<DOC>
[105 Senate Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:53125.wais]
S. Hrg. 105-920
COASTAL BARRIER RESOURCES SYSTEM:
PUMPKIN KEY, FLORIDA
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED FIFTH CONGRESS
SECOND SESSION
on
S. 2470
A BILL TO DIRECT THE SECRETARY OF THE INTERIOR TO MAKE TECHNICAL
CORRECTIONS TO A MAP RLATING TO THE COASTAL BARRIER RESOURCES SYSTEM
__________
SEPTEMBER 22, 1998
__________
Printed for the use of the Committee on Environment and Public Works
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U.S. GOVERNMENT PRINTING OFFICE
53-125 cc WASHINGTON : 1999
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COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
ONE HUNDRED FIFTH CONGRESS
JOHN H. CHAFEE, Rhode Island, Chairman
JOHN W. WARNER, Virginia MAX BAUCUS, Montana
ROBERT SMITH, New Hampshire DANIEL PATRICK MOYNIHAN, New York
DIRK KEMPTHORNE, Idaho FRANK R. LAUTENBERG, New Jersey
JAMES M. INHOFE, Oklahoma HARRY REID, Nevada
CRAIG THOMAS, Wyoming BOB GRAHAM, Florida
CHRISTOPHER S. BOND, Missouri JOSEPH I. LIEBERMAN, Connecticut
TIM HUTCHINSON, Arkansas BARBARA BOXER, California
WAYNE ALLARD, Colorado RON WYDEN, Oregon
JEFF SESSIONS, Alabama
Jimmie Powell, Staff Director
J. Thomas Sliter, Minority Staff Director
(ii)
C O N T E N T S
----------
Page
SEPTEMBER 22, 1998
OPENING STATEMENTS
Chafee, Hon. John H., U.S. Senator from the State of Rhode Island 1
Graham, Hon. Bob, U.S. Senator from the State of Florida......... 2
WITNESSES
DeGennaro, Ralph, Executive Director, Taxpayers for Common Sense. 14
Prepared statement........................................... 32
Hayward, Thomas Z., chairman, Terra Cotta Realty, Inc............ 11
Prepared statement........................................... 29
Jackson, Gerry, Assistant Director for Ecological Services, U.S.
Fish and Wildlife Service, Department of the Interior.......... 4
Prepared statement........................................... 23
Savitz, Jacqueline, executive director, Coastal Alliance......... 9
List, Examples of Federal subsidies available to property not
in the CBRS................................................ 28
Prepared statement........................................... 24
ADDITIONAL MATERIAL
Text of S. 2470, A bill to direct the Secretary of the Interior
to make technical corrections to a map relating to the Coastal
Barrier Resources System....................................... 34
Maps and illustrations relating to Pumpkin Key, Florida.......... 37
(iii)
COASTAL BARRIER RESOURCES SYSTEM: PUMPKIN KEY, FLORIDA, S. 2470
----------
TUESDAY, SEPTEMBER 22, 1998
U.S. Senate,
Committee on Environment and Public Works,
Washington, DC.
The committee met, pursuant to notice, at 9:19 a.m. in room
406, Senate Dirksen Building, Hon. John H. Chafee (chairman of
the committee) presiding.
Present: Senators Chafee, Allard, and Graham.
OPENING STATEMENT OF HON. JOHN H. CHAFEE,
U.S. SENATOR FROM THE STATE OF RHODE ISLAND
Senator Chafee. All right, the committee will come to
order. This is a meeting of the full Committee on Environment
and Public Works, and we're having a hearing on S. 2470, a bill
relating to the Coastal Barrier Resources System.
The purpose of today's hearing is to receive testimony on
the removal of Pumpkin Key from Coastal Barrier Unit FL-35.
Pumpkin Key is a 25-acre island off the coast of North Key
Largo in Florida.
Prior to talking about Pumpkin Key, it might be useful to
briefly review the Coastal Barrier System, how we got it, what
it does. Congress enacted the Coastal Barrier Resources Act,
the so-called CBRA, in 1982, which is really quite a while ago,
to address financial and ecological problems associated with
the development of coastal barriers. Undeveloped coastal areas
along the eastern seaboard were included in the system. This
was a success, the 1982 act, and Congress subsequently passed
the Coastal Barrier Improvement Act of 1990.
The 1990 Act expanded the definition of ``coastal barrier''
and added to the system areas in Puerto Rico, the U.S. Virgin
Islands, the Great Lakes, and additional areas along the
Atlantic and Gulf Coast.
Now, here's the essence of what this bill does. It
prohibits Federal flood insurance and other financial
assistance for development of areas identified within the
system. This prohibition deters development in coastal
barriers, which serves three very worthwhile purposes. It
promotes public safety by discouraging construction in areas
prone to severe weather conditions; it preserves valuable
natural resources; and it promotes fiscal responsibility by
avoiding Federal subsidies in insurance of inherently risky
development.
I would like to stress this last point. What this
legislation does is get the Federal Government out of the
business of subsidizing high-risk development. Nothing in
CBRA--and this is absolutely important to remember--nothing in
this bill prevents property owners from doing what they want on
their own land. It only provides that they do so at their own
financial risk.
Today we will be hearing from Mr. Jackson, Assistant
Director for Ecological Services for the U.S. Fish and Wildlife
Service. We will also be hearing from Jackie Savitz, Executive
Director of Coast Alliance; Mr. Hayward, President of Terra
Cotta Realty; and Mr. DeGennaro.
But first, do you have something you would like to say,
Senator Graham?
OPENING STATEMENT OF HON. BOB GRAHAM,
U.S. SENATOR FROM THE STATE OF FLORIDA
Senator Graham. Mr. Chairman, I want to thank you for
accommodating my request and that of Senator Mack for a hearing
today on this bill. This bill was introduced by Senator Mack
and me to make the technical corrections to the maps of the
Coastal Barrier System. One of those corrections has already
been agreed to, and that is the removal of a parcel on Ocean
Reef. The other component of S. 2470 is the subject of this
hearing, and that is the removal of Pumpkin Key.
I would like to point out that this action is supported by
the Fish and Wildlife Service, and I believe we will have
testimony to that effect shortly. Pumpkin Key, as the chairman
has said, is a 26-acre island off North Key Largo, Florida. It
was added to the Coastal Barrier System in 1990. At that time
it included several residential structures and a full
complement of infrastructure, constructed to accommodate 11
additional residences.
Mr. Chairman, what I would suggest this meeting is not
about is the Federal Flood Insurance Program. Many of us have
been involved in the issue of the actuarial soundness of the
Federal Flood Insurance Program, whether it adequately relates
premiums to risks, and a panoply of issues that are relevant to
that subject. The question here is whether this particular
piece of property is so distinguished from other properties
that are not in the Coastal Barrier System that it should be
removed from that system.
I believe that that is, in fact, the case, and that the
evidence--as presented particularly by the Fish and Wildlife
Service, which is responsible for the implementation of this
program--will so indicate.
Mr. Chairman, I have a longer statement that I would like
to submit for the record, but I believe we have witnesses today
that can fully educate us on this subject.
[The prepared statement of Senator Graham follows:]
Prepared Statement of Hon. Bob Graham, U.S. Senator from the State of
Florida
I would like to begin by thanking the chairman for accommodating my
request for a hearing on S. 2470, a bill to modify the Coastal Barrier
System to remove Pumpkin Key from this system. Senator Chafee's
leadership on this issue has insured that the execution of the Coastal
Barrier Resources Act has proceeded as intended by Congress.
The bill that I have introduced with my colleague, Senator Mack,
will make a technical correction to the maps in the Coastal Barrier
System in the State of Florida.
In 1990, Congress passed an addendum to the Coastal Barrier
Resource Act which almost doubled the size of the Coastal Barrier
System. Included in this modification was Pumpkin Key, a 25-acre island
in upper Key Largo, Florida. At the time of its inclusion into the
system, there were several residential structures and a full complement
of infrastructure constructed to accommodate 11 additional residences
already on the island.
As you know, I am a strong supporter of the Coastal Barrier System
as well as development of a rational Federal disaster mitigation
program that seeks to minimize the potential Federal liability in
disaster prone areas. Frequently, our discussions on the Coastal
Barrier System become mired in this debate on the Federal Government's
role in Federal flood insurance and disaster mitigation.
This is not a debate for today. Today we are discussing the Fish
and Wildlife Service's implementation of the requirements of the
Coastal Barrier Resources Act as they pertain to the Pumpkin Key
property. We are discussing the content of the regulations that dictate
execution of this program. We are comparing those regulations to the
actions that have been taken to date, and we will be making a decision
as to whether those actions met the terms of the regulations.
I do not believe that the Federal Government should take on
unnecessary liability for disaster losses. However, I also believe that
where the Federal Government has accepted responsibility for disaster
losses as it has with Federal flood insurance, we must fulfill this
responsibility and make Federal flood insurance available for all
Americans who are eligible under the terms of existing law. In the
action that I have proposed with Senator Mack, we are seeking to insure
that we meet the terms of existing law and fulfill our responsibility
by correcting the mapping error made with the Pumpkin Key property.
As you know, the Fish and Wildlife Service has established
guidelines which require that a property meet one of two criteria if it
is to be excluded from the Coastal Barrier System. These guidelines
were published in the Federal Register in a proposed rule in 1982.
First, a property must have more than one structure per five acres.
The Fish and Wildlife Service stated that Pumpkin Key does not meet
this criteria.
The second criteria is to identify whether a property has a full
complement of infrastructure which the Fish and Wildlife Service
defines as, ``. . . vehicle access (i.e., improved roads or docks) to
each lot or building site plus reasonable availability of a water
supply, a waste water disposal system, and electrical service to each
lot or building site.''
The discussion we will be having today focuses on criteria number
two and the meaning of the definition of ``full complement of
infrastructure.''
In 1996, the Fish and Wildlife Service reviewed the Pumpkin Key
property and determined that it was undeveloped. Over the next 2 years,
they worked with my constituents to collect all pertinent information
on this property, and after an additional review, concluded in 1998
that Pumpkin Key was in fact misidentified as an undeveloped property.
I have with me and would like to see included in the record a letter
dated January 28, 1998 from the Fish and Wildlife Service stating this
conclusion.
During this second review, the Fish and Wildlife Service reviewed
the level of infrastructure present on Pumpkin Key in 1990. Signed,
sworn affidavits and as-built engineering drawings were provided that
demonstrate the presence of electricity, water, and wastewater disposal
capacity for every building on the island.
The major difference between the assessment of Pumpkin Key as
undeveloped in 1996 and developed in 1998 is the review of
transportation infrastructure and ``vehicle access'' which the Fish and
Wildlife Service defines in its regulations as ``improved roads or
docks''. On this small island, paved golf cart paths are the primary
mode of transportation. Vehicle access from the mainland is provided by
a 21-slip docking facility that was completed prior to 1990.
The lack of paved roads in the traditional sense led the Fish and
Wildlife Service in 1996 to classify Pumpkin Key as undeveloped. Upon
review of the docking facility and the geography of Pumpkin Key--an
island that has no bridge or ferry access and therefore no automobiles,
the Fish and Wildlife Service has revised its initial review, and
concurred that Pumpkin Key should be excluded from the Coastal Barrier
Resources System.
I understand that the committee is interested in reviewing the Fish
and Wildlife Service interpretation of the definition of ``vehicle
access'', and I look forward to today's discussion. I am aware that
some of you have concerns on the broader issue of the Federal
Government's role in compensating disaster losses, and I look forward
to a future comprehensive discussion on this issue.
Senator Chafee. Well, thank you, Senator. You're right;
this isn't a hearing on flood insurance. We all have views on
that, and I think at some time it would be well to review the
system. That's not what's before us now. The question is, does
Pumpkin Key qualify to be in or out of the Coastal Barrier
Resources System?
Senator Allard?
Senator Allard. Mr. Chairman, I am just here to find out
about this issue and listen to everybody's comments. I don't
have anything that I want to contribute to the record at this
point in time.
Senator Chafee. This isn't a burning issue in Colorado?
[Laughter.]
Senator Allard. No. It's been a few thousand years since
we've had a coastline in Colorado.
Senator Chafee. All right.
Now, Mr. Jackson, who is Assistant Director for Ecological
Services for the U.S. Fish and Wildlife Service.
And it is helpful to have the maps so that we know what
we're dealing with.
Why don't you proceed, Mr. Jackson? You can keep your
testimony within the area of 5 or 7 minutes, but we don't have
a great long list of witnesses so we will be able to give you a
little slack today.
STATEMENT OF GERRY JACKSON, ASSISTANT DIRECTOR FOR ECOLOGICAL
SERVICES, U.S. FISH AND WILDLIFE SERVICE
Mr. Jackson. Thank you, Mr. Chairman. Good morning, Senator
Graham, Senator Allard. My name is Gerry Jackson. I am the
Assistant Director for the Fish and Wildlife Service's
Ecological Services Program, and I do appreciate this
opportunity to testify before the committee on S. 2470.
This is a bill that directs the Secretary of the Interior
to make corrections to a map relating to the Coastal Barrier
Resources System.
S. 2470 would modify the boundaries of Unit FL-35 within
the Coastal Barrier Resources System in Florida by excluding an
area that was incorrectly mapped as ``undeveloped.'' The
Coastal Barrier Resources Act of 1982, which established the
Coastal Barrier Resources System, was designed to limit
federally subsidized development activities within undeveloped
coastal barriers.
It is important to note that the Act does not prohibit
development, as you said, and landowners are still free to
develop their property.
Senator Chafee. Perhaps we could explain briefly. Senator
Allard wasn't here when we did this and perhaps he is
unfamiliar with it.
What the Coastal Barrier Resources Act does--let's take the
Atlantic coast. We went along the Atlantic coast and chose
those areas that were labeled ``undeveloped'' under the
criteria that we had. I believe ``undeveloped'' was less than
one house per every five acres. And then what we said was, any
private person can continue to do whatever he or she wanted to
do in development, but the Federal Government wasn't going to
pay for it. We weren't going to provide flood insurance, we
weren't going to build sewer system, the Federal Government
wasn't going to build roads on these particular areas. But if
the private person or the developer wanted to go ahead and have
roads at his own expense, that's all right, but the Federal
Government wasn't going to pay for it.
That's the essence of what we're dealing with here.
Then you get into considerable discussion and argument over
what are the criteria that determine whether this is developed
or undeveloped. In other words, if it's considered a developed
are, then you can go ahead and have flood insurance, and we
will continue to build roads--the Federal Government will--and
sewage plants and whatever it might be.
But what usually comes up, and this is a typical situation
with Pumpkin Key: did Pumpkin Key fall within the definition of
an undeveloped area, and thus is it subject to the legislation?
Obviously, the developers weren't very happy about this because
they like the Federal benefits, as everybody does. They like
the roads, they like the flood insurance, and that's totally
understandable.
I'm sorry, I interrupted you, Mr. Jackson, but I thought
perhaps that would be helpful. Go ahead.
Mr. Jackson. OK.
Senator as you said, S. 2470 would remove the 25-acre
island of Pumpkin Key from the Coastal Barrier Resources
System. Based on information at the time, Pumpkin Key was
mapped by the Service as an undeveloped coastal barrier in the
1988 report to Congress and included in the Coastal Barrier
Resources System by Congress in 1990 on that basis.
Subsequently, however, in late 1996 and early 1997 the
owner of Pumpkin Key provided new information to the Service
describing the level of development on Pumpkin Key, including a
list of structures and infrastructure and when they were built.
The new information was sufficient for us, the Fish and
Wildlife Service, to determine that the island met the
requirements to be considered as ``developed'' at the time of
passage of the Coastal Barrier Improvement Act in November,
1990.
A full complement of infrastructure is defined to include
water supply, wastewater disposal, electricity, and paved
roads. The development information supplied by representatives
of Pumpkin Key on August 5, 1996, and on February 14, 1997,
clearly demonstrates a high level of infrastructure development
prior to 1990. Signed and sworn affidavits and ``as-built''
engineering drawing attest to the presence of electricity,
water, and wastewater disposal capacity for every building lot
on the island, as well as paved golf cart paths. These paths
were paved in 1984, and they provide the transportation
infrastructure for the island, which has no bridge or ferry
access and no automobiles.
This information, which was not available to the Service
when it prepared the 1988 report nor to Congress when it
included Pumpkin Key in the system in 1990, provides the
basis----
Senator Chafee. The existence of the golf cart paths was
not known?
Mr. Jackson. That's correct, Senator, nor the full extent
of the other infrastructure.
Essentially, this information which was provided was the
basis for the Service's current finding that the island was
developed prior to its inclusion in the system. Therefore,
Senator, we do support modification of the boundary of Unit FL-
35 to exclude Pumpkin Key, as proposed in this bill, as a valid
technical correction of a mapping error.
Senator that concludes my oral statement. I would be more
than happy to answer any questions that you may have.
Senator Chafee. So the criteria was that even though the
area didn't have the prescribed number of houses--in other
words, this is, what, 26 acres?
Mr. Jackson. Between 25 and 26 acres, that's right.
Senator Chafee. OK, let's call it 25 acres, and I think
there were only a couple of houses on it, is that right?
Mr. Jackson. We have indicated that there are three
insurable houses.
Senator Chafee. OK. Let's say that there are three houses.
So therefore it doesn't meet the criteria to be excluded, of
one house for every five acres?
Mr. Jackson. Right.
Senator Chafee. However, what they are saying is that they
qualify under another criteria, namely, that it is developed.
They have sewage and electricity and roads--not roads for
automobiles because they don't have any automobiles on the
island; it's roads for golf carts, and I presume that's the way
they get around.
Mr. Jackson. That is correct.
Senator Chafee. So if you have before you, Fish and
Wildlife Service, an area that doesn't meet it on population
grounds but meets it on these other criteria, then that would
be excluded, is that what you're telling us?
Mr. Jackson. That's correct, Senator. It's a two-stage
screening process that we go through.
Senator Chafee. Have you ever considered golf carts paths
to be the equivalent of paved roads before?
Mr. Jackson. Actually, Senator, this is the first time that
we've had paved golf cart paths come to us.
If I could, I went back and looked at the Federal Register
notice that was published on August 16, 1982, and I think it's
relevant here. I'll just quote from that.
It says, ``A full complement of infrastructure requires
that there be vehicle access, that is, improved roads or docks,
to each lot or building site, plus reasonable availability of a
water supply, a wastewater disposal system''----
Senator Chafee. These are the criteria?
Mr. Jackson. These are the criteria.
Senator Chafee. As of what date?
Mr. Jackson. This was published August 16, 1982, in the
Federal Register.
Senator I think the key words there are ``vehicle access.''
On an island of this size, 25 or 26 acres, we feel that that
sort of makes sense from a practical standpoint, that golf
carts would be the appropriate mode of transportation.
Senator Chafee. Senator Graham?
Senator Graham. Mr. Chairman, I don't have much to add to
that. The language that is in the regulation is ``vehicle
access (i.e., improved roads or docks)''.
There is a dock serving this island, is that correct?
Mr. Jackson. That's correct.
Senator Graham. So under the strictest of definitions you
would say that it would meet the test of having a dock. But as
you say, the words ``vehicular access'' are not necessarily
defined as a 20-foot-wide asphalt road. It is in the context of
what is appropriate for this island. Is that correct?
Mr. Jackson. That's correct.
Senator Graham. Am I correct also that the local government
with jurisdiction over this island waived its normal public
works requirements relative to the scale of roads, given the
nature of this island community?
Mr. Jackson. Senator, I don't know the answer to that.
Senator Graham. Maybe one of our other witnesses can
comment on that, but it's my understanding that the local
government, recognizing the character of this island, waived
its normal public works requirements and accepted these golf
cart paths as being an appropriate vehicular access for Pumpkin
Key.
Mr. Jackson. I think that would make sense, given the 25-
acre size of the island.
Senator Graham. And is there any question that the other
factors under the second criteria--that is, water supply,
wastewater disposal system, electric service to each lot or
building site--have been met?
Mr. Jackson. Sir, our understanding is that all those
criteria are fully met on the island.
Senator Graham. So we're down to the narrow question of
whether vehicular access on Pumpkin Key can be met by a
combination of a dock and golf cart paths?
Mr. Jackson. Yes, sir, that seems to be the issue.
Senator Graham. Thank you.
Senator Chafee. Senator Allard?
Senator Allard. I don't have any questions at this point,
Mr. Chairman, thank you.
Senator Chafee. Mr. Jackson, I saw the photo here, and
there is quite extensive dockage. Was that there when we were
doing this back in 1982?
Mr. Jackson. I believe that is correct, Senator.
Senator Chafee. Now, am I correct in saying that the
criteria that you talk about, Mr. Jackson, were proposed in
1982 but later withdrawn, so that there are no formal
regulations? In other words, what you read as being the
criteria--and you said it was published in the Federal
Register--that may be so, but it was later withdrawn?
Mr. Jackson. That's correct, Senator. It was withdrawn
because of the passage of the Coastal Barrier Resources Act,
because areas were delineated on maps during that process. So
we didn't feel at that point in time that we needed to go
forward with any formal regulations.
Senator Chafee. Yes, Senator Graham?
Senator Graham. In that context, as I recall in the
consideration of the 1990 Coastal Barriers Act, your agency was
very active in developing the basic staff work and maps which
then were presented to Congress for enactment.
In developing those maps, was it your intention to utilize
the two criteria of your 1982 proposed rule?
Mr. Jackson. The two criteria, meaning the number of
structures----
Senator Graham. The five acres.
Mr. Jackson.----and the infrastructure? Yes, sir.
Senator Graham. So it was your intention that the standards
of the ``one structure per five acres'' being the first
criteria, and second being the full complement of
infrastructure as defined, would be the basis upon which the
maps which you drew for presentation to Congress in 1990 would
be predicated, is that correct?
Mr. Jackson. That's correct, and we based those on the
information that was made available to us at that time. Since
1982 we have, on occasion, had information brought to us that
indicated that we made mapping errors, or we just didn't have
the appropriate information in front of us when we made those
decisions at that time.
Senator Graham. How many corrections to the 1990 Act have
been made to date?
Mr. Jackson. Let me check with my technical staff person
and see if he knows that number. I don't know that number right
off.
We're estimating, Senator, a couple dozen units.
Senator Chafee. In other words, in answer to Senator
Graham's question, the areas that we originally included within
the definition of what qualifies for the coastal barriers,
there have been about a couple dozen where there have been
appeals and subsequently the decision was that a mistake was
made and that they should have been excluded? Is that what
you're saying?
Mr. Jackson. Yes, Senator, technical corrections were
required.
Senator Chafee. I see.
I'm sorry, go ahead.
Senator Graham. And I understand that--in fact, I believe
tomorrow we're going to have a markup on a bill which contains
at least two additional corrections, or maybe four. Is that
correct?
Mr. Jackson. That's correct.
Senator Graham. Thank you, Mr. Chairman.
Senator Chafee. Any other questions?
Senator Allard. Mr. Chairman?
Senator Chafee. Senator Allard?
Senator Allard. Everything on the island is private
property, privately owned?
Mr. Jackson. That's correct.
Senator Chafee. Mr. Jackson, thank you very much for
testifying.
Mr. Jackson. Thank you, Senator.
Senator Chafee. Now we have a panel consisting of Ms.
Savitz, Executive Director, Coast Alliance; Mr. Hayward,
President, Terra Cotta Realty; and Mr. DeGennaro.
I have a call that I've just got to take. Take your seats,
please, and I'll be right back.
Senator Graham. Mr. Chairman, could I ask if Mr. Jackson
could stay, if there are some questions that are raised that he
might answer?
Senator Chafee. Fine.
Mr. Jackson, can you stay?
Mr. Jackson. Yes, sir.
[Recess.]
Senator Chafee. All right, would you all step up to the
table, please, Ms. Savitz and Mr. Hayward and Mr. DeGennaro.
We will start with Ms. Savitz, Executive Director of the
Coast Alliance. Why don't you proceed?
STATEMENT OF JACQUELINE SAVITZ, EXECUTIVE DIRECTOR, COAST
ALLIANCE
Ms. Savitz. Thank you, Mr. Chairman, good morning. Good
morning, Senators. My name is Jacqueline Savitz and I am the
Executive Director of the Coast Alliance. We are a national
environmental coalition that works to preserve the Nation's
priceless coastal resources. I greatly appreciate the
opportunity to be here today to testify regarding S. 2470, a
bill to delete a barrier island from the Coastal Barrier
Resources System.
Today I am speaking on behalf of 23 conservation
organizations from Florida and across the Nation.
The Alliance has a long track record with the Coastal
Barrier Resources System, which I'll refer to as ``the
System.'' We resolutely supported its creation in 1982. We
worked hard to ensure its expansion in 1990, and we have
continued to educate the public as to its value. We recently
won a lawsuit preventing illegal changes to the system.
I am here today to oppose S. 2470 because the bill would
undermine the integrity of the Coastal Barrier Resources
System.
In 1982, Congress decided that taxpayers should not
subsidize private development of undeveloped barrier islands.
The ultimate question raised by this bill is whether Pumpkin
Key was inappropriately included in the System back in 1990.
The Alliance and the 23 groups we represent argue that
Pumpkin Key was rightly included in the System at that time.
Its exclusion would run counter to Congressional intent,
putting human life and property at risk, and the removal of
Pumpkin Key undermines the integrity of the system itself.
For these reasons we recommend an unfavorable committee
report.
Beside the many technical arguments for including the
island, one could merely look at the island--if it was a little
closer, you could probably see this picture; Pumpkin Key is in
the upper lefthand corner, a little tree-lined area--one could
merely look at it and see that it's undeveloped. Common sense
and the application of statutory criteria demonstrate that this
is not a valid technical correction. Coast Alliance understands
that there are three other bills currently before this
committee that are valid technical corrections, but this one is
not. And we do need to verify that Pumpkin Key is not included
in any of these other bills.
As the chairman said, the Coastal Barrier Resources Act of
1982 was set up for three very important goals: to minimize the
loss of human life; to protect fragile natural resources; and
to reduce wasteful Federal expenditures. The System does not
regulate development. Undeveloped coastal barriers included in
the System are prohibited from receiving nearly 50 Federal
subsidies for new private construction. The developer is still
free to develop his land, but without financial support from
the U.S. Treasury.
Pumpkin Key is a barrier island near Key Largo, Florida. In
1990 it was added through the Coastal Barrier Improvements Act,
among other undeveloped parcels, to the System. The island is
part of a unique ecosystem. This critical habitat is being
continuously eaten up by development.
The following observations made in this report from the
Fish and Wildlife Service, Department of the Interior, shed
light on the valuable, sensitive nature of Pumpkin Key and its
surroundings.
Mangrove communities along the Keys are productive
ecosystems which support a diversity of fish, birds, and other
wildlife. This includes birds with special status, including
Kirtland's warbler, white-crowned pigeon, great white heron,
magnificent frigatebird, bald eagle, and peregrine falcon, and
others. Even wading birds like the great blue heron and roseate
spoonbill, and shorebirds such as the snowy plover, American
oystercatcher, and sooty tern--in fact, the only known nesting
sites for the magnificent frigatebird, sooty terns, and brown
noddies in the continental United States are located in the
Keys. And as I said, these habitats are dwindling.
Major storms have assaulted the Keys on many occasions, and
their impacts are well documented. In 1935, one of the most
violent hurricanes in U.S. history destroyed virtually all of
the human-made structures in the Matecumbe area and killed 400
people. Deleting Pumpkin Key from the System will encourage
risky development on this island and shift the risk of
development from the developer to the taxpayer. Deleting it
from the System is inconsistent with the statutory definition,
it runs counter to the intent of the law, it is a stretch of
existing Fish and Wildlife Service criteria, and it undermines
the integrity of the System.
Therefore we urge this committee to exercise its
independent judgment and reject the bill.
Specifically, in 1990 the island met the test that no more
than one structure per five acres may be present in order to be
classified as undeveloped, and it still meets that criterion
today. According to the Fish and Wildlife Service observations,
Pumpkin Key meets the statutory definition of an undeveloped
barrier island because it is subject to wave, tidal, and wind
energies, and there are only three houses on this small island.
With the exception of these few structures on the 25.5 acre
island, the natural ecological processes are not significantly
impeded.
The island does not have sufficient infrastructure that
would define it as developed. The Fish and Wildlife Service
stated, as recently as August 11, that ``the island's lack of
paved roads kept Pumpkin Key from meeting the full compliment
of infrastructure criterion.'' The Service then categorizes
Pumpkin Key as developed based on the presence of a golf cart
path.
We ask that the Congress reject this dilution of the
criteria.
Since there is no automobile access to the island, fleeing
it in case of a hurricane could be perilous. Removal of Pumpkin
Key contradicts Congressional intent to minimize a loss of
human life and actually encourages more people to move into
harm's way.
If Congress labels Pumpkin Key as ``developed,'' other
coastal barriers will become easy targets for developers who
would have Uncle Sam subsidize risky development.
The bottom line is that the plain language of the statute
controls and overrides the inconsistent application of U.S.
Fish and Wildlife Service criteria. Therefore, Congress should
apply its statutory standard, which would keep Pumpkin Key
within the System, and maintain the System's integrity.
In conclusion, the wisdom of the Coastal Barrier Resources
System to minimize loss of life, to protect fragile coastal
resources, and to reduce wasteful Federal expenditures could be
lost if this bill takes us down the slippery slope leading to
continued deletions from the System.
The act's wise goals and the System's continued integrity
should be more important than the political pressure to allow
taxpayer giveaways for this specific development project.
Thank you, Mr. Chairman, for your leadership on this issue
and for giving Coast Alliance the opportunity to testify here
today.
Senator Chafee. Thank you, Ms. Savitz.
We will hear from each of the witnesses and then we will
have questions of the panel.
Now, Mr. Hayward, President of Terra Cotta Realty, Inc.
Mr. Hayward, won't you proceed, please?
STATEMENT OF THOMAS Z. HAYWARD, JR., CHAIRMAN, TERRA COTTA
REALTY (FLORIDA), INC.
Mr. Hayward. Thank you, Mr. Chairman, Senator Graham,
Senator Allard, for the opportunity to be here this morning.
My name is Thomas Z. Hayward, Jr., and I am chairman of
Terra Cotta Realty (Florida), the owner of the property known
as Pumpkin Key, near North Key Largo, Florida. I am here to
testify on behalf of George Berry, who is the founder of TCR
and resides on Pumpkin Key. I am also here representing the
Berry family and Robert F. Berry, who is seated behind me
today.
Specifically, we want to express our strong support for the
legislation, S. 2470, introduced by Senator Bob Graham and
cosponsored by Senator Connie Mack. Senator Graham, of course,
is a member of this distinguished committee. The bill reflects
the findings of the United States Fish and Wildlife Service
that Pumpkin Key was mistakenly included in the System when
Congress passed the 1990 amendments to the Coastal Barrier
Resources Act.
Allow me to provide the committee with some background on
the timeframe and physical development of Pumpkin Key.
Mr. Berry personally bought Pumpkin Key in 1973 as a
retirement residence for himself and his family. By 1976, it
was quite obvious that to secure the necessary permits at the
Federal, State, and county level, it was going to take
considerably more time and expense than Mr. Berry originally
contemplated, so at that time he sold one-half of the property
to Terra Cotta Realty, which is a private real estate
investment company owned by the Berry family.
In 1980 we received the last of our permits and started
construction of the subaqueous utility line, as well as the
private residential 20-slip concrete dock.
At this point, to provide the committee with a brief
chronological outline documenting the development of Pumpkin
Key, I would like to give you a brief recitation.
From 1974 to 1978, we negotiated all necessary easements
for crossing across Card Sound from Key Largo.
From 1980 to 1981, the subaqueous utility crossing,
bringing water, electric power, and telephones to Pumpkin Key,
was completed.
From 1981 to 1982, the construction of the cart paths, the
vehicular access paths, around the island and the distribution
of the utilities to each of the 16 residential lots approved by
Monroe County was completed.
And by 1983, the completion of the caretaker's residences,
the dockhouse, the principal residence, the beach area, and
three breakwaters were also completed.
The subaqueous utility line provides almost 14,000-volt
primary electric power, the voltage of which is stepped down
via 10 transformers spread throughout the island. Water and
telephone service has been extended to each lot, and the entire
grid was fully operational by 1983.
Access to Pumpkin Key is provided from a private marine
facility located at the Ocean Reef Club, located approximately
1,300 feet across the water, and I refer you to the exhibits
attached to my testimony.
In 1986, Monroe County was rezoned, and the island was
rezoned ``offshore island.'' In light of this rezoning in 1986,
we immediately filed for a vested rights hearing in Monroe
County. The hearing officer found, as a matter of both law and
fact, that the site plan was grandfathered and our right to
develop 15 additional residential lots was a vested right.
Due to the fact that the State of Florida, Department of
Community Affairs, had put Monroe County under its control as
an area of critical State concern and had frozen all zoning,
Pumpkin Key was and still is zoned an offshore island. So to
protect our vested rights for 16 residential lots on Pumpkin
Key, we started negotiations in 1993 with Monroe County and the
State of Florida, Department of Community Affairs.
The result of these negotiations was to reduce our 16 lots
to 12, with the balance of the 11 to be built out, placing some
8 additional acres at the center of Pumpkin Key in a private
conservation area that can never be developed. This development
agreement was approved by the Monroe County Commission in
January, 1995.
We had no more completed our development agreement than we
were advised by the FEMA representative from Monroe County that
the new CBRS map and FEMA map showed Pumpkin Key in the CBRS,
which means that a homeowner cannot secure, among other things,
flood insurance for a residence on Pumpkin Key, and without
flood insurance, it is just about impossible to secure mortgage
money. This notification was the first knowledge we, Monroe
County, or the State of Florida Department of Community Affairs
had of this inclusion.
Mr. Chairman, you are right. The debate here today is not
about the National Flood Insurance Program. We have to comply
with Federal and State regulations as they currently exist,
which mandate insurance to qualify for lending approval, and
also the issuance of private insurance, such as windstorm
insurance, by private insurance companies.
Hurricane Andrew had no effect on Pumpkin Key. There was no
flooding. It is protected, as indicated on the map on the
easel, by Key Largo and all the development at Ocean Reef.
We then requested the Fish and Wildlife Service to
undertake a comprehensive review of the Pumpkin Key situation,
and on July 28 of this year, the Director of the Fish and
Wildlife Service wrote to Congressman Deutsch, indicating
Pumpkin Key met the requirements to be considered developed at
the time of the passage of the CBRS in 1990.
More specifically, the Fish and Wildlife Service states
that Pumpkin Key had a full complement of infrastructure prior
to 1990. A ``full complement of infrastructure'' is defined
under Fish and Wildlife guidelines to include water supply,
waste disposal, electricity, paved roads, or docks.
The guidance, Mr. Chairman, that you referred to and asked
Mr. Jackson about was established in 1982. I refer you to the
establishment of the CBRS in 1985, which incorporated those
same guidelines by reference. So essentially, for the past 16
years those guidelines have been what has been followed by the
Fish and Wildlife Service.
Since the island is only 25.6 acres in size, there is no
need for roads or automobiles on Pumpkin Key. In fact, on an
island the size of Pumpkin Key, a road or more expansive street
system would be environmentally intrusive. And in fact, Mr.
Chairman, to answer your question to Senator Graham, the local
governmental authorities did waive the requirement for any
extensive roads.
Under the guidelines applied by FWS, the extensive docking
facilities provide the necessary transportation access to and
from the island.
Mr. Chairman, before concluding there is one other item
that I would like to discuss quickly.
Some have alleged that Pumpkin Key is a mangrove island,
but the fact is that Pumpkin Key is an elevated island of
limestone base which is covered primarily by tropical hardwood
hammock. Only a small portion of Pumpkin Key has mangrove,
approximately 1.6 acres, and we protected that through a
voluntary private covenant in 1980. We subsequently set aside
an additional 8 acres which we also have protected through a
private conservation covenant.
Under the statute, only undeveloped coastal barriers were
and are to be included in the System. The facts show--and upon
review, the Fish and Wildlife Service agrees--that at the time
Pumpkin Key was added to the System, it was already developed.
Consequently, we are not asking for any kind of special
exception. Rather, we are asking for the law to be applied
appropriately in our case. The enactment of S. 2470 would be
fully consistent with both the spirit and letter of the Coastal
Barrier Resources Act.
In all due respect, Mr. Chairman, it is a simple fact that
Pumpkin Key is not a barrier island. It is never flooded. It
has been improved with over $5 million of infrastructure,
totally paid for by Terra Cotta Realty Company and not by
public funds, has never taken advantage nor applied for any of
the 50 subsidies cited by Ms. Savitz this morning. It meets to
the letter the FWS guidelines. It is protected by private
insurance, which mandates Federal flood insurance. It has no
endangered or protected species on the island. And when
Hurricane Andrew impacted the State of Florida a few years ago,
there was no flooding. We removed the families from Pumpkin
Key; they securitized the island; they removed themselves all
the way to Tampa, which is two-thirds of the way up the State
of Florida, to avoid the hurricane, and there was no loss of
life.
Mr. Chairman and Senators, thank you for your time. We ask
your support in enacting S. 2470, introduced by Senator Graham,
which would implement that recommendation. Thank you again for
the opportunity to be here this morning and to answer any
questions.
Senator Chafee. Thank you, Mr. Hayward.
Mr. DeGennaro, who is the Executive Director, Taxpayers for
Common Sense.
Mr. DeGennaro?
STATEMENT OF RALPH DE GENNARO, EXECUTIVE DIRECTOR, TAXPAYERS
FOR COMMON SENSE
Mr. DeGennaro. Thank you, Mr. Chairman. My name is Ralph
DeGennaro. I am Executive Director of Taxpayers for Common
Sense, which I co-founded in 1995. Taxpayers for Common Sense
opposes S. 2470.
Taxpayers for Common Sense is a 501(c)(3) nonprofit
organization dedicated to cutting Government waste and
maintaining a balanced Federal budget. We are politically
independent. We seek to reach out to taxpayers of all political
persuasions, to build support for common sense reform. Our goal
is a Government that costs less, makes more sense, and inspires
more trust.
I would like to thank you for the opportunity to testify
today and for your leadership on this issue over the years.
Also I would like to thank Senator Graham for adhering to the
process by introducing S. 2470 as a free-standing bill instead
of seeking to attach it as a rider on unrelated legislation.
I would like to make three key points here.
First, by undermining personal responsibility, S. 2470
mocks taxpayer compassion displayed in times of disaster.
Fundamentally, Taxpayers for Common Sense believes that
Americans want their Government to be softhearted in times of
disaster and hardheaded before disaster strikes. In 1993,
Hurricane Andrew decimated South Florida and parts of the Keys,
causing $25 billion worth of damage. But taxpayers from across
the Nation were there for their fellow Americans. Hundreds of
millions of taxpayer dollars were spent on an emergency basis
to ameliorate the State's immediate suffering and give the
State what it needed to get back on its feet.
Inevitably, Florida and other States will suffer such
disasters again. When they do, Taxpayers for Common Sense
believes most Americans want Congress to open its heart and
open its wallet for its fellow stricken citizens.
But when the storm has passed and there is time to think
clearly, American taxpayers demand that their fellow citizens
use common sense. People should take responsibility for their
own actions and avoid living in harm's way to reduce the
likelihood of needless deaths and disaster payments. That is
why Taxpayers for Common Sense opposes S. 2470. This bill
forces Federal taxpayers to buy front-row tickets to a
hurricane. And we just heard that when Hurricane Andrew hit, no
big deal, didn't affect at all. In that case, why do you need a
Federal subsidy to develop there?
The bill mocks the compassion that Americans showed in 1993
and that we will be asked to show again. We want to help, but
it's fair that we ask something in return.
Second, S. 2470 forces hardworking taxpayers to subsidize
luxury homes. Read the promotional materials. Even if
subsidizing certain coastal developments made sense, Pumpkin
Key does not belong on the list. Anyone who can afford to buy a
home there does not need taxpayer handouts. Read the
promotional brochures. The bill asks Federal taxpayers to
subsidize the development of a dozen luxury homes on a secluded
island. Reportedly, some homeowners will arrive by helicopters;
I don't know that for a fact, but it would be interesting to
find out.
Third, S. 2470 further dismantles the Coastal Barrier
Resources System that protects against developers who gamble
with taxpayer money. We heard earlier that this hearing is not
about the National Flood Insurance Program. Well, it's all
about subsidy. What this bill would do is permit Federal
subsidies to be given here, and we need to recognize that.
President Reagan signed the Coastal Barrier Resources Act
in 1982 in part in order to reduce taxpayer bailouts of resort
developers up and down the eastern seaboard. Since 1996,
Congress has slowly begun dismantling this law, piece by piece,
via special interest exemptions. This bill is no exception. It
is exactly the kind of property that the Coastal Barrier
Resources System is meant to cover, and no amount of haggling
over definitions will change that. This is the wrong message
for Congress to send. Only in Washington, D.C. is the absence
of a Federal subsidy considered an unfair imposition. I think
what everybody needs to understand is that nobody is preventing
Mr. Hayward and his colleagues from doing exactly what they
want; they just can't do it with our money.
We have also heard about Monroe County. Monroe County is
not putting up the money here. The subsidies that would be
enacted are Federal; they are not county subsidies. If Monroe
County wants to pay for the 50 subsidies that this property
would be eligible for, fine.
Finally, Mr. Chairman, I think we need to get back to
reality. These are clips from yesterday and today. Turn on your
television; watch Hurricane George as it rages across the
Caribbean; five are dead; billions in damages will be done.
Puerto Rico was declared a disaster area today.
No law of man can repeal the laws of nature. No piece of
paper voted by this Congress in all its majesty under the dome
across the street can change the trail of terror and
destruction to be wrought by Hurricane George and other storms.
Our Nation is only two centuries old, but the hurricanes are
millions of years old and have immense power. Why would
Congress ask taxpayers to stand in harm's way and put their
money at risk for something that the gentleman sitting next to
me is not willing to put his own money at risk for?
Thank you.
Senator Chafee. Thank you, Mr. DeGennaro.
Mr. DeGennaro, I do want to stress that while many of us
have misgivings about the whole Flood Insurance Program, and
you've set forth your views on it, that's not the subject of
why we're here today. It may well be that we think it's an
outrage, that Federal flood insurance is provided for these
very, very wealthy homes. Forget here--other places that are
outside the act, outside the coverage of the Coastal Barrier
Resources legislation. But that's for another day. That's
something that we should take up and look at.
I think it's extraordinary that in 1982 and 1990 we were
able to exclude as much as we did. I was the leader of that at
the time, and I guess every developer in Florida and Texas came
to see me. It wasn't just there; it was right up the whole east
coast.
But that's a separate subject. It may well be, as you say,
that you're absolutely right, but that's for another day.
Mr. DeGennaro. Mr. Chairman, I take your point.
The point is, though, subsidies--the bill would make this
property eligible for subsidies.
Senator Chafee. There's no question about it, but that's
the way we did the legislation. And the question is, does this
Pumpkin Key fall into the exclusion group that we had, or is it
covered? That's the question before us. It is clear that these
are presumably very wealthy people; if we say they're not
covered--the reason they're here is that they're seeking
Federal flood insurance. That's no secret. I think Mr. Hayward
himself testified to that, that without the Federal flood
insurance, getting mortgages is extremely difficult.
Just out of curiosity, not that this is determinative, is
private flood insurance available? Or is that just not done?
Mr. Hayward. Mr. Chairman, if it was, we would have
purchased it. We have private insurance. When we went to get
our windstorm coverage, we were mandated by Chubb & Sons that
to issue our private windstorm insurance coverage, that we also
had to take out and pay for the Federal flood insurance before
they would issue the private insurance policy, which is the
only one in our entire 28-year ownership of Pumpkin Key that
we've ever applied for.
Senator Chafee. Ms. Savitz, you were quoting the statute
there and saying that it was in conflict with the criteria
language. In your testimony I didn't quite see that. Where were
you quoting from? Do you have that page?
Ms. Savitz. Yes, I do, sir. I think what it is in conflict
with is an ever-changing set of criteria that have never been
codified or set to actual regulations that have evolved in the
Fish and Wildlife Service process.
The statute I'm talking about is in the U.S. Code under
definitions. I can read it to you, if you like.
Senator Chafee. Sure.
Ms. Savitz. I'm not sure whether we included it
specifically in our testimony or not. It says, ``The term,
'undeveloped coastal barrier,' means a depositional geologic
feature, such as a barrier tombolo, barrier spit, or barrier
island, that, one, is subject to wave, tidal, and wind
energies; two, protects landward aquatic habitats from direct
wave attack; and, three, all associated aquatic habitats,
including adjacent wetlands, marshlands, estuaries, inlets, and
nearshore waters; but only if such features and associated
habitats contain few manmade structures, and these structures
and man's activities on such features and within such habitats,
do not significantly impede geomorphic and ecological
process.''
And as I said----
Senator Chafee. Is there a section for that?
Ms. Savitz. Yes, I'm sorry, Section 3502.
Senator Chafee. Of what?
Ms. Savitz. I'm sorry, I'm not an attorney. It says, United
States Code, Annotated, Title 16, Conservation, Chapter 55,
Coastal Barrier Resources.
Senator Chafee. We'll take a look at that.
Senator Graham. Was that the 1990 act?
Ms. Savitz. Yes, I think so. It says, ``Current through
Public Law 105-165, approved 3/20/98.'' So I think it is from
the 1990 law.
Senator Chafee. Mr. Hayward----
Mr. Hayward. Yes, sir?
Senator Chafee.----what is the binding significance of the
two properties that the Berrys are going to set aside--that is,
your company or the Berrys, which I guess is the same because
the Berrys own Terra Cotta, don't they?
Mr. Hayward. Yes. We own the entire island, including the
conservation areas.
Senator Chafee. I mean, the family owns Terra Cotta Realty,
don't they?
Mr. Hayward. Yes, sir, they do, the Berrys.
Senator Chafee. So what is the binding significance of
the--I believe you had set aside an acre and a half for
mangrove, and then something like----
Mr. Hayward. Yes, sir, eight acres.
Senator Chafee.----eight more acres. Is that a binding
setup?
Mr. Hayward. That's a binding covenant, Mr. Chairman, to
use a legal term. It runs with the land. It's in perpetuity. We
made that commitment to Monroe County, to the State of Florida,
Department of Public Affairs. It's part of all the record of
the proceedings of the local authorities. That is a commitment,
and it's irrevocable on the part of Terra Cotta Realty of
Florida.
Senator Chafee. In other words, you can't get out of it?
Mr. Hayward. That is correct, Mr. Chairman.
Senator Chafee. You can't put a couple houses in that area?
Mr. Hayward. No, sir, nor would we want to. We have been
very sensitive, we believe, in our development of this parcel
of real estate since we purchased it in 1970.
Senator Chafee. Senator Graham?
Senator Graham. Mr. Chairman, as you have said, our purpose
here today is not to debate the desirability or the wisdom of a
public policy that has the Federal Government providing flood
insurance or other activities that can be seen as encouraging
development. Under your wise leadership we've had a policy at
the Federal level that says that there will be areas of the
Nation, generally defined as ``undeveloped barrier islands,''
which will be prohibited from receiving that package of
benefits. I am pleased to say that the State of Florida has a
similar policy relative to State assistance.
I will further state that the State of Florida has
recognized the special qualities of the Florida Keys. In 1972,
Florida passed what was called the Environmental Land and Water
Management Act of 1972, or Chapter 380, which set up a
procedure called an ``Area of Critical State Concern,'' where
the State would join into a superior partnership with a local
government to assure the appropriate land management of a
portion of the State. The Florida Keys was one of the first
areas to be given that Area of Critical State Concern
designation.
Senator Chafee. Florida must have had a series of
extraordinary Governors in that period, do you think?
[Laughter.]
Senator Graham. Modesty precludes me from answering that
question.
But for a period now of some 20 years, the Florida Keys
have been, both under the traditional local land use policy of
Monroe County--since this is not in a municipality--and also
with State control, administered by the Florida Department of
Community Affairs.
I say all that to give the background that in terms of
issues of safety, appropriateness of development, those matters
do not have to depend upon Federal intervention through the
grant or withholding of Federal programs, such as flood
insurance. There is a panoply of State and local agencies which
have taken intense interest in the Florida Keys, and
specifically in this area of Key Largo.
The issue before us today is whether, under the Federal
laws of 1982 and 1990, Pumpkin Key constitutes an ``undeveloped
barrier island'' for purposes of inclusion in the Coastal
Barrier Resources System, which has the effect of excluding it
from eligibility for a variety of Federal programs. The Fish
and Wildlife Service has testified that the standard that they
used in developing the maps that were used by Congress in 1990,
and prior to those maps that were adopted in 1990 in
administering the program, were twofold: one, a standard of
residences per acre, and the second criteria was the
comprehensiveness of development infrastructure.
In their opinion, Pumpkin Key fails to meet the first test
but does meet the second test of comprehensiveness of
infrastructure.
I would like to ask each of the witnesses, if those are the
criteria that the Fish and Wildlife Service have been applying,
why do you feel that Pumpkin Key either does or does not meet,
particularly, the criteria of comprehensive infrastructure?
Ms. Savitz. I think I'll start, if that's OK.
I think that the statement made by Mr. Hayward is a little
bit misleading when he said that the Fish and Wildlife Service
has followed the same guidelines for 16 years. Our research
shows that over about the past 16 years, the actual criteria
and how they are applied has changed a number of times. Between
impact statements, statements to Congress, and guidelines, the
actual definition of infrastructure has varied.
Senator Graham. Specifically, in what ways do you feel the
criteria that the Fish and Wildlife Service indicates that they
used between 1982 and 1990, and then used in developing the
maps that were adopted by Congress in 1990, are not met by
Pumpkin Key?
Ms. Savitz. Well, I think that if you are going to focus on
a Fish and Wildlife Service criterion, then paved roads were
clearly expressed as recently as in the testimony of Mr. Taylor
of the Fish and Wildlife Service to the House on this bill,
where he said that ``the full complement of infrastructure
consists of paved roads, water, electric, and sewer.'' That's
even what the Fish and Wildlife Service said in their August,
1997 letter, but then they changed their minds and said that a
golf cart path counts as a paved road. And I think that's
really where there's a divergence here, which is why I've
suggested the use of statutory criteria.
Senator Graham. So the whole issue is whether this island
would be considered undeveloped because it does not have paved
roads?
Ms. Savitz. Well, I think the issue is actually what the
Coastal Barrier Resources System intended and what Congress
intended when it set up the System. The Fish and Wildlife
Service criteria, in the sense that they have evolved and
changed, don't really provide a good standard for determining
whether something should be included or not. The issue is
whether Pumpkin Key was undeveloped at the time that it was
included in the System, and based on the statute, we believe
that it was not.
Senator Graham. But the standards that were used in the
statute in 1990 to develop these maps were the standards that
were published in the Federal Register in 1982, according to
the testimony that we had. If that is the case, is there any
way in which, in your judgment, the criteria failed to be met
in terms of a complement of infrastructure other than the
failure to have paved roads?
Ms. Savitz. I think that the full complement of
infrastructure criterion is not a statutory criterion, and I do
think the failure to have paved roads is the reason why that--
if you call it ``guidance''--is not met.
Senator Graham. I don't want to put words in your mouth,
but are you saying that the reason that you're here testifying
against this today is because of the failure to have paved
roads, and therefore in your opinion, because of that, the
failure to meet the criteria for a complement of
infrastructure?
Ms. Savitz. No, sir. The reason I'm here to testify today
is because the Coastal Barrier Resources System preserves areas
like Pumpkin Key, and we're concerned that the movement from a
paved road to a paved golf cart path is the beginning of a
slippery slope that could erode the entire System, and we're
very concerned about that. That's why we're here today.
Mr. DeGennaro. Senator Graham, I'd like to echo Ms. Savitz'
comments.
I would like to research for the record, and provide to the
committee, a more detailed response to the question you're
asking. I think we need to get at what's the law, what are the
regulations, what governed at the time.
We are not here because of anything the Fish and Wildlife
Service said.
I would also like to address another fundamental part of
Mr. Hayward's argument, and that is that Monroe County or the
State of Florida gave some approvals or allowed things to go
forward. Again, I think we need to be clear. It's not up to
Monroe County or the State of Florida to decide this; it's up
to the Federal Government.
Senator Graham. You think the Federal Government has
responsibility for land use management in Monroe County,
Florida?
Mr. DeGennaro. No, sir. I think the Federal Government has
the right to decide what it will provide subsidies for under
Federal law.
Senator Graham. And it has done so, has it not?
Mr. DeGennaro. You mean, the Fish and Wildlife Service
testimony today?
Senator Graham. No, I mean the statutes that were passed in
1982 and 1990.
Mr. DeGennaro. Correct, but those are interpreted by
Federal agencies. We believe that the Federal Government should
have a role in interpreting--we believe that the Federal
Government should not turn over the interpretation of those
laws to county and State governments, who will not pay the
consequences.
Senator Graham. Well, in 1990, when the Congress adopted a
series of detailed maps that indicated what properties were in
or out of the Coastal Barrier System, the testimony that we've
had today was that those maps were developed based on these two
criteria. Properties were in or out because they either had one
structure per five acres, or if they didn't meet that standard,
they were in or out because they had a complement of
infrastructure which included these specific items.
Was that your understanding of how the 1990 maps were
developed?
Mr. DeGennaro. I would like to go back and give you a
really substantive and clear answer for the record. One of the
reasons we are here----
Senator Graham. Is it your opinion today that those were
not the criteria?
Mr. DeGennaro. Senator, you would want me to give you the
best answer I could, and that's what I'll do.
Senator Graham. I just wondered, what is your current state
of mind? Do you think those were or were not the criteria that
were used in 1990?
Mr. DeGennaro. What I'd like to do is really research the
whole thing, give you a really good, clear, short answer for
the record.
One of the reasons we're here, though, is because we
disagree with the Fish and Wildlife Service's position as
testified today.
Ms. Savitz. Senator Graham, if I could, I think that you're
right, that the Fish and Wildlife Service does use those
criteria to determine what their recommendations to Congress
would be. But those are recommendations; they don't necessarily
dictate what will ultimately end up in the maps. Those are
actually designated by Congress.
So I think the Fish and Wildlife Service uses their
criteria to the best of their abilities to draw the maps and
make recommendations to the Congress, but it's ultimately the
decision of the Congress on which areas get included or which
areas don't. And for that, they have a statutory definition to
guide them.
Senator Chafee. Senator Allard?
Senator Allard. Let me get this straight. You don't have
Federal flood insurance now, is that correct?
Mr. Hayward. We do, sir.
Senator Allard. How long have you had Federal flood
insurance on the residences on the island?
Mr. Hayward. Since 1984, since we constructed it.
Senator Allard. So what has happened is, the Federal
Government up to this point has recognized--or the insurance
companies have always recognized the insurability of properties
on here?
Mr. Hayward. Yes, sir. From private insurance, windstorm,
general liability coverage, that is correct.
Senator Allard. OK. So these three structures, just to make
sure we're clear on this, these three structures that you had
on the island, if they had been subject to a hurricane and had
been destroyed in 1986 or 1989, just hypothetically, then the
Federal Government would have come in like the rest of the area
and help subsidize that insurance, is that correct?
Mr. Hayward. No, sir, only if there was any surge or water.
If it was windstorm, it was all private insurance, and that's
in fact what it has been and continues to be, not only with
respect to us but with respect to Ocean Reef to our east.
Senator Allard. What I'm trying to get to is that if we
don't extend this to you because of a change in policy, it
sounds to me like you lose what you have been relying on all
along, to get Federal flood insurance. You lose that, is that
correct?
Mr. Hayward. That is correct, and then we lose the ability
to obtain our private insurance.
Senator Allard. See, Mr. Chairman, I guess that's what I'm
looking at. If you've sort of allowed a right for them to have
the Federal insurance, we've changed that now in existing
properties--in a way I think we do kind of affect property
values and whatnot there, and I think that does have an impact.
If we had been expanding this--if they hadn't had Federal
flood insurance prior to this, then in my view we are expanding
a Government program, a Government subsidy, and we shouldn't be
doing it. This is a gray area, but to me that's the important
issue.
You've been receiving it all along; there's been a change
in policy here that has impacted an existing situation that
you've had on the island. You apparently do meet the definition
under the utilities that go to the island.
So I guess you come right back again to the definition of
how a coastal reef area was defined, and obviously you fall out
of that definition.
So that's the thing that was of interest to me, was whether
we were actually expanding eligibility for a Federal program,
in which case Mr. DeGennaro's arguments would have been very
valid. But up to this point--and I agree with the chairman, by
the way, that we need to look at floodplain areas and we need
to look at coastal areas. I do think that we need to change our
flood insurance, and we should not be encouraging people to
take on high-risk development and then have the taxpayers
subsidize it. But in this case, where you've already been
receiving it, it seems to me that you're an exception.
Senator Chafee. Senator, I would make this point. Let's
just discuss the three houses that were there.
Mr. Hayward. Yes, sir?
Senator Chafee. In those three houses, if he had Federal
flood insurance on them, he can continue to have Federal flood
insurance, except if it exceeds--I think it's 50 percent----
Mr. Hayward. That's correct.
Senator Chafee.----50 percent damage. In other words, you
get one big bite out of the apple. You don't get a second one.
However, if it's relatively minor--not minor, but up to 40
percent damage, say, to the home--then you can continue to have
that.
So that's the way we did the Act when we did it in 1982,
and we continued that in 1990.
All right. Let me just say, for the sake of everybody here,
I think we want to determine this and make a decision here as
rapidly as possible. So we will get to this as soon as we can,
one way or the other. I think in fairness to the owners of the
island, they're entitled to an answer.
Yes, Senator?
Senator Graham. Yes, Mr. Chairman. Could I ask a question
of Mr. Jackson?
Senator Chafee. Sure.
Senator Graham. Mr. Jackson, you indicated that since 1990
there have been approximately two dozen corrections to the
maps, is that correct?
Mr. Jackson. That's correct.
Senator Graham. Have those corrections utilized the two
criteria that we are discussing here today, that is, the one
residence for five acres or the complement of infrastructure?
Mr. Jackson. I think, Senator, that basically that is
correct. Oftentimes we find that there was information that was
not available to us during some of those initial
determinations, so when that information is provided, we go
back and we basically go back and we go through that two-phase
process.
Senator Graham. So is the analysis that you have given on
Pumpkin Key consistent with the analysis that you have given on
those two dozen previous projects?
Mr. Jackson. I believe that's correct, Senator. We had
never really faced a situation like this before, with golf cart
paths. I'm not sure that anybody even contemplated that back in
the early 1980's, 1990. So essentially we went back and looked
at our criteria to make sure that they still fit, and based on
that pattern, we made that call, that we felt that it did in
fact constitute appropriate infrastructure as pathways were
concerned.
Senator Graham. It seems to me that the verbatim language
in your standard is, ``vehicle access (i.e., improved roads or
docks) to each lot or building site''--it seems to that under
that definition of vehicular access, meaning improved or docks,
that you might not even have to get to the question of paved
roads because you've met the docks requirement.
But I would further say that a reasonable definition of
what constitutes vehicular access in this context, particularly
one that has been sanctioned by both the local government and
the State of Florida as being appropriate, would indicate that
that standard has been met.
Mr. Jackson. I agree. We really didn't--and usually don't--
look at docks per se, standalone. However, I think at least by
our definition and by most folks' definition of a vehicle, I
think a golf cart meets that standard, particularly when you're
looking at a 25-acre island. Personally, I would hate to see
roads and cars in a small area like that because I think some
of the impacts associated with that would be, from an
environmental standpoint, even more damaging.
Senator Chafee. Mr. Hayward, what is the difference between
subaqueous and underwater? Is that just a big word for
underwater?
Mr. Hayward. That's a big word, Mr. Chairman. It is
underwater. It crosses from the Ocean Reef Club to Pumpkin Key,
and it's pursuant to easements that were granted by the State
of Florida, Department of Public Affairs, and we pay a lease to
the State of Florida for that.
Senator Chafee. I see.
Just out of curiosity, what is the depth, roughly?
Mr. Hayward. It starts from the mainland at very shallow.
At that point it is probably 15 or 20 feet, and then it rises
back, and then the intercoastal is in between Pumpkin Key and
the mainland, so it drops off again. But generally, Card Sound
is a very shallow, flat area.
Senator Chafee. All right. Any other questions?
[No response.]
Senator Chafee. I want to thank you all for coming. Some of
you have come from considerable distances, and we appreciate
that. We appreciate the testimony that everybody has given. As
I said before, I'd like to get an answer one way or the other
on this fairly soon, so therefore we'll be considering it
rather soon at the committee, hopefully.
Thank you all very much.
[Whereupon, at 10:30 a.m., the committee was adjourned, to
reconvene at the call of the Chair.]
[Text of S. 2470 and statements submitted for the record
follow:]
Statement of Gerry Jackson, Assistant Director for Ecological Services,
U.S. Fish and Wildlife Service, Department of the Interior
Good Morning. I am Gerry Jackson, Assistant Director for Ecological
Services of the U.S. Fish and Wildlife Service. I appreciate this
opportunity to testify on S. 2470, a bill to direct the Secretary of
the Interior to make corrections to a map relating to the Coastal
Barrier Resources System.
The Administration supports enactment of S. 2470. This bill would
modify boundaries of unit FL-35 within the Coastal Barrier Resources
System in Florida by excluding an area that was incorrectly mapped as
undeveloped.
The Coastal Barrier Resources Act of 1982, which established the
Coastal Barrier Resources System, was designed to limit federally
subsidized development activities within undeveloped coastal barriers.
It is important to note that the Act does not prohibit development.
Landowners are still free to develop their property.
However, Congress determined that taxpayers should not subsidize
development activities in these high-risk, damage-prone coastal areas.
By restricting all new Federal expenditures and financial assistance in
such areas, Congress sought to minimize the loss of human life,
wasteful expenditure of Federal revenues, and damage to fish, wildlife,
and other natural resources associated with coastal barriers.
Section 10 of the original Coastal Barrier Resources Act mandated a
study of coastal barriers and required the Department of the Interior
to provide Congress with recommended changes to the System. An
extensive public review period was conducted from 1983 up to the
completion of the Department's 1988 Report to Congress. This Report
included final recommendations for additions and deletions to the
System. Using this report and its maps, the Congress in 1990 enacted
the Coastal Barrier Improvement Act, which both added and removed areas
from the System.
S. 2470 would remove the 25-acre island of Pumpkin Key from the
Coastal Barrier Resources System. Based on information available at the
time, Pumpkin Key was mapped by the Service as an undeveloped coastal
barrier, so designated in its 1988 Report to Congress, and included in
the Coastal Barrier Resources System by Congress on that basis.
Subsequently, in late 1996 and early 1997. the owner of Pumpkin Key
provided new information to the Service describing the level of
development on Pumpkin Key, including a list of structures and
infrastructure and when they were built. This new information was
sufficient for us to determine that the island met the requirements to
be considered as ``developed'' at the time of passage of the Coastal
Barrier Improvement Act in November 1990.
According to Departmental criteria. the first step in analyzing
development status is to examine the number of structures in place at
the time of inclusion in the System. The Service received evidence that
three insurable structures on the Pumpkin Key were built by November
1990. Since there were not sufficient structures for the island to be
considered as developed, the Service then examined the level of
infrastructure present.
A full complement of infrastructure is defined to include water
supply, wastewater disposal, electricity, and paved roads. The
development information supplied by the representatives of Pumpkin Key
on August 5, 1996, and February 14, 1997, clearly demonstrates a high
level of infrastructure development prior to 1990. Signed, sworn
affidavits and as-built engineering drawings attest to the presence of
electricity, water, and wastewater disposal capacity for every building
lot on the island, as well as paved golf cart paths. These paths, paved
in 1984, provide the transportation infrastructure for the island,
which has no bridge or ferry access and no automobiles.
This information, which was not available to the Service when it
prepared the 1988 Report, nor to Congress when it included Pumpkin Key
in the System in 1990, provided the basis for the Service's current
finding that the island was developed prior to its inclusion in the
System. We therefore support modification of the boundary of Unit FL-35
to exclude Pumpkin Key, as proposed in S. 2470, as a valid technical
correction of a mapping error.
This concludes my formal statement. I would be happy to answer any
questions you may have.
__________
Statement of Jacqueline Savitz, Executive Director, Coast Alliance
Introduction
Good morning. My name is Jacqueline Savitz and I am the Executive
Director of the Coast Alliance, a national environmental coalition that
works to protect the resources of the nation's four coasts: Atlantic,
Pacific, Great Lakes, and Gulf of Mexico. I greatly appreciate the
opportunity to offer testimony regarding S. 2470, a bill to delete a
barrier island from the Coastal Barrier Resources System (CBRS). I am
speaking today on behalf of the Coast Alliance and twenty-three local
and national conservation and citizen organizations.
The Coast Alliance has a long track record with the CBRS. We
resolutely supported its creation in the 1980's and worked hard to
ensure its expansion in 1990. More recently we have worked to educate
the public about the value of the Coastal Barrier Resources System
(CBRS) and have won a lawsuit preventing the U.S. Fish and Wildlife
Service from making illegal changes to the CBRS maps. I am here today
to oppose S. 2470 and discuss why the passage of this bill would
undermine the integrity of the CBRS.
In 1982, Congress decided that taxpayers should not subsidize
private development of undeveloped barrier islands. The ultimate
question raised by this bill is: Whether Pumpkin Key was
inappropriately included in the CBRS?
The Coast Alliance and the twenty-three groups that we represent
today argue that: (1) Pumpkin Key was rightly included in the CBRS in
1990; (2) its exclusion from the CBRS runs counter to Congressional
intent, putting human life and property at risk; and (3) the removal of
Pumpkin Key undermines the integrity of the CBRS itself. For these
reasons, which are explained in more detail below, we strongly
recommend an unfavorable committee report on S. 2470.
Besides the many legal arguments for including the island, any lay
person could merely look at a photo of it and determine that Pumpkin
Key is not developed. Common sense and the application of statutory
criteria should move Congress to the obvious truth that this bill is
not a valid technical correction.
Background
The Law
The Coastal Barrier Resources Act of 1982 (CBRA), 16 U.S.C. Section
3501 et seq. (1994) (Pub. L. 97-348), established the Coastal Barrier
Resources System in order to achieve three goals: to minimize the loss
of human life by discouraging development in high-hazard areas, to
protect fragile natural resources along the coast, and to reduce
wasteful Federal expenditures. Undeveloped coastal barriers included in
the CBRS are prohibited from receiving Federal subsidies for new,
private construction. The CBRS does not prevent development from
occurring, it prevents the distribution of Federal funds, such as
Federal flood insurance, for construction. The developer is free to
obtain private insurance for new development inside the System.
In 1990, Congress passed the Coastal Barrier Improvements Act
(CBIA) as an amendment to the CBRA. The CBIA added Pumpkin Key (unit
FL-35), among other undeveloped parcels to the CBRS. Section 3503 of
the statute deemed ``undeveloped coastal barrier'' to mean:
(A) a depositional geologic feature (such as a bay barrier,
tombolo, barrier spit, or barrier island) that--(i) is subject to wave,
tidal, and wind energies, and (ii) protects landward aquatic habitats
from direct wave attack; and (B) all associated aquatic habitats
including the adjacent wetlands, marshes, estuaries, inlets, and
nearshore waters; but only if such features and associated habitats
contain few manmade structures and these structures, and man's
activities on such features and within such habitats, do not
significantly impede geomorphic and ecological process.
Under the CBRA, the United States Fish and Wildlife Service (F&WS)
is authorized to consider, and make recommendations as to whether
parcels of property should be considered undeveloped, and therefore
included in the CBRS. To this end, the F&WS may consider whether there
are fewer than one structure per five acres of fastland. 50 Fed. Reg.
8700 (March 4, 1895). The Secretary of Interior defined ``structure''
to mean a legally authorized building larger than 200 square feet in
area, regardless of the number or size of housing units it contains. H.
R. Rep. No. 101-657(I), p.6. See also 44 CFR 71 (Oct. 1, 1996). The
F&WS also currently considers whether there was a full complement of
infrastructure on the parcel prior to its inclusion in the System.
According to the F&WS, a full complement of infrastructure includes
electric lines, water lines, sewer pipes/septic systems and paved
roads.
Florida Keys Environment
In 1988, the United States Department of the Interior described the
natural environments of the Florida Keys in its ``Final Supplemental
Legislative Environmental Impact Statement on the Proposed Changes to
the Coastal Barrier Resources System.'' At that time, Interior made the
following observations (pages III-3--III-6):
The Florida Keys are a narrow, elongated chain of 97 low-lying
islands extending in an arc from south and west of Miami to the Dry
Tortugas about 235 miles away.
The shallow Florida Bay, filled with carbonate mudflats, seagrass
beds, and small mangrove islands, separates the Keys from the south
Florida mainland. Fringing mangroves typically front the Keys where
beaches are absent.
[T]he Keys . . . function as coastal barriers[,]. . . are subject
to wind, wave, and tidal energies and to severe flooding and damage by
hurricanes, and protect landward aquatic habitats.
The abundant coral reefs and seagrass beds in the Florida Keys
support a great variety of recreationally and commercially important
shellfish resources. Among these are spiny lobsters, stone crabs, and
pink shrimp. These habitats also support large numbers of fish.... Many
of the fish, particularly members of the snapper and grouper families,
provide important recreational and commercial fisheries.
[M]angrove communities along the keys . . . are productive
ecosystems which support a high diversity of fish, birds, and other
wildlife. The mangrove food web, based largely on leaf detritus, also
supports nearshore fisheries.
Upland vegetation is found on some keys where elevations are
sufficient. On the northern keys and Big Pine Key, hardwood hammocks,
unique assemblages of tropical and semitropical trees and shrubs, are
found.
Major storms have assaulted the Keys on many occasions and their
impacts are well documented. The most dramatic of these was a hurricane
that hit the Keys in 1935. This hurricane was one of the most violent
in U.S. history .... That hurricane destroyed virtually all human-made
structures in the Matecumbe area ... and killed 400 people.... The
level topography of the Keys makes human-made structures on them as
vulnerable to destruction by hurricanes as those on the lowest profile,
mostly wash over prone sandy coastal barriers.
Hurricane landfall frequencies are very high in the Keys (Figure 3
[attached]). The mean annual offshore wave energy, however, is the
lowest of any sector along the United States' coast. This combination
of generally peaceful waters with occasional hurricanes carries great
potential danger because the human inhabitants--many of whom have not
resided in the Keys for long--and the visitors are not generally
prepared for the potential devastation of storm hazards there.
In 1988, the Department of Interior released its ``Report to
Congress: Coastal Barrier Resources System, with Recommendations,'' as
required by Section 10 of the CBRA. In Volume I, page 55 of this
document, Interior found that:
A number of birds with special status are found in the Florida
Keys. These include Kirtland's warbler, white-crowned pigeon, great
white heron, magnificent frigatebird, roseate tern, brown pelican, bald
eagle, and peregrine falcon. Numerous wading birds, including the great
blue heron, snowy egret, and roseate spoonbill, and shorebirds such as
the snowy plover, American oystercatcher, sooty tern, and laughing gull
are also present. The Keys also serve as temporary stopping sites for
many migrating land birds that arrive in early spring and fall each
year. While land bird distribution in the Keys is limited by
availability of habitat, the region is a virtual haven for coastal
aerial feeding birds such as terns and gulls because of the abundant
marine life and relatively shallow waters.... The only known nesting
sites for the magnificent frigatebirds, sooty terns, and brown noddies
in the continental United States are located in the Keys.
Findings
Pumpkin Key is a barrier island near Key Largo, Florida. Pumpkin
Key is clearly undeveloped. Congress was right to include Pumpkin Key
in the System in 1990 and it is the decision of the Congress, not the
F&WS to determine whether a parcel should be remain within the CBRS.
Development on barrier islands is risky because of their
vulnerability to storms. In fact, such development leads to property
damage and potential loss of life. S. 2470 asks Congress to reverse its
prior decision and call this island ``developed'' and delete it from
the CBRS, thereby allowing it to receive some of the fifty Federal
development subsidies available.
If Congress chooses to delete Pumpkin Key from the System, it will
encourage risky development on this barrier island. S. 2470 would shift
the risk of development from the developer to the American taxpayer. If
the owner of Pumpkin Key wishes to develop a hazard prone island, he is
free to do so. He is also free to get private insurance for the
project. However, the 11 sites that will become homes will be damaged
in the next major hurricane, and if Uncle Sam subsidizes this
development, the owners will seek payment from the American taxpayer.
Once damages are repaired, there will be another storm, it is just a
matter of when. Remarkably in recent correspondence, the Fish and
Wildlife Service has changed its position and opted to call this island
developed. We feel that this policy decision: (1) is inconsistent with
the statutory definition, (2) runs counter to the intent of the law,
(3) is a stretch of existing F&WS criteria, (4) and undermines the
integrity of the System. We urge this committee to exercise its
independent judgment and reject S. 2470.
Specifically, the Coast Alliance and citizen groups across Florida
and the Nation support Pumpkin Key's continued inclusion in the System
for the following reasons:
(1) Pumpkin Key was rightly included in the System as it was
clearly undeveloped in 1990.
In 1990, Pumpkin Key satisfied the statutory definition of an
undeveloped barrier island.
The CBIA defined ``undeveloped coastal barrier'' to include barrier
islands that are subject to wave, tidal, and wind energies--if these
barriers contain few manmade structures and if the natural ecological
processes are not significantly impeded. Here, the F&WS has documented
that the Florida Keys are subject to wave, tidal, and wind energies and
that there are only three houses on this small barrier island.
Furthermore, with the exception of the few structures on the 25.56 acre
island, the natural ecological processes are not significantly impeded.
In 1990, the island met the F& WS test that no more than one
structure per five acres may be present in order to be classified as an
undeveloped CARS unit, and it still does today.
According to the F&WS, there are only three valid ``structures'' on
Pumpkin Key. Additionally, there are more than 3600 fastland acres in
Unit FL-35. There is no evidence that the unit exceeds the ``more than
one structure per five acres'' criterion.
The island does not have sufficient infrastructure that would
define it as ``developed'' and would keep it out of the CBRS.
Pumpkin Key does not meet the F&WS ``full complement of
infrastructure'' criterion because it does not have paved roads. The
F&WS stated in an August 11, 1997, letter that ``[a]t the time of its
inclusion in the System, based on the best information available at the
time, Pumpkin Key was correctly mapped as an undeveloped coastal
barrier.'' F&WS went on to state that the island's lack of paved roads
kept Pumpkin Key from meeting the full complement of infrastructure
criterion. These criteria should not be diluted or compromised. Now,
however, the F&WS is willing to consider the island developed despite
the fact that there are no paved roads. This constitutes a dilution of
the criteria for exclusion. Allowing the removal of a barrier island
because it has a golf cart path and a subaqueous utility line runs
counter to Congressional intent to preserve undeveloped coastal
barriers.
The infrastructure criterion was designed to allow exclusion in
cases where construction was ongoing. However, in this case, there was
no ongoing development at the time of inclusion in the System. While
the developers may have made a financial investment, they are still
free to capitalize on that venture. Additionally, in the Feb. 2O, 1996
letter from F&WS to Sen. Graham, the Service said, ``Intensive
capitalization is a consideration only when geomorphic ecological
processes are altered to the extent that the long-term perpetuation of
the coastal barrier is threatened. The development and potential
development of Pumpkin Key at the time of its inclusion in the System
did not significantly impede geomorphic and ecological processes;
therefore intensive capitalization was not a consideration for
excluding Pumpkin key from the System.''
Now, the F&WS is choosing to create a policy exemption for Pumpkin
Key by essentially waiving the paved roads guideline from its ``full
complement of infrastructure'' criterion. If Congress approves this, it
will set a dangerous precedent and undermine the System's integrity.
The bottom line is that the plain language of the statute controls and
overrides the inconsistent application of F&WS criteria. Therefore,
Congress should apply its statutory standard of ``undeveloped coastal
barriers'' and keep Pumpkin Key within the System.
``Plans'' to develop an island do not trigger removal from the
CBRS.
Developers argue that they had plans to develop Pumpkin Key prior
to its inclusion in the CBRS. However, plans do not equal development.
In fact, CBRS criteria reject the concept of phased development and the
F&WS stated that, ``[p]reparing plans to develop or acquiring permits
to build do not constitute development as defined by the delineation
and mapping criteria.'' Feb. 20, 1996 letter to Sen. Graham. The
undeveloped barrier island was properly included in the CBRS. The
developer is still free to build on this property, but at its own risk,
not the taxpayers'.
Information that Pumpkin Key was being added to the CBRS was
available to all interested parties for review and action at the time
of inclusion.
Lack of knowledge of inclusion is not a criterion for removal and
the burden was on the developer to make an argument for exclusion at
that time. Pumpkin Key representatives did not oppose its inclusion
within the CBRS, despite opportunity to do so. The F&WS notified Monroe
County about Pumpkin Key's inclusion in the CBRS, and received comments
regarding He 1990 Coastal Barrier Improvements Act from individuals and
organizations throughout the Florida Keys, but none regarding Pumpkin
Key specifically. Pumpkin Key's developers should have known about its
inclusion.
(2) Exclusion of Pumpkin Key from the fiscally prudent and
environmentally sound Coastal Barrier Resources System runs counter to
Congressional intent.
Removing this unit from the CBRS would be a taxpayer rip-off,
allowing the developers access to Federal subsidies for their risky
venture.
Coastal areas not in the CBRS cost the Federal taxpayer roughly
$82,000 per developed acre. Some of these costs come from the National
Flood Insurance Program (NFIP). The NFIP is one of the largest domestic
liabilities behind the Social Security System and it has required major
taxpayer bail-outs in the past. Extension of additional Federal flood
insurance for high risk development farther impacts the fund, places an
unfair burden on taxpayers, destroys critical habitat, and invites
human tragedy.
Encouraging development on Pumpkin Key puts Americans in harm's way
and does so at the expense of the U.S. Treasury.
One of the System's three objectives is the protection of human
lives. Therefore, the System was designed with human safety clearly in
mind. Since there are no roads or automobile access to the island,
fleeing it in case of a hurricane would be perilous and extremely
difficult. Removal of Pumpkin Key from the CBRS would create an
exception for isolated coastal barriers, a precedent that contradicts
Congressional intent to minimize the loss of human life by discouraging
development in high-hazard areas. Government support of such projects
would convey a false sense of security and make the Federal Government
vulnerable to repetitive pay-outs for flood and storm-related damages.
It would also encourage future development on this and other barrier
islands.
(3) Removal of Pumpkin Key undermines the integrity of the Coastal
Barrier Resources System.
The Coast Alliance and citizen groups across Florida and the Nation
are gravely concerned about the policy implications of creating an
exemption from the existing criteria for Pumpkin Key's developers.
Federal flood insurance is a major Federal subsidy, which
encourages coastal development. In many places such development is
effectively contingent upon Federal flood insurance. If Congress
removes this parcel despite the fact that aerial photos at the time of
inclusion clearly showed the lack of development in this unit, other
coastal barriers will become easy targets for removal by developers,
who would have Uncle Sam subsidize risky development.
Coastal barriers, such as Pumpkin Key, are important to fisheries
and wildlife.
Coastal wetlands support more than 75 percent of the nation's
commercial fish and shellfish at some point during their life cycles.
Barrier areas also provide critical habitat for a variety of wildlife--
including 18 federally endangered species. Development usurps important
habitats for threatened and endangered sea turtles, shore birds, and
other wildlife and can destroy food sources for coast-dependent
species. The Federal Government should not encourage such destruction.
Conclusion
The Coast Alliance is dedicated to educating the public and
reminding Congress of the value of the System and the costs associated
with its piecemeal destruction. Despite the Service's recent change in
position, it is important to note that in 1996 the F&WS stated that,
``Pumpkin Key was included in the System because it met the definition
of less than one structure per five acres of fastland for Unit FL-35;
it was not intensively capitalized; and its shoreline had not been
intensely manipulated. Also, it was not a cluster of development.
Therefore, it was correctly placed in the System.''
In conclusion, Congress should not remove Pumpkin Key from the
System because it satisfies the statutory criteria, and we argue that
it satisfies the density and infrastructure criteria for undeveloped
coastal barriers. First, there were no paved roads, and the mere
existence of a subaqueous utility line does not fulfill the criterion
of a ``full complement of infrastructure.'' Furthermore, the argument
that a 25.6 acre island, having only three houses in a unit of greater
than 3600 acres, is ``developed'' does not pass the straight face test.
Second, the goals of the CBRS--to minimize the loss of human life by
discouraging development in high-hazard areas, to protect fragile
natural resources along the coast, and to reduce wasteful Federal
expenditures--should outweigh any political pressure to allow taxpayer
giveaways for unwise development. Third, deleting Pumpkin Key from the
CBRS would undermine the integrity of the System.
Thank you Mr. Chairman for the opportunity to testify here today.
______
examples of federal subsidies available to property not in the coastal
barrier resources system (cbrs) (not an exhaustive list)
According to the Department of the Interior Federal financial
assistance is precluded from CBRS lands, and is defined as ``any form
of loan, grant, guaranty, insurance, payment, rebate, subsidy or any
other form of direct or indirect Federal assistance'' 43 CFR Subtitle
A, October S. 1983, (as announced in 48 FR 45664.)
Subsidies include but are not limited to:
1) Construction or purchase of any structure, appurtenance,
facility or related infrastructure;
2) Construction or purchase of any road, airport, boat landing
facility on, or bridge or causeway to any System unit.
3) Assistance for erosion control or other stabilitation of any
inlet, shoreline, or inshore area, except in certain emergencies.
Examples
Department of Agriculture Loans For Rural Disaster Relief Loans For
Water Systems Loans For Wastewater Systems Loans For Commercial
Development Loans For Community Services Loans For Subdivision
Development
Department of Commerce Grants For Planning And Administering Local
Economic Development Programs Grants For The Coastal Energy Improvement
Program
Rural Electrification Administration Loans for expanded Electrical
Systems
Army Corps to Engineers Construction And Financial Assistance For
Beach Erosion Control Construction And Financial Assistance For
Hurricane Protection Construction And Financial Assistance For Flood
Control Construction And Financial Assistance For New Or Expanded
Navigation Projects
Department of Energy Energy Development Programs
Housing and Urban Development Block Grants For Community
Development Mortgage Insurance Housing Assistance Rehabilitation
Subsidy Programs Urban Development Action Grants
Department of Interior-National Park Service Grants To States For
Historic Preservation Survey And Planning Grants To States For Land
Acquisition And Development Of Protected Areas Grants To States For
Prep. Of State Comprehensive Outdoor Rec. Plans (LWCF)
Department of Transportation Grants For Airport Planning And
Development Federal Assistance To States For Highway Construction
Capital Improvement And Operating Grants
Environmental Protection Agency Grants For Wastewater Treatment
Construction Grants For Water Quality Management Planning
Federal Emergency Management Administration Federal National
Insurance Program Disaster Assistance Program
Federal Home Loan Administration Guaranteed Housing Loans
General Services Administration Construction or Reconstruction of
Federal Property Exchange or Sale of Federal Property For Development
Purposes
Small Business Administration Loans To Small Businesses for
Disaster Relief Loans To Small Businesses for Upgrading of Water
Treatment Systems Loans To Small Businesses for Other Purposes Disaster
Assistance To Homeowners
Veterans Administration Guaranteed Housing Loans From Veterans
Administration
______
American Littoral Society, Highlands, NJ
Big Pine Key Civic Association, Inc. Big Pine Key, FL
Center for Marine Conservation, Washington, DC
Clean Ocean Action, Highlands, NJ
Florida Keys Citizens Coalition, Key Colony Beach, FL
Florida Keys Environmental Fund, Islamorada, FL
Gulf Restoration Network, New Orleans, LA
Key Deer Protection Alliance, Inc., Big Pine Key, FL
Lake Pontchartrain Basin Foundation, Metairie. LA
Long Island Sierra Club, Huntington Station, NY
ManaSota-88, Inc., Palmetto, FL
New Jersey Environmental Lobby, Trenton, NJ
Ocean Advocates, Dickerson, MD
Natural Resources Defense Council, New York, NY & Washington, DC
North Beach Neighborhood Ass'n, Inc., New Smyrna Beach, FL
North Carolina Coastal Federation, Newport, NC
Reef Relief, Key West, FL
Sea Turtle Survival League, Caribbean Conservation Corporation,
Gainesville, FL
Sierra Club National Marine Wildlife and Habitat Committee
Sierra Club, Midwest, Madison WI
South Carolina Coastal Conservation League, Charleston, SC
Upper Keys Citizens Association, Key Largo, FL
Volusia-Flagler Environmental Action Committee, Inc., New Smyrna Beach,
FL
__________
Statement of Thomas Z. Hayward, Jr., Terra Cotta Realty (Florida), Inc.
Thank you, Mr. Chairman and members of the committee. My name is
Thomas Z. Hayward, Jr. and I am the chairman of Terra Cotta Realty
Florida (TCR), the owner of the property known as Pumpkin Key near
North Key Largo Florida. I am here today to testify on behalf of George
A. Berry III, who is the founder of TCR and resides on Pumpkin Key. I
am also here representing the Berry family and Robert F. Berry is here
with me today.
Specifically, we want to express our strong support for legislation
(S. 2470) introduced by Senator Bob Graham and co-sponsored by Senator
Connie Mack. Senator Graham, of course, is a member of this
distinguished committee. The legislation would correct the Coastal
Barrier Resources System (CBRS) map, so as to exclude Pumpkin Key from
``FL-35''. The bill reflects the findings of the United States Fish and
Wildlife Service that Pumpkin Key was mistakenly included in the System
when Congress passed the 1990 amendments to the Coastal Barrier
Resources Act. Identical legislation (ELR 3647) has been introduced in
the U.S. House of Representatives by Representative Peter Deutsch,
whose Congressional District includes Pumpkin Key.
Allow me to provide the committee with some background on the
timeframe and physical development of Pumpkin Key. Mr. Berry personally
bought Pumpkin Key in 1973 as a retirement residence for himself and
his family. In 1974, he hired the Miami engineering firm of Connell,
Metcalf & Eddy to start the planning, engineering and permitting of
Pumpkin Key. At the time of the purchase, Pumpkin Key was zoned GU-1,
one residence per acre or 25 residences for the property. By 1976 it
was quite obvious that, to secure the necessary permits at the Federal,
State, and County level it was going to take considerably more time and
expense than Mr. Berry originally contemplated. So, at that time, he
sold one half of the property to Terra Cotta Realty Florida, which is a
private real estate investment company owned by the Berry family.
In 1980, we received the last of our permits and started
construction of the subaqueous utility line as well as on a private
residential 20 slip concrete dock. Those permits were from: (1) at the
Federal level, the U.S. Corps of Engineers, Jacksonville, Florida; (2)
at the State level, the Florida Department of Natural Resources and the
Florida Department of Environmental Regulation; and (3) at the local
government level, the Monroe County Department of Building and Zoning,
the Monroe County Department of Growth Management, and the Monroe
County Commission.
In 1981, again because construction costs far exceeded the original
estimates, Mr. Berry sold the balance of Pumpkin Key to Terra Cotta
Realty Florida. The site plan that had been approved called for 16 lots
of one acre or more and three caretaker apartments. The first caretaker
moved onto Pumpkin Key in June 1983. On March 7, 1984, Mr. Berry and
his wife moved into their residence on Pumpkin Key--a full 10 years
after the original purchase of the property.
At this point, I would like to provide the committee with a brief
chronological outline documenting the development of Pumpkin Key.
1974-1978 Negotiations were held with the Ocean Reef Club, Inc. for
the purchase of a right of way on their new development of Snapper
Point to install underground power, telephone cable, and a four (4')
inch private water line to serve Pumpkin Key. At that time, The Ocean
Reef Club was the only source of potable water on North Key Largo (See
Exhibits A & B).
1980-1981 The subaqueous utility crossing was constructed bringing
water, electric power and telephones to Pumpkin Key from Ocean Reef
Club property on Snapper Point. This comprised of two four (4") inch
water mains, two (2) 13,800 volt electric lines and a one hundred (100)
pair telephone cable. An additional four inch (4') line was installed
to handle future wastewater disposal in the event public sewers became
available in North Key Largo. During this period the 20 slip double
``L'' private residential concrete dock was installed (See Exhibits A &
B).
1981-1982 Construction of cart paths and distribution of utilities
to each of the 16 residential lots (See Exhibit C).
1982-1984 Construction of caretaker's residences, dock house, the
residence and two tennis courts, beach area, and three breakwaters (See
Exhibit D). The two tennis courts, constructed in 1983, are not just
designed for recreational purposes; they are also designed to function
as a heliport for emergency medical evacuation.
The subaqueous line provides 13,800 volt primary electric power,
the voltage of which is stepped down via ten transformers spread
throughout the island. The step-down transformers provide 440, 220, and
110 volt electrical service to all of the original 16 permitted lots.
Water and telephone service has also been extended to each lot. The
utility system and island-wide electrical grid were fully operational
by 1983, well before Pumpkin Key was added to the CBRS in 1990. Also in
1978, Terra Cotta received county, state, and Federal approval to
construct a beach area, a 20 slip multi-residential docking facility,
and breakwaters to protect the dock and beach area. The dock facility
provides dock space for each of the 16 lots and building sites. Access
to Pumpkin Key is provided from a private marine basin facility located
at Ocean Reef Club, North Key Largo, Florida. The basin, located 1,300
feet across the water from Pumpkin Key includes docking facilities, a
garage for cars and golf carts, and a guest house for Pumpkin Key. Here
again, these facilities were completed and fully operational before
Pumpkin Key was added to the CBRS.
In 1986 Monroe County was rezoned and although the approved plat
filed and accepted in 1980 by the county was in full force and effect,
the Island was rezoned O.S. (offshore island)--one residence per 10
acres when there were already four residences on the property existing
from 1983. In light of this rezoning in 1986 we immediately filed for a
vested rights hearing in Monroe County. The hearing was held in 1989,
in Key West, Monroe County, Florida. The hearing of ricer found as a
matter of both law and fact that the site plan was grandfathered and
our right to develop 15 additional residential lots was a vested right.
This finding of the hearing officer was upheld and approved by the
Monroe County Commission in January 1990.
Due to the fact that the State of Florida, Department of Community
Affairs, had put Monroe County under its control as an area of critical
State concern and had frozen all zoning, Pumpkin Key was and still is
zoned as an offshore island. So, to protect our vested rights for 16
residential lots on Pumpkin Key, we started negotiations in 1993 with
Monroe County and the Florida Department of Community Affairs. We
sought a development agreement to provide us with ten (10) years to
build on the remaining 15 (15) residential lots. The results of these
negotiations were that we gave up 20 5 percent of the vested rights to
the 16 (16) residential lots, leaving 12 (12) with a balance of 11 (11)
to be built out and placing some eight (8) acres of Pumpkin Key in a
private conservation area that can never be developed. This development
agreement was signed by all parties on January 13, 1995, and approved
by the Monroe County Commission by unanimous vote in January 1995.
We had no more than completed our development agreement than we
were advised by the FEMA representative for Monroe County that the new
CBRS map and the FEMA map showed Pumpkin Key in the CBRS, which means
that a homeowner cannot secure flood insurance for a residence on
Pumpkin Key and without flood insurance it is just about impossible to
secure mortgage money. This notification was the first knowledge we, or
Monroe County, or the State of Florida Department of Community Affairs
had of this inclusion. Mr. Chairman, the debate here today is not about
the National Flood Insurance Program. We have to comply with the
Federal and State regulations as they currently exist, which mandate
insurance to qualify for lending approval.
In 1996, after being contacted by representatives of our company,
the Fish and Wildlife Service undertook a comprehensive review of the
Pumpkin Key situation. On January 28 of this year, the Director of the
Fish and Wildlife Service wrote to Congressman Deutsch indicating that
``Pumpkin Key met the requirements to be considered developed at the
time of the passage of the Coastal Barrier Improvement Act in November
1990.'' What this means is that Pumpkin Key should not have been
included in the Coastal Barrier Resources System to begin with and the
Service admits that had they known then what they know now, Pumpkin Key
would not have been included in the CBRS FL-35. The bill introduced by
Senators Graham and Mack would correct that error.
More specifically, the Fish and Wildlife Service letter states that
Pumpkin Key had a ``full complement of infrastructure'' prior to 1990.
A full complement of infrastructure is defined under Fish and Wildlife
Service guidelines to include water supply, waste water disposal,
electricity, and paved roads or docks. The Fish and Wildlife Service
states that their review ``clearly demonstrates a high level of
infrastructure development prior to 1990.'' They noted the presence of
electricity, water, and waste disposal capacity for every building lot
on the island, as well as the paved cart paths and docking facilities.
The paved cart path exceeds two miles in length. Since the island is
only 25.6 acres in size, there is no need for roads or automobiles on
Pumpkin Key. In fact, on an island the size of Pumpkin Key, a road or
more expansive street system would be environmentally intrusive. Under
the guidelines applied by the FWS the extensive docking facilities
provide the necessary transportation access to and from the island.
Earlier this year, on May 19, the Subcommittee on Fisheries,
Wildlife and Oceans of the House Resources Committee held a hearing on
Congressman Deutsch's counterpart bill--H.R. 3647. We were very pleased
with the positive reception that we received from the House Committee
at that time. Subsequently, along with two other non-controversial FWS-
supported properties, the Pumpkin Key correction was included in the
Department of Interior fiscal year 1999 Appropriations bill (H.R. 4193)
which passed the House on July 23.
Mr. Chairman, before concluding, there is one other item I would
like to quickly discuss. Some have alleged that Pumpkin Key is a
``mangrove island''. But the fact is that Pumpkin Key is an elevated
island of limestone base which is covered primarily by tropical
hardwood hammock. Only a small portion of Pumpkin Key has mangrove
(approximately 1.6 acres), which we preserved through a voluntary, but
binding covenant on the approved site plan in 1980. Subsequently we
further set aside an additional 8 acres in a private conservation area
as part of our development agreement entered into between Terra Cotta
Realty, Monroe County, and the Florida Department of Community Affairs
in 1995.
conclusion
So, prior to 1990, Terra Cotta Realty had undertaken extensive
capital investment in Pumpkin Key, totaling more than $5 million in
development funds. We believe that all of the above facts clearly
demonstrate that Pumpkin Key was, in fact, developed prior to its
mistaken inclusion in CBRS in 1990.
Under the statute, only undeveloped coastal barriers were and are
to be included in the System. The facts show, and upon review the Fish
and Wildlife Service agrees, that at the time that Pumpkin Key was
added to the System it was already developed. Consequently, we are not
asking for any kind of special exception; rather, we are asking for the
law to be applied appropriately in our case. The enactment of S.2470
would be fully consistent with both the spirit and the letter of the
Coastal Barrier Resources Act.
Mr. Chairman and members of the committee, we greatly appreciate
the opportunity to provide the committee with the facts in this case.
We believe that these facts reflect that Pumpkin Key's inclusion in
CBRS was an error. This position is supported by the Fish and Wildlife
Service which, after an exhaustive review of the facts in this matter,
concluded that the addition of Pumpkin Key to the System was not
correct. Director Rogers' letter to Congressman Deutsch states that the
removal of Pumpkin Key from the System is a ``valid technical
correction that the Service and Department can support.'' We ask your
support in enacting the legislation (S.2470) introduced by Senator
Graham, which would implement that recommendation. Thank you, again,
for this opportunity to testify here today.
__________
Statement of Ralph DeGennaro, Executive Director, Taxpayers for Common
Sense
Good morning Mr. Chairman and members of the committee. My name is
Ralph DeGennaro and I am Executive Director of Taxpayers for Common
Sense, which I co-founded in 1995. Taxpayers for Common Sense opposes
S. 2470.
TCS is 501-C3, non-profit organization dedicated to cutting
wasteful government spending and subsidies and maintaining a balanced
budget. We are a politically independent organization that seeks to
reach out to taxpayers of all political beliefs in working toward a
government that costs less, makes more sense and inspires more trust.
Taxpayers for Common Sense receives no government grants or contracts.
Mr. Chairman, I would like to thank you for the opportunity to
testify today. Also, I would like to thank Senator Graham for adhering
to the process by introducing S. 2470 as a free-standing bill instead
of seeking to attach it as a rider on unrelated legislation.
By undermining personal responsibility, S. 2470 mocks taxpayer
compassion displayed in times of disaster
Fundamentally, Taxpayers for Common Sense believes that Americans
want their government to be soft-hearted in times of disaster and hard-
headed before disaster strikes. In 1993, Hurricane Andrew decimated
South Florida and parts of the Florida Keys, causing $25 billion in
damage. But taxpayers from across the Nation were there for their
fellow Americans in Florida. Hundreds of millions of taxpayer dollars
were spent on an emergency basis to ameliorate Florida's immediate
suffering and to give its people the means to get their state back on
its feet as quickly as possible. Inevitably, Florida and other states
will suffer such disasters again. When they do, TCS believes most
Americans want Congress to open its heart and wallet to aid stricken
citizens.
But when the storm has passed and there is time to think clearly,
American taxpayers demand that their fellow citizens use common sense.
People should take responsibility for their own actions and avoid
living in harm's way to reduce the likelihood of needless deaths and
disaster payments. That is why Taxpayers for Common Sense opposes S.
2470. This bill forces Federal taxpayers to buy front-row tickets to a
hurricane. Worst of all, S. 2470 makes it more likely that unsuspecting
homeowners will die, lulled by the good housekeeping seal of approval
symbolized by Federal subsidies. This bill mocks the compassion that
Americans showed in 1993.
S. 2470 forces hardworking taxpayers to subsidize luxury homes
Even if subsidizing certain coastal developments made sense,
Pumpkin Key would not be on the list. Anyone who can afford to buy a
home there does not need taxpayer handouts. Read the promotional
brochures. The bill asks Federal taxpayers to subsidize the development
of a dozen luxury homes on a secluded island. Reportedly, some
homeowners will arrive by helicopters landing on the tennis courts.
S. 2470 further dismantles the Coastal Barrier Resources System that
protects against developers who gamble with taxpayer money
President Reagan signed the Coastal Barrier Resources Act (CBRA) in
1982, in part in order to reduce taxpayer bailouts of resort developers
up and down the Eastern seaboard. Since 1996, Congress has slowly begun
dismantling the CBRA piece by piece via special interest exemptions. S.
2470, designed to exempt Pumpkin Key, is no exception. It would simply
continue the dismantling of a law that protects taxpayers and encourage
further exemptions. That is the wrong message for Congress to send.
The CBRA authorized the establishment of the Coastal Barrier
Resources System (CBRS)--a designation that does not allow the taxpayer
subsidized development of undeveloped coastline as defined by the CBRA.
Before the establishment of the CBRS, taxpayers paid millions each year
to bail out private developers that invested in risky coastline
development. The CBRA was passed in an effort to curtail the spiraling
costs to taxpayers. The CBRS does not prohibit private development--it
simply states that developers are prohibited from receiving Federal
subsidies for new, private construction on undeveloped coastal
barriers. In other words, the System prevents the distribution of
Federal funds, such as those in the National Flood Insurance Program
(NFIP), to support construction.
Developers are then free to choose not to build in risky areas, or
to pay market rates for private insurance if they choose to gamble and
develop vulnerable areas within the system. TCS understands that
obtaining private insurance for development on coastal flood plains and
barrier systems is difficult since the risk for insurers is so high.
But, if private developers are unwilling to risk their own money,
should they be allowed to risk taxpayers' money instead? Why should
taxpayers be forced to pay for others' risky investments?
The exemption of Pumpkin Key, and other coastal areas like it,
undermines the very reason the CBRS was established. It has been proven
that the availability of flood insurance under the National Flood
Insurance Program (NFIP), along with other Federal subsidies,
encourages development along vulnerable areas of America's coasts. The
U.S. GAO concluded in 1982 that the NFIP acts as a ``financial safety
net'' for developers. In 1988, the Department of the Interior (DOI)
concluded that Federal subsidies are one of the key reasons why coasts
have become so heavily developed since World War II. Additionally, a
report prepared for the DOI concluded that every developed acre of
coast costs $82,000 in Federal subsidies.
The biggest taxpayer gamble on the coast is the NFIP, which risks
hundreds of million in taxpayer dollars every year, depending on the
damage caused by natural disasters over that year.
The NFIP has a terrible financial track record with a debt of over
$900 million to the U.S. Treasury. In 1993, the NFIP had to borrow
money from the treasury in order to pay claims from the Midwest Floods
and Hurricane Andrew. In 1996, the NFIP had to borrow $680 million from
taxpayers in order to pay insurance claims prior to Hurricane Fran.
This hurricane then caused another $4 billion in damage, part of it on
flood insurance claims. The reason for the taxpayer bailouts is
simple--the dollar amount the Program collects on policies is far below
the dollar amount these policies are actually worth. In other words,
the NFIP has over $325 billion worth of policies in effect, yet has
only about $500 million in the Flood Insurance Fund for payment of
claims. When no flooding or natural disasters occur in a given year,
the Program has about $500 million in reserve. When there is flooding,
however, the Program immediately goes into the red.
Taxpayers for Common Sense urges the committee to protect
unsuspecting homebuyers and taxpayers by rejecting S. 2470. Thank you
very much.
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