Rain Check

Flood after flood, taxpayers still subsidize people living in harm's way.

It is a completely preposterous sight. Only now—more than four years after the Mississippi River flooded—has Earlwayne Stumpf been able to move back into his home near Valmeyer, Illinois. Now fully fortified, the house rests atop 12 feet of concrete ($40,000 worth); the front porch of what Stumpf calls his "castle in the sky" sits at an even level with the hayloft of his nearby barn.

Valmeyer, a lowland farming community of 900 in Monroe County, enjoyed a brief moment of fame in 1994 when the federal government bought the town for more than $12 million and moved it up the road to the top of nearby limestone bluffs. The much hyped move was meant to show how Congress, in the wake of the Mississippi disaster, would prevent such flood damage in the future.

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But Stumpf stayed on his own land in order to farm, despite living amid the evidence of past calamities, such as the sediment sand dunes brought by the floods of 1993—which rise like boils in the middle of the fields, covered in cattails and opportunistic scrub.

In fact, nationally, most people stayed put. The Federal Emergency Management Agency (FEMA) buyout plan, a program designed to rid dangerous floodplains of their inhabitants, has relocated only about 12,000 people. That leaves nearly 10 million people in the U.S. living in floodplains, according to federal disaster officials.

And the rains keep coming, continually breaking down the dirt-pile levees built to keep river walls unnaturally higher than the river. Overall damage estimates for the 1993 Mississippi River floods range from $12-$16 billion. Since then, the Texas floods of '94, the California floods of '95, '96, and '97, and the North Dakota floods of '97 have hit communities—and, ultimately, taxpayers—hard. So, especially amid incessant El Niño doomsday predictions, why are we still building in the floodplains? Because there are lots of incentives to keep things just the way they are.

If somebody or something is in harm's way, the first approach should be [to ask], 'Does it need to be in harm's way?'" says Gerald Galloway, a retired brigadier general, West Point dean, and civil engineer who led a White House investigation into the country's flood control policies. His inquiry produced a critical report of the government's levee management, which is stewarded by the U.S. Army Corps of Engineers.

Levees, Galloway says, were built on an assumption of financial viability, that is, if it could be demonstrated that the development of the lowlands—traditionally, through farming—would bring enough economic gain to pay for the levee. In the 100 years since the government first started constructing levees, that logic has also been used to determine whether to repair them.

But these economic analyses do not take into account the damage from floods that manage to break the levees. So the billions in flood damages are not part of the equation when the government decides whether or not to spend millions repairing a floodplain levee. "When you know the levee has been damaged several times before, and you know the site of that levee is the proximate cause of the damage, the calculus used in determining whether or not the levee should be rebuilt does not include that fact," says Galloway. If a levee has failed repeatedly, Galloway observes, it probably should not be rebuilt. "You don't have to be a rocket scientist."

Davenport, IOWA
1888 The U.S. Army Corps of Engineers starts documenting floods in Davenport, Iowa.

1938 Davenport floods again in the fall of 1938 (and again in the spring of '39, '42, '43, and '44.)

1965 "The Great Flood of 1965" causes an estimated $10 million in damage along the Mississippi. Another "Great Flood," in 1993, causes $12-$16 billion in damage along the river.

1993 After the 1993 bailout, government-backed flood insurance still covers property in Davenport for $63 million. Residents—and taxpayers—hope they don't take another bath.

photos courtesy of U.S. Army Corps of Engineers, Rock Island District

Under current federal laws, if a local farm cooperative or county agency maintains a levee to the specifications of the U.S. Army Corps of Engineers, that levee will qualify for a federal subsidy covering between 75 and 80 percent of the costs to repair it after a flood. Those costs routinely run into the millions for a single levee, according to the corps. Federal subsidies from secondary programs, such as the Department of Housing and Urban Development's community development block grant, frequently cover the remaining 20 percent of the repair costs. So, if you have taken care of your levee, but it breaks in a storm, the government rebuilds it. Three years ago, the corps spent close to $300 million on flood control along the Mississippi and its tributaries alone, out of a total of $1.4 billion spent on storm damage prevention.

Congress, meanwhile, has long treated levee-repair spending as a budgetary sacred cow. "For a politician, next to kissing a baby, helping a flood victim is about the best thing you can do," says a Democratic congressional aide who works on flood policy. "All we [Congress] want to do when the disaster happens is put things back the way they were."

Environmentalists say the Army Corps of Engineers, which constructs and repairs levees as the federal government's primary flood control agency, has a vested interest in keeping a bad system going, and so encourages and even generates projects that keep people in harm's way. Raleigh Leef, the corps' deputy chief of policy and civil works, denies this, saying the agency merely takes its marching orders from Congress. "I'd like nothing better than to see our program decrease," he says.

The Clinton administration's Council on Environmental Quality opposed the rebuilding of many levees following the 1993 floods. Then came the 1994 elections: The Democrats were swept out of congressional control, and proposed changes have wound up lost amid bipartisan bickering. The Council on Environmental Quality, for example, suddenly found Sen. Kit Bond (R-Mo.) as chairman of the Senate appropriations subcommittee that approves the CEQ's annual budget.

Bond is a levee loyalist. "There's federal levees that should be repaired where there's a federal role in the levees and they've complied with federal standards," he says.

Bond led a failed effort to appropriate $105 million to rebuild all levees damaged in the 1993 floods—including those constructed privately by farmers and not normally under federal jurisdiction. And while he did have one of the constituencies hardest hit by the flooding, he also received $139,025 from real estate interests and $265,864 from the construction industry during the 1996 election cycle, according to the Center for Responsive Politics. That includes $10,000—the maximum political contribution organizations can make—from both the National Association of Home Builders and the National Association of Realtors, building lobbies actively campaigning for the levee subsidy.

Developers get an awfully nice sweetheart deal. As long as the corps can prove there's an economic benefit to developing a floodplain, and can persuade Congress to fund the project, developers looking to build in a flood zone can get: (1) a government-built levee protecting their investment, (2) the government's nearly total subsidy of the repair should floods damage it, and (3) the right to offer property buyers guaranteed federally underwritten flood insurance policies through the National Flood Insurance Program (NFIP).

"Those who extract the most profit from building on the floodplain experience none of the risk," says Jeffrey Mount, a professor of geology at the University of California at Davis, 12 miles west of Sacramento, in California's Central Valley floodplain. Mount points out that areas such as Arboga, a town in nearby Yuba County, are being newly zoned for subdivisions on the very same land inundated by floods in early 1997. Currently, 58,000 structures are being planned for the Central Valley. "As long as you can build a house, sell it, and walk away, you will," says Mount.

The government does offer to buy out residents of a flooded or severely flood-prone region for the market value of their home or place of business. Many of those living in the fertile lowlands, however, are farmers who would also be giving up their livelihoods.

So they stay, and they are encouraged to carry policies from the taxpayer-subsidized NFIP, which is operated by FEMA. If flood damage to a house equals 50 percent or less of its assessed value, the policyholder gets a check for repairs. If the damage is more than 50 percent of the structure's worth, the person can still rebuild but has to meet tougher construction codes—such as building a high-rise ranch house like Stumpf's—to qualify for a mortgage, insurance, or any aid.

But the NFIP is broke. The program currently operates at a $2.6 billion loss. It has received $1.2 billion in emergency appropriations during the past 30 years, and it hasn't even included on its books $917 million in loans. Nor do those figures include the losses from 1997, another heavy flood year. Still, the NFIP has issued a gargantuan $422 billion worth of policies on property located in flood zones that private insurers won't touch. Even worse, of the nearly 10 million households at risk for flooding nationally, three-fourths don't carry any insurance, instead hoping for the best—and relying on federal disaster relief if the worst comes true.

Stumpf says the only subsidy his family ever accepted was a Kennedy-era wheat subsidy, which they had to take. He criticizes some of his fellow farmers, saying the flood also brought opportunism. "The people here wanted all the levees rebuilt. The big levee, of course you have to do that. But everyone starts saying, 'You have to rebuild my levee too.'"

But his definition of subsidy seems arbitrary. After all, tens of millions of federal dollars were spent to rebuild the levee between his farm and the river, a massive expenditure dedicated to keeping his land dry and in business. In addition, his flood insurance, which will cost him less than $200 a year on the new house—even though he lives in what was once the bottom of the river—is taxpayer-backed, by the debt-ridden NFIP.

When asked about this, Stumpf nods agreeably. But he argues that, federal buyout program or not, he did not have a real option to leave. As surrounding areas continue to develop—with strip malls and shopping centers sending more water rushing into the floodplain—building a new home, he says, has become more expensive than rebuilding on his own land, including the retrofits. Besides, Stumpf says, he's safe now.

Marc Herman lives in Alameda, Calif. His work has appeared in Civilization and Harper's Magazine.

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