Floods are a fact of life in many places around the country.  During the last few years, we have seen devastation from events like Hurricane Katrina in New Orleans, the drastic flooding in Iowa, Missouri and many other states along the Mississippi River.  Unless you have lived in the Santa Maria Valley for longer than 40 years, the concept of flooding creating damage and loss to your home or personal property has not been a concern.

The city of Santa Maria prior to 1967 was subject to flooding on an almost bi-annual basis.  This is because the Santa Maria River, which is fed by the foothills and mountains to our east, channels a tremendous amount of water over a short distance on its way to the Pacific Ocean during our rainy season.  Without a way to channel the water away from the city, it was not unusual to see water flood into the city center, usually as far south as Stowell Road on a regular basis.  The flooding, although chronic, was not catastrophic, usually flooding about a foot or so of water on average.

In the 1960’s as both a flood control and water reclamation project, the Santa Maria River Levee and Twitchell Resevoir were constructed by the Army Corps of Engineers.  Upon the completion of the levee,  the area south of the river was categorized in the Flood Insurance Rate Maps (FIRM) as an area that is deemed to have a 1% or less chance of major flooding in any given year.  As a result of this categorization, property owners have been generally exempt from a requirement to purchase flood insurance.  (Federally backed mortgages require flood insurance when there is a greater than 1% chance of flooding, and most private mortgages are starting to adopt the same requirement).

The failure of the levee system in New Orleans, along with the large numbers of uninsured losses in traditionally flood prone areas has prompted the review of all levees across the United States.  Every levee will need to be ‘re-certified’ to determine that their protection is still adequate. 

Santa Maria’s levee, upon review, was deemed to be inadequate and in need of renovation.  This causes our area to lose it’s category of 1% or less chance of flooding, and requires FEMA to re-draw the flood maps that determine the amount of risk, and therefore the pricing mechanism for flood insurance.   The maps create ‘zones’ which distinguish a particular area’s risk versus another.  Basically, the higher the risk, the higher the pricing for flood insurance.

Unfortunately, this area’s designation will change from a FIRM zone that allows for relative inexpensive pricing (currently $348 for a preferred policy that contains $250,000 of building coverage and $100,000 of contents coverage) to a pricing model that can make the same preferred policy on the same property cost $1385.00.  If the home you live in or are purchasing was built before 1974 and is in the changed zones, your same policy can cost as much as $5481.00.  So, where you live, and when your house was constructed will play a big part as to how these changes will effect you and your family.

City, County and Federal officials are working on a plan to bring the levee up to certification standards.  At the last estimate, the cost is approximately $48 million.  Upon completion of the work and re-certification of the levee, the requirement for purchasing flood insurance should be lifted, but consumers are urged to consider maintaining this valuable coverage.  Of course, the pricing at that time should be substantially reduced.

Our office will be glad to discuss your particular situation and help you with your insurance needs.  Feel free to contact us to help you determine if the home you own or are considering buying may be affected.

Marty Mariscal  CLU, CHFC
Mariscal-Rumbaugh Insurance

Posted: July 11th, 2008 under Area Information.

The Pismo Beach Car Show took place this past weekend.   I used to participate by entering my 1969 Checker Aerobus and even was fortunate to win first place one year in my division.  Now it’s fun for me to be an observer and to roam downtown Pismo Beach and talk to the owners of the cars on display. 

The record-breaking heat added another element to the event.  I thoroughly enjoyed the warm evening weather as we watched the cars cruise the streets, although some of the vendors complained that the crowds were thinner than they expected.  If that was the case, it’s hard to tell whether it was the heat or gas prices (or both) that affected their business.

Posted: June 23rd, 2008 under Area Information.

We often get questions from people who are interested in buying a Central Coast beach property that generates income as a vacation rental. Pismo Beach and Shell Beach are popular destinators for tourists and one of the key areas of interest for a possible vacation home. However many people, including locals, are not aware of the fact that the City of Pismo Beach (which includes Shell Beach) has a Zoning Ordinance that makes it illegal to rent a home as a short-term vacation rental in Pismo Beach and Shell Beach neighborhoods that are zoned “residential”. The ordinance defines a short-term rental as one that is less than 30 days. Until recently, the City of Pismo Beach really didn’t enforce any penalties for violators and left it up to neighbors to complain before any action was taken. Now Pismo Beach has hired an enforcement officer who will be researching, investigating and enforcing the ordinance. Currently the City plans to shut off the water supply for those who violate the ordinance after two complaints/warnings.

Posted: June 6th, 2008 under Area Information.

In anticipation of reduced property tax revenues due to the weak stock market, increasing number of homes in foreclosure and declining home values, the Pismo Beach City Council voted to add a 1/2 cent increase in sales tax to the June Ballot.  If approved, the sales tax will be 7.75%, which is what it currently is in Arroyo Grande, Grover Beach, San Luis Obispo and Santa Maria.  According to the City Council, secure funding is needed to continue the work that has already begun for repair of sidewalks, streets, beach access stairs, and improving the storm drainage systems.

Posted: April 15th, 2008 under Area Information.