Vernon K.
that it is going to be out there someday. You know it may not happen for many years and
I've lost the use of my land."
The flood insurance had a good rationale for saying, "Well, we're not going to use
anything that we don`t know today--pretty darn sure of today. If something new comes
up and changes, we'll change the floodplain when that happens. That's really not all that
difficult to do, you just change the line on a map
it may have some strong
impacts on people. It's not hard to do.
Whereas, if you discover that you made a wrong frequency analysis in designing a levee,
you can't go back and tear part of the levee down because you thought it was too high or
build it up higher either because you have to go through an incremental, economic
justification analysis to get any addition on that levee which is almost impossible to get.
Making changes on a structural project are infinitely more difficult than making changes
in an
report or a flood insurance report. That's really the basic difference in
the two concepts and why they don't agree. Well, the flood insurance hasn't been as
strong at trying to get the Corps to change as the Corps has been trying to get FEMA
[Federal Emergency Management Agency] to change and to use expected probability.
The Corps, when I was with the Corps, we always tried to get them to do that because we
said, "Well, in the long run if you do that you'll be saving yourself money because you
won't have to change the floodplain and you'll be getting returns on your money that are
more closer to the actuarial rate."
But FEMA says, "Well, it's not hard for us to change the rates either. If we're not getting
the kind of money we need, why we'll just raise the rates." That's what they've done.
They didn't really do a hard economic appraisal on what they should do to change their
rates and so forth. They just said, "Hey, we're losing money. We'll increase the rates
until we quit losing money. That's the way they've done it so far.
Q ..
That's a very practical approach, isn't it?
Well, it's a simplistic approach and it works politically, too, I guess. It's a lot easier to
A
put your books before the public and say, "Look, we're losing money. We've got to
charge you more. Then it is to say, "Hey, we may lose money if we don't raise our
rates. We think we might. People don't want to buy that, they'll buy the other concept.
So, anyway, we get into those kind of differences.
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