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8.2 Holmquist Add FloodingAGENDA SECTION: NO. 8 ITEM NO. 2 CITY OF SALINA REQUEST FOR COMMI SS ION ACTION OATE 5/6/1985 Adm i n i s tra t i on OR I G I NAT I NG DEPARTMENT: City Clerk D. L. Harrison BY: TIME 4:00 P.M. APPROVED FOR AGENDA: BY: Request from Paul Adrian, of the Salina Board of Realtors, who wants to address the City Commission on the Wilson and Company Flood Control Program and the Federal Emergency Management Agency report. COMMISSION ACTION MOTION BY SECOND BY TO: FOR CITY COMMISSION MEETING 5-6-85 FIRST OF ALL, 'YOUR HONOR, MAY I TAKE THIS OPPORTUNITY TO EXPRESS TO YOU AND YOUR FELLOW COMMISSIONERS THE DEEP APPRECI- ATION OF THE SALINA BOARD OF REALTORS® AND ITS BOARD OF DIRECTORS FOR THE COURTESY YOU HAVE EXTENDED TO US IN ALLOWING ME TO PRESENT TO YOU TODAY THE FOLLOWING STATEMENT: AS WE REVIEW AND STUDY THE FEMA PROGRAM, AS PROPOSED TO BE ENACTED BY AN ORDINANCE, WE HAVE COME UP WITH TWO OR THREE BASIC CONCERNS AND THEN AN ADDITIONAL TWO OR THREE ENDORSEMENTS THAT WE WOULD LIKE TO PASS ON TO YOU TODAY. LET ME BEGIN THEN, FIRST OF ALL, WITH OUR CONCERNS. THE FEMA PROGRAM AS IT IS NOW CONSTRUCTED AND PROPOSED IS, WE THINK, AN ATTACK ON PERSONAL PROPERTY RIGHTS OF CITIZENS IN THE CITY OF SALINA. A CURSORY EXAMINATION OF THE FLOOD MAP AS PRESENTED TO THE CITY AND THE PUBLIC WOULD IMMEDIATELY SHOW THAT THERE ARE APPROXIMATELY 500 TO 1,000 PROPERTY OWNERS IN THE CITY OF SALINA, WHO, UNDER THIS PROGRAM AND/OR PERHAPS BY AN ACT OF GOD, WILL HAVE THEIR PROPERTY VALUE REDUCED FROM ITS CURRENT FAIR MARKET VALUE TO AS LOW AS POSSIBLY ZERO. JUST LAST WEEK, OUR MAYOR SIGNED A PROCLAMATION PROCLAIMING LAST WEEK PRIVATE PROPERTY WEEK IN THE CITY OF SALINA. WE THINK ALL OF US HERE TODAY REALIZE THAT ONE OF THE MOST IMPORTANT BUILDING BLOCKS OF A FREE AND DEMOCRATIC SOCIETY SUCH AS OURS IS THE CONSTITUTIONALLY GUARANTEED RIGHT TO OWN, BARTER, BUY, SELL AND FREELY EXCHANGE PRIVATE PROPERTY. ONE OF THE PROBLEMS REALTORS® ON THE SALINA BOARD OF REALTORS®' COMMITTEE ON FLOOD CONTROL AND/OR THE MAYOR'S "TASK FORCE COMMITTEE," ... ONE OF THE THINGS THESE REALTORS® KEPT RUNNING INTO, AS THEY DISCUSSED THE PROGRAM WITH~FEMA AND GOVERNMENTAL OFFICIALS, WAS THIS EMBARRASSING QUESTION, "SINCE THE PLAN, AS PRESENTED TO THE CITY OF SALINA, HAS BEEN IN THE MAKING FOR 5 oR MORE YEARS, WHY IS IT THAT AT THE LAST MINUTE YOU ARE RAISING ALL OF THESE OBJECTIONS?" THIS SITUATION IS LIFTED OUT NOT TO POINT AN ACCUSATORY FINGER AT ANYONE, BECAUSE IF WE ARE GOING TO GET INTO THE PROCESS OF LAYING BLAME, I THINK THERE IS ENOUGH TO GO AROUND, INCLUDING THE SALINA BOARD OF REALTORS®. BUT IT IS LIFTED UP TO POINT OUT THAT THE ENTIRE FEMA PROGRAM HAS NOT HAD AN OPEN, ABOVE-BOARD, HONEST, GIVE-AND-TAKE DEBATE IN WHICH ALL CITIZENS WERE MADE COMPLETELY AWARE OF ITS IMPLICATIONS. WE SINCERELY DOUBT THAT 10% OF THE 500 TO 1,000 REAL ESTATE OWNERS -- WHO ARE AFFECTED IN THIS DEVALUATION BY FEMA -- HAVE ANY IDEA OF EXACTLY WHAT IT WILL MEAN. IF THEY REALLY UNDERSTOOD, WE WOULD VENTURE A GUESS THAT THERE WOULD BE A LONG LINE OF CLIENTS AND ATTORNEYS AT OUR COURTHOUSE DOORS TODAY, SEEKING INJUNCTIVE RELIEF. THIS IS A RATHER HARSH STATEMENT, BUT LET ME EXPLAIN TO YOU EXACTLY WHAT IS HAPPENING. THROUGH NO FAULT OF THEIR OWN, PEOPLE IN SALINA, KANSAS, HAVE ACCEPTED AT FACE VALUE THE VALIDITY OF A CITY HALL BUILDING PERMIT WHICH ALLOWED SOMEONE TO BUILD A STRUCTURE IN A GIVEN POINT WITHIN THE CITY LIMITS. THEY HAVE EVALUATED THAT STRUCTURE, DETERMINED WHETHER IT WOULD FIT THEIR NEEDS AND PURPOSE~ AND HAVE PAID MARKET VALUE FOR IT. IF THIS PROGRAM IS ADOPTED, THOSE SAME PEOPLE ARE GOING TO WAKE UP TO THE FACT THAT THEIR PROPERTY'S REAL VALUE HAS DEPRECIATED -3- TREMENDOUSLY. PEOPLE DO NOT UNDERSTAND WHAT FEMA MEANS WHEN IT KEEPS REFERRING TO "THE 50% RULE." THEY DO NOT UNDERSTAND THAT IT IS REALLY A 25-30% RULE. THERE IS NO QUESTION AS TO WHAT CAN AND WILL HAPPEN. EXAMPLE: HERE IS A FAMILY THAT OWNS A $60,000 HOUSE. THAT'S FAIR MARKET VALUE ON TODAY'S MARKET. AFTER YOU ADOPT THE FEMA PLAN, THE FAMILY EXPERIENCES A FIRE LOSS. AND LET'S ASSUME THE FIRE DEPARTMENT EXTINGUISHES THE FIRE. IT CALCULATES THE DAMAGE TO THE STRUCTURE FROM BOTH FIRE AND WATER, TO BE $20,000. NO PROBLEM, $20,000, THAT'S LESS THAN 50%. THE FAMILY GOES RIGHT DOWN TO CITY HALL TO GET A PERMIT TO REBUILD. CAN HE REBUILD THE STRUCTURE? NOT SO! NOT UNDER THE FEMA PROGRAM. FROM FAIR MARKET VALUE OF $60,000, WE HAVE TO SUBTRACT THE VALUE OF THE LOT AND ALL OF ITS APPURTENANCES. LET'S SAY THAT THE LOT, THE STREET, THE SEWER AND THE WATER ARE WORTH APPROX- IMATELY $20,000. YOU SUBTRACT $20,000 FROM $60,000 AND YOU COME UP WITH A NET VALUE OF $40,000. NOW THERE IS ONE OTHER LITTLE FACTOR IN THERE, THE MAN HAPPENED TO HAVE A DETACHED GARAGE ON THE LOT, NOT AFFECTED BY THE FIRE. SO YOU SUBTRACT $5,000 MORE FROM THE STRUCTURAL VALUE BECAUSE THE GARAGE WASN'T INVOLVED IN THE FIRE. YOU NOW HAVE A REMAINING VALUE OF $35,000, AND HE HAD A $20,000 LOSS. WHEN THE PERMIT IS REQUESTED, HE IS ADVISED, "OH NO, YOU CANNOT REBUILD THAT STRUCTURE BECAUSE YOU HAVE HAD MORE THAN A 50% LOSS." WHERE DOES THIS MAN STAND? LET'S EXAMINE HIM ONE STEP FURTHER. BEFORE THE FIRE, HE HAPPENED TO HAVE A $40,000 MORTGAGE. HE GETS HIS $20,000 CHECK FROM THE INSURANCE COMPANY AND THE MORTGAGE COMPANY SAYS, "AH-HA, WE ARE ON THE -4- CHECK WITH YOU BECUASE WE HOLD A FIRST MORTGAGE LIEN ON THIS PROPERTY. GIVE US THAT $20,000." WHICH HE DOES-- ~THEN THEY SAY, "NOW, YOUR MORTGAGE HAS BEEN REDUCED TO $20,000, PAY UP." THE MAN SAYS, "BUT I DON'T OWN ANYTHING, ALL I HAVE IS A VACANT LOT." THE MORTGAGE COMPANY SAYS, "WELL, WE'LL ACCEPT A DEED FOR THE OTHER $20,000." HE GIVES THEM THE DEED. SO WHERE IS HE? HE'S OUT IN THE MIDDLE OF THE STREET. HE THOUGHT HE HAD A $20,000 EQUITY YESTERDAY MORNING WHEN HE WOKE UP. TODAY HE FINDS THAT HE OWNS NOTHING. HE HAS LOST HIS ENTIRE PROPERTY. THIS, GENTLEMEN, IS EXACTLY WHAT CAN OCCUR IN THE CITY OF SALINA STARTING THE DAY AFTER YOUR ORDINANCE TO ADOPT THE FEMA PROGRAM IS PUBLISHED AND BSiCOMES FINAL. AND THAT'S NOT THE END OF IT. EVERY PROPERTY OWNER WITHIN THAT FLOOD AREA, AS DESIGNATED BY OUR MAP, IS IN EXACTLY THE SAME POSITION THAT THIS FICTIONAL CHARACTER WAS. WE THINK THE FEMA PROGRAM, BECAUSE OF "THE 50% RULE," IS, IN EFFECT, CONDEMNATION OF PRIVATE PROPERTY WITHOUT DUE RECOURSE AND WITHOUT COMPENSATION. TWO OF THE FUNDAMENTAL REQUIREMENTS FOR THE LAW OF EMINENT DOMAIN TO BE EXERCISED. YOU SEE, GENTLEMEN, WE ARE NOT TALKING ABOUT A SHANTY TOWN THAT SPRANG UP ILLEGALLY AND JUST KIND OF GREW AND HAPPENED TO BECOME A PART OF OUR CITY BY ACCIDENT -- WE ARE TALKING ABOUT REAL PROPERTY, REAL HOMES IN SOUTH SALINA, IN DOWNTOWN SALINA, IN ALL OF NORTH SALINA, IN THE BUSINESSMEN'S ASSOCIATION DISTRICT OF NORTH SALINA -- ALL OF THIS PROPERTY IS IN THE SAME CATEGORY AND SUBJECT TO THE SAME HAZARDS AND THE SAME DEVALUATION. OUR ONLY CONCERN, OUR ONLY REASON, OUR ONLY PURPOSE IN RAISING THIS CONCERN BEFORE YOU TODAY IS THAT WE ARE CONVINCED THAT LESS THAN 10% OF THE PEOPLE INVOLVED IN -5- THIS HUGE DEVALUATION PROCESS HAVE THE SLIGHTEST IDEA HOW IT AFFECTS THEIR PRQPERTY. .' WE STRONGLY URGE YOU, THE MEMBERS OF OUR CITY COMMISSION, WHO ARE GOING TO BE RESPONSIBLE FOR WRITING THE ORDINANCE, TO USE YOUR COLLECTIVE-INTELLIGENCE TO WORD IT IN SUCH A WAY AS TO MAKE IT PALATABLE AND TO ELIMINATE, IF POSSIBLE, THE CONFISCATORY PORTION OF THE ORDINANCE. AS I SAID, THESE AREN'T SHANTY TOWN OWNERS, THESE ARE PEOPLE WHO HAVE TRUSTED OUR CITY, THEY HAVE TRUSTED OUR ZONING ORDINANCES, THEY HAVE TRUSTED THE REALTORS®, THEY HAVE TRUSTED THEIR NEIGHBORS, AND SUDDENLY THEY FIND THEY ARE A DISCRIMINATORY CLASS. JUST THINK OF THE INEQUITY THAT EXISTS. THERE ARE PLACES IN TOWN WHERE IF YOU LIVE ON THE EAST SIDE OF THE STREET, WHAT I DESCRIBED TO YOU IN THE EXAMPLE IS WHAT'S GOING TO HAPPEN TO YOU. BUT IF YOU LIFE ON THE WEST SIDE OF THE STREET, YOUR MARKET VALUE IS GOING TO REMAIN THE SAME, OR POSSIBLY EVEN GO UP. THOSE OF US THAT LIVE IN KANSAS, ARE EXTREMELY FORTUNATE TODAY BECUASE WE HAVE THE NUMBER 3 MOST IMPORTANT AND POWERFUL MAN IN THE UNITED STATES IN WASHINGTON, D.C., AND I'M REFERRING TO ROBERT DOLE. AND I'M SURE THAT ROBERT DOLE AND NANCY KASSEBAUM AND PAT ROBERTS WOULD EXTEND TO YOU, IF YOU REQUEST IT, THE SAME COURTEOUS COOPERATION THAT THEY HAVE EXTENDED TO OUR STATE AND NATIONAL REPRESENTATIVES. QUINN PEATLING, WHO SERVES ON OUR LOCAL AND STATE LEGISLATIVE COMMITTEE, JUST RETURNED FROM A NATIONAL LAND USE MEETING IN D.C., WHERE SHE MET WITH THE FEMA PEOPLE. MR. DOLE WAS MOST HELPFUL. I AM SURE THEY WILL EXTEND TO YOU THE SAME COURTESY THAT ALICE DENNING HAS FOUND THEY EXTENDED TO HER AS SHE REPRESENTED US -6- IN THIS MATTER IN VARIOUS PLACES. JOE MENDICINA, OUR ZONE 5 CHAIRMAN, IS VERY ANXIOUS TO EXTEND TO YOU THE FULL COOPERATION OF THE KANSAS ASSOCIATION OF REALTORS® AND THE NATIONAL ASSOCIATION OF REALTORS®. WE DO, GENTLEMEN, HAVE AVENUES OF ACCESS AND WE WANT TO BE HELPFUL. REMEMBER THAT ANY REGULATION THAT WAS CONCEIVED BY MAN AND PUBLISHED IN THE FEDERAL REGISTER AND THEREBY HAS THE EFFECT AND FORCE OF LAW, CAN ALSO BE CHANGED WITH EXACTLY THE SAME PROCEDURE IF WE UNITE OUR FORCES AND PLACE THE EMPHASIS AND CONCERN AT THE POINT OF GETTING THINGS CHANGED. NOTHING IN A DEMOCRACY IS CAST IN CEMENT. EVERYTHING HAS TO BE AT THE WILL OF THE GOVERNED. AND, YES, WE KNOW THAT THE APPEAL DEADLINE IS MAY 22, BUT EVEN THOUGH IT IS, THERE ARE AVENUES THAT CAN BE PURSUED AND EXPLORED AND EXPANDED STILL AVAILABLE TO US. I KNOW THAT ALICE DENNING, DEAN BOONE, GWEN PEATLING, JOE MENDICINA, AND ANYONE ELSE ON THE BOARD WHO IS KNOWLEDGEABLE AND UP-TO-DATE ON THESE AFFAIRS WILL BE GLAD TO HELP YOU SEEK OUT THE POINTS OF PRESSURE THAT SHOULD BE APPLIED. I JUST SIMPLY CANNOT FIND STRONG ENOUGH WORDS TO USE WHEN I AM TALKING ABOUT THE CONFISCATORY NATURE OF THESE REGULATIONS. I THIN~ AGAIN, THAT USING YOUR COLLECTIVE WISDOM CAN MAKE THIS FEMA PROGRAM PALATABLE. ONE METHOD THAT COMES TO MIND IMMEDIATELY IS, IF "THE 50% RULE" WERE TO APPLY ONLY IN THE EVENT OF FLOOD LOSS, I DON'T THINK ANYBODY WOULD FIND FAULT WITH IT. BUT THE FACT THAT DAMAGE CAN OCCUR BY AN ACT OF GOD OVER WHICH MAN HAS ABSOLUTELY NO CONTROL, OTHER THAN FLOOD, AND HIS PROPERTY CAN BE DEVALUATED TO ZERO, THIS, WE THINK, IS UNJUST. THIS, WE THINK, IS UNCONSTITUTIONAL. THIS, WE THINK, IS ABSOLUNTELY UNCONSCIONABLE. -7- NOW, LET ME COME QUICKLY TO SEVERAL RECOMMENDATIONS WE WANT TO MAKE TO YOU WITH FULL ENDORSEMENT AND SUPPORT. NUMBER ONE, WE SUPPORT THE USAGE OF PART OR ALL OF THE WILSON FLOOD CONTROL PROPOSALS THAT WILL BE MADE TO YOU TUESDAY. WE THINK THAT BY INITIATING THEM AND PURSUING THEM AND COMPLETING THEM, WE WILL ELIMINATE MUCH OF THE FLOODWAY IN SOUTH SALINA, WHICH, IN TURN, WILL ELIMINATE MUCH OF THE FLOOD PROGRAM IN NORTH SALINA. WE HEARTILY ENDORSE IT AND WE URGE YOU TO TAKE IMMEDIATE AND SWIFT ACTION ON ANY PORTION OF IT THAT YOU FEEL WILL HELP THE POOR HOME OWNER CAUGHT IN THIS DELEMMA. AS POINTED OUT BY GEORGE SYBRANT1 THESE EFFORTS SHOULD BE COORDINATED WITH THE CORPS SO THAT FEMA WILL GIVE US CREDIT FOR THE CORRECTIONS. OUR SECOND RECOMMENDATION IS THAT YOU WORK AS EXPEDITIOUSLY AS HUMANLY POSSIBLE TO COMPLY WITH THE CORPS' DEMAND THAT WE DO SOMETHING WITH THE A. J. HOLMQUIST ADDITION AND THE PROBLEM THAT IT CREATES FOR OUR DIKE SYSTEM. WE HOPE THAT YOUR REPLY ON OR BEFORE THE 20TH DAY OF MAY WILL BE EXACT, WILL BE CONCRETE AND TO THE POINT WITH SPECIFIC COMPLETION DATES, THEREBY, ELIMINATING THE CORPS' THREAT TO DECERTIFY OUR ENTIRE DIKE SYSTEM, WHICH COULD PUT 90% OF THE CITY OF SALINA IN THE 100-YR FLOOD PLAIN. WE ARE FULLY AWARE, GENTLEMEN, THAT BOTH OF THESE RECOM- MENDATIONS ARE GOING TO COST MONEY AND, REGARDLESS OF WHERE YOU FIND THE MONEY, WHETHER IT IS BY REVENUE BONDS, GENERAL OBLIGATION BONDS, BENEFIT DISTRICTS OR SALES TAX REVENUE, THE AMOUNT OF MONEY THAT YOU WILL SPEND ALLEVIATING THE PAIN OF THE FEMA FLOOD PROGRAM WILL BE WELL WORTHWHILE. -8- GENTLEMEN, IN SUMMARIZATION, LET ME CLOSE BY SAYING THAT THE DEVALUATION OF PROPERTY IN THE CITY OF SALINA THAT DID OCCUR AS A RESULT OF.THE GREAT DEPRESSION OF THE EARLY 1930's, WILL BE DWARFED AND MADE MINUSCULE IN COMPARISON TO THE DEVALUATION THAT IS GOING TO TAKE PLACE IN THE CITY OF SALINA THE DAY AFTER YOU PASS THE CITY ORDINANCE THAT ENCOMPASSES AND EMBRACES THE FEMA PROGRAM AS IT NOW EXISTS. YOU WILL ERODE YOUR TAX BASE BY MANY, MANY MILLIONS OF DOLLARS. YOU WILL STIFLE ECONOMIC GROWTH WITHIN THE CITY. YOU WILL CREATE A DRAG ON THE ECONOMY OF OUR CITY. YOU WILL STIFLE INCOMING NEW BUSINESS. YOU WILL CAST A SHADOW OVER ALL THE cITY THAT WILL TAKE YEARS AND YEARS TO OUTLIVE. WE MUST, WE SHOULD AND, WITH YOUR HELP, WE WILL FIND A WAY OUT OF THIS DILEMMA. I KEEP REMEMBERING THAT A WORLD OF PASSIVE NONINTERVENTIONIST PEOPLE GAVE A PAPER HANGER THE OPPORTUNITY TO TRY TO CHANGE THE WORLD. MAY THE GOOD LORD NOT LET US BE AMONG THEM IN OUR FUTURE. George Sybrant, Attorney at Law, 200 N. Summit Street, Arkansas City, Kansas 67005, who spoke to the Board of REALTORS® in a public meeting on 3-13-85 regarding FEMA.