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Indy Fights to Restore Flood Insurance

(CN) Indianapolis and the Indiana County in which it is located are challenging a federal decision to suspend their participation in the National Flood Insurance Program.

In a complaint filed in the Indianapolis Federal Court, the municipalities claim the Depart of Homeland Security and Federal Emergency Management Agency kicked them out of the program because of minor, easily corrected blemishes in a report submitted to the federal agencies in February.

The National Flood Insurance Program is a federally-subsidized initiative that makes flood insurance more affordable than similar coverage purchased at market rates.

FEMA had demanded that the city

city adopt certain floodplain management regulations in order to remain eligible to participate in the insurance program.

The city submitted an updated draft ordinance intended to satisfy federal regulators, but FEMA was far from happy with the ordinance.

Citing ten instances of noncompliance within its provision, the federal agency on April 22 immediately suspended the city's eligibility for the insurance program.

According to Indianapolis attorneys Andrew Mallon and Donald Morgan, who are representing the city, FEMA's conclusion is incorrect, and represents an abuse of discretion in violation of the Administrative Procedures Act.

Three days after the suspension, FEMA conceded that more than half the items it had identified as noncompliant were, in fact, compliant.

While Indianapolis maintains that its ordinance satisfies all necessary legal requirements, it nevertheless asked the regulators to stay the suspension of the city's eligibility until the other four disputed errors can be corrected.

The attorneys argue that because only the joint City-County Council can make changes to the ordinance, and it does not convene until May 9, Indianapolis and Marion County homeowners face substantial risk, consider that the Midwest is at the height of its spring rainy season.

And the economic consequences, for the county, city, and individual homeowners could be disastrous, the complaint says.

The city says the consequences of suspending federally-subsidized flood insurance could include decreased property values, decreases in the city and county's property tax base, and a diminished ability to attract new business and residents to the Indianapolis area.

For many of the low-income homeowners within the county flood plain, damages from a flood could result in mortgage defaults and irreparable financial harm.

According to the Indianapolis Star, representatives from the city and FEMA were in settlement talks Thursday and the court was notified that federal regulators will work with Indianapolis to identify a solution that assures a reinstatement of the city's coverage.

From 1978 to February, 2016, Marion County had more than 2,031 insurance claims stemming from floods, the second largest amount in Indiana. Those claims cost insurers more than $15,000,000. Presently, 7,000 homeowners live in the Marion County flood plain.

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