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Second Appeal Brief
PA ID# 025-UXFAV-00; Hialeah Housing Authority
PW ID# 2172, 2173, 2174, 2175, 2176, and 2177; Insurance
Citation: FEMA-1345-DR-FL; Hialeah Housing Authority, Project Worksheets (PWs) 2172 - 2177
Summary: Severe storms produced flooding that affected the Hialeah Housing Authority (Applicant) in October 2000. As a result, the Federal Emergency Management Agency (FEMA) prepared PWs 2172, 2173, 2174, 2175, 2176, and 2177 to repair the damages caused by the flooding. The facilities were located in a special flood hazard area, therefore requiring that the buildings and contents be fully covered by a standard flood insurance policy from the National Flood Insurance Program. A FEMA Insurance Specialist, after reviewing the Applicants flood insurance policy, discovered that the Applicant was underinsured and reduced the Project Worksheet amounts in accordance with 44 CFR § 206.252(a). The result was a reduction of $800,230 from the total repair cost of $811,545. The Applicant submitted its first appeal on March 17, 2004, claiming that FEMA failed to notify the Applicant as required by 42 U.S.C. 5172(d)(4) that there would be a reduction in assistance if the properties in question were underinsured. Based on this reason, the Applicant asserted that FEMA is barred from reducing the amount of assistance provided. After re-inspection and review of the first appeal documentation, the Region IV Acting Regional Director determined that the maximum amount of insurance proceeds, which would have been received had the buildings and contents been fully covered by a standard flood insurance policy, was $627,537. This resulted in a total obligation of $276,523, after subtracting $627,537, from the Applicants total claimed costs of $904,060. The Applicant submitted its second appeal on September 28, 2004, claiming that it fulfilled its requirements for obtaining insurance and FEMA cannot reduce the assistance because it failed to notify the Applicant about a reduction in assistance if the properties were underinsured. The State of Floridas Department of Community Affairs supports the Applicants appeal for $627,537.
Issues: Is the Applicant eligible for additional funding?
Findings: No. Reductions in assistance are mandatory and applied uniformly.
Rationale: 44 CFR §206.252