Community Rating System 2016
MEMORANDUM
TO: Clay Phillips, City Manager
FROM: Kenneth M. Griffin, P. E., CFM, Director of Engineering and Public Works
DATE: September 1, 2016
REF: Community Rating System
First, the City of Coppell continues to provide service above and beyond what is required in the area of floodplain management. A change in rating does not mean we are doing less;
it just means that changes in the way points are calculated caused the City to fall short on retaining our Class 7 rating.
This year the City receive 1,425 total points, which equates
to a Class 8 rating. To retain our Class 7 rating the City needed 1,500 points. Below is a table which shows the points required for each Class and the corresponding insurance premium
reduction. As a Class 7 community, citizens within the floodplain that had flood insurance received a discount of 15% off their premium. Those same policy holders will now receive
a 10% discount. It’s important to note that the change from a Class 7 to a Class 8 did not impact citizens that have flood insurance policies for property outside the floodplain. A
Class 7, 8 and 9 all receive a 5% discount.
Insurance Premium Reduction
CRS Class
Credit Points
Inside Floodplain
Outside Floodplain
1
4,500+
45%
10%
2
4,000-4,499
40%
10%
3
3,500-3,999
35%
10%
4
3,000-3,499
30%
10%
5
2,500-2,999
25%
10%
6
2,000-2,499
20%
10%
7
1,500-1,999
15%
5%
8
1,000-1,499
10%
5%
9
500-999
5%
5%
10
0-499
0
0
I had the opportunity to discuss our results in detail with our representative on 8/31/2016. The most interesting part of the discussion centered on the number of actual
policies we have and the impact
of a Class 8 rating on those policies. In the City of Coppell, we have a total of 435 floodplain insurance policies. Of those, 45 are within the floodplain and 390 are for property
outside the floodplain. So the movement from a Class 7 to a Class 8 only affects the 45 policies within the floodplain. The other 390 still receive a 5% reduction in premium.
After
determining the scope of the issue, I inquired about the financial impact. Before the change in Class, citizens with policies in the floodplain were saving on average about $93/year.
After the change, they will save about $62/year. So the change in Class has an average impact of $31/year per policy. In actual dollars, as a Class 7 the savings were $5,285/year
and as a Class 8 the savings are $3,891/year for the 45 policies within the floodplain.
Why do I mention the above information? For years, internal to the Engineering Department, we
have discussed the effort to lower our Class rating versus the actual benefit to the citizen. Based on the way points are allocated, it is unlikely that we would ever move to a Class
6. Currently, there are 13,530 points available. However, over half the available points are in four areas that the City’s effort most likely will not change. Those areas are: preservation
of all existing floodplain; acquiring properties that are currently within the floodplain and removing the structures; retrofitting and/or flood control projects; and a complete prohibition
of development within existing floodplain. These four activities have an available point total of 7,323. This year we received only 906 of those points.
I did discuss an appeal process
with our representative since we were so close to retaining our Class 7 rating. There is not an appeal process, but there is a process in which we can request a modification to our
rating. This actually means that we start completely over and go through another 1 to 2-year process to determine if we can receive credit for additional activities to reach the Class
7 threshold of 1,500 points. Some of the items we would change would be our website, our notifications to residents in the floodplain, our GIS mapping, additional studies for floodplains,
etc.
It’s my opinion that we actually perform at a level that warrants a Class 7, however, going through an entire new process for a gain of $31/year for 45 policies is not a good use
of staff resources. My recommendation is that we continue to improve in our floodplain management and make a concerted effort during our next five-year review cycle to move back to
a Class 7.