to need to adopt these maps, which has significant implications on the way our code works but we must adopt the maps in order to remain part of the National Flood Insurance Program, which provides significant rate reductions for our property owners,” McGean said. “Once you [Mayor and City Council] all are comfortable with the proposed code changes, it has to go to the State for their approval. Once the State approves, it will return to the Mayor and City Council for adoption.”
The goal moving forward is to allow property owners to take advantage of the lower flood insurance rates most will recognize using the new maps, while maintaining a safe and sustainable community.
The existing flood maps put in place in 1986 places most ocean front properties in the V Zone, which stands for velocity. The V Zone has the highest insurance rates and the highest construction standards. Most Boardwalk properties are located in the A0 Zone, and virtually all property in Ocean City is located in a 1 percent, or 100-year flood zone with a mapped Base Flood Elevation (BFE.)
“That means in any given year you are given a 1 percent chance of having a flood equal or higher severity then what is none as the 100-year flood, which means in a 100-year period there is a 63-percent chance that you are going to have a flood in an equal or more severe as the 100 flood, and in the time you own your home, or a 30-year mortgage there is a 30-percent chance that you will experience a storm equal or more severe then what is known as the 100 year storm,” McGean explained.
Due to beach replenishment, the dune and the seawall, under the proposed flood maps, there are no V zones west of the building limit line.
“So there are no more properties in Ocean City that are built with buildable area located in the V Zone under the new maps,” McGean said. “That is a very good thing and something that since we have done beach replenishment we have been hoping for.”
Also, ocean front properties south of 143rd Street are now located completely out of the 1 percent flood zone. Between 143rd Street and the Delaware line, properties are in the A Zone except for Ocean Place and Starboard Tack Condo who appealed and were not successful. However, FEMA did issue a map revision for Ocean Place and Starboard Tack Condo that said because of their high elevation they have taken them out of the flood zone.
Most Boardwalk properties are also out of the 1 percent flood zone, and many parts of Ocean City now located outside the 1 percent flood zone will have no mapped BFE.
Insurance implications of the new maps are almost all oceanfront properties will see a significant decrease in their flood insurance costs due to no longer being located in the V Zone, and many other properties will also see a reduction in flood insurance rates due to no longer being located in the 1 percent flood zone, V or A.
Properties remaining in the same flood zone as the existing maps are likely to see an increase in their rates due to overall nationwide rate increases. Unfortunately, most mortgage companies may not require flood insurance if a property is located outside of a mapped 1 percent flood zone. Because of this, instead of taking advantage of the ability to get flood insurance at a much lower rate, many may choose to drop flood insurance altogether.
“This does not mean flood insurance is not available to you. It does not mean you should not purchase flood insurance. You will be able to purchase flood insurance and it will be much cheaper then you have paid in the past, but your mortgage company will not make you get it,” McGean said.
Staff is recommending the council urge every Ocean City property owner to maintain flood insurance and to work with banks, insurance agents, property managers and other stakeholders towards this goal.
Regarding building code implications, staff is recommending Chapter 38 be amended if the new flood maps are adopted to change all elevation references from NGVD 1929 to NAVD 1988 for consistency with new flood maps, which is an a difference of an eighth of a foot. Also, since all V Zones are now located east of the building limit line, prohibit construction in the V Zone.
“The best assurance when a storm does hit is to have some foundation a sufficient elevation. It appears to me the proposed changes from staff continued the criteria that we have in place,” Councilman Dennis Dare said.
Looking back to the 1970’s when town officials implemented the building limit line and critical foundation requirements, which include required elevations, Dare pointed out the town was in the forefront of protecting its property owners.
“The foresight that the Mayor and City Council had in the 1970’s is remarkable. You can see the difference in town because so much of the town north of 30th St. was developed after the 70’s when this criteria went into place as opposed to the downtown that was developed 100 years before that. I think it is a good move to maintain that,” Dare said.
Dare furthered if a house is built after the changes are made and owners elect not to purchase flood insurance, at least code requirements will protect them.
“When the storm does hit here, and if we have our properties at the right elevations with the proper foundations we are going to survive the storm a lot better than recover from it a lot faster,” he said. “The real cost savings in this is most property owners in Ocean City are going to see their flood insurance cut in half but let’s not reduce our standards. Let’s just reduce the bills.”
The council voted 5-0, with Council President Lloyd Martin and Councilman Tony DeLuca absent, to forward the item to be presented again at the next legislative session providing the public opportunity to comment.
Paired with the flood map discussion, Chief Building Official Kevin Brown initiated a discussion regarding the changing of the Code’s definition of “substantial improvement” so that cumulative improvement costs begin 10 years from the date of the proposed improvement permit application, instead of from initial construction, which will encourage redevelopment and match FEMA’s model ordinance.
Currently, the Code definition for “Substantial damage” is “any reconstruction, rehabilitation, addition or other improvement of a structure, the cost of which equals or exceeds 50 percent of the market value of the structure before the start of construction of the improvement. This term includes structures which have incurred substantial damage, regardless of the actual repair work performed. The term does not, however, include either: any project for improvement of a structure to correct existing violations of state or local health, sanitary or safety code specifications which have been identified by the local code enforcement official and which are the minimum necessary to assure safe living conditions, or any alteration of a historic structure, provided that the alteration will not preclude the structure’s continued designation as a historic structure.”
The Code furthers, “Substantial improvement is commenced when the first alteration of any structural part of the building is begun; costs of incremental improvements to a building or structure shall accumulate with respect to the 50 percent criterion which defines substantial Improvement.”
The recommended change strikes “is commenced when the first alternation of any structural part of the building is begun”, to state instead, “shall be cumulative and costs of incremental improvements to a building or structure shall accumulate with respect to the 50 percent criterion which defines substantial improvement. Improvement shall date back ten years from the date of each application for building permit.”
“When property sales were high, property values were high, and at that time substantial improvement wasn’t even a question but now after that spike hit things fell back and finally are now coming back to where market value is somewhat stable. With that said, the cumulative cost of the first alteration of a structure adds up. Since 1971, if the structure was improved, that accumulative value gets us much quicker to that 50 percent,” Brown said. “In other words, if a building permit is submitted today, we will only go back and add those cumulative costs of improvements from 10 years back and not back to 1971. Therefore it will allow folks to improve their properties without the fear of having to bring entirely up to code.”
The council voted 5-0 to approve the suggested language change defining “substantial improvement” and the item move to first reading at the next Mayor and City Council legislative session at such time public comment will be accepted.