Mandatory NFIP Deductions

February 23, 2010

Fred W. Liebe

State Coordinating Officer

Oklahoma Department of Emergency Management

2401 N. Lincoln (Will Rogers Building Tunnel)

Oklahoma City, OK 73105

Re:  Second Appeal–City of Miami, PA ID 115-48000-00, Mandatory NFIP Deductions,

FEMA-1712-DR-OK, Project Worksheets (PWs) 1209, 2024, 2025, and 2026

Dear Mr. Liebe:

This letter is in response to your letters dated August 14, 2009, and August 28, 2009, which transmitted the referenced second appeal on behalf of the City of Miami (Applicant).  The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) mandatory National Flood Insurance Program (NFIP) deductions of $258,907 from PWs 1209, 2024, 2025, and 2026. 

FEMA prepared PW 1209 for $4,396 to replace damaged pool sand filters and pumps and PW 2024 for $102,827, PW 2025 for $102,827, and PW 2026 for $140,200 to repair flood damage to three barns following a flood in July 2007.  FEMA reduced the eligible amount of each PW by $2,517, $76,120, $76,120, and $104,150 respectively, because the damaged facilities were located in a Special Flood Hazard Area (SFHA).  FEMA regulations at 44 CFR §206.252, Insurance requirements for facilities damaged by flood, require FEMA to reduce the amount of assistance it provides for facilities that are located in SFHAs by the amount of insurance which would have been received had the building and its contents been insured by A National Flood Insurance Program policy.

On October 28, 2008, the Applicant submitted its first appeal requesting a waiver of mandatory NFIP deductions on PWs 1209, 2024, 2025, and 2026.  The Oklahoma Department of Emergency Management forwarded the appeal to FEMA on December 30, 2008.  The State recognized that NFIP deductions are mandatory and did not support the request for a waiver.  However, the State did support the Applicant’s argument that the PWs included some buildings and contents that were uninsurable and thus not subject to the deduction.  On April 27, 2009, the Acting Regional Administrator denied the first appeal for these PWs.  The Applicant submitted a second appeal-on July 28, 2009, to remove the mandatory NFIP deduction from PWs 1209, 2024, 2025, and 2026 in the amount of $258,907.  The Applicant submitted pre-disaster pictures of the equipment and facilities as well as an email from the Applicant’s insurance carrier stating that the equipment and horse barns were uninsurable under the NFIP.  The State forwarded the second appeal to FEMA on August 14, 2009, for PWs 1209, 2024, 2025, and 2026 recommending approval.

The NFIP General Property Form, Section IV, PROPERTY NOT COVERED, 14, states:  “We do not cover any of the following property:  Hot tubs and spas that are not bathroom fixtures, and swimming pools, and their equipment such as, but not limited to, heaters, filter pumps, and pipes wherever located.”  Based on this clause, the pool sand filters and pumps referenced in PW 1209 are uninsurable under the NFIP and are not subject to mandatory NFIP deductions.  With regard to the horse barns (PWs 2024, 2025 and 2026), FEMA defines a building as a structure with two or more outside rigid walls and a fully secured roof affixed to a permanent site.  Based on the photos the Applicant submitted, the horse barns meet the definition of a building.  Therefore, flood insurance under the NFIP is available for the barns.  Based on this determination of insurability, the mandatory NFIP deductions apply to the Applicant’s horse barns.

I have reviewed the information submitted with the appeal and have determined that the Applicant’s appeal should be partially approved.  I am approving the appeal of PW 1209 in the amount of $2,517.  With regard to PWs 2024, 2025, and 2026, I have determined that the Acting Regional Administrator’s decision in the first appeal is consistent with Public Assistance regulations and policy.  Accordingly, I am denying the second appeal for these three PWs in the amount of $256,390.  By this letter, I am requesting that the Regional Administrator take appropriate action to implement my decision.

Please inform the Applicant of my decision.  This determination is the final decision on this matter pursuant to 44 CFR §206.206, Appeals.

Sincerely,

/s/

Elizabeth A. Zimmerman

Assistant Administrator

Disaster Assistance Directorate

cc:  Tony Russell

       Regional Administrator

       FEMA Region VI