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Second Appeal Letter
PA ID# 087-91034; Pajaro Valley Unified School District
DSR ID# Multiple; Implementation of Flood Insurance Policy
February 2, 1998
Mr. D.A. Christian
Governor's Authorized Representative
Governor's Office of Emergency Services
Post Office Box 239013
Sacramento, California 95823
Dear Mr. Christian:
This letter is in response to your September 10, 1997, transmittal of the Pajaro Valley Unified School District's second appeal under FEMA-1046-DR-CA. The City is requesting reimbursement for damages to insurable flood damaged buildings at the Pajaro Middle School. The Pajaro Middle School is located in a special flood hazard area (SFHA). Costs for repairing damages originally estimated in damage survey reports (DSRs) 16017, 16021, 16043, 16066, 16077, and 16078 totaled $221,658. The Federal Emergency Management Agency (FEMA) determined that DSRs pertaining to flood-damaged facilities should be approved for $750, the value of a standard flood insurance policy (SFIP) deductible available through the National Flood Insurance Program (NFIP). Accordingly, $4,500 was approved for funding repairs (6 sites at $750/site). Following the first appeal, supplemental DSRs were prepared with the assistance of NFIP-certified insurance adjusters to account for costs which would not have been covered under an SFIP ($117,803). The affected DSRs are listed on an enclosure to this letter. The applicant submitted a first appeal of FEMA's decision to reduce funding, but was denied pursuant to the mandatory reductions specified in Section 406(d) of the Stafford Act. The applicant submitted a second appeal letter dated July 30, 1997.
Section 406(d) of the Stafford Act establishes that Federal assistance for an insurable building damaged by flooding and located in a SFHA identified for more than one year by the Director, shall be reduced. Pursuant to Title 44 of the Code of Federal Regulations (CFR), section 206.252(a) "The amount of the reduction shall be the maximum amount of the insurance proceeds which would have been received had the building and its contents been fully covered by a standard flood insurance policy." The maximum payment under the NFIP results from application of the minimum deductible ($750). Eligible funding may also include costs which would not have been covered under an SFIP. These reductions and limitations on funding are mandatory and uniformly applied as established by the Stafford Act and 44 CFR. Therefore, as established in the first appeal response, the applicant has received the maximum funding eligible in accordance with FEMA regulations and policy. As the applicant does not currently have flood insurance policies, receipt of Federal assistance is contingent upon the applicant procuring and maintaining such policies in the amount of eligible damages for each building.
The applicant states that flood insurance was not obtained because they were unaware that flood insurance was available through the NFIP, and that such insurance was not affordable. The NFIP was established to provide flood insurance at reasonable rates and is available at considerably less cost than other policies. Flood insurance has been available through the NFIP since 1973. Further, it is noted that more than 18,000 participants in the NFIP, emergency offices in all 50 states, and floodplain management groups were notified of the reductions required by the new law in letters sent in the spring of 1989. The effective date of the reductions was delayed 180 days from the effective date of the Stafford Act to provide sufficient notice to potential applicants. Regulations concerning the reductions were published in the 44 CFR on March 21, 1989, clearly stating the reduction will be the amount payable under an SFIP through the NFIP. Also, Section 406(d) of the Stafford Act describes the mandatory reductions to be made in Federal assistance. Therefore, the applicant should have been aware of such reductions.
Based on my review of the second appeal issues I have found no basis to overturn the Region's initial determination of ineligibility of funding for damages that would have been covered under an SFIP. Therefore, this appeal is denied.
Please inform the subgrantee of my determination. The subgrantee may submit a third appeal to the Director of FEMA. The appeal must be submitted through your office and the Regional Director within 60 days of receipt of this determination.
Lacy E. Suiter
Executive Associate Director
Response and Recovery Directorate
cc: Ray Williams
Acting Regional Director
FEMA Region IX