NEW FLOOD PROGRAM OPTION AVAILABLE???
At the regular weekly meeting of the Citizen’s Advisory Committee a recent change to the Flood Relocation Program was discussed. For months we have been lobbying Fredericton bureaucrats to allow more flexibility in program delivery particularly with respect to the “hard cap” of $100,000 for relocation of residences. As we all now know the announcement by the Minister last October that the program would pay “up to” $100,000 to relocate a home essentially established this figure as the minimum cost of a relocation since contractors are not about to leave any of that government money on the table and the cost of site work is higher than anticipated due to the terrain in the new developments on both sides of the river. A review of completed relocations to date reveals that the cost to move even the smaller homes are at or near this cap. Most, if not all, of the homes currently being prepared for relocation will come in at a cost exceeding the cap and in some cases the cost will be far in excess of $100,000 leaving the homeowner on the hook for significant out of pocket expense. In one case a homeowner who planned to relocate has abandoned the plan even after completing some site work and is looking at flood proofing because it became obvious that relocation just wasn’t financially viable for him. Others elected a buyout early on realizing that their relocation costs would exceed the cap and they were not in a position to pay the excess. Buyouts are at appraised home value prior to the flood less any DFA money received by the homeowner that was not spent on repairs. You will understand the importance of this reminder later in this article.
The Committee has always argued that the “hard cap” penalizes those residents who own larger homes as, logically, it should be more expensive to move a large home than a smaller one. We have further argued that money saved on buyouts could be used to subsidize these extra costs. Why not? The government announced an $8 million program to assist approximately 80 homeowners. As long as they all get moved, flood proofed or bought out at a cost less than this, what’s the problem? To date, there have been 22 appraisals on homes scheduled to be bought out. The total appraised value of these 22 homes is $1,493,400. To relocate these 22 homes would cost $2.2 million. So the program saves $706,600 on these buyouts. There are 32 homeowners who have elected relocation to date. Some homeowners will be $5,000 to $10,000 over the cap while others will be substantially more. Regardless, dividing these savings among them as necessary would absolutely guarantee that all could be relocated without exceeding the overall program maximum and without costing residents any money out of pocket. Obviously, doing it this way, which was precisely what was proposed to Cabinet in the first place (and what was done in the first relocation 20 years ago), makes far too much sense as the refrain from Fredericton bureaucrats has constantly been “the approved Cabinet document does not provide for this and the program must be executed precisely as approved by Cabinet”.
I guess this is the way it has to be…Cabinet approved policies have to be followed to the letter….except for when they don’t! You see, about 3 weeks ago a resident who had elected relocation made a proposal directly to senior officials in Fredericton which essentially combined the best features of relocation and buyout with respect to his own property. He proposed that rather than relocating his home which would cost the program $100,000 (and himself several thousand more) and leave him with an older home which would require upgrading and modifications, why not just give him the $100,000 less any unused DFA money associated with that property and he would commit to rebuild a new home on a lot outside the flood zone but within village limits. He would further commit to tear down the existing home and return the lot to grade at his expense prior to turning it over to the province. Personally, I think this is a brilliant idea except that it does not take into account the appraised value of the home which means it is possible that the homeowner receives more for the home than it is worth which is exactly the case in this instance. It saves the program money; it provides the village and province with a higher value property for tax purposes and it obviously provides the homeowner a far better option than any of those approved in the Cabinet document. This fourth option which the bureaucrats bizarrely refer to as a “relocation” (there’s nothing getting relocated here) is in fact a hybrid solution between relocation and buyout. Really, it is a straight buyout but the Cabinet document stipulates (so we have always been told) that a buyout is based on appraised value prior to the flood less any unused DFA money. In this situation, the homeowner would have received far less had the “normal” buyout rules been followed. But he came up with a better idea, proposed it to bureaucrats in Fredericton and they approved it. You can’t blame the homeowner, all he did was ask. It is the government who went along with it and tried to cloak the whole thing as a great idea for all concerned. Personally, I like the concept provided it is announced and made available to all. But that’s the rub; the government would prefer to treat this as a one-off situation and keep it quiet and that’s not fair! Not fair to the other flood victims and really not fair to the homeowner either who will have to bear the brunt of small town talk and innuendo for years to come. I tried to explain this to Andre Chenard at the July 22nd Citizens Advisory Committee meeting. He is the Director of Community Funding and Technical Services Branch at the Department of Environment and Local Government, and he approved and signed off on the deal. Unfortunately I didn’t do a very good job of explaining the problems created by making this side deal for one homeowner only and I lost my temper and stormed out of the meeting after advising Mr. Chenard that he could make this new option public or I would. Well, obviously, he didn’t and so here we are.
I have always been of the opinion that if something is being done “in secret” and the intention is not to make it public, there must be something wrong with it. There is nothing wrong with this proposal itself. It makes perfect financial sense. Why then does the government want to keep it quiet and extend the benefit to one family only? Feel free to draw your own conclusions. Could it be that they are embarrassed to have approved participation in the program to properties acquired post-flood in the first place? Again, this is not the homeowners’ doing…it’s the government’s mistake! The homeowners’ asked if they qualified; the bureaucrats said YES! Now it has come back to bite them. You reap what you sow.
Regardless of what homes qualify under the program, any option offered must be made available to all and if it is not it will be a travesty and will bring disrepute to the entire program. Every file must be revisited and if homeowners would be due any further compensation had this option been available to them, that amount must be calculated and a check issued. Furthermore, offering this new deal puts to rest the old refrain that the program must be delivered precisely as approved by Cabinet because this arrangement is not in the Cabinet document. So clearly the bureaucrats in Fredericton can do what they wish (or what they are instructed to do by their political masters). We only need to point them in the right direction and authorizing this deal overturns the last rock under which they could hide. Therefore, the $100,000 relocation “hard cap” should also be out the window and the program savings identified earlier in this article should be made available to homeowners who need additional funding to relocate their homes. This is only fair!
Mr. Chenard can be reached at 453-3849 or by email at Andre.Chenard@gnb.ca. Wes McLean can be reached at 273-2460 or by email at Wes.McLean@gnb.ca. Contact them about your case. Apparently just about anything is on the table.
Good luck,
Al McPhail
