New Harmony hit by flood plain dilemma

A chunk of downtown New Harmony is now located in a flood plain – with homes and businesses on Tavern and Church Street to the west, stretching to property on Steam Mill, Brewery and Fredrick streets.

The new flood plain maps take effect Nov. 5 – meaning New Harmony residents who fall within the new flood zone area must have flood insurance on their property. But flood insurance for home and business owners could reach anywhere from $400 a year, to $4,000, Flanders said, after receiving quotes from multiple agencies.

The bed and breakfast is his home and place of business – and is not currently in a flood zone, nor does he currently carry flood insurance.

Residents who own their property – they do not have a mortgage through a bank or lending company – are not required to purchase flood insurance.

But that’s a risk the property owner would assume, and some residents in New Harmony are thinking about taking the chance to avoid insurance costs.

New Harmony town council members held a meeting Saturday for the community to learn more about the flood plain designation and how it could impact residents’ property value, mortgages and insurance rates. The panelists included George Bowman, assistant director of flood plain management at the Department of Natural Resources; Andy Weintraut, branch manager at Schultheis Insurance in Mt. Vernon; Ryan Farmer with Ryan Farmer Appraisal Company; and Michelle Hudson, a realtor and broker with Shrode Agency in Mt. Vernon.

New Harmony residents Caroline and Tom Williams have two pieces of property in town – one in which they live, and another they are remodeling and hope to sell.

But the property they’re hoping to sell now falls within the flood zone, but they own the home and will not be required to obtain the additional insurance. But not only are they worried the house will be a difficult sell with the new designation, they’re debating on whether to buy flood insurance for the home while its for sale.

“We’re worried that once we finish this house to sell, that it would be a significant financial burden to anyone who buys it,” Caroline Williams said.

Hudson, who has 27 years of experience as a realtor, said she has found flood plain properties difficult to sell sometimes. She said those properties typically take more time to move off the market.

“There are certain stigmas associated with various things which we are unfamiliar – with flood areas, a majority of people are not familiar with them,” Hudson said. “I feel as a realtor, that stigmatizes a property. It does affect buyers on a variety of levels.”

She said she thinks part of minimizing that stigma against flood plain properties is educating potential buyers about what costs are associated with flood insurance, and what the previous owner’s average insurance rates were.

Another concern for some residents is once they buy the flood insurance, what’s to stop the insurance premiums from skyrocketing over the next few years.

Weintraut said he would strongly encourage anyone affected by the new rezoning to talk to their insurance agents immediately – there’s not much time before the November deadline.

He said anyone who purchases flood insurance under the current zoning, would have the lower premium for at least a year.

“If you’re going to have to get, you know you’ve got a mortgage and you have to comply, I would get it and have that extra year at a lower rate because you’ll never get it at that price again,” Weintraut said.

He said in talking with the flood insurance companies he represents, he doesn’t believe the cost of flood insurance for people living in a flood plain will increase drastically in the next few years, but also said with legislative changes the cost may not be finite.

He said there are no guarantees that the flood insurance premiums would not increase over time. There are still changes to how the flood mapping process work coming down the pipeline, he said, and no one really knows what prices could look like in five to 10 years.

The last flood plain maps adopted in New Harmony was 1987. The new base flood elevation is 380.4 feet.

But one silver lining to the new flood map is that the DNR and the Federal Emergency Management Agency has approved the affected area as a “fringe” area, meaning any new construction on designated flood areas -- building a house, business, barn or other structure – would not need to go to the state for permits. The “fringe” designation keeps permit authority on the local level.

The preliminary maps were finalized in 2011. Bowman said FEMA didn’t begin the 90-day appeal period until 2013. He said residents and business owners then had from June until September of that year to make a formal appeal of the new map.

Although the appeal period is over, and the maps will take effect in November, some New Harmony residents are still arming to go to battle.

Which Bowman said he’d like to receive any additional information or thoughts from residents as DNR, FEMA and other government agencies work with Illinois to possible study the Wabash River and its reservoirs in the coming years. This study could help provide more up-to-date and accurate information to the agencies when creating future maps.

But it’s a long process, Bowman said, and won’t change the new flood map.

Linda Warrum, one of the town council members, said she understands why the people are angry, and that the council wanted to facilitate the public meeting to get some answers.

The town council had to pass an ordinance accepting the new maps, she said, in order for New Harmony residents to get flood insurance.

“Also, it would be difficult for New Harmony to receive any federal and state grants,” she said. “There is no good answer. It is something is happening not only here, not just in Indiana, but all over.”