Cedar Rapids flood insurance costs a moving target | TheGazette

Mike Jager, executive director of Veterans Memorial Commission walks through a hallway in the basement of the Veterans Memorial Building on May's Island in downtown Cedar Rapids on Tuesday, August 7, 2012. (Cliff Jette/The Gazette-KCRG TV9)

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CEDAR RAPIDS ? As the city is renovating or replacing several of its key flood-damaged public buildings, officials are figuring out how to defend against an even more immediate threat than another flood: the high cost of flood insurance.

For example, a year after the historic Floods of 2008, the city was told that it could have to pay as much as $960,000 a year for flood insurance on the Veterans Memorial Building alone. The building on May?s Island in downtown Cedar Rapids, which served as the seat of city government for years, is now being transformed into a veterans-services center and veterans museum.

But even now, Finance Director Casey Drew cautioned, officials still don?t know the full cost of flood insurance for city buildings and facilities. That includes both the renovated ones such as the Paramount Theatre, the former federal courthouse ? now City Hall ? the Ground Transportation Center bus depot and the Veterans Memorial Building; along with new structures such as the Central Fire Station, the downtown Public Library, the convention center and the Public Works Facility.

Once the city receives quotes from the private insurance market, Drew said, officials will sort through several issues ? how much coverage is required by the federal government, how much more is needed, what kind of deductibles the policies might come with and how much risk the city can stomach.

Calculating costs

A few things do seem clear, though: The cost of flood insurance will be much less than the quotes from 2009 indicated, but it will still exceed half a million dollars a year.

Under the terms of a partial flood-insurance waiver secured from the federal government in 2009, the city has to purchase basic coverage from the National Flood Insurance Program.

The coverage level specified in the waiver varies from building to building ? $1 million worth will be required for the Paramount Theatre, for example, while structures like park shelters will need less.

The waiver also requires the city to spend a set amount on premiums for additional insurance ? one-third of 1 percent of its total annual operating budget, or about $500,000, according to Drew. But no one can say how much extra flood coverage that $500,000 will buy.

?I don?t know if that gives us $50 million, $100 million or $150 million in coverage,? he said. ?If we go out and look and they say, ?You can get $1 million in flood insurance coverage and it?s going to cost you $500,000,? that?s a problem.?

The city, which didn?t have NFIP insurance before the flood, is now paying $82,386 a year for $19.5 million worth of coverage on 49 public buildings. However, that amount doesn?t include some major building projects, which are covered by builder?s risk insurance during construction.

Iowa City, meanwhile, pays $23,305 a year for NFIP premiums on 10 buildings or facilities, plus another $113,465 for $5 million in additional coverage, said Melissa Miller, the revenue and risk manager there.

Protection measures

As the flood recovery continues, Drew said, Cedar Rapids officials are focused on protecting public buildings and their essential electrical and mechanical systems from future damage, along with putting new structures above the 2008 water level. He said such mitigation efforts will help cut the cost of the flood insurance premiums.

During a tour of the Vets Building this week, for instance, Mike Jager, executive director of the Veterans Memorial Commission, pointed out that the electrical, fire suppression and phone equipment has now been moved from the basement to the second floor.

Air conditioning and air-handling equipment that had also been in the basement is now on the roof. New boilers have been elevated seven to eight feet above the basement floor. And a 12,000-pound door is being installed that will seal shut so floodwater from the May?s Island underground parking ramp doesn?t get inside the building.

In addition, the backup generator is now housed in a new utility building, three to four feet above the 2008 flood level.

Aerial with new Federal Courthouse, Cedar River, police station, new amphitheater construction area, May's Island, APAC, True North, Alliant Tower on Friday, July 20. 2012. (Cliff Jette/The Gazette-KCRG TV9) in downtown Cedar Rapids on Friday, July 20, 2012. (Cliff Jette/The Gazette-KCRG TV-9)

Source: http://thegazette.com/2012/08/10/cedar-rapids-flood-insurance-costs-a-moving-target/

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