Let's play a game. We'll call it Spot the Flaws.
Here is part of FEMA's official explanation about how its National Flood Insurance Program (NFIP) arrived at new premiums for homes that had rate subsidies:
"The single most important (factor) is the elevation of the structure in relation to the Base Flood Elevation.''
And here is a snippet from an inquiry by an investigative arm of Congress that examined subsidized flood policies:
"According to NFIP data, property elevations relative to the base flood elevation are unknown for 97 percent of … the 1.15 million historically subsidized policies.''
Do you spot the flaw?
FEMA officials are raising premiums despite not having the single most important piece of information they themselves say is needed to establish accurate rates.
Seems kind of nutty, right?
Just wait, there's more.
Because the NFIP has pretty much cornered the market on flood insurance policies for the past 40 years, no one else has had reason to produce rate studies. FEMA does not publicize its accounting methods and did not return a call this week.
"We've been talking to FEMA about how they set their rates for some time,'' said Alicia Puente Cackley, who has authored several flood insurance studies for the U.S. Government Accountability Office. "We've asked them to explain it to us.
"It hasn't been the exact same explanation each time.''
Spot the flaw?
FEMA not only lacks basic information, it also lacks a checks and balance system. It can set rates without transparency, recourse or even logic.
The accountability office's report last July indicated FEMA has, at different times, suggested subsidized policy holders were paying between 35-45 percent of their true cost. Yet some Pinellas County residents say rates have jumped 500 percent or more.
Spot the flaw?
When Congress passed Biggert-Waters in 2012, FEMA was instructed to rid itself of subsidized policies and produce an affordability study.
By the end of 2013, the agency had eliminated 40 percent of its subsidized policies and had begun increasing rates for the rest. It obviously moved quickly to comply. Yet in early 2014, the agency still had not started an affordability study. In other words, FEMA selectively chose which edicts it would jump on.
Meanwhile, the accountability office warned that by moving so quickly to raise rates, the program could be putting itself in increased financial jeopardy due to a loss of revenue from homeowners who simply stop carrying coverage.
Spot the flaw?
In short, everything about FEMA's implementation of Biggert-Waters stinks.
It appears the agency employed a whatever-it-takes attitude to get out of debt while ignoring basic science, math, business and fairness doctrines.
Which means the debate in Congress is all wrong.
This is not about WHY Biggert-Waters is needed. We already know that answer. The NFIP was heavily in debt, so changes had to be made.
The issue should be HOW Biggert-Waters was implemented. Because it seems fairly evident that FEMA went off half-cocked.
This is an agency designed to help homeowners in crisis, and what it has actually done is created a new crisis.
So, tell me, who will save us from our saviors?