Before initiating a flood proofing funding program, certain factors need to be considered by community officials. Six of the most important factors are covered in the following sections of this chapter:
3.1 Ensure that the projects to be funded are appropriate for the flood hazard.
3.2 Identify the source of the funds.
3.4 Get others in the community interested in and supportive of flood proofing.
3.5 Involve the property owners in the flood proofing and funding decisions.
3.6 Ensure that the community has the legal authority to fund the projects.
3.7 Ensure that local staff will be free from liability.
The "how to" aspects of the funding arrangements are covered in Chapter 4. More information on local experiences can be obtained from the contacts listed in Appendix A.
The financial benefits of flood proofing can be very attractive to community officials. It is usually cheaper to protect a building in place than to acquire and/or remove it. However, flood proofing techniques that leave a building in the flood plain are not appropriate in areas subject to the high hazards of deep flooding, erosion, flash flooding, high velocity flooding or heavy debris flows.
In many places the only safe approach is to remove buildings from harm's way. Flood proofing should be undertaken only where the occupant is not left in a life-threatening situation.
Flood proofing is an appropriate flood protection measure only for certain flood hazards and particular types of buildings. A community should develop criteria to decide which properties should be protected by which measures. The Corps publication, Flood Proofing - How to Evaluate Your Options, provides detailed guidelines on determining the most appropriate measure for an individual building.
Communities should generally restrict flood proofing projects to areas subject to low velocity and/or shallow flooding. Some limit their funding to the safest types of projects as seen by these examples:
Wanting to finance flood proofing projects is one thing; having the money to do it is quite another. Communities may encounter one or two problems in devoting funds to flood proofing: having adequate funds to start a new program, and/or having the legal authority to spend the money on flood proofing. This section reviews the wide variety of funding sources that have been used in communities around the country. The question of legal authority is discussed in Section 3.5.
Property Taxes: Property taxes are the mainstay of most local governments. There are two kinds of property taxes, general and special purpose. Most communities have a "general corporate fund" or "general revenue fund" that may be used to finance many kinds of activities, especially staff and administrative expenses. Frankfort, Kentucky; Rosemont, Illinois; and Fairfax County, Virginia, identified this kind of fund as one of their sources for the money.
A special purpose storm drainage property tax finances the program in Prince George's County, Maryland. Revenue from this separate State-approved tax is deposited in a discrete fund. Money from this fund may be spent only on storm drainage projects (including flood proofing). Impact fees are also collected by the County and placed in this fund.
King County, Washington, has a special County-wide property tax levy that goes into its River Improvement Fund. It can be used for various river maintenance and flood protection purposes.
Sales Tax: Some states authorize communities to levy sales taxes for special purposes. The Economic Development Council of Kemah, Texas, is supported by a 0.5 percent sales tax. The Council funds various community improvement activities including drainage projects, flood plain acquisition and flood proofing. Using its home rule powers, Mount Prospect, Illinois, levies a sales tax of 0.25 percent for flood and stormwater purposes.
Every five years, the citizens of Tulsa, Oklahoma, vote on extending a 1 percent sales tax. Each referendum includes a list of projects to be financed by the bonds. The last one included several flood control projects and specifically set aside $600,000 for flood proofing and acquisition. (While the City found a source of funds, as noted, the City Attorney later ruled that the funds could not be used on private property.)
Bond Issue: Bonds are usually issued to pay for large public works projects, including flood and drainage improvements. Fairfax County, Virginia, and Homewood, Illinois, identified bonds sold for stormwater or drainage improvement purposes as one of their funding sources.
Impact Fees: Some drainage projects in Fairfax County, Virginia, are paid by contributions from developers. They are required to contribute to the cost of handling the increased stormwater runoff produced by their developments. The fees are put in a fund for drainage projects. Flood proofing can be funded when it is shown to be a more economical way to handle a drainage problem.
Creative Financing: A community is limited only by its imagination. Several have found "creative" ways to find funds for flood proofing. For example, Illinois levies an income tax which it shares with local governments. For a few years the share was increased. The City of Des Plaines appropriated $200,000 from this "extra" money to establish a fund for its flood proofing rebate program. The fund still has a balance to support more projects, even though the income tax revenue sharing was decreased back to the old level.
Frankfort, Kentucky, plans to set up a revolving loan fund by augmenting general revenue with the proceeds from the sale of land that had been purchased for low income housing and the phasing out of a housing corporation. Since these two programs were designed to improve housing, there are no problems with using their assets to improve the City's housing stock by flood proofing flood prone homes.
State Support: Some states have had special appropriations to support local programs. The Amite River Basin Commission will be funding a portion of the pilot project in Denham Springs, Louisiana, through its annual appropriation from the State. In 1988, the Illinois Housing Development Authority set aside $500,000 for low interest loans for flood proofing. Eighteen Chicago suburbs and one county were authorized to approve loans from their allocation. This program is explained in more detail in Appendix A.
Federal Support: Several federal agencies, such as the U.S. Army Corps of Engineers and the Tennessee Valley Authority, have directly supported flood proofing projects. The lessons learned from this work is often transferable to local government programs. One example of this is the Corps' publication, A Flood Proofing Success Story, which provides documents on dealing with property owners and contractors that are applicable to all financing programs.
The Department of Housing and Urban Development's Community Development Block Grant and FEMA's Public Assistance and Hazard Mitigation Grant Programs provide funds for communities to administer. These are discussed in Section 4.3.
What motivates a community to fund flood proofing projects? Those that have investigated or implemented funding programs cited one or more of five broad reasons: economics, comprehensive planning, external impact, the Community Rating System, and post-flood mitigation funding. These five items are discussed in detail in this section.
Economics: The most frequently cited reason for funding flood proofing was cost - it was shown to be less expensive than other flood protection measures. In some cases, as in Fairfax County, Virginia; Homewood, Illinois; and King County, Washington, studies of local flood problem areas reviewed a variety of structural and nonstructural alternatives. Where flood proofing was found to be the most economical solution, the community favored it instead of a more expensive structural project.
Flood proofing is also less expensive than acquisition, especially where property values are high. As shown in Figure 8, below, King County estimated that it could elevate eight homes for the price of acquiring and relocating one. Part of this large difference in cost is due to the high cost of housing in the Seattle area.
Two cautions must be noted. First, communities must remember that flood proofing does not stop street and yard flooding, damage to infrastructure, traffic disruption and other problems that accompany floods. Protecting buildings is often only one goal of a flood protection program. Thus, using dollars only may not produce an accurate comparison.
Second, predicting the actual costs of projects in areas with little flood proofing experience may be difficult. A homeowner may construct a project at a relatively small out-of-pocket cost. The same project will cost substantially more if it is fully funded by a government agency that pays for engineering design and prevailing wages for the contractor. For example, the first bids received by Homewood, Illinois, were twice the original estimates. This report includes the costs of the projects described to show the great range of prices in different parts of the country.
Comprehensive Planning: Some communities have prepared comprehensive flood plain management or flood damage reduction plans. During the planning process, they concluded that flood proofing should be a part of the program, especially in isolated areas that won't be protected by structural projects. The plan may recommend a variety of ways to implement flood proofing projects, such as providing technical assistance and funding.
King County, Washington, prepared such a comprehensive plan. It includes preliminary project recommendations for over 120 flooding and erosion problem sites in the County. The plan looked at home elevation along with other flood protection measures, such as retrofits of existing flood control facilities, relocation of homes, construction of new flood or erosion control facilities, and improved flood hazard education and flood warning.
Cost
One-time Cost
Annual
Structural capital improvements
265,000,000
$300,000
Relocation and elevation
240,000
Elevate 168 houses
4,000,000
Acquire 234 houses
42,100,000
Acquire 113 mobile homes
7,300,000
Maintenance and monitoring
383,000
2,400,000
River planning
4,850,000
0
Flood hazard education
106,000
15,000
Warning and emergency response
97,000
62,000
Complaint response and enforcement
0
216,000
Interlocal coordination
64,000
15,000
Administration
0
$150,000
$323,900,000
$3,398,000
The resulting King County Flood Hazard Reduction Plan identifies a need for more than $300 million in flood hazard reduction efforts (see Figure 8). The plan identifies 168 homes as possible candidates for elevation, at an estimated cost of $4 million. Although the average cost of elevating a home is much less than the cost of acquiring and relocating it, elevation was recommended only in areas with very low velocity flows and where a home would not be at risk from undercutting through erosion. It should be noted that costs vary greatly around the country, depending on building types, how many non-flood related items (such as stairs and landscaping) are included, and local economic conditions.
Frankfort, Kentucky, was scheduled to have a large portion of its downtown protected by a levee constructed by the Corps of Engineers. The project would leave several hundred properties exposed to flooding by the Kentucky River. The City created a task force which conducted a building-by-building survey. The resulting mitigation plan recommended acquiring properties in the high velocity floodway, flood proofing others, revising the City-County comprehensive plan, assisting in locating new low and moderate income housing, constructing some small protection projects, and publicizing flood insurance.
While not preparing comprehensive plans, other communities have opted for flood proofing as part of comprehensive approaches to help all flood prone properties. In some cases, flood proofing was chosen as a way to help areas not protected by planned structural measures. For example, two Illinois communities, Mount Prospect and Des Plaines, initiated rebate programs to help people who would not be protected by major sewer improvements.
External Impact: Sometimes flood proofing is selected because other flood protection measures have adverse impacts on other properties or the environment. Structural projects can increase flood heights and destroy habitats. Except for barriers, flood proofing projects do not alter flood flows or affect habitats; they just modify existing buildings.
Flood proofing can also be less disruptive to a neighborhood than, for example, removing houses or building a large wall. Fairfax County, Virginia, and Tulsa, Oklahoma, had proposed channel improvements at public meetings. Residents objected to having their back yards disturbed by bigger and wider ditches. These two communities have since redirected their planning efforts to focus on flood proofing solutions in these neighborhoods.
Community Rating System: The Community Rating System (CRS) is a part of the National Flood Insurance Program (NFIP). Flood insurance rates are reduced in communities that apply to the CRS and show that they are implementing flood plain management activities that exceed the minimum requirements of the NFIP. There are 18 credited activities, including public information programs, technical assistance to residents, higher standard regulations, acquisition and relocation, flood proofing and flood warning. These activities and their credit points are explained in the CRS Coordinator's Manual for local officials.
Most communities apply because they have already implemented some of the credited activities. However, once in the CRS, some want to improve their insurance rate reduction, so they initiate new programs to receive more credit for more activities. For example, officials in Kemah, Texas, and South Holland, Illinois, became interested in flood proofing after reading the manual. They have implemented public information programs and have planned funding programs, in part to receive CRS credit, but primarily to offer an additional form of assistance to help protect flood prone properties.
Post-flood Mitigation Programs: Usually a community becomes interested in flood protection programs after a flood. Not only is there interest in trying new approaches, there may be funds available to support new programs. In the last few years, Federal disaster assistance programs have promoted and funded flood proofing as a way to reduce future disaster assistance payments.
For example, while processing the applications for grants to repair flooded wastewater treatment plants or other public buildings, FEMA staff identify flood proofing or other mitigation alternatives. They encourage the local applicants (and provide 75% of the cost) to incorporate flood proofing instead of returning the building to its pre-disaster, flood prone condition. Many communities have found the funds needed to match the FEMA grant for flood proofing.
The Department of Housing and Urban Development's Community Development Block Grant program also has a post-disaster funding program. A State agency administers this program in rural areas. The Village of St. Charles, Michigan, took advantage of this program to fund a comprehensive flood damage reduction program after it was flooded in 1986. The program included dike construction, bridge improvements, sanitary sewer protection and elevation of homes. The cost of home elevation was shared with the property owners on a 75/25 basis.
Voluntary property owner involvement is vital to the initiation and long-term operation and maintenance of a flood proofing project. However, flood proofing is often viewed by property owners as a poor alternative to a flood control project that keeps water away from them. They would rather have the problem corrected than have to modify their homes or lots, especially if they think the resulting appearance will affect their property values. Many times residents perceive a flood proofing proposal as evidence that local officials are giving up on them and are leaving the residents to fend for themselves.
Flood proofing can be a major disruption to people's houses. Planning for a flood protection project can be a tense time for the owners, who may not know whether the community will be stopping the flooding, altering their houses, or relocating their families out of the neighborhood. Therefore, flood proofing projects may begin with the owners suspicious of, or opposed to, the idea.
Keeping residents informed was the recommendation most frequently voiced by communities experienced in implementing flood protection plans. A guiding principal for Prince George's County, Maryland, calls for developing a personal relationship and mutual trust with the property owner. This requires both the right attitude and sound technical data that can be explained in lay terms.
To gain support and cooperation for any flood protection proposal, the experienced communities recommend citizen participation early in the planning process. Tulsa, Oklahoma, South Holland, Illinois, and King County, Washington, all used existing standing committees to represent the interests of flood plain residents.
Other communities formed temporary committees for specific areas. Homewood, Illinois, and Frankfort, Kentucky, developed their plans during a series of public meetings with representatives from the affected neighborhoods. The planning process reviewed the costs and benefits of all alternatives to help residents understand why their preferred projects might not be feasible.
In some cases, residents may promote the idea of flood proofing. In Denham Springs, Louisiana, residents had been waiting for years for State and Federal agencies to decide if a large reservoir would be built. Planning for the reservoir had taken a long time because of economic and environmental problems. Some residents felt that "they won't see a flood control project before they die." They went to the Amite River Basin Commission, which responded by starting a pilot project to demonstrate how to elevate homes and train local contractors in the techniques.
Once there is general support for a flood proofing project, continuous contact with the owners must be maintained. Details of the project plans must be worked out and their participation in this task is vital. Homewood, Illinois, held a general meeting with just the residents who would be assisted, followed by one-on-one meetings between the owners and the architects during the design stage.
Prince George's County, Maryland, spends a great deal of time with the affected residents. Construction plans account for the appearance of the final product and landscaping as well as flood protection. A few minor projects, such as correcting utility line violations, may be included at the County's expense to continue the good will with the owners. Contact with the owners and their neighbors is continuous throughout planning and construction. One contractor's supervisor estimated that each day he spent two hours on project supervision and six hours on public relations.
Two legal questions sometimes arise when considering government involvement in flood proofing: the statutory authority to spend public money on improving private property, and liability for protecting private property. In some communities, legal challenges have prevented implementation of well-planned programs.
The problem of statutory authority arises from Dillon's Rule, a Nineteenth Century court ruling that found that because they are created by State government, local governments can do only what State laws specifically authorize. If an action is not authorized by statute, a community cannot do it. In some states, larger communities may be granted "home rule." A home rule community is authorized to do anything that is not prohibited by statute.
Prince George's County, Maryland, does not have a statutory authority question because Maryland law authorizes local governments to spend public funds on "stormwater management" which is defined as:
... the planning, designing, acquisition, construction, demolition, maintenance, and operation and disposition, practices, and programs for the control and disposition of storm and surface waters, including floodproofing and flood control and navigation programs.
Most states do not have laws that address flood proofing so clearly. A few communities reported either that it was against State law or that there was not specific authority to use public money to improve private property. In Tulsa, the City Attorney issued an opinion that read:
Under the Oklahoma Constitution ... expenditure of tax dollars must be for a public purpose.
Flood proofing will increase a building's value with primary benefit to the individual property owner rather than the community and therefore does not constitute a public purpose...
It is our opinion that the City of Tulsa may not use sales tax funds to finance or construct flood proofing projects on private property since such expenditure would be for a private rather than public purpose. Opinion 92-36
Legal reports in two other states reached different conclusions. In response to a request from the Amite River Basin Commission, Louisiana's Attorney General issued an opinion that read:
We see no reason why the Commission cannot conduct such projects in cooperation with other public and private entities, who will also be benefited thereby. That this project will be conducted upon and thereby benefit private property, does not, in our opinion, obviate the public character of this project as encompassed within the Commission's authority to develop flood protection plans. It occurs to us that most, if not all, flood protection facilities, works and plans benefit private property and the owners thereof.
The fact that the expenditure of public funds for projects in the public interest may result in the enhancement of private property does not denigrate the public nature of such projects and the public purposes served thereby. Opinion 93-193
The authority under which Illinois communities without home rule could act was researched by Professor Clyde Forrest, Jr., an attorney and professor of planning at the University of Illinois. He concluded:
... a review of Illinois Revised Statutes has disclosed many provisions relating to municipal drainage works and housing repair programs. When the necessary actions to achieve flood proofing are viewed as serving a public purpose, protecting the health and safety of citizens of the municipality, current statutes yield an interesting array of enabling authority.
It is my opinion that authority exists for a non-home rule municipality to undertake the restoration of housing areas and construction of improved storm drainage projects and to use unrestricted public funds for such purposes.
Professor Forrest cites five statutes and one section of the Illinois Constitution. The strongest authority comes from statutory authorizations for communities to undertake community development activities, to bring buildings up to safe and sanitary conditions, and to protect their residents from the health and safety problems of flooding. In Illinois, as in most states, there is authority to spend local funds on activities whose costs are shared with a State or Federal agency.
What if a flood proofed property is later damaged by a flood? What if the owner failed to maintain a protection measure? These questions have been debated nationally for some time. The topic has been studied extensively by Jon Kusler, nationally known attorney in flood plain management law. Mr. Kusler summarized his most recent findings in Floodplain Management in the United States: An Assessment Report, Volume 2, prepared for the Federal Interagency Floodplain Management Task Force, 1992.
Excerpts from that report are quoted here. However, each community's legal department should provide more specific guidance. While no court cases involving flood proofing were found, the following general findings apply:
1. Government agencies are generally not liable for flood damage unless the flood was caused by a government action.
Except in a few instances, governments are not liable for naturally occurring flood damages. Government has, in general, no duty to construct dams, adopt regulations, or carry out other hazard reduction activities unless required to do so by a statute. It is only where a government unit causes flood damages or increases natural flood damages that liability may arise.
As a result, some government attorneys have recommended, in some instances, that agencies or local governments 'do nothing' with regard to flood loss reduction as a way of reducing potential liability. This is increasingly poor advice....
As a practical matter, it is often impossible or impractical for a City or State to 'do nothing' with regard to hazard areas in order to avoid liability. Cities have usually already undertaken a broad range of activities that may increase natural flood damages on private property. These activities include construction of roads and bridges, storm drains, dikes and levees, sewage treatment and water supply plants, and various public buildings in the flood plain. Given the high risk of liability associated with these activities, it may be far more appropriate to install a flood warning system with the slight chance that liability may result if the system is incorrectly designed or maintained than it is to face unmitigated flood damages resulting from the earlier activities. (pages 10-12 - 10-13)
2. Liability is based on negligence. A community is well defended by a properly designed and maintained project.
In general, government units are not 'strictly or absolutely' responsible for increased flood damages. Liability usually results only where there is a lack of reasonable care.
Where the standard of reasonable care is judicially applied to an activity, the seriousness of foreseeable threat to life or economic damage is an important factor in determining reasonableness of conduct. In general, the more serious the anticipated threat, the greater the care the government entity must exercise. (page 10-13)
3. Policy or discretionary actions are more defensible than nondiscretionary, ministerial actions.
As a general rule, courts do not hold legislative bodies or administrative agencies liable for policy decisions or errors in judgment where the legislature or agency exercises policy-making
or discretionary powers. But they often hold agencies responsible for failure to carry out nondiscretionary duties or for negligence in carrying out ministerial actions. (page 10-13)
4. Government employees are usually protected from liability suits.
Although governments may be liable for increased flood or drainage losses in a broad range of contexts, government employees are usually not personally liable for planning, permit issuance, operation of dams, adoption of regulations or other activities No personal liability results where a government employee acts in good faith, within the scope of his or her job, and without malice. Successful lawsuits for hazard-related damages against government employees under common law theories or pursuant to Section 1983 of the Civil Rights Act are apparently nonexistent. (pages 10-13 - 10-14)
Based on these findings, a community has five ways in which it can protect itself from lawsuits:
1. Staff should become technically competent in the field. The community won't be sued if the project is correctly designed or if staff give the right advice and no one is damaged by flooding.
... 'liability can be avoided if flood damages are avoided.' From a legal perspective, this is a sound philosophy. (page 10-17)
2. Staff should limit flood proofing advice and projects to areas where it is appropriate, i.e., areas of lower velocities and flood depths. This will reduce the dangers of failure and the level to which "reasonable care" must be applied. For example, as noted in Figure 9, Prince George's County has decided to avoid more complicated projects.
3. The community should enter into a contract or agreement with each property owner. The agreement should specifically exempt the local government from liability due to damage or loss that may result from failure of the project. An example of such an agreement is on Figures A-8 through A-10.
4. Staff should follow nationally recognized flood proofing guidelines. Almost all professions have a set of accepted practices or standards. For example, accountants do not certify that a company's finances are straight, they say that they have reviewed the company's books in accordance with "Generally Accepted Accounting Principles."
Building officials do not review plans to see if the building will be protected from flood damage, although that is the ultimate objective. They review plans to see if they meet minimum flood plain management or building code standards for flood plain construction.
A professional is normally not held liable if he or she acted in accordance with the accepted standards of the profession. A set of flood proofing standards or guidelines would greatly help flood protection staffs. Unfortunately, such standards do not exist yet. In the meantime, the community can use the Corps' manual Flood Proofing: How to Evaluate Your Options (see page 9) or FEMA or state guidance to prepare its own standards and have them adopted by its governing board.
... from a legal perspective it may be desirable to submit proposed standards ... to a community's legislative body (e.g., community council) for debate and approval. Due to the special way legislative decisions are treated by the courts, legislative judgments, particularly those of a discretionary nature, are less likely to result in a successful liability suit than are agency decisions. Courts generally defer to legislative judgment. (page 10-17)
5. The Community may want to purchase liability insurance or establish a self-insurance pool or plan to protect itself.
This floodwall protects a walk out basement and was financed by Prince George's County, Maryland.
This example shows how attention to detail is critical in flood proofing. Being five feet high, the design must account for over 300 pounds of water pressure per square foot. A watertight connection to the building wall is vital. Improperly designed connections have been shown to be a major cause of failure of this type of project.
Note the sump to handle internal drainage and the electrical supply for the sump pump. The local building code requires a railing for walls higher than 30 inches. These and other complications have led Prince George's County to decide not to fund any more walls higher than three feet except where technically feasible and cost-effective.
