Citation:  FEMA-1930-DR-IA, City of Hopkinton, Insurance, Project Worksheet (PW) 1516

Cross-
Reference:  NFIP Mandatory Reduction

Summary:  The Applicant’s Waste Water Treatment Plant (WWTP) incurred damage as a result of flooding associated with DR-1930 in June 2010.  FEMA prepared PW 1516 to document eligible costs for this project.  Because the Applicant is located in a Special Flood Hazard Area (SFHA) that has been identified on a Flood Insurance Rate Map (FIRM) for more than one year and the Applicant does not have flood insurance, FEMA reduced funding by the maximum amount of funding that would have been available under the National Flood Insurance Program (NFIP).  The amount of the reduction was $287,086, which the Applicant has appealed.  The Applicant previously received funding for flood damage at the WWTP following DR-1763 in 2008, and argued that FEMA did not inform it of any requirement to purchase flood insurance at that time.  The Applicant’s damage under DR-1763 was less than $5,000, not triggering the obtain and maintain insurance requirements, and that requirement is not at issue in this appeal.  FEMA also applied a mandatory NFIP reduction to the assistance provided under DR-1763.  This reduction and its basis were explained to the Applicant at that time.  Additionally, the Applicant is a community that has participated in the NFIP since its initial Flood Hazard Boundary Map went into effect on October 29, 1976.  Further, the WWTP has been identified on a FIRM since July 2, 1987.  This is sufficient to demonstrate that the Applicant should have been aware of its status and insurance requirements due to its location in a SFHA, as well as being an NFIP-participating community.

Issue:  Was FEMA required to reduce the amount of project funding by the amount that would have been eligible under the NFIP?

Finding:  Yes.

Rationale:  Stafford Act Section 406(d) Repair, Restoration, and Replacement of Damaged Facilities, Flood Insurance; 44 CFR §206.252(a) and (d) Insurance requirements for facilities damaged by flood.