Attorney: Stonington not obligated to reimburse residents for loss of flood discount

Stonington — Town Attorney Thomas Londregan has informed the Board of Selectmen that the town has no legal obligation to reimburse property owners who lost their annual 5 percent flood insurance premium discount and to do so would be in violation of the town’s authority.

At a Board of Selectmen meeting last month, some Mystic residents demanded that the town reimburse them for the loss or possibly face a class action lawsuit.

One of them, Thomas Norris, has sent a letter to the selectmen containing a proposed resolution that would reimburse property owners for the loss of the discount, for which the town has accepted responsibility.

“While it may be that the town is not ‘legally’ responsible for the loss, the town has an ethical and moral obligation to do what is right and that is to reimburse the blameless policy holders for their financial loss,” he wrote.

Norris’ resolution would require the town to reimburse property owners for their loss now and in the future if the town cannot get the discount reinstated by Nov. 1.

Property owners are expected to raise the issue with selectmen when the board meets Wednesday night at 7 p.m. at the high school.

In his letter, Londregan noted that participation in the flood discount program is voluntary by municipalities and the town could have discontinued its participation any time if it decided the time and cost of the program had become a burden.

He pointed out that state statutes and case law generally hold that municipalities are not liable for discretionary actions.

“Since the Community Rating System is a voluntary incentive program, I can find no duty for the Town to participate,” he wrote. “Since participation is not mandatory but discretionary, I find no liability for the town for not remaining in the program.”

Earlier this summer, The Day reported that homeowners whose policies were coming up for renewal were being told they no longer qualified for the discount because the town had not addressed some deficiencies found in its flood planning by a Federal Emergency Management Agency audit.

Those deficiencies need to be corrected to qualify for the discount under the Community Rating System.

The problems do not affect borough homeowners who continue to qualify for an even larger discount of 10 percent.

Because flood insurance can cost many homeowners several thousand dollars, the loss of the discount meant an increase of a few hundred dollars in their bills. The average discount is $80, according to the town.

The cost increase is compounded by the annual rate increase homeowners face each year as the federal program tries to make the program actuarially sound.

Town officials have assured residents they are working diligently to correct the problems that led to the loss of the discount that resulted when a FEMA audit uncovered eight properties that lacked flood elevation certificates or had other problems that needed to be corrected.

A change in Town Hall personnel resulted in the oversight.

j.wojtas@theday.com

Twitter: @joewojtas

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