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Second Appeal Letter
PA ID# 167-UY6NX-00; Gulf Marine Institute of Technology
PW ID# PW 12410; NFIP Reduction
December 19, 2011
W. Nim Kidd
Assistant Director, Texas Department of Public Safety
Chief, Texas Division of Emergency Management
P.O. Box 4087
Austin, TX 78773-0220
Re: Second Appeal–Gulf Marine Institute of Technology, PA ID 167-UY6NX-00, Insurance Reductions, FEMA-1791-DR-TX, Project Worksheet (PW) 12410
Dear Chief Kidd:
This letter is in response to a letter from your office dated April 1, 2011, which transmitted the referenced second appeal on behalf of the Gulf Marine Institute of Technology (Applicant). The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) application of mandatory National Flood Insurance Program (NFIP) reductions to the Applicant’s flood damaged property.
Hurricane Ike damaged the Applicant’s property located in a Special Flood Hazard Area (SFHA). FEMA prepared PW 12410 for $350,899. Section 406(d) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) and Title 44 of the Code of Federal Regulations (CFR) §206.252, Insurance requirements for facilities damaged by flood, require FEMA to reduce the amount of eligible assistance for a facility in a SFHA by the maximum amount of the insurance proceeds which would have been received. During the insurance review of the project, FEMA applied a mandatory NFIP reduction of $127,668.
In its first appeal letter dated November 28, 2010, the Applicant appealed FEMA’s NFIP reduction. The Applicant had applied for a comprehensive insurance program, including flood insurance coverage, and was in the insurance underwriting process for approximately three months prior to Hurricane Ike. When Hurricane Ike occurred, the Applicant was in the process of getting the last required information for the insurance underwriters. Therefore, the Applicant did not have flood insurance at the time of Hurricane Ike. The Regional Administrator denied the first appeal in a letter dated January 13, 2011, because flood insurance was not in place at the time of the disaster declaration and, therefore, the NFIP reductions were appropriate.
The Applicant submitted its second appeal on March 28, 2011, reiterating that the Applicant made sincere and timely efforts to obtain flood insurance prior to Hurricane Ike.
Section 406(d) of the Stafford Act mandates a reduction in the amount of Public Assistance funding for a facility that is insurable under the NFIP, located in a SFHA, and damaged by floodwaters. For insurable facilities that do not have flood insurance, FEMA will reduce eligible project funding by the maximum amount of insurance proceeds that would have been received had the building and its contents been fully covered by a standard flood insurance policy. FEMA recognizes the good faith efforts of the Applicant to obtain the appropriate insurance. However, although the Applicant was in the process of obtaining flood insurance, the Applicant did not have flood insurance coverage at the time of Hurricane Ike. Therefore, the mandatory NFIP reduction applies.
I have reviewed the information submitted with the appeal and have determined that the Regional Administrator’s decision in the first appeal is consistent with Public Assistance regulations and policy. Accordingly, I am denying the second appeal.
Please inform the Applicant of my decision. This determination is the final decision on this matter pursuant to 44 CFR §206.206, Appeals.
cc: Tony Russell
FEMA Region VI