Regulatory Updates

The Goundwater Sustainability Act of 2014

The following questions are specific to the Mid-County Region:


1) What are the Top 5 Points our community should know about Mid-County groundwater issues?

        • Our shared groundwater basin is in a state of overdraft with seawater contamination at our coastline. This condition is unsustainable and is a result of historically pumping out more water than can naturally be replenished by rainfall. 
          • In 2014, California passed landmark legislation, the Sustainable Groundwater Management Act, which (for the first time ever in California) requires statewide management of groundwater. Locally, this means that a Groundwater Sustainability Agency needs to be formed by 2017, a Groundwater Sustainability Plan needs to be adopted by 2020, and water use from the basin must be sustainable by 2040, eliminating threats of seawater intrusion and other adverse impacts.
      • We have to work together to manage the groundwater in the Mid-County region. Currently, four agencies (the City of Santa Cruz, County of Santa Cruz, Central Water District, and Soquel Creek Water District) have partnered together and have included private well representatives to address the state mandate of sustainably managing the basin to meet the deadline of 2040.
      • Solutions to addressing the overdraft condition in our basin will need to include a diverse set of projects, programs, and activities to be undertaken by all basin users. Exactly how and what are to be determined, but could likely include a combination of water conservation, supplemental supply and increased groundwater recharge.
      • Community input and participation is critical. We are proud that people in the mid-county region have been coming together and talking about groundwater issues and managing their water use more efficiently.  We will continue to seek input and active dialogue along the way.

       

      2) How can I be involved in the process?

  • Community participation is vital to the development of the GSP. The first step is to review the content on the website and sign up for the newsletter.
  • Community meetings are held on a regular basis to provide information to the public and allow residents to ask questions and make suggestions. These are posted on the website and announced via the newsletter.
  • The Board of the Mid-County Groundwater Management Agency oversees the management of the basin. The Board  meets bi-monthly, and the public are invited to attend these meetings.

 

3) What impact does a private well have on the basin?

  • A residential well owner in the hills of Soquel or Aptos probably uses less than half an acre foot of water per year – we estimate about 130,000 gallons (give or take 10%.) There are about 2,000 such parcels in our basin. So when you think of the combined result of rural residential pumping, it is significant – the gross amount pumped (before return flow) is about a sixth of all basin usage.
  • We all pump from the same groundwater. You could oversimplify and say we all are sticking straws into the water glass and sucking – it doesn’t matter if you are near the rim or in the middle of the glass.
  • The actions of individual well owners can have a cumulative impact. Together we have significantly reduced the amount of pumping in the last two years.
  • In addition to rural residential properties, there are other private pumpers in our basin: schools (like Cabrillo or Aptos High), camps (like Kennolyn or Seventh Day Adventist Camp), Seascape Golf Course, and agricultural users (nurseries, vineyards, orchards and row crops.) These groups together use about the same water amount as the combined use of Central and Santa Cruz Water Districts from the basin.
  • Another factor we are exploring in more detail is the idea of return flow. This is the concept that septic systems leach water back into the ground – whether this reaches the main aquifers through our various Purisima layers is under study. The general idea is that about 50% of rural residential water use returns to groundwater.
  • Rural pumping can also draw water from the shallow aquifers that feed our streams, and pumping may reduce the amount of water available for steelhead and salmon.

 

4) Can the new Groundwater Agency tell landowners how much they can pump? Will they require metering of private wells?

  • The Agency cannot directly control how much people can pump. However, it must monitor the amounts of pumping, and it will probably set guidelines for different types of usage (residential, agricultural, schools, parks, golf courses.)
  • The State law exempts minimal residential users from having to meter their wells. Small water systems are required to meter their usage, and any larger private pumpers or non domestic users, such as farmers, camps, golf courses and Cabrillo, will have to report their water use to the Agency.
  • The Agency might also establish an assessment program based on the amount of groundwater extracted. This would help to fund groundwater management projects, and would also help to provide incentives to reduce excessive pumping.

 

5) What are the possible solutions to our groundwater overdraft?

  • Santa Cruz County has done a great job with conservation – we are among the top cities and counties in the state in the percentage reduction in our water usage. We need to keep conserving, but we know the urgency in people’s minds will wane if we get some decent rainfall. Our problem in mid-county won’t go away with having regular or even increased rain, and conservation isn’t enough to fix our problem.
  • The Soquel Creek Water District board has prioritized further research on replenishing the aquifer by injecting purified waste water to help to slow the spread of salt water intrusion near the coast.
  • The City of Santa Cruz Water Supply Advisory Committee has recommended water transfers during the winter months, from their extra water in the San Lorenzo River to Soquel Creek, which would help to reduce the pumping by the Soquel Creek Water District. They will also investigate the feasibility of injecting some of that extra water into the aquifer. (The idea is that this extra stored water could be drawn on by Santa Cruz Water when they need extra in the future – in summer drought conditions.)
  • There is work being done to develop a desalination plant in Moss Landing by a private group.  If this becomes a viable and cost-effective option, it could potentially supply additional water to the region.
  • Local agencies are also exploring options to capture stormwater from parking lots and urban areas, filter it and put it back into the ground to increase recharge.

 

John Ricker: Pending bills would alter local water landscape


By John Ricker
Special to the Sentinel
POSTED:   09/06/2014 01:39:08 PM PDT


Last week, the California Legislature passed a three-bill package that would establish the Sustainable Groundwater Management Act to address overuse of California's groundwater basins. The governor is expected to sign these bills, which will require at-risk groundwater basins to be locally managed with a groundwater sustainability plan designed to achieve basin sustainability by 2040.

The act directs local agencies to create and implement plans to stop depletion of groundwater. Plans must include monitoring and management over a 50-year horizon and include measurable objectives that will be reviewed by the state every five years.
The act also directs local authority to limit or curtail groundwater extraction, monitor water withdrawals, and track the location of wells. Small domestic wells are exempt from any metering requirements. Local agencies will be authorized to assess regulatory fees to fund groundwater management and replenishment.
Local groundwater sustainability agencies must be formed no later than Jan. 1, 2017. For basins identified as medium-or-high priority with critical conditions of overdraft, sustainability plans must be adopted by Jan. 1, 2020.
The act authorizes the state to intervene and take over control when local agencies do not act.

With most of the groundwater aquifers in Santa Cruz County in overdraft, this new legislation will provide significant additional authority to bolster ongoing management efforts.
Groundwater management plans already exist for the Mid-County, Scotts Valley and Pajaro Valley areas. While the Pajaro Valley is already in compliance with most of the act's provisions, management plans and implementation efforts in Scotts Valley and Mid-County will need to significantly expanded and strengthened.
The county, and Soquel Creek and Central water districts have already been holding a series of meetings to engage Mid-County groundwater users. The next meeting will be 7-9 p.m. Tuesday, and will focus on this new law. The meeting is open to the public and will be held in the Soquel Congregational Church community room, 4951 Soquel Drive. Visit www.soquelcreekwater.org for details.
John Ricker is water resources division director for Santa Cruz County.


No swift relief from high flood insurance rates

BY JOSH BOATWRIGHT
Tribune staff 
Published: March 28, 2014   |   Updated: March 28, 2014 at 04:24 PM
ST. PETERSBURG — It took more than a year following the passage of the 2012 Biggert-Waters Flood Insurance Reform Act before most policyholders knew about the dramatic premium increases coming their way.

Now that President Obama has signed a bill to repeal many of those rate hikes, the Federal Emergency Management Agency is acting quickly to give anxious homeowners a clear idea of when relief is coming and how they’ll get it.

Meanwhile, newly elected Republican U.S. Rep. David Jolly of Pinellas County introduced a bill in Congress this week to extend that help to commercial properties and second homes.

“Just because a relief measure was passed and enacted, we’re still not done. That bill only provided a certain amount of relief,” Jolly said Thursday in a conference call with Pinellas business leaders and city officials.

Jolly said he has met with FEMA Administrator Craig Fugate to discuss whether there’s room in the recently passed bill to include businesses and owner-occupied second homes, which were excluded in the Homeowner Flood Insurance Affordability Act.

FEMA has reached out to major insurance agencies, such as St. Petersburg’s Wright Flood, to discuss when policyholders should expect their monthly premiums to go back down.

In short, those who were promised swift relief from unaffordable flood policies will have to keep shelling out those big payments until FEMA works up new rate tables, a process that could take well over a year, according to the provisions in the law.

But the agency is expected to move more quickly for those unable to sell a home because of massive premiums facing potential buyers, and for others who may be forced to abandon their property as their coverage costs escalate.

“They’re moving very rapidly to implement this and get relief to the property owners,” said Patty Templeton-Jones, chief operating officer for Wright Flood.

The new law will undo many of the reforms in the controversial Biggert-Waters Act, which aimed to remove low, subsidized rates on about 20 percent of all policies nationwide backed by the National Flood Insurance Program.

The help is aimed at owners of primary homes, placing lower caps on annual rate hikes for primary homeowners and allowing properties to avoid a major rate change if their community’s flood maps are redrawn.

It does little for second homes or businesses; in fact, another pending bill could deny all refunds for people who overpaid premiums on vacation homes.

While U.S. Reps. Kathy Castor, D-Tampa, and Gus Bilirakis, R-Palm Harbor, have endorsed Jolly’s bill to help these properties, it could take months and more letters to Congress from small business owners before there’s enough support for it to pass, Jolly said.

Here’s a summary of what’s in the new flood insurance law, who it helps and when that help is coming:

The timetable

It could take more than 16 months before all aspects of the law are in effect, including the adjustments to insurance premiums. FEMA has up to eight months to finalize the new rate tables and must give insurance agencies another six to eight months after that to implement the changes.

Rate relief

For primary homeowners, the law slows down the ascent toward higher, risk-based rates, but the relief may not be significant for homes in hazardous flood zones.

Prior to 2013, FEMA could raise rates a maximum of 10 percent each year. Biggert-Waters allowed for an increase up to 20 percent to quickly remove subsidies from older homes that had been paying less than their true risk rate.

The new law caps annual increases at 18 percent, with average premium increases ranging from 5 to 15 percent each year.

In the past, the highest rate increases have been placed on properties with the highest risk, especially those with repeated flood claims.

FEMA also is instructed to minimize policyholders who are paying more than 1 percent of the value of their total policy; for example, a homeowner with $200,000 of coverage would never pay more than $2,000 a year. Critics have said this could prevent some properties from ever reaching true risk-based rates.

A home that previously wasn’t mapped in a hazardous area won’t see rates immediately spike if FEMA reassesses a community’s flood hazards. However, those rates would climb steadily over the years until they reach full risk rates.

As for home sales, buyers will be allowed to keep the seller’s previous, subsidized rate rather than immediately paying the full risk rate at their next policy renewal. It remains unclear whether this provision will go into effect immediately or only after FEMA releases its new rate tables.

The law restores the “substantial improvement threshold” from 30 percent to 50 percent of a building’s fair market value. This means substantial renovations can be done without requiring an expensive series of flood safety improvements.

Second homes, businesses excluded

While the bill shields home buyers from an immediate rate hike, there are no rate caps for second homes, businesses or those that have had repeated flood claims. Rates for these properties will go up about 25 percent each year.

FEMA is instructed to “monitor” affordability for small businesses, nonprofits and houses of worship and report back to Congress semiannually.

Refunds

Policyholders can get a refund directly from FEMA for the excess they would have paid under the new law, but only after the revamped rate tables are finished. That means home buyers who saw their rates soar to $10,000 or $20,000 could be in for a big check from the government, but will have to deal with their current rates for quite a while.

Program debt

All policyholders in the flood program will pay a surcharge to ensure there are sufficient reserves to pay out future claims in a big disaster, $25 a year for primary homes and $250 for all other property types.

While it slows down rate increases and even refunds many policyholders, the Congressional Budget Office has indicated the law will not cost taxpayers additional money. Closing up the program’s $24 billion debt, however, could be prolonged substantially.

Future affordability

The biggest question hanging is how FEMA will decide to assess each property in future years based on flood risk. With an average 15 percent annual premium increase, it may not take long for a $1,500 policy to snowball.

There’s nothing specific in the law to change how FEMA sets rates, so they likely will creep back up over time, but there are some provisions to ensure more transparency about how the long-term coverage costs will be calculated.

Funding for FEMA’s affordability study — being conducted by the National Academy of Sciences — is being upped from $750,000 to $2.5 million. Within 18 months of that study, the agency must submit a detailed plan to help people who can’t afford their policies. Recommendations include targeted financial assistance for low-income homeowners and a list of approved flood mitigation improvements and how much they would reduce annual rates.

A flood insurance advocate will be appointed to represent homeowners and communities with disputes about FEMA’s flood maps and other issues.

Future changes to flood maps will be subject to a series of public hearings and FEMA will be required to share its model for assessing risk and setting premiums.

New options will be included in government flood policies to reduce annual rates such as higher deductibles and excluding coverage for detached structures like garages that aren’t occupied. Lenders, though, would still decide whether to accept these alternative coverage options when offering mortgages, Templeton-Jones said.

 

House Republicans Release Flood Insurance Relief Bill

By Andrew Taylor | February 24, 2014

House GOP leaders last week put the final touches on legislation that would significantly water down a recently enacted overhaul of the much criticized federal flood insurance program, easing many premium increases and allowing below-market rates to be passed on to people buying homes with taxpayer-subsidized policies.
The leaders released a final version of  the bill, H.R.3370, Homeowner Flood Insurance Affordability Act of 2014,  on Friday. (A copy of H.R. 3370 is embedded at end of this article.)
The reform law, the Biggert-Waters Flood Insurance Reform Act of 2012, was aimed at weaning hundreds of thousands of homeowners off of subsidized rates and required extensive updating of the flood maps used to set premiums, but its implementation has stirred anxiety among many homeowners along the Atlantic and Gulf coasts and in flood plains, many of whom are threatened with unaffordable rate increases.
GOP aides say their measure would also repeal a provision that threatens hundreds of thousands of homeowners with huge premium increases under new and updated government flood maps. Those homeowners currently benefit from below-market rates that are subsidized by other policyholders and the new legislation would preserve their “grandfathered” status. The aides requested anonymity because they  spoke before the measure was publicly released.
Anger over the higher rates has fueled a bipartisan drive to delay or derail many of the 2012 changes. In response, the Senate last month took a different approach, passing a bill to delay the changes, which were aimed at putting the flood insurance program on sound financial footing. The flood program is presently $24 billion in the red, mostly because of huge losses from Hurricane Katrina and Superstorm Sandy.
The House measure was expected to be released on Friday and a vote is likely next week.
It also would allow homeowners to pass on government-subsidized premiums to people who buy their homes instead of requiring purchasers to pay actuarially sound rates immediately, as required by the 2012 law, named after former Rep. Judy Biggert, R-Ill., and Rep. Maxine Waters, D-Calif. The new rates are particularly high in older coastal communities in states like Florida, Massachusetts, and New Jersey, and have put a damper on home sales as prospective buyers recoil at the higher, multi-fold premium increases.
The measure would also give relief to people who have bought homes after the changes were enacted in July of 2012 and therefore face sharp, immediate jumps in their premiums; they would see those increases rolled back, though they would get annual rate increases of perhaps 15 percent; aides said the rate increases hadn’t been finalized as of Thursday afternoon.
But people whose second home is in a flood zone and those whose properties have repeatedly flooded would continue to see their premiums go up by 25 percent a year until reaching a level consistent with their real risk of flooding.
The Federal Emergency Management Agency, which runs the program, would retain the ability to increase premiums each year, but the increases wouldn’t be as steep as mandated under the 2012 law. The House bill calls for a surcharge on each of 5.6 million policyholders to offset the cost of continued subsidies for about 1.1 million homeowners.
The 2012 reforms of the flood insurance program, which passed with sweeping bipartisan support, were aimed at fixing flaws like highly-subsidized premiums for frequently-flooded properties and expensive vacation homes. The law preserved subsidies for people whose main residence is located in a flood zone but wouldn’t allow them to pass those subsidies along to the family that buys the home. That has put a damper on real estate markets and property values in states like Florida, where more than a quarter of a million homeowners pay subsidized rates. Some homeowners face a Catch-22: Once phased in, the rates are beyond their finances but, because of the higher insurance rates, they face having to sell their properties at distressed prices.
Projections of what the new rates will be have caused panic among hundreds of thousands living in low-lying coastal areas and near the banks of rivers and their tributaries subject to flooding.
The Senate last month passed with bipartisan support legislation that would put much of the 2012 law on hold for four years. And last month’s government-wide spending bill contained a provision to put off higher premiums required by new flood maps, delaying for at least a year higher premiums on hundreds of thousands of homeowners who pay grandfathered, below-market rates for insurance because their homes were in compliance with earlier flood codes.
The changes proposed by the House dismayed supporters of the 2012 law, who said it began to remove incentives for people to live in costly, flood-prone areas.
“We are concerned that the end product would thoroughly undercut the reforms that more than 400 House members voted for in Biggert-Waters,” said Steve Ellis, vice president of Taxpayers for Common Sense, a Washington-based watchdog group. “It would artificially-reduce premiums for a huge number of policyholders and actually create a sort of bifurcated system where some people are living under one set of rules and other people are living under another set of rules.”

 

Flood Insurance Premium Increase

Effective October 1, 2013, subsidized flood insurance premiums are being phased out for certain properties that have not been elevated, but are located within a Special Flood Hazard Area. Additionally, starting last year, buyers of these properties are no longer being offered subsidized flood insurance premiums.
The subsidy for flood insurance premiums is being phased out under the recently enacted Biggert-Waters Act of 2012 to improve the fiscal soundness of the National Flood Insurance Program (NFIP). This law also requires a 5% assessment for all policies for a new Reserve Fund, although Preferred Risk Policies will not be assessed until an undetermined future date.

Current Policyholders: According to the Federal Emergency Management Agency (FEMA), 81% of current flood insurance policyholders are not affected by the subsidy phase-out as they do not pay subsidized rates. Most of the remaining 19% of policyholders have subsidized flood insurance premiums for older properties that have not been elevated, but are located in a Special Flood Hazard Area as designated by FEMA. An older property means a property built before the community adopted its first Flood Insurance Rate Map (FIRM). Most communities adopted their initial FIRM in the 1970s or 1980s.

Here’s the breakdown for the 19% of all policyholders with subsidized premiums, not all of whom will see higher premium costs. Only 5% of all policyholders will see premium increases starting in 2013. These policyholders are property owners who have been receiving subsidized policies for non-primary residences, businesses, or severe repetitive loss properties. Their premium increase will be limited to 25% per year until the premium reflects the property’s true risk. Another 4% of all policyholders with pre-FIRM condominiums and multifamily properties will see premium increases sometime in the future to be determined by FEMA. The other 10% of all policyholders have pre-FIRM primary residences, and will not see premium increases until their properties are sold or their policies lapse.

New Policyholders: Starting last year, subsidized insurance premiums are no longer being offered for new flood insurance policies, including newly purchased pre-FIRM properties in a Special Flood Hazard Area. Sellers generally disclose to their buyers in a Natural Hazard Disclosure Statement as to whether their property is located in a Special Flood Hazard Area. Buyers are also advised about the NFIP, and to look into obtaining insurance during the buyer’s inspection period, in C.A.R.’s standard form Buyer’s Inspection Advisory (Form BIA paragraph 11) and Statewide Buyer and Seller Advisory (Form SBSA paragraphs 16 and 31).

For new policyholders, an Elevation Certificate is needed to determine the true flood risk premium for a pre-FIRM property in a high-risk area. Property owners without an Elevation Certificate should speak to their insurance agent, as well as review FEMA’s Homeowner’s Guide to Elevation Certificates.

For more information about flood insurance under the Biggert-Waters Act of 2012, visit FEMA’s website.

 

Government Pipeline Maps Get Industry-wide Support with New California Law

The pipeline database disclosure requirement in AB 1511 received broad support from California’s real estate and hazard disclosure industries and lawmakers alike. It establishes the National Pipeline Mapping System (NPMS) on the U.S. Department of Transportation website as the standard reference for pipeline location information for California real estate consumers – and the benchmark for pipeline maps in the hazard disclosure industry.

Assembly Bill 1511 (Bradford), which became law this week, was modeled after California's existing “Megan’s Law Database Disclosure”. AB 1511 adds a seller disclosure to the residential purchase contract, effective July 1, 2013, titled “Notice Regarding Gas and Hazardous Liquid Transmission Pipelines.” The notice directs home buyers to the NPMS “Public MAP Viewer” — an online portal that displays neighborhood maps showing gas transmission and hazardous liquid pipelines and identifies the pipeline owners and operators.