CAPE MAY — A group of residents and a candidate for office in this week’s election are questioning why the city has no flood insurance on its new $10.5 million convention facility.

Cape May Convention Hall survived Hurricane Sandy with no damage, helped in part by a sand dune the city erected in front of it as the storm approached, but some are saying the lack of insurance is a pretty big risk to take. The city only applied for the insurance in July and the new hall opened in May.

Rusty Chew, who ran against Mayor Ed Mahaney in Tuesday’s election, and is currently behind by 19 votes with 11 more days to accept absentee ballots, began raising the issue last week. Chew notes that most of the hall construction was paid for by a bond issue local taxpayers will be paying off.

“Isn’t flood insurance required for a bond issue? It’s essentially a loan the people are repaying. I pay a premium for my property and I’m required to have insurance by the lender. There certainly are some questions,” Chew said.

Some residents are raising some of those questions. Trenton Avenue resident Charles Hendricks said he asked City Manager Bruce MacLeod last week if there was flood insurance but got no response, so on Monday he filed an Open Public Records Act (OPRA) request. Hendricks withdrew the request after MacLeod acknowledged at Tuesday’s City Council meeting there is no flood insurance on the building.

Hendricks said he has filed a second OPRA request to find out the elevation of the building after hearing it is not high enough above the base flood elevation to get insurance. He also wants all internal correspondence between city officials on the issue.

“They’re probably two feet below where they need to be,” Hendricks said.

Mayor Ed Mahaney said he first heard about the lack of insurance on Oct. 29, the day before the storm made landfall. Mahaney said under the city’s form of government the mayor and members of City Council do not handle administrative duties. They are MacLeod’s job.

“Now that this has been brought to my attention, and City Council’s, we are overseeing the situation to make sure it is rectified. This is not an administrative duty of the mayor or City Council but we can provide oversight. Nobody on City Council knew about it,” Mahaney said.

The construction of sand dunes was done in several areas of town as the storm approached, Mahaney said, and was not related to the lack of flood insurance. He noted the city’s damages were minimal with claims at $368,000, and all but $114,000 of this was on private property. The dune construction, Mahaney said, was “a prudent decision that did yield positive results.”

MacLeod said the building has had other forms of insurance since May through the Atlantic County Municipal Joint Insurance Fund, but the JIF does not cover flood insurance.

“In July we said, ‘Let’s move forward on flood insurance,’” said MacLeod.

Such applications, he noted, are reviewed by the Federal Emergency Management Agency, or FEMA, which will provide maximum coverage of $500,000. The city would need to go to private insurers for more coverage. MacLeod said the city may not be able to afford the premiums to insure the building for $10.5 million.

“We would have to get prices and evaluate excess coverage,” said MacLeod, noting they have been working on the issue for several months with the city’s risk management consultant, the Marsh & McLennan Agency. The consultant could not be reached for comment on Thursday.

Hendricks raised other questions. He said FEMA requires new construction to be 101/2 feet above base flood elevation, with an additional 1 foot to the lowest horizontal structural member. MacLeod said the main deck of the hall is at 15.2 feet. Hendricks, however, said a sump pump facility built into the foundation is only at 81/2 feet.

MacLeod is aware of that issue.

“Well, we haven’t been denied. We’re going through the (application) process,” MacLeod said.

Hendricks does not believe the building is high enough and argues the process started way too late.

“You don’t apply for it in July when you open a place in May. There’s too much smell here,” said Hendricks.

Deputy Mayor Jack Wichterman said a sump pump should be lower in a building to be effective. Wichterman agreed with Mahaney that the oversight was not the fault of elected officials. Wichterman said he found out there was no flood insurance on Saturday.

“They started in July. They should have started earlier. The buck stops with (MacLeod), and he has said that,” Wichterman said.

Chew questions why the hall is still occupied under a temporary certificate of occupancy. The permanent CO has yet to be issued. Wichterman said this is not due to flood insurance but other issues. Hendricks said people can’t get a CO for a house in vulnerable areas without flood insurance.

Mahaney said the hall was built in excess of code requirements. MacLeod said it was constructed to withstand a hurricane.

“There’s been no damage to the hall and we’ll have insurance very promptly,” Mahaney said.

Contact Richard Degener:

609-463-6711