Indianapolis, FEMA seek deal on flood insurance suspension

The city and the Federal Emergency Management Agency were in settlement talks Thursday to lift a suspension of flood insurance policy renewals for Marion County homeowners.

The possible deal averted a showdown in U.S. District Court in Indianapolis, where the city had asked a judge to stop FEMA from denying policy renewals and new policies.

A hearing Thursday was postponed when the court was notified that FEMA will work with Indianapolis to identify a solution that assures a reinstatement of Indianapolis' coverage, said Taylor Schaffer, a spokeswoman for Mayor Joe Hogsett.

FEMA placed a hold on policies April 22 because it claimed Indianapolis made mistakes when it updated its flood-protection map and ordinance. The suspension could affect many of the 7,000 homeowners who live in the flood plain in Marion County and are required to buy flood insurance, as well as homebuyers seeking mortgages in flood zones.

With a compromise, the city could avoid taking the ordinance back before the City-County Council for fixes on May 9, which would expose homeowners to suspended insurance for another week and a half.

City lawyers had argued in their legal complaint that the suspension would have “the effect of stripping thousands of Indianapolis households and prospective homebuyers of their eligibility for federal flood insurance.” Flood insurance can be bought through FEMA's National Flood Insurance Program or through private insurers, which can be more expensive, city officials said.

“FEMA’s suspension comes during the height of the spring rainy season,” the complaint read. “Should Indianapolis flood during the period of FEMA’s suspension while homeowners are without flood insurance, the economic consequences for Indianapolis could be disastrous.”

The suspension also applies to homeowners in Beech Grove, Lawrence, Southport and Speedway.

The federal government requires counties to update their flood protection ordinances about every 10 years. Marion County began working on its plan last year and sent it to the Department of Metropolitan Development for review and then to the City-County Council for approval on April 11 in order to meet an April 19 deadline.

But on April 22, FEMA notified the city that the ordinance had 10 mistakes that needed to be fixed and until they were, the insurance policies were suspended. The city immediately changed six of the alleged errors to FEMA’s liking, but the other four need to go through the City-County Council legislative process.

Because the council doesn't meet until May 9, the city wanted a restraining order to prevent homeowners from having their coverage lapse.

The possible settlement would come as a relief to Carmen Ton, who lives near Mud Creek on the northeast side. Ton said she was preparing to mail her insurance renewal Thursday when she read about the suspension and got nervous.

“This is simply untenable that FEMA can pull the rug out from homeowners simply because of a bureaucratic glitch,” she said. “I own two homes and mailed in one check two weeks ago that was cashed. The other is due May 25, so I just put it in the mail. I hope it is accepted."

Ton’s homes are on Sergeant Road next to Mud Creek near Fall Creek Road. She said the houses are not in the flood plain, though parts of her properties are, so she isn’t required to purchase insurance.

“The cost isn’t as much as in the flood plain, about $500 a year,” she said.

A spokeswoman for FEMA declined to say what Indianapolis did wrong, but city officials described the 10 allegations of “non-compliance” by FEMA as technical and semantical and said they had no problem changing them if it saves homeowners grief.

“We received no advanced notice of the suspension, nor any indication from FEMA … over the past eight months that our ordinance language was insufficient,” said Jeff Bennett, deputy mayor of community development in an email.

Bennett said the city had contacted Sen. Joe Donnelly and Rep. Andre Carson for help.

Indiana Department of Natural Resources spokesman Phil Bloom said every county in the state is renewing its flood ordinance and of 85 that have been completed Marion County’s is the only one FEMA has sent back.

The city said DNR reviewed and approved its ordinance. According to a letter addressed to Hogsett,  DNR water planner Darren Pearson said the agency "has approved the above referenced floodplain management regulations."

Jim Polito, who represents of group of homeowners in the flood zone of the Warfleigh neighborhood on the north side, said he renewed his insurance in April and said “any disruption could be disastrous.”

“If there is a lapse and you have to reinstate, that is going to hurt,” he said.

Call IndyStar reporter John Tuohy at (317) 444-6418. Follow him on Twitter: @john_tuohy.

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