Page 1 October 1998 PROPERTY ACQUISITION HANDBOOK FOR LOCAL COMMUNITIES A SUMMARY FOR STATES HOW THIS HANDBOOK CAME TO BE Across the nation, more and more flood-inundated communities are choosing property acquisition as a hazard mitigation option. Besides being a permanent solution to a hazard-related problem, property acquisition achieves many other objectives, such as protecting critical habitat, providing opportunities for recreation, providing flood storage, or enhancing other natural or cultural resources. Since the devastating floods of 1993, Hazard Mitigation Officers from flood-inundated States and FEMA Regions have developed guidelines to assist communities through the property acquisition process. Hundreds of acquisition projects have tested the effectiveness of those guidelines. The Property Acquisition Handbook for Local Communities brings together into one document the best practices from States that have successfully fostered property acquisition projects. FEMA and its cadre of Region, State, and local subject-matter experts and potential users designed the handbook to: q Bring as much nationwide uniformity as possible to the property acquisition process, while respecting each Stateís and FEMA Regionís diversity. q Make the process more user-friendly for the communities, regardless of their size, expertise, and human and technical resources. PROPERTY ACQUISITION HANDBOOK FOR LOCAL COMMUNITIES STATE SUMMARY Page 2 October 1998 q Reduce the amount of time between the disaster and the receipt of a check by the property owner by streamlining the process to the greatest extent possible.The Handbookís Mission The handbookís goal is to empower communities with knowledge and best practices that will enable them to: q Determine if property acquisition is the most viable mitigation alternative for them before investing too much time and too many resources. q Plan property acquisition projects so the projects are well directed from the beginning. q Develop sub-grant applications that have the best possible chance of being approved and funded. q Submit applications that are right the first time, precluding the need for revision cycles that can slow the process. q Manage property acquisition projects efficiently. q Administer sub-grant funds according to laws and regulations, general accounting principles, and good business practices. q Use acquired properties in ways that make sense for the community. q Maintain acquired properties as open space. THE CHALLENGE Our biggest challenge was writing guidance that would be meaningful to thousands of communities, all of which face their own unique challenges. Consequently, we have taken care to describe generic procedures and advise communities to seek specific guidance from their States. For the benefit of all communities, but especially for those that have limited resources, we have provided a Toolkit containing further guidance and forms to assist communities throughout the property acquisition process. PROPERTY ACQUISITION HANDBOOK FOR LOCAL COMMUNITIES STATE SUMMARY Page 3 October 1998 CONTENTS OF THE HANDBOOK We provide each State with hard copies of the Property Acquisition Process poster and Property Acquisition Handbook for Local Communities to distribute to their communities. A three-ring binder contains: qProperty Acquisition Handbook for Local Communities. q Property Acquisition Handbook Toolkit, Part 1 of 2, Tools. q Property Acquisition Handbook Toolkit, Part 2 of 2, Forms. q Poster. The subsections below explain the poster and the binderís contents in detail. POSTER The wall poster presents a ìroad mapî for communities considering and implementing property acquisition projects. It depicts the four phases of the process, using a distinct color for each, and the major steps of each phase, using an icon and a short caption for each. The handbook is divided into sections according to the phases, icons, and captions on the poster. The icons appearing on the poster also appear in the margins of the handbook where the steps are fully explained. For example, each phase has at least one town meeting, which is represented by an icon of a building with a banner reading ìtown meeting.î A communityís project staff will soon associate that picture with a town meeting and know ìat a glanceî when within the process town meetings should be held and where within the handbook they can learn how to prepare for and conduct town meetings. The poster also uses ìroad signsî such as ìstopî and ìwaitî to guide project staff through contingencies. In addition, it provides space for staff to note important dates, such as the deadline for submitting applications to the State. PROPERTY ACQUISITION HANDBOOK FOR LOCAL COMMUNITIES STATE SUMMARY Page 4 October 1998 The steps identified on the poster and the order in which they are presented represent generic property acquisition steps and a logical progression for completing them. NOTE HERE The arrows between the icons show the progression or ìflowî of the steps. Where the arrows separate into two ìpathsî those steps can be performed concurrently. For example, in Phase I, the arrow leading from ìIdentify Project Teamî divides into two arrows, one leading to ìOutline Project Strategyî and the other to ìPrioritize Target Properties.î The placement of these icons indicates that the local community can accomplish those steps concurrently. For example, a community can outline its project strategy as it prioritizes target properties to acquire, or can assign certain members of the project team to do one, while other members do the other. CONVENTIONS USED WITHIN THE HANDBOOK The handbook uses the following conventions to present information in a user-friendly format. q Shaded text boxes, which are used to present general notes and supplemental information that warrant emphasis or do not easily fit into the main body of text. The note above is an example. Shaded text boxes also present ìGood Ideas,î which are practices successfully used by communities around the country, and case studies, which are success stories from around the country. Note We understand that many of you already have in place procedural steps that might vary from the steps depicted on the poster. If a certain step does not apply to your State or if your State requires an additional step, simply explain those differences to your communities. PROPERTY ACQUISITION HANDBOOK FOR LOCAL COMMUNITIES STATE SUMMARY Page 5 October 1998 q Marginal notes, such as references to the Code of Federal Regulation or to other FEMA publications. q Icons, which correspond to the poster and direct the user to the place within the handbook where a step is explained in detail. PROPERTY ACQUISITION HANDBOOK FOR LOCAL COMMUNITIES MAIN TEXT The first wire-bound book within the three-ring binder is the main body of text. It is the ìhow toî guidance. In addition to a table of contents and preface, it contains the following six tabbed sections: q To Buy or Not to Buy q Application q Implementation q Open Space Management q Glossary and Acronyms q Index n To Buy or Not to Buy This part of the handbook describes Phase I of the property acquisition process. It provides general information and then guides the community through deciding whether or not property acquisition is an appropriate mitigation alternative. To Buy or Not to Buy is divided into an introduction, two chapters, and an appendix: q Introduction. The Introduction briefly describes and contrasts the Hazard Mitigation Grant Program (HMGP) and Flood Mitigation Assistance Program, and identifies the contents of Phase I. q Chapter 1 ñ The Basics. Chapter 1 is a tutorial on property acquisition and the HMGP. It explainsóas far as possible in laypersonís termsóthe federal laws, regulations, and policies that drive the PROPERTY ACQUISITION HANDBOOK FOR LOCAL COMMUNITIES STATE SUMMARY Page 6 October 1998 property acquisition process. As a result, it builds the communityís knowledge base and lays a foundation for the rest of the guidance. Chapter 1 also discusses the importance of managing the property ownersí expectations, and building and maintaining lines of communication with the property owners. This chapter is divided into five major subsections: n Criteria for Projects Funded under HMGP n Money Matters n Types of Property Acquisition n Methods of Property Acquisition n Property Acquisition and the Property Owner q Chapter 2 ñ Getting Started. Chapter 2 is the beginning of the property acquisition process itself. At this point, the contents of both the poster and handbook are parallel. This chapter guides communities through the decision-making steps and is divided into 10 subsections: n Evaluate Your Mitigation Options n Determine Your Stateís Priorities and Procedures n Identify Project Team n Outline Project Strategy n Prioritize Target Properties n Conduct Town Meeting n Community Wants Buyout? n Examine Ability to Complete Project n Examine Projectís Impact on Community n Community has Resources and Consensus to Proceed? PROPERTY ACQUISITION HANDBOOK FOR LOCAL COMMUNITIES STATE SUMMARY Page 7 October 1998 q Appendix. This Appendix is a brief explanation of federal regulations addressing floodplain management and wetland protection, and what those regulations mean to communities pursuing property acquisition. It is divided into two major subsections: n 44 CFR Parts 9 & 10 n What do 44 CFR Parts 9 & 10 Mean to My Community? n Application Phase II, guides the community through completing and submitting a property acquisition application that has the best possible chance of being approved by the State and FEMA. This part is divided into an introduction and three chapters as follows: q Introduction. The Introduction describes the contents of Phase II. q Chapter 1 ñ First Things First. The first chapter guides communities through preliminary application-related tasks per the major subsections below. These tasks alert property owners and the State to a communityís intention to submit an application and begin collecting the information required on the application. n Submit Notice of Pre-Application n Conduct Town Meeting n Start Project Planning q Chapter 2 ñ Ready, Set, Apply. Chapter 2 leads communities through completing and submitting a property acquisition application and is divided into the two major subsections below. This chapter explains the detailed information required on an application, and suggests how to compile and present that information. n Complete Project Application n Submit Application to State PROPERTY ACQUISITION HANDBOOK FOR LOCAL COMMUNITIES STATE SUMMARY Page 8 October 1998 NOTE HERE q Chapter 3 ñ While You Wait. For communities that are confident of funding, Chapter 3 describes what can be done to prepare for the receipt of grant funds. The chapter leads them though some activities to prepare for receipt of those funds, enabling them to quickly get their project started once funds are received. Individual communities can decide how much preparation they want to do before the implementation phase, and how much they want to delay until receipt of funds. This chapter is divided into two subsections, with emphasis on the second. n Follow Up n Prepare to Receive a Sub-Grant n Implementation This part of the handbook explains Phase III of the property acquisition process. It guides communities through implementing property acquisition should their applications be approved and funded. It leads them through actually acquiring properties, and managing their sub-grant funds and files. This part comprises an introduction and five chapters as follows: q Introduction. The Introduction identifies the contents of Phase III. q Chapter 1 ñ Before You Do Anything Else. Chapter 3 of Phase II transitions into Chapter 1 of Phase III, and assumes the communityís application is approved and funded. This chapter instructs communities to complete any preparation activities not yet completed, and to Note This part uses a generic application to illustrate the minimum information and level of detail required by FEMA. We recognize that individual States might have their own forms and additional requirements, and caution communities to use their Stateís forms if they exist. PROPERTY ACQUISITION HANDBOOK FOR LOCAL COMMUNITIES STATE SUMMARY Page 9 October 1998 familiarize themselves with their sub-grant and related documents. It is divided into three subsections: n Complete Activities from Phase II, Chapter 3 n Carefully Review Your Sub-grant Agreement n Gather copies of Applicable Regulations and Procedures q Chapter 2 ñ Set Up Your Sub-grant Administration System. This chapter is a tutorial on sub-grant administration. It also helps communities set up a system for managing their sub-grant funds, records, and files. Chapter 2 is divided into three subsections: n Set Up Your Financial Record-Keeping System n Set Up Your Property Acquisition Project Filing System n Budget Your Administrative Costs q Chapter 3 ñ Finish What You Started. Chapter 3 helps communities perform the tasks that earlier chapters have helped them prepare. It is divided into the following major subsections: n Implement Policies & Procedures n Submit Press Release & Conduct Town Meeting n Procure Necessary Services q Chapter 4 ñ Acquire Those Properties! Chapter 4 ìwalksî communities through the interactions, real estate transactions, and inspections required for acquiring property. The major subsections, listed below, comprise a ìto do listî for communities. n Meet with Property Owner n Conduct Title Search & Appraisal n Determine Duplication of Benefits n Make Offer to Property Owner n Request Funds from State PROPERTY ACQUISITION HANDBOOK FOR LOCAL COMMUNITIESóSTATE SUMMARY Page 10 October 1998 n Conduct Closing n Clear & Inspect Land Chapter 5 ñ Conduct Sub-grant Closeout. This short chapter explains how to officially ìclose the booksî once a community has completed its property acquisition project. n Open Space Management This part, Phase IV of the process, summarizes some of the ìbest practicesî used by communities throughout the country that have implemented property acquisition projects and converted acquired property into open space as required by law. It comprises an introduction and three chapters as follows: Introduction. The Introduction reiterates the federal law requiring all property acquired with HMGP funds to be forever maintained as open space and identifies the contents of the phase. q Chapter 1 ñ Open Space Use Questions & Answers. Chapter 1 is a basic discussion of open space and its contribution to a community. The chapterís major subsections answers the following three questions. n How May We Use Our Open Space? n What is Prohibited on Open Space? n How Can Open Space Benefit My Community? q Chapter 2 ñ Planning. Chapter 2 guides communities through basic open space planning activities. It is divided into these subsections: n Identify Open Space Workgroup n Involve Community n Prepare Open Space Concept Plan PROPERTY ACQUISITION HANDBOOK FOR LOCAL COMMUNITIES STATE SUMMARY Page 11 October 1998 q Chapter 3 ñ Implementation & Long-term Management. This chapter helps communities turn their open space plans into reality and maintain their open spaces for the long term. It is divided into these four major subsections: n Obtain Funding n Obtain Technical Assistance Resources n Implement Your Open Space Plan n Manage & Maintain Open Space Property n Glossary and Acronyms The Glossary and List of Acronyms contains the meanings of words, terms, and acronyms used in the handbook, as well as other common words, terms, and acronyms that community project staff might hear or see as they interact with others involved in disaster recovery and hazard mitigation. n Index The index enables community project staff to quickly find information on a specific subject (e.g., duplication of benefits) by identifying where related information is within the handbook and toolkit. PROPERTY ACQUISITION TOOLKIT, PART 1 OF 2, TOOLS The two-part Toolkit provides tools to help communities maneuver through the property acquisition process and complete activities. The first part of the Toolkit contains tools such as checklists, town meeting briefing tips, sample letters, etc. Tools provide information succinctly and simply, illustrate a point, or ease the communityís workload. All tools are numbered sequentially according to the phase during which they are first mentioned (e.g., Tool I-1, Tool II-1, etc.) and are referenced in the margin of the handbookís main text. PROPERTY ACQUISITION HANDBOOK FOR LOCAL COMMUNITIES STATE SUMMARY Page 12 October 1998 PROPERTY ACQUISITION TOOLKIT, PART 2 OF 2, FORMS The unbound reproducible forms found behind the wire-bound books in the binder comprise the second part of the Toolkit. These forms are templates communities may use ìas isî or customize to State and community specifications. Like the Tools, they also are numbered sequentially (Form I-1, Form II-1, etc.) and are referenced in the margin. Forms are provided on disk as well as hard copy. PROPERTY ACQUISITION HANDBOOK FOR LOCAL COMMUNITIES STATE SUMMARY Page 13 October 1998 DISTRIBUTING & USING THE HANDBOOK You may distribute the handbook right away to familiarize communities with property acquisition before the next disaster strikes; or, after a disaster as part of the recovery effort. We provided a tab labeled ìStateî at the back of the binder to enable you to insert State-specific policies, procedures, and forms before distributing the handbook to your communities. The handbook cautions communities to refer to and use materials provided by their States. In several instances, it also directs communities to contact their State Hazard Mitigation Officers if they have questions or require further information. The handbook is a flexible tool, and we encourage you to use it in the way that makes sense for you and your communities. If you have any questions, please call your FEMA regional office or FEMAís Hazard Mitigation Directorate in Washington, DC. Table of Contents i October 1998 TABLE OF CONTENTS Preface ................................................. v PROPERTY ACQUISITION AT WORK ...................................................... vi USING THIS HANDBOOK ..................................................................... viii PHASE I ó To Buy or Not to Buy INTRODUCTION ..........................................I-1 HAZARD MITIGATION GRANT PROGRAM ............................................ I-1 FLOOD MITIGATION ASSISTANCE PROGRAM .....................................I-2 CONTENTS OF THIS PHASE ................................................................ I-3 CHAPTER 1 ó THE BASICS ..............................I-4 CRITERIA FOR PROJECTS FUNDED UNDER HMGP ............................... I-4 MONEY MATTERS ..............................................................................I-8 TYPES OF PROPERTY ACQUISITION .................................................. I-11 METHODS OF PROPERTY ACQUISITION............................................ I-12 PROPERTY ACQUISITION AND THE PROPERTY OWNER ...................... I-13 CHAPTER 2 ó GETTING STARTED ...................... I-16 EVALUATE YOUR MITIGATION OPTIONS ......................................... I-16 DETERMINE YOUR STATEíS PRIORITIES AND PROCEDURES ............... I-17 IDENTIFY PROJECT TEAM................................................................ I-17 OUTLINE PROJECT STRATEGY......................................................... I-20 PRIORITIZE TARGET PROPERTIES .................................................... I-22 CONDUCT TOWN MEETING ............................................................. I-24 COMMUNITY WANTS BUYOUT? ...................................................... I-26 EXAMINE ABILITY TO COMPLETE PROJECT...................................... I-27 EXAMINE PROJECTíS IMPACT ON COMMUNITY ................................ I-28 COMMUNITY HAS RESOURCES AND CONSENSUS TO PROCEED? ........ I-30 APPENDIX ............................................. I-31 44 CFR PARTS 9 & 10 ................................................................... I-31 WHAT DO 44 CFR PARTS 9 & 10 MEAN TO MY COMMUNITY? .... I-32 Table of Contents ii October 1998 PHASE II ó Application INTRODUCTION ........................................ II-1 CONTENTS OF THIS PHASE .............................................................. II-1 CHAPTER 1 ó FIRST THINGS FIRST ................... II-4 SUBMIT NOTICE OF PRE-APPLICATION............................................II-4 CONDUCT TOWN MEETING ..............................................................II-5 START PROJECT PLANNING ............................................................ II-10 CHAPTER 2 ó READY, SET, APPLY! ................... II-14 COMPLETE PROJECT APPLICATION .................................................. II-14 SUBMIT APPLICATION TO STATE.................................................. II-22 CHAPTER 3 ó WHILE YOU WAIT .................... II-24 FOLLOW UP ................................................................................... II-24 PREPARE TO RECEIVE A SUB-GRANT .............................................. II-24 PHASE III ó Implementation INTRODUCTION ....................................... III-1 CONTENTS OF THIS PHASE ............................................................ III-1 CHAPTER 1 ó BEFORE YOU DO ANYTHING ELSE . . . III-4 COMPLETE ACTIVITIES FROM PHASE II, CHAPTER 3 .................... III-4 CAREFULLY REVIEW YOUR SUB-GRANT AGREEMENT...................... III-4 GATHER COPIES OF APPLICABLE REGULATIONS AND PROCEDURES.. III-5 CHAPTER 2 ó SET UP YOUR SUB-GRANT ADMINISTRATION SYSTEM ......................... III-6 SET UP YOUR FINANCIAL RECORD-KEEPING SYSTEM ................... III-6 SET UP YOUR PROPERTY ACQUISITION PROJECT FILING SYSTEM .................................................... III-11 BUDGET YOUR ADMINISTRATIVE COSTS ...................................... III-16 CHAPTER 3 ó FINISH WHAT YOU STARTED .........III-19 IMPLEMENT POLICIES & PROCEDURES .......................................... III-19 SUBMIT PRESS RELEASE & CONDUCT TOWN MEETING ................ III-19 PROCURE NECESSARY SERVICES .................................................. III-23 Table of Contents iii October 1998 CHAPTER 4 ó ACQUIRE THOSE PROPERTIES! ..........III-26 MEET WITH PROPERTY OWNER ................................................... III-26 CONDUCT TITLE SEARCH & APPRAISAL ....................................... III-28 DETERMINE DUPLICATION OF BENEFITS..................................... III-28 MAKE OFFER TO PROPERTY OWNER ............................................ III-30 PROPERTY OWNER ACCEPTS OFFER ..............................................III-31 REQUEST FUNDS FROM STATE ................................................... III-33 CONDUCT CLOSING ..................................................................... III-33 CLEAR AND INSPECT LAND .......................................................... III-34 CHAPTER 5 ó CONDUCT SUB-GRANT CLOSEOUT .......III-35 PHASE IV ó Open Space Management INTRODUCTION ........................................ IV-1 CONTENTS OF THIS PHASE .............................................................. IV-1 CHAPTER 1 ó OPEN SPACE USE QUESTIONS & ANSWERS............................ IV-3 HOW MAY WE USE OUR OPEN SPACE? ......................................... IV-3 WHAT IS PROHIBITED ON OPEN SPACE? ........................................ IV-4 HOW CAN OPEN SPACE BENEFIT MY COMMUNITY? ....................... IV-4 CHAPTER 2 ó PLANNING .............................. IV-8 IDENTIFY OPEN SPACE WORKGROUP .............................................. IV-8 INVOLVE COMMUNITY.................................................................... IV-11 PREPARE OPEN SPACE CONCEPT PLAN ............................................ IV-13 CHAPTER 3 ó IMPLEMENTATION & LONG-TERM MANAGEMENT .....................................IV-17 OBTAIN FUNDING ........................................................................ IV-17 OBTAIN TECHNICAL ASSISTANCE RESOURCES ............................. IV-18 IMPLEMENT YOUR OPEN SPACE PLAN............................................ IV-18 MANAGE & MAINTAIN OPEN SPACE PROPERTY ............................. IV-19 Glossary ............................................ G-1 Table of Contents iv October 1998 List of Acronyms .................................. A-1 Index ...........................................Index-1 Preface v October 1998 PREFACE Natural disasters are inevitable, and we have seen how the emotional and financial costs of coping with them can be overwhelming. The good news is communities all across our nation are restructuring themselves to reduce the effects of natural disasters. FEMA sponsors two mitigation programs to help communities take a proactive approach to reducing the effects of disasters: the Flood Mitigation Assistance Program and the Hazard Mitigation Grant Program. This handbook explains the Hazard Mitigation Grant Program and leads you through the process of implementing one form of mitigation: property acquisition. Property acquisition is effective because it is a permanent form of mitigation. It makes FEMA funds available to you for buying property in flood-prone areas, and dedicating that property to use as open space for all time. It enables you to remove people from harmís way . . . forever. In that way, it reduces future emotional and financial costs associated with your communityís disaster response, recovery, and repair. Many States and communities have implemented property acquisition projects, some of which have already stood the tests of natural disasters. To learn how effective property acquisition can be, read the example in ìProperty Acquisition at Work,î which follows on the next page. We encourage you to carefully consider the mitigation options available to you and choose the best one for your community. We hope this handbook will help you through that decision and, if you choose property acquisition, through the property acquisition process. Property Acquisition at Work vi October 1998 PROPERTY ACQUISITION AT WORK The Missouri Buyout Program1 The 1993 Midwestern flood was a record breaker both in terms of river levels and duration. Of the nine Midwestern States affected, the State of Missouri was the hardest hit. State officials estimate damages totaled $3 billion. Over 216,000 households were located in Missouriís designated floodplains. Many of those households were affected by the 1993 flood, which created a unique window of opportunity to create more permanent solutions to Missouriís increasingly frequent flooding problems. Both flood survivors and unaffected taxpayers began to call for a way to alleviate future vulnerability to flooding. The largest response was for a buyout (property acquisition). Like many States that suffered from that disaster, Missouri designed and implemented a buyout program. The State received close to $100 million, which flowed down to the local communities. One reason Missouriís program was so successful was its emphasis on a collaborative partnership among Federal, State, and local governments. No one imagined that Missouri would get an opportunity to test its buyout programís effectiveness so soon when the flood of 1995 struck. The 1995 flood was the third-largest flood of record in many places, despite the fact that it was considerably less devastating than its predecessor two years earlier. More importantly, the buyout program resulting from the 1993 flood had removed 2,000 families from harmís way by the time the 1995 flood struck. 1 Extracted from Out of Harmís Way/The Missouri Buyout Program, prepared by the Missouri State Emergency Management Agency. Property Acquisition at Work vii October 1998 St. Charles County, Missouri A good example of the success of Missouriís buyout program is St. Charles County, which is on the confluence of the Missouri and Mississippi rivers. In St. Charles County alone, the combined costs of the 1993 flood exceeded $160 million. The buyout program in St. Charles County acquired 1,374 properties located in the 100-year floodplain. These properties included over 560 single-family residences and 3 mobile home parks with a combined total of 814 mobile home pads, approximately 684 of which were occupied. When the 1995 spring rains hit, 1,000 families (approximately 2,500 people) were out of harmís way thanks to the buyout program. St. Charles County Planning Director, Steve Lauer estimates that at least 95 percent of those acquired properties would have flooded again during the 1995 disaster. The table below compares and contrasts the costs of disaster assistance in St. Charles County resulting from the 1993 and 1995 floods. St. Charles Countyís property acquisition project cost $13,700,810 to fully implement. However, by comparing the costs of the 1993 and 1995 floods, you can see the projectís benefits far COSTS St. Charles County Cost Comparison 1993 And 1995 Floods Using this Handbook viii October 1998 USING THIS HANDBOOK This handbook is written specifically for local communities looking for ways to minimize the impact of future disasters. The handbook is a ìhow toî guide to lead you through one specific hazard mitigation alternative known as property acquisition (also referred to as ìbuyoutî). A wall poster accompanies the handbook and uses icons to present major steps of property acquisition ìat a glance.î The icons on the poster appear in the margin of the handbook, where that step is explained in detail. The handbook comprises four parts, each of which explains the four phases of the property acquisition process, and a Glossary, List of Acronyms, and two-part Toolkit. The four phases are: q Phase I ó To Buy or Not to Buy. Phase I is the decision-making phase, which empowers you to make an informed decision whether or not property acquisition is an appropriate mitigation alternative for your community. q Phase II ó Application. Phase II leads you through applying for FEMA funds and getting your community ready to administer those funds should your application be approved. q Phase III ó Implementation. Phase III leads you through the actual acquisition of property and administration of FEMA funds . q Phase IV ó Open Space Management. Phase IV helps you plan how to use the property you acquire as open space, as required by law, and manage it for the long term. The Glossary and List of Acronyms contain the meanings of words, terms, and acronyms you may see and hear as you proceed through the process. Using this Handbook ix October 1998 The Toolkit contains tools that help you maneuver through the process and complete activities. The Toolkit is divided into two parts: q Checklists, samples, examples, etc. These tools are designed to provide information succinctly and simply, illustrate a point, or ease your workload. They are numbered sequentially, according to the phase where they are first mentioned (e.g., Tool I-1, Tool II-1, etc.), and referenced in the margin. The tools are separately bound. q Reproducible forms. These tools are templates you may use ìas isî or customize to your Stateís or communityís specifications. They also are numbered sequentially, according to the phase where they are first mentioned (e.g., Form I-1, Form II-1, etc.), and referenced in the margin. Both unbound paper and disk copies are provided. (Reproducible forms have been developed using Microsoft Word 97 software.) If you have any questions or require technical assistance as you use this handbook, contact your State Hazard Mitigation Officer (SHMO). A Word of Caution Always use any forms your State provides to you. Use forms provided in this handbook only if your State has not provided a similar form or other instructions for providing data. PHASE I To Buy or Not to Buy I-1 October 1998 INTRODUCTION Your community has experienced a destructive flood that has caused considerable damage to property, and major social and economic disruption to the well-being of your community. Property owners probably are concerned with living in the floodplain and are asking how they can avoid future risk and damage. HAZARD MITIGATION GRANT PROGRAM Presidential-declared disasters provide considerable funds to States and communities via the Hazard Mitigation Grant Program (HMGP). The HMGP assists States and local communities in implementing long-term hazard mitigation measures. The HMGP can be used to fund projects that protect public or private property. Examples of projects include: q Retrofitting, such as floodproofing and elevating, to protect structures from future damage; q Development of State or local standards to protect new and substantially improved structures from disaster damage; q Development of comprehensive hazard mitigation programs with implementation as an essential component; q Acquisition and relocation of structures from hazard-prone areas; and q Acquisition and demolition of structures. FEMA has regulatory oversight of the HMGP. However, the States are responsible for administering the HMGP, and prioritizing and selecting project applications from communities. States then forward project applications to FEMA for final approval. The window of opportunity for applying for HMGP funds is relatively small. Communities that have experienced disaster damage compete for limited available funds. The effort communities must expend to complete all requirements for submitting an application that will meet both State and FEMA approval is considerable. Nevertheless, that effort is worthwhile. To Buy or Not to Buy PHASE I I-2 October 1998 FLOOD MITIGATION ASSISTANCE PROGRAM Your HMGP application might be fully approved. However, if your application is not approved and your community participates in the National Flood Insurance Program (NFIP), the effort you have expended to apply for funds under HMGP puts you in an excellent position to apply for funds under FEMAís Flood Mitigation Assistance (FMA) program. FMA is a mitigation program that is not directly related to a disaster event. FMA provides funding to assist States and communities in implementing measures to reduce or eliminate the long-term risk of flood damage to buildings, manufactured homes, and other structures insured under the NFIP. FEMA annually provides funds to the States to conduct FMA projects. The States then can offer two types of FMA grants to their communities: q Planning grants to develop or update flood mitigation plans. Plans must assess flood risk and identify actions to reduce those risks. q Project grants to implement mitigation measures such as: n Elevation n Dry floodproofing n Acquisition Only communities with structures and real property insured under the NFIP are eligible to receive a project grant under the FMA program. In addition, communities that have a State-approved mitigation plan might be in a better position to compete for HMGP funds. Good Idea Preparing an acquisition plan and conducting hazard mitigation planning can help a community obtain a favorable entry under the Community Rating System (CRS) and possibly reduce flood insurance costs to citizens of the community. See Glossary for more information. 42 U.S.C. 4101 44 CFR Part 78 PHASE I To Buy or Not to Buy I-3 October 1998 GOOD I BOX CONTENTS OF THIS PHASE This phase comprises two chapters: q Chapter 1 ó The Basics. Chapter 1 provides basic information about property acquisition and FEMAís requirements for a project. Its purpose is to build your knowledge base so you can successfully complete the steps you see depicted on the poster. q Chapter 2 ó Getting Started. Chapter 2 guides you through activities that will help you decide whether or not property acquisition is feasible for your community. The knowledge imparted by the first chapter and the activities of the second put you in the best position to decide whether to buy or not to buy. q Part 1 of the Toolkit contains the following tools referred to in this phase: n Tool I-1, Examples of Mitigation Options n Tool I-2, SHMO1 Shopping List n Tool I-3, Sample Job Description n Tool I-4, Town Meeting Checklist n Tool I-5, Conducting Town Meeting Checklist n Tool I-6, Sample Agenda n Tool I-7, Sample Presentation Notes q Part 2 of the Toolkit contains the following forms: n Form I-1, Hazard Mitigation Project Strategy n Form I-2, Property Owner Questionnaire I n Form I-3, Self-assessment Worksheet 1See Glossary and Acronyms To Buy or Not to Buy PHASE I I-4 October 1998 CHAPTER 1 ó THE BASICS Since the devastating floods of 1993, States with flood-prone communities have generally opted to accept and forward to FEMA a large percentage of community applications outlining acceptable property acquisition projects. Generally, property acquisition, which forever removes vulnerable property owners from the floodplains, is the best and most cost-effective mitigation alternative. This handbook is designed to help communities through the property acquisition process ó from formulating a potentially successful application, through implementing and closing out a project, to managing and maintaining acquired open space. But, first, you must decide ó Is property acquisition the best and most cost-effective mitigation alternative for my community? This phase of the handbook, Phase I ó To Buy or Not to Buy, will help you make that decision. This first chapter gives you a basic understanding of property acquisition. It presents ó as far as possible in laypersonís terms ó the laws, regulations, and policies that drive the property acquisition process. CRITERIA FOR PROJECTS FUNDED UNDER HMGP n Minimum criteria The Robert T. Stafford Disaster Relief and Emergency Assistance Act (Public Law 93-288) is the statute governing the HMGP. Its implementing regulations are located in Title 44 of the Code of Federal Regulations (CFR). By Federal law and regulation, any property acquisition project using HMGP funds must, at a minimum: 44 CFR ß206.434 (b) PHASE I To Buy or Not to Buy I-5 October 1998 q Conform to the Stateís Section 409 Hazard Mitigation Plan q Conform to 44 CFR Part 9, Floodplain Management and Protection of Wetlands, and 44 CFR Part 10, Environmental Considerations q Independently solve or be a functional part of a solution to a problem q Prove to be cost-effective and a substantial reduction of future risk because it: n Addresses a problem that is repetitive or poses a significant risk to health and safety n Is the most practical, effective, and environmentally sound alternative among a range of alternatives n Is or contributes to a long-term solution to a problem n Considers long-term changes to the areas it protects n Costs less than its anticipated benefits COST VS BENEFITS BOX Costs and Benefits FEMA or State financial analysts will perform a benefitcost analysis (BCA) to determine if your project is cost effective. A project is cost-effective if its benefits are equal to or higher than its costs. The BCA compares the present-day cost of a project to its long-term benefits. Benefits simply are future damages that do not occur because a project has been implemented. Because acquisition projects permanently eliminate flood risks for purchased properties, their benefits continue far into the future. See the Appendix to this phase for an explanation of 44 CFR Parts 9 & 10 To Buy or Not to Buy PHASE I I-6 October 1998 n Property acquisition and relocation requirements Any community implementing a property acquisition project using HMGP funds: q Must dedicate and forever maintain acquired property as open space. q Must provide assurances that certain restrictions will be conveyed in the deed to acquired property. q May not apply for or receive additional disaster assistance for acquired property. (However, farmers are still eligible for Federal Crop Insurance.) q Must acquire properties only from property owners who voluntarily agree to sell their properties, and notify property owners in writing that it will not use its power of eminent domain to acquire properties if a voluntary agreement is not reached. n Other criteria Through the implementation of property acquisition projects over the past several years, FEMA has established guidance policies to manage the finer details of project implementation and comply with other federal laws and regulations relating to property acquisition. Those policies include the following: q Structures relocated from acquired property must be placed outside the 100-year floodplain. q Structures must be demolished or removed from acquired property within 90 days of closing. (In extraordinary circumstances, States may allow exceptions to this requirement.) q Ownership of acquired property may not be conveyed to private citizens or entities; ownership may be conveyed to other public entities or nonprofit organizations with the approval of the State and FEMA. 44 CFR ß206.434 (d) FEMA Policy PHASE I To Buy or Not to Buy I-7 October 1998 q Communities should assist FEMA in coordinating with their State Historic Preservation Officer (SHPO) regarding any structures that are 50 years old or older, or have historic significance. q Communities may not use FEMA funds to acquire properties that are contaminated by hazardous materials (other than general household hazardous materials such as lead paint and asbestos). If a property contains hazardous materials, it must be cleaned up before it can be acquired. q Flood-prone communities receiving HMGP funds must participate in the National Flood Insurance Program (NFIP). However, if your community has not been mapped, contact your Stateís floodplain management official; you may be eligible to receive HMGP funds. (For communities not participating at the time of the disaster, the State may consider and forward to FEMA their HMGP applications if they enter the NFIP within six months of the disaster declaration.) q Because of the voluntary nature of acquisition, homeowners are not entitled to assistance under the Uniform Relocation Assistance and Real Property Acquisition Policies Act (URA). However, displaced tenants are entitled to assistance under the URA, and additional relocation assistance might be available to low-income homeowners living in floodplains. q Communities must subtract from the purchase price of every property the total value of other disaster-related repair assistance paid to the owner to avoid duplicating benefits, unless the property owner can provide receipts showing that the benefits were used for their intended purposes (e.g., home repair). This policy is known as duplication of benefits (DOB), and is explained in detail in Phase II2. To summarize, DOB avoids using tax dollars to provide the same benefits to one citizen twice. This deduction applies if the community uses pre-flood fair market value. The deduction does not apply if the community uses post-flood market value. q Communities must accept responsibility for monitoring and enforcing the proper use of acquired property as open space. 2Only federal disaster-related assistance paid for the repair or replacement of structures is considered DOB. To Buy or Not to Buy PHASE I I-8 October 1998 ALLOWABLE OPEN SPACE BOX MONEY MATTERS n Project costs HMGP funds help communities pay some of the project and administrative costs of implementing an acquisition project. Project costs include, but are not limited to: q The fair market value (FMV) of each property q Costs of conducting appraisals, lot surveys, title searches, closings, demolitions, and relocations q Tenant relocation assistance q Legal fees relating to contract review and settlement n Cost Share Under the HMGP, FEMA may contribute up to 75 percent of your project costs. Your community must formally agree to provide a local match in the amount of the remaining project costs (at least 25 percent). However, sources may be available to help you meet those project costs, such as: What is allowable open space use? Generally, allowable open space uses for acquired property include, but are not limited to, recreation; preservation; cultivation; grazing; camping (if adequate warning and evacuation time is available); non-commercial, temporary, open storage of vehicles that are easily moveable (such as recreational vehicles); and unimproved permeable parking lots. See Phase IV for more detail on allowable use of acquired property. 44 CFR ß206.432 (c) PHASE I To Buy or Not to Buy I-9 October 1998 q Your State. Ask your SHMO if your State has made funds available and in what percentage or amount. q Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG). You can use existing and supplemental appropriation CDBG funds toward your local match. q Donated funds. Monetary donations from individuals and organizations (e.g., a local civic organization) can be applied toward the local match. q In-kind services. Donated services (e.g., demolition) also can be applied toward the local match. (Often in such cases, a community will grant the demolition company salvage rights.) q Property Owners. Property owners can use their own funds or donate 25 percent of the FMV of their properties. Property owners also can apply their Increased Cost of Compliance (ICC) claims toward the local match because the purpose of ICC is to assist property owners in implementing mitigation measures. INCREASED COST OF COMPLIANCE BOX Increased Cost of Compliance (ICC) When a structure covered by a standard flood insurance policy under the NFIP sustains a flood loss and is declared to be substantially or repetitively damaged, ICC helps pay property owners for the cost of mitigation measures, to include elevation, demolition, and relocation, up to $15,000. ICC claims apply to structures only.3 See FEMA 301, Increased Cost of Compliance Coverage, for more information. 3See Glossary for more information on substantial damages To Buy or Not to Buy PHASE I I-10 October 1998 n Administrative costs In addition, FEMA currently contributes administrative costs on a sliding scale based on your total project costs. Administrative costs include the extraordinary costs your community incurs to administer your sub-grant such as the cost of preparing reports, overtime, and incidental expenses. Sliding Scale SLIDING SCALE COSTS.EPS For example, if your total project costs are $6,000,000, FEMA will provide no more than $4,500,000 (75 percent) of your project costs and $66,000 of your administrative costs: ADMINISTRATIVE COSTS.EPS Since administrative costs are provided on a sliding scale, other ìindirect costsî (e.g. overhead) are not allowed. PHASE I To Buy or Not to Buy I-11 October 1998 TYPES OF PROPERTY ACQUISITION Generally, we can divide property acquisitions into two broad categories: basic acquisition and acquisition and relocation of structures. n Basic acquisition A basic acquisition project simply acquires land and strucures, and demolishes the structures located on the land. It is conducted like any other real estate transaction, and is the easiest type of acquisition project to implement and manage. n Acquisition and relocation of structures An acquisition and relocation project is a basic acquisition that acquires land, but offers an alternative to demolishing structures: moving them out of harmís way, outside the floodplain. Relocation might mean simply moving a structure to another lot, or reestablishing an entire neighborhood at a new site within the community. A structure can be relocated on the same property if a portion of it is outside the floodplain. Relocation often is a good way to protect historic structures. RHINELAND CASE STUDY BOX Relocating a Neighborhood: Village of Rhineland, Missouri Rhineland, Missouri has a history of repetitive flooding, including four flood events in 1993 alone. Rhineland also has an old heritage and sense of community; its citizens have family ties and roots in the community dating back generations. Although mitigation for Rhineland means its survival, preserving its sense of community is just as important. As a result of the 1993 floods, Rhineland has used HMGP funds to move 32 homes from flood-prone bottomland to a bluff above the floodplain. It has used HUD CDBG funds and local bonds to build new roads and infrastructure to re-establish the neighborhood on the bluff. The local power company donated installation of new lines. As a result, the relocated homes have quadrupled in value. To Buy or Not to Buy PHASE I I-12 October 1998 METHODS OF PROPERTY ACQUISITION n Fee-simple acquisition Fee-simple acquisition simply means acquiring title to land and structure(s). By law, restrictions must be attached to the deed (see Form II-11). Restrictions include the following: q The property shall be dedicated and maintained in perpetuity for uses compatible with open space, recreational, or wetlands management practices. q No new structure(s) will be built on the property except for the following: n A public facility open on all sides and functionally related to a designated open space or recreational use; n A public rest room that is wet floodproofed; or n A structure compatible with open space, recreational, or wetlands management use and proper floodplain management policies and practices, which FEMAís Director approves in writing before construction of the structure begins. n Acquisition of a conservation easement Conservation easements are practical in agricultural areas where the owner wants to retain title to and continue farming his or her property. It also is practical where acquiring a large parcel of property is cost prohibitive. Simply defined, an easement is a right of passage over someone elseís land. However, an easement can be used to prevent the owner from doing certain things. A conservation easement is an easement that prevents the property owner from developing the property. The property owner retains title to his or her property and can transfer title. However, the terms of a conservation easement acquired using HMGP funds carry the same restrictions as fee-simple acquisition, and the property is forever subject to those terms, regardless of who has title. 44 CFR ß206.434(d)(1) PHASE I To Buy or Not to Buy I-13 October 1998 PROPERTY ACQUISITION AND THE PROPERTY OWNER Among the biggest challenges of property acquisition is managing the property ownersí expectations. The best ways to meet these challenges are to understand and communicate with the property owners. n Understand the property owners and what motivates them. You might find that some property owners are eager to sell their property. Others may be reluctant, apprehensive, or undecided. Others might be absolutely against the idea. Many factors influence a property ownerís decision whether or not to sell. Examples include: q Personal finances q Degree of damage and amount of personal property lost q Value of property q Age of household q Size and makeup of household q Personal acceptance of risk q Neighborsí decisions q Familyís and friendsí opinions q Quality of life offered in a new neighborhood, whether it is a relocated neighborhood or simply the area in which the property owner chooses to buy after selling his or her property to the community Property owners are influenced by those factors in different ways. For example, one elderly couple whose children are grown might be eager to sell their large home with its large yard and move to a smaller home or condominium outside the hazard area. On the other hand, another elderly couple might be reluctant to sell the home where they raised their children, despite the risks of future disasters. To Buy or Not to Buy PHASE I I-14 October 1998 n Communicate with the property owners. Misconception also influences property ownersí decisions and continued support of a project. Therefore, one of the most important tasks you can do is communicate with the property owners. It also is one of the easiest; all it requires is accessibility, honesty, and consistency. Some of the means of communication you can use include: q Point of contact (POC). Provide a single POC who the property owners can get to know, and to whom they have regular and consistent access. q Informational materials. FEMA and your State probably have brochures and pamphlets on hand that you can use. Ask your SHMO. q Public announcements and notices. Use local radio and television stations to air public service announcements (PSAs). Publish public notices in local newspapers, community newsletters, and other local publications; and post them in houses of worship, community and shopping centers, and other places where people tend to gather. If your community comprises ethnic groups who speak other languages in addition to or instead of English, use those languages in your announcements and notices. If you do not, you risk excluding some property owners and violating anti-discrimination laws, as well as undermining the success of your project. q Public meetings. Nothing can substitute face-to-face contact and open forums that allow for two-way exchange. This handbook contains details on how to conduct at least one town meeting during each phase of the process. If necessary, provide foreign and sign language interpretors at town meetings. q Hotlines. If your community has the resources, establish a hotline that property owners can call to receive basic information and/or ask questions. Feedback and timeliness also are important to communication. Listen to what property owners have to say, and respond to their questions as quickly and accurately as possible. PHASE I To Buy or Not to Buy I-15 October 1998 n Manage property ownersí expectations. The property owners must understand from the beginning that property acquisition, despite its mitigation effectiveness, might not make them whole again. However, they will receive fair compensation for their property. Property acquisition presents a good opportunity for them to recoup a large part of their investment in property that probably has lost some, if not most, of its value; but it will not compensate for their entire emotional and financial losses. In addition, they must understand that property acquisition takes time. No matter how dedicated your community, State, and FEMA regional staff are, property acquisition requires a lot of work . . . work that simply cannot be completed in just a few weeks time no matter how large your staff is nor how many hours they work. The good news is lessons learned and applied during the 1990s continually help speed the process and increase its efficiency. Under the best circumstances, property acquisition, from disaster occurrence to real eState closing, might take at least 7 to 18 months to complete. To Buy or Not to Buy PHASE I I-16 October 1998 CHAPTER 2 GETTING STARTED GOOD IDEA BOX You now have a basic understanding of property acquisition under the HMGP. This chapter gets you started in the property acquisition process itself. It guides you through the important steps of making a decision ìto buy or not to buy.î EVALUATE YOUR MITIGATION OPTIONS Your first step is to look at the mitigation options that might benefit your community. This serves two purposes: first, it enables you to determine which is best for your community; second, it helps collect data for your application. Remember ó to receive funding, you must prove that your proposed project is the best alternative among a range of options considered. In fact, you should describe at least three alternatives (one of which is ìno actionî) on your application. Mitigation options include, but are not limited to, those described in Tool I-1 in the Toolkit. Good Ideas 1 Conduct damage assessments as soon as possible. Both the NFIP and HMGP require accurate assessments. 2 Identify and declare substantially damaged buildings as quickly as possible. (Substantially damaged means the cost of restoring a structure to its pre-disaster state would equal or exceed 50 percent of its pre-disaster market value.4) Tool I-1 4See FEMA 311, Guidance on Estimating Substantial Damage for more information PHASE I To Buy or Not to Buy I-17 October 1998 Your State Hazard Mitigation Officer (SHMO) and regional and local planners and engineers can help you identify and evaluate which alternatives are viable for your community. Alternatives that may not be funded by the HMGP might be funded by other Federal or State agencies. If your community wants to pursue an alternative that is not eligible under HMGP, ask your SHMO to help you find other sources of funding. DETERMINE YOUR STATEíS PRIORITIES AND PROCEDURES After evaluating your mitigation options, if you decide that you want to further explore property acquisition, your next step is to talk with your SHMO. Your State has developed and continues to maintain planning documents known as the State Section 409 Hazard Mitigation Plan, or simply the 409 Plan, and the State Section 404 Administrative Plan for the Hazard Mitigation Grant Program, or simply the State 404 Plan. Those plans, to some degree, create the context of all mitigation projects conducted within your State and establish procedures all communities must follow. In addition, your State might have established guidance for many of the decisions you are about to make, such as prioritizing properties for acquisition. So, before you go any further, you should contact your SHMO. You will find a ìSHMO Shopping Listî (Tool I-2) in the Toolkit. Use this tool as a checklist to ensure you ask for and get everything you need. IDENTIFY PROJECT TEAM Ideally, the same project team should see the project through, from this decision-making phase through application to implementation. Also, ideally, your project team leader will be qualified and available to serve as your local sub-grant administrator as you implement your project. Tool I-2 To Buy or Not to Buy PHASE I I-18 October 1998 Alternatively, your team leader can lead your team through the decision- making and application phases, and then turn the project over to the local sub-grant administrator for implementation. Once you have submitted your application, you can search for a local sub-grant administrator pending approval of your application. You will find a sample job description for a local sub-grant administrator in the Toolkit (Tool I-3). n What does the project team do? The project team does everything discussed in this Handbook from this point forward in Phases I, II and III (see poster). n What should I look for in a team leader? Planning a project and completing an application is a lot of work and requires input from many sources. The project leader will be the primary point of contact (POC), representing your community to the State and property owners. Consequently, look for someone who is: q A strong, responsible leader q Able to delegate tasks to match team membersí skills and interests q A good verbal and written communicator q Organized, reasonable, and even-tempered q Able to work with and gain the respect of team members, State and local officials, and (most important) property owners and tenants q Able to work with people who are under considerable stress q Able to troubleshoot problems and defuse tense situations q Knowledgeable of local, regional, and State governments; and their departments, activities, and personnel Tool I-3 PHASE I To Buy or Not to Buy I-19 October 1998 n Who should be on my project team? Anyone who is willing to help or serve as a resource should be on the team. You will need a mix of people who support the project and want it to succeed and who can: q Interact with property owners and tenants, both in large groups and one-on-one q Interact with State and local officials and government personnel q Conduct research q Speak in public q Write well q Prepare a budget q Organize and maintain a filing system q Provide clerical support Your project team can comprise local and regional employees, paid consultants, and volunteers (to include property owners and tenants). At some point during your project planning or while developing your application or implementing your project, you may need technical assistance from legal counsel, appraisers, tax assessors, surveyors, engineers, budget analysts, grant specialists, building inspectors, zoning administrators and other experts. You likely will be able to find people who can provide this assistance among current local, regional, or State employees; contractors or consulting firms; independent consultants; citizen groups; colleges and universities; private organizations; etc. Those experts who provide technical assistance can be either members of the team or simply available to the team on an as-needed basis. Services provided by those experts on a voluntary basis during implementation might count as donated in-kind services toward your local match. To Buy or Not to Buy PHASE I I-20 October 1998 n What about a team to develop my open space plan? Since you must maintain any property you acquire as open space, begin planning how best to use that property as early as possible. You probably will find greater efficiency if you build an open-space team separate from your project team. The two teams can work in parallel and share data. OUTLINE PROJECT STRATEGY With the information provided by your SHMO as your framework and your team in place, you now are ready to start strategizing a potential project. Your strategy must work within the context of your Stateís hazard mitigation goals and objectives. Ultimately, your strategy will become the foundation for the communityís Hazard Mitigation Plan. Outlining your strategy begins with an assessment of how things are and a vision of how things can be. Use Form I-1 in Part 2 of the Toolkit to capture your project strategy and prioritize target properties, which is discussed in the next section. If you decide to buy, you can use much of this data on your application. To begin: q Record basic data about your community, such as its population, area size, elevation above sea level, industry and economy, infrastructure, services, and topography. (Your Stateís economic and business development, environmental, and housing agencies can help. Also, check census records.) q Summarize your communityís disaster history. Go back at least 25 years, and farther if your community has suffered through significant disaster events. Check public and media records for as much detail as possible. (Your Stateís department of natural resources should have much of this data.) Include the year and type of event (e.g., flood), a description, and the amount of damages expressed in dollars. The description of the event should include its: n Cause (e.g., hurricane, melting snow, torrential rains, etc.) n Type of event (e.g., 100-year flood) Form I-1 PHASE I To Buy or Not to Buy I-21 October 1998 n Severity expressed in measurable terms (e.g., floodwaters rose two feet above the average three-foot flood stage) n Effects on life and property (e.g., 1 person was killed, 8 were injured, 52 properties were substantially damaged, and 219 were otherwise damaged) n Effects of past disasters on property and structures damaged during this most recent event (e.g., 100 Maple Avenue was flooded in 1992 and suffered damages totaling $10,000; and again in 1995 with damages totaling $12,000), as well as the effects of the recent disaster (e.g., 100 Maple Avenue was substantially damaged) n Rescue and recovery efforts (e.g., 500 people were evacuated from their homes) q Identify and describe the areas affected by this most recent disaster and the damages suffered. q Assess and describe the future risks from natural disasters to lives, property, infrastructure, and services within your community. Use historical data and characteristics of the area to extrapolate those future risks. On your application, you must describe a repetitive problem that your project would solve. This activity coupled with the one above will enable you to do that. q Identify at-risk areas such as floodplains, and describe their vulnerability in terms of flood elevation and development. q Identify alternatives to property acquisition. Since you have already evaluated your mitigation options, you should be well prepared to identify alternatives to property acquisition. On your application, you must demonstrate that you have considered at least three viable alternatives, of which property acquisition is one and no action may be another. (Your State might require more than three.) Identify and describe those alternatives now. For each alternative, describe: n How well it would solve the problem n How it would address a recurrent or repetitive problem To Buy or Not to Buy PHASE I I-22 October 1998 n Its implementation and maintenance costs vs. the costs of future disasters if the alternative is not implemented n Its advantages and disadvantages q Begin early to consider how you might use acquired property. Potential use should coincide with your communityís overall environmental, conservation, recreational, and floodplain and wetlands management goals. FEMA does not require you to identify how you will use the acquired property, only that you make binding promises that you will maintain it as open space for all time. (This promise usually is in the form of an assurance on the application.) PRIORITIZE TARGET PROPERTIES Prioritizing properties for acquisition will be among your most challenging decisions. You might not receive enough HMGP funds to purchase every property you would like to acquire. Furthermore, your State or FEMA might ask you to explain your selection of properties to acquire. To prioritize target properties: q Establish measurable and unbiased criteria by which you can classify properties q Rank criteria into priorities q Group target properties by criteria n Specific criteria Identify specific criteria that apply to properties within your community. For example: q Properties that have been substantially damaged q Properties that have suffered repetitive losses PHASE I To Buy or Not to Buy I-23 October 1998 q Properties that are insured under the NFIP q Properties that are located in the floodway q Properties that are located in the floodplain (e.g., identify 10-, 25-, 50-, 100-, 500-year floodplains as they apply to your community) q Properties that are residential (and further classify such properties as those that are primary or secondary residences, and those that are owner- or tenant-occupied) q Properties that are vacant lots q Properties that are commercial q Any other as directed by your State n Priorities Based on any priorities established by your State and the criteria applicable to your community, establish your communityís priorities. For example: q Priority 1: Properties that are primary residences and substantially damaged, located in the floodway, and either insured or uninsured q Priority 2: Properties that are primary residences and substantially damaged, located in the floodplain, and insured q Priority 3: Properties that are primary residences and substantially damaged, located in the floodplain, but not insured q Priority 4: Properties that are contiguous lots to priorities 1, 2, and 3 The actual number of ranked priorities will depend on your Stateís priorities and your communityís criteria. Describe your priorities as definitively as possible. Regardless of how detailed your priorities are, briefly explain why each is a priority and why it is ranked as it is. To Buy or Not to Buy PHASE I I-24 October 1998 GOOD NEWS BOX CONDUCT TOWN MEETING The handbook incorporates a town meeting in each phase. The Toolkit contains two tools to help you prepare for any town meeting. Tool I-4, Town Meeting Checklist, is a one-page checklist you can use before each town meeting to ensure you are adequately prepared. Tool I-5, Conducting Town Meeting Checklist, will help you complete the checklist the first time. This first town meeting serves two purposes: it presents general information about property acquisition to property owners and begins to gauge their interest in participating. Therefore, give them enough information to enable them to begin thinking about that important decision. During this town meeting: q Summarize hazard mitigation. Explain hazard mitigation simply, using enough detail to define it but not so much that you lose the property ownerís interest. The property owners are mostly interested in the details that directly affect them. q Explain property acquisition. Explain that property acquisition is only one form of hazard mitigation, but the most permanent form. Describe how it works. Briefly discuss relocation of structures. q Explain fair compensation. Knowing they will receive a fair price for their property is important to them. Good News Acquisition of substantially damaged properties in floodways or floodplains in NFIP-participating communities generally are cost-effective, and may be processed more quickly than acquisition of other properties. Check with your SHMO. Tools I-4 and I-5 PHASE I To Buy or Not to Buy I-25 October 1998 q Stress the fact that property acquisition requires voluntary participation. Property owners might be concerned that the government will try to force them to sell their homes. Assure them that property will be acquired only from owners who want to sell, and the community will not use its power of eminent domain to acquire property. q Identify the types of costs that the community will pay for, and those that it will not. q Explain duplication of benefits. During Phase II, the application phase, you will have an opportunity to explain duplication of benefits in detail during a town meeting. However, money is an important issue. Take this opportunity to briefly introduce property owners to duplication of benefits, and advise property owners to save all their receipts. q Explain advantages and disadvantages of property acquisition to the property owners so they can make an informed decision as to whether or not they want to sell their property. q Explain the property ownersí obligations. Create a sense of teamwork. Explain that the property owners have active roles to play and can move the process along by: n Attending town meetings and promptly returning completed questionnaires n Evaluating their options and making decisions in a timely manner n Providing the documentation the community requests of them in a timely manner n Keeping their appointments for one-on-one meetings, appraisals, closings, etc. q Explain alternatives to property acquisition, and the advantages and disadvantages of each. Share the knowledge you learned while evaluating your mitigation options. q Identify your priorities for targeting properties. Briefly describe each priority and explain why it is ranked as it is. To Buy or Not to Buy PHASE I I-26 October 1998 q Answer questions. Solicit questions and answer them as fully as you can. Have knowledgeable State and local officials and employees on hand to provide answers. If you cannot answer any given question, tell the property owner you do not know the answer, but will find it. If you cannot answer it by the end of the meeting, publicize the answer later. Do not improvise an answer if you are uncertain. q Ascertain the property ownersí interest. This is a major purpose of the meeting. You can only proceed with a property acquisition project if the property owners are interested in selling. Open the floor to general discussion, and allow property owners to express their opinions and ask new questions. Distribute Property Ownerís Questionnaire I (see Form I-2), and ask property owners to complete it before they leave. Designate someone to collect the completed questionnaires. q Pass around a sign-up sheet (use two or more for large groups). Ask property owners to print their names, addresses, and telephone numbers regardless of their level of interest. The sign-up sheet will help document the meeting and establish a mailing list. (You also can use it to determine if any questionnaires are missing.) q Compile minutes. Designate a recorder to compile the minutes of the meeting. You will find a sample Agenda (Tool I-6) and Presentation Notes (Tool I-7) for this town meeting in the Toolkit. The Presentation Notes provide appropriate detail for this meetingís talking points. COMMUNITY WANTS BUYOUT? After the town meeting, you reach an important decision point. Immediately, review and evaluate the property owner questionnaires. What do they indicate about the property ownerís interest in participating in a project? What does the meeting itself indicate? If the property owners are not interested, property acquisition obviously is not an appropriate mitigation alternative for your community. However, if they are interested, it might be. You have two more considerations before you can make a final decision. Those considerations are: Form I-2 Tools I-6 and I-7 PHASE I To Buy or Not to Buy I-27 October 1998 q Your communityís ability to complete a project q The impact of a project on your community EXAMINE ABILITY TO COMPLETE PROJECT Applying for funds and implementing a project if FEMA approves the funds requires: q Coordination among property owners; Federal, State, and local governments; and contractors and consultants q Constant and consistent communication with the property owners q Long-term management of acquired property n Examine your ability to fulfill those requirements and successfully complete a project. q Look carefully at the current and future commitments of your project team members, and local and regional employees q Determine what property data (e.g., tax assessments, legal descriptions, plats, elevations, etc.) are readily available to you, and how easily you can gather data not readily available q Determine your ability to provide the local match (at least 25 percent) q Develop an administrative budget for submitting an application, and implementing and completing a project q Estimate time lines for submitting and completing an application (which is dependent on your Stateís deadlines), and implementing and completing a project (which might require at least 7 to 18 months) To Buy or Not to Buy PHASE I I-28 October 1998 n Ask yourself the following questions and carefully evaluate your answers. q Does your community have the human and physical resources to see the project through? q Is a project manageable considering the existing workloads on local and regional staffs? q Will existing workloads suffer if your community implements a project? q Does your community have the financial resources to supplement the administrative costs FEMA will contribute? q Does your community have the human, physical, and financial resources to plan, manage, and maintain open space? Your answers to the above questions will determine your ability to complete a project. EXAMINE PROJECTíS IMPACT ON COMMUNITY You have one more consideration before you are able to make a fully informed decision to buy or not to buy; that is, the impact of a project on your community as a whole. Property acquisition can have both positive and negative impacts on your community. Generally, the positive impacts are the same for any community. However, the possible negative impacts affect every community differently. n Positive impacts of property acquisition include the following: q It provides more complete and permanent protection from future hazards than other mitigation alternatives because it permanently removes people from harmís way q It reduces the financial and emotional costs of future disasters because every acquired property represents one less area where your community must direct response, evacuation, rescue, and recovery efforts PHASE I To Buy or Not to Buy I-29 October 1998 q It is consistent with general environmental, conservation, recreational, and wetland management goals q It can help achieve floodplain management objectives because it helps expand flow-carrying capacity by increasing flood storage areas q It makes land available for public use n To evaluate the possible negative impacts of property acquisition on your community: q Determine the effect property acquisition may have on property values and taxes. Consider relocating homes to non-flood-prone areas of the community. q Determine the effect of a revised tax base on your communityís ability to maintain services. q Based on your identified properties, determine the effect of not acquiring all properties within a priority or omitting an entire priority (or priorities). q Identify potential resources of funds for acquiring properties not covered by HMGP funds (e.g., FMA), and then evaluate the likelihood of tapping those resources. q Identify potential political or socioeconomic implications. For example, evaluate whether or not property acquisition unfairly benefits one ethnic group or inadvertently discriminates against another; or may reduce services or access to a portion of the community. q Determine the long-term budgetary impact of maintaining acquired property as open space. Identify potential non-profit partners to assist with this task. q Determine, based on available information, if historic buildings valuable to the community might be affected. Consider relocating or floodproofing historic structures. To Buy or Not to Buy PHASE I I-30 October 1998 n Also, evaluate how your project: q Assists citizens directly affected by the disaster q Addresses your communityís goals to: n Ensure a clean, safe, healthy environment n Attract and retain an adequate workforce n Provide adequate infrastructure to support development n Provide adequate housing n Preserve historic areas n Promote economic development n Maintain an adequate tax base COMMUNITY HAS RESOURCES AND CONSENSUS TO PROCEED? The time has come to make a decision. See the Toolkit for a self-assessment worksheet (Form I-3) that will help you ascertain whether or not property acquisition is the right mitigation alternative for your community. If you decide ìto buy,î go on to the next phase of this handbook, Phase II ó Application. On the other hand, if you decide ìnot to buy,î reconsider other mitigation alternatives. Once youíve made a decision, make a public announcement. Form I-3 PHASE I To Buy or Not to Buy I-31 October 1998 APPENDIX 44 CFR PARTS 9 & 10 Part 9 of Title 44 implements and enforces Executive Orders (EOs) 11988, Floodplain Management, and 11990, Protection of Wetlands. In support of these EOs and the National Environmental Policy Act (NEPA) of 1969, FEMA: q Avoids any adverse impact associated with the development or modification of floodplains, and the destruction or modification of wetlands q Does not support development on floodplains and in wetlands if a practicable alternative exists; and generally minimizes the destruction, loss, or degradation of wetlands q Reduces the risk of flood loss; and minimizes the impact of floods on human health, safety, and welfare q Promotes nonstructural flood protection methods to reduce the risk of flood loss q Restores and preserves the natural and beneficial values served by floodplains q Preserves and enhances the natural values of wetlands q Involves the public throughout the floodplain management and wetlands protection decision-making process Part 10 further supports the NEPA by ensuring that FEMA and any recipient of FEMA funds take care to: q Evaluate effects of actions on the environment q Protect, restore, and enhance the quality of the environment q Avoid or minimize negative impacts on the environment To Buy or Not to Buy PHASE I I-32 October 1998 q Preserve historic, cultural, and natural aspects of our national heritage and diversity To this end, FEMA conducts environmental reviews of the projects it funds to determine their impact on the environment. Exempt from extensive review under NEPA are projects that FEMA may determine have: q Minimal or no effect on environmental quality q No significant change to existing environmental conditions q No significant cumulative environmental impact WHAT DO 44 CFR PARTS 9 & 10 MEAN TO MY COMMUNITY? They are meaningful in three ways: q FEMA must determine whether or not an environmental review is necessary and to what extent one is necessary. Therefore, provide enough information on your application for FEMA to make that determination. This handbook and your SHMO and State environmental office will help you do that. Barring extraordinary circumstances, a property acquisition project typically has a positive impact on the environment and is exempt from the requirement for a more lengthy environmental assessment under NEPA. However, an acquisition project that involves FEMA funding of a relocation subdivision might require a more extensive review. q FEMA also is required to comply with the requirements of other laws including, but not limited to, those governing historic buildings, archeological resources, and hazardous and toxic materials. You will be asked to provide specific information and assist researching these issues. PHASE I To Buy or Not to Buy I-33 October 1998 q You must keep the members of your community involved by keeping them informed. You can do this through public forums, such as public announcements and public meetings. Furthermore, you must give the public opportunities to express their opinions through surveys, public meetings, etc. Again, this handbook will help you meet this requirement. PHASE II Application II-1 October 1998 INTRODUCTION You have decided that property acquisition is the best mitigation alternative for your community. This phase supports your commitment to developing a sub-grant application that has the best possible chance of being approved and funded. Of course, whether or not your State recommends your application for funding depends on the amount of total funds it receives from the Federal Emergency Management Agency (FEMA), and how your communityís project ranks among its mitigation priorities. CONTENTS OF THIS PHASE This phase comprises the chapters, tools, and forms identified below. Read all three chapters before you begin the activities. q Chapter 1 ó First Things First. Chapter 1 helps you to: n Submit a letter of intent or pre-application to your State n Conduct a town meeting to further prepare property owners and tenants for the property acquisition project, and to gather the information you will need for your application n Plan a project q Chapter 2 ó Ready, Set, Apply! Chapter 2 leads you through completing and submitting a property acquisition project application. A completed application requires detailed information about each property that your community might acquire. It also requires detailed information about the disaster itself, the history of disasters in your community, how this project will solve a disaster-related problem, and how your project might impact your community. (Use your Hazard Mitigation Project Strategy from Phase I to get started.) All of this information helps your State and FEMA determine whether your project is a cost-effective mitigation alternative and appropriate for funding under the Hazard Mitigation Grant Program (HMGP). Application PHASE II II-2 October 1998 q Chapter 3 ó While You Wait. Chapter 3 gives you a head start on Phase III, Implementation. It helps you use the time while your application is being reviewed to prepare yourself for implementing your project and managing government funds. Specifically, Chapter 3 discusses: n Preparing to administer a sub-grant and conduct a town meeting to initiate your project n Drafting contracts, policies, and procedures that you will need to conduct a project q Part 1 of the Toolkit contains the following tools to help you work through this phase: n Tool II-1, Sample Pre-application n Tool II-2, Sample Letter of Notification (Property Owner) n Tool II-3, Sample Letter of Notification (Tenant) n Tool II-4, Sample Agenda n Tool II-5, Sample Presentation Notes n Tool II-6, Sample Application (Complex Project) n Tool II-7, Sample Application (Simple Project) n Tool II-8, Application Checklist n Tool II-9, Tips for Writing an Effective Press Release q Part 2 of the Toolkit contains the following forms and fact sheets: n Form II-1, Pre-application n Form II-2, Duplication of Benefits (DOB) Fact Sheet n Form II-3, URA Relocation Assistance for Tenants Fact Sheet n Form II-4, Assistance for Mobile-Home Owners and Tenants Fact Sheet PHASE II Application II-3 October 1998 n Form II-5, Property Owner Questionnaire II n Form II-6, Tenant Questionnaire n Form II-7, Application n Form II-8, Offer Letter n Form II-9, Statement of Voluntary Transaction n Form II-10, Affidavit n Form II-11, Exhibit A (Restrictive Covenants for a Deed) n Form II-12, Exhibit B (Restrictive Covenants for an Easement) n Form II-13, Tenant Relocation Assistance Application and Worksheet n Form II-14, Hazardous Materials Property Survey/Individual Property Survey Form Application PHASE II II-4 October 1998 CHAPTER 1 ó FIRST THINGS FIRST SUBMIT NOTICE OF PRE-APPLICATION Let your State Hazard Mitigation Officer (SHMO) know that you are interested in applying for Hazard Mitigation Grant Program (HMGP) funds. If you have not completed your ìSHMO Shopping Listî (Tool I-2) from Phase I, do so now. Determine your Stateís policy for pre-application and application, and obtain copies of its forms, if available. Even if your State does not use a formal notice of intent or pre-application, call your SHMO and follow-up that telephone call with a letter. Your State must notify FEMA of its intent to participate in the HMGP within 60 days of the disaster declaration. Consequently, the State must know which of its communities are interested in property acquisition. If your State does not have its own pre-application form and has not instructed you otherwise, you may use the template provided in the Toolkit (Form II-1). A sample completed pre-application is provided as Tool II-1. Approximately one week after submitting your notice of intent or preapplication, contact your SHMO and ask if the State supports your intent to apply for HMGP funds. If the State does support your application, continue through this phase. If it does not support your application, consider other possible sources of assistance. Form II-1 & Tool II-1 PHASE II Application II-5 October 1998 SPECIAL NOTE BOX CONDUCT TOWN MEETING n Prepare to conduct a town meeting. Refer to the Town Meeting Checklist (Tool I-4) to prepare for the town meeting. In addition to preparing letters of invitation to congressional representatives and state officials, also prepare individual notices to owners and tenants of every property targeted for acquisition. Use the notices to: q Explain the project q Inform property owners that they might be eligible for property acquisition q Inform tenants that they reside in properties that might be acquired and advise them that they might be eligible for tenant relocation assistance (See Form II-3 for detailed information) q Emphasize the voluntary nature of property acquisition to property owners q Encourage attendance at the meeting Special Note If your State does not support your HMGP application, ask your SHMO about FEMAís Flood Mitigation Assistance (FMA) program. Also consider using U. S. Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG) funds. Explore other public agencies and private organizations that acquire property for conservation, preservation, and recreation purposes. See Phase IV for a partial list of possible sources of assistance. Application PHASE II II-6 October 1998 Sample letters of notification to property owners and tenants are provided in the Toolkit (Tools II-2 and Tool II-3). This second town meeting serves two purposes: it announces your communityís firm intent to apply for a sub-grant to fund a property acquisition project, and continues to gather support from property owners. Property owners probably are tired of living through one disaster after another and are anxious to hear about the details of a potential solution. However, they also might be nervous about participating in a Federal grant program and unrealistic about the benefits it provides. For that reason, be sure to fully explain and repeat (as often as necessary) all benefit information, especially possible benefit restrictions. Try to make the meeting friendly, and as informative and supportive of the community as possible. CASE STUDY FORT FAIRFIELD, MAINE Tools II-2 & II-3 How One Community Did It: Fort Fairfield, Maine Fort Fairfield, Maine hosted a town meeting that included a community supper, provided with the assistance of the Red Cross. They arranged separate breakout sessions for flood-affected residents and flood-affected businesses so that group-specific questions could be addressed. The community supper created a sense of camaraderie that might not have been achieved otherwise. PHASE II Application II-7 October 1998 n Conduct a town meeting. During this town meeting: q Introduce the point of contact (POC). The POCís job is to make sure no one falls through the cracks or has a question that goes unanswered. The POC can be the project team leader, or another project team member. Tell property owners and tenants who their POC is, how they may contact their POC (e.g., mailing address, email address, telephone number, etc.), and when their POC is available. q Establish project office hours. Establish a regular project workplace and regular hours. Keep the office open at least one evening each week for the convenience of owners and tenants who might have other daytime commitments. On the back of the agenda, photocopy a map with the location of the office and its hours, address, and telephone number. q Review the property acquisition process. Since property acquisition affects property owners, mobile-home dwellers, and tenants differently, consider using separate breakout sessions. Think about the number of people expected at the meeting, how many of them attended the first meeting (compare the sign-up sheet from the first meeting with the notices you prepared for this meeting), and how much they still want to learn. If many of those expected did not attend the first meeting, consider separate breakout sessions for those who attended the first meeting and those who did not. In any case, refer to your presentation notes from and issues raised during the first meeting to review property acquisition. q Explain duplication of benefits (DOB) in detail. DOB is one of the most complex and least understood aspects of property acquisition. It is an issue that can cause confusion and anger if not properly understood. Therefore, be sure every property owner understands it. Photocopy Form II-2, Duplication of Benefits (DOB) Fact Sheet, and distribute copies to property owners. Consider asking your SHMO to provide an expert from outside your community (such as a FEMA staff member) to explain DOB at the meeting. DOB can be an unpleasant subject; having a neutral expert on hand to explain it can remove your project team members from any unpleasantness that could cause division between them and the property owners. Also, an expert can answer any questions the property owners might have. Form II-2 Application PHASE II II-8 October 1998 SPECIAL NOTE BOX q Explain additional homeowner relocation assistance to property owners, if your community intends to offer it. Additional relocation assistance may be offered to low-to-moderate income (LMI) property owners to enable them to participate in the property acquisition project. Often, the fair market values (FMVs) and, therefore, the purchase prices of their properties, are not adequate for them to purchase properties in less hazardous areas. Additional homeowner relocation assistance helps them bridge the gaps between the amounts they are paid for their properties and the amounts they must pay for replacement housing. Check with your SHMO to determine if this assistance is available through a CDBG. This might be an Environmental Justice (Executive Order 12898) issue for which other funds might be available. q Explain Uniform Relocation Assistance and Real Property Acquisition Policies Act (URA) to tenants (if applicable). If a property owner decides to sell his or her rental property to the community, tenants of that property are eligible for tenant relocation assistance under the URA. Photocopy Form II-3 and distribute copies to tenants. Use an easel and pad or chalkboard to go over the steps for calculating a rent increase. (See Form II-3 for the steps.) Form II-3 Special Note National Flood Insurance Program (NFIP) settlements for the repair or replacement of a structure are counted as DOB. As a result, many property owners who have purchased flood insurance through the NFIP and pay regular premiums might feel unfairly penalized. Therefore, FEMA offers States the option of providing a reimbursement to property owners with flood insurance whereby an eligible property owner can retain an amount from his or her flood insurance claim settlement equal to no more than five years of flood insurance premiums. Contact your SHMO to find out if your State provides this option. If it does, be sure to explain it when you explain DOB. PHASE II Application II-9 October 1998 q Explain assistance for mobile-home owners and tenants (if applicable). Generally, mobile-home dwellers tend to be grouped as follows: n Homeowners who own both the mobile home and homepad. Those mobile-home owners are considered to be property owners and are treated no differently. n Tenants who rent both the mobile home and homepad. Tenants of mobile homes are treated no differently than any other tenant. They are eligible for URA relocation assistance to tenants. n Homeowners who own the mobile home but rent the homepad. Those mobile-home dwellers are a hybird of property owner and tenant. In this case, if the homepad, which the mobilehome owner rents, is acquired during a property acquisition project, that mobile-home owner is entitled to homepad rental assistance. Homepad rental assistance is comparable to URA tenant relocation assistance, and is calculated the same way. That same mobile-home owner also is considered involuntarily displaced from his or her homepad; and, therefore, also is entitled to replacement housing assistance. Replacement housing assistance is compensation for the difference between the value of the displacement mobile home and the cost of a replacement mobile home. Furthermore, mobile-home owners might be eligible to sell their mobile homes as part of the acquisition project. Each of those benefits is independent of the others, and any mobile-home owner who owns a mobile home but rents the pad and chooses to sell is still entitled to all of the above benefits. Photocopy Form II-4, Assistance for Mobile-Home Owners and Tenants Fact Sheet, and distribute copies to mobile- home owners. Consider asking your SHMO to provide experts to discuss the various kinds of assistance. They can easily explain eligibility and procedures, and answer any questions the owners and tenants might have. Form II-4 Application PHASE II II-10 October 1998 q Answer questions. Solicit questions and answer them as fully as you can. Follow-up on questions you cannot answer. Allow open discussion. (Review guidance on establishing your local buyout policy in Chapter 3 of this Phase in case any of those topics arise during the question-and-answer period.) q Collect data. Distribute the property ownerís and tenantís questionnaires (Forms II-5 and II-6) and self-addressed, stamped envelopes. These questionnaires are information-gathering tools for your project team. They solicit individual property owner and tenant data, which is required by FEMA on the application. The property owner questionnaire also begins to capture data regarding DOB and assistance eligibility. Review the questionnaires; explain why the information is important and how it will be used, clarify any unfamiliar terminology, and emphasize the date it is due. (Give them at least one week to complete and return the questionnaire.) q Pass around a sign-up sheet (use two or more for large groups). Ask property owners and tenants to print their names and, if this is their first meeting, addresses and telephone numbers. This sign-up sheet will help maintain your mailing list. (You also can compare it with the questionnaires you receive to determine if any are missing.) q Compile minutes. Designate a recorder to compile the minutes. You will find a Sample Agenda (Tool II-4) and Sample Presentation Notes (Tool II-5) for this town meeting in the Toolkit. START PROJECT PLANNING Before you sit down to develop your application, start thinking about how your community will address some of the finer details of property acquisition. These details depend on the priorities you established in Phase I, and form your communityís local buyout policy. Your buyout policy is the foundation of your property acquisition project; it must be understandable, defendable, and applied consistently to all participants. The following activities will get you started. Chapter 3 covers these details and your local buyout policy in more detail. For now, think about the following and how your decisions might affect development of your application. Forms II-5 & II-6 Tools II-4 & II-5 PHASE II Application II-11 October 1998 n How will your community establish property values? FEMA policy states that communities acquiring properties with FEMA funds must ìestablish and document a fair market value. The value must be derived from a reasonable methodology that has been consistently applied throughout the community, such as independent appraisals, opinions of value, or a formula based on tax assessments.î To comply with that FEMA policy: q Determine whether to base the purchase offer on pre- or postdisaster value. Your choice affects DOB. q Determine the means of establishing FMV. (Appraisals usually are the most accurate means. Appraisals must be conducted by Statelicensed or certified appraiser.) q Calculate the purchase offer consistently for all participating property owners. q Determine a policy and process for property owners to appeal a determination of value. q Distinguish between pre- and post-disaster ownership. (For properties purchased after the disaster declaration date, base offers on the price the post-disaster purchaser paid, plus the cost of repairs he or she has made that can be substantiated by receipts.) q Adhere to your Stateís laws and regulations. n What amount of acreage per property is your community willing to acquire? Acquiring property can become cost prohibitive unless some limits are set. Even communities in predominantly rural areas have limited each individual property acquisition to the residential structure and the land on which it sits, not to exceed one acre. Use fee-simple acquisition to acquire land and structures, or conservation easements to acquire structures and restrict land use. A conservation easement allows farmers to sell their homes yet retain ownership of the surrounding land for the sole purpose of farming. Likewise, it allows owners of large multi-acre lots to sell their homes yet retain ownership of the land for private recreational activities such as hunting, fishing, and camping. FEMA Policy Application PHASE II II-12 October 1998 When deciding how much land your community will acquire from a single owner, take into consideration: q Your communityís specific geographical location q Your communityís plans for the acquired land q The property ownerís needs and wants q FEMAís policy to encourage the acquisition of contiguous properties n Will your community demolish or relocate structures? Basic acquisition involves acquiring land and structures, and clearing the land by demolishing its structures. Relocation involves acquiring land only and clearing it by relocating structures to another site. (Relocation is a good way to preserve historic structures.) Your community might decide to relocate some structures and demolish others. Demolition requires a qualified contractor to: q Remove aboveground structures (e.g., gasoline tanks) q Remove site improvements (out buildings) q Fill in basements (with or without removing foundation walls) q Remove or cap utilities and septic tanks q Remove and dispose of asbestos Relocation requires a qualified engineer to carefully consider: q Health concerns often associated with flood-damaged buildings. Homes that have been exposed to harmful contaminants (e.g., oil, sewage, and chemicals) found in the floodwaters or have intense mold growth (which can cause severe allergic reactions) are not good candidates for relocation. q The condition of the structures. Substantially damaged and otherwise unsound structures are not good candidates. q The type of structure. The least-expensive and most cost-effective structures to relocate are those: n Built on crawl space or basement foundations PHASE II Application II-13 October 1998 n Made of wood frame, or masonry but are small and compact n Less than three stories high n What is your communityís policy toward mobile homes? Structure your policy in a way that makes sense for your community and its mobile-home population. Keep in mind: q A tenant who rents a mobile home and the pad it rests on, and meets other tenant eligibility requirements, is entitled to relocation assistance under the URA q A tenant who owns a mobile home but rents the pad it rests on, and meets other tenant eligibility requirements, is entitled to relocation assistance under the URA, even if the mobile home is acquired n Is your community commited to keeping property owners inside the community? Your community may choose to implement a basic acquisition without thought to where property owners move. However, you might consider actively encouraging property owners to resettle in existing or emerging areas within the community by offering some type of incentive. Considerations include the effect of property acquisition on your communityís tax base; the availability of resources, vacant lots, and housing; and both public and private development plans. CASE STUDY GRAND FORKS, ND How One Community Did It: Grand Forks, North Dakota In an effort to restore its tax base, Grand Forks, North Dakota used HUD CDBG funds to initiate a voucher program as an incentive to residents to resettle within the city. Under the program, residents who sell their homes to the city receive a $15,000 voucher if they build or purchase a new home within Grand Forks, and a $10,000 voucher if they purchase an existing home within Grand Forks. (HMGP funds cannot be used for such financial incentives.) Application PHASE II II-14 October 1998 CHAPTER 2 ó READY, SET, APPLY! Regardless of any Stateís forms and specific requirements, a property acquisition application typically addresses five general areas: q Applicant data q Explanation of the problem and alternative solutions q Budget q Property inventory q Environmental and sociological considerations An application also has a number of attachments and enclosures. This chapter assists you in one of two ways. On one hand, if your State has supplied you with a standard application form, this chapter provides guidance for completing that application as thoroughly as possible. On the other hand, if your State does not have a standard application form, you are welcome to use the model application found among the reproducible forms (Form II-7). The numbered items and explanations in the next section correspond to the model application. Two examples of a completed model application are provided in the ToolKit (Tools II-6 and II-7). Tool II-6 is an example of a complex project that requires the highest level of detail. Tool II-7 is an example of a simpler project that requires a lower level of detail. COMPLETE PROJECT APPLICATION When completing the project application, remember that the most useful thing you can provide for application reviewers is complete and accurate information. If you are asked to explain or describe something, offer as much detail as possible. Use simple, concise, and complete Form II-7 Tools II-6 & II-7 PHASE II Application II-15 October 1998 sentences to avoid confusion. Keep in mind that the application reviewers are not as knowledgeable of your community and its acquisition project as you are. The application is your only means for expressing your communityís needs and objectives. Include and accurately label all attachments requested and any others that you think might be useful to the application reviewers. n Part 1: Applicant Data q 1. FEMA___-DR-___: This is the disaster identification assigned by FEMA. q 2. Applicant Name: An applicant must be a county, city or town government; an eligible, private nonprofit organization or institution; or a recognized Native American Indian tribe or organization. Use your communityís official name. q 3. TIN: This is your Taxpayer Identification Number. If you do not know your TIN, ask your communityís financial officer. q 4. County Name: Use the official name of the county in which your community is located. q 5. County Code: If you do not know your countyís code, ask your State Hazard Mitigation Officer (SHMO). q 6. State Code: Use your Stateís two-letter abbreviation. q 7. State Legislative District: Identify the State legislative district in which your community is located. If you do not know your district, ask your communityís voter registrar. q 8. U.S. Congressional District: Identify the U. S. congressional district in which your community is located. If you do not know your district, ask you communityís voter registrar. q 9. FIPS Code: The Federal Information Processing Standards Code is an identification number used to identify applicants for the Public Assistance portion of the Federal Disaster Assistance Program under Public Law 93-288. If you do not know this number, the State will complete this information for you. Application PHASE II II-16 October 1998 q 10. Public Entity ID: This is your communityís public entity identification number, if it has one. If necessary, the State will complete this information for you. q 11. CID: This is your communityís Community Identification Number, if it has one. If necessary, the State will complete this information for you. q 12. Primary Point of Contact (POC): Provide all pertinent information requested, including the POCís full name, nickname, job title, and organization (employer). List the address, telephone number, fax number and email address where the POC can be reached during normal business hours (approximately 8:30 a.m. through 5:30 p.m.). Also include directions to the POCís place of business. q 13. Alternate POC: Provide all pertinent information requested, including the alternate POCís full name, nickname, job title, and organization (employer). List the address, telephone number, fax number and email address where the alternate POC can be reached during normal business hours (approximately 8:30 a.m. through 5:30 p.m.). q 14. Application Preparer: If the person completing the application is different than the primary or alternate POC, provide requested information about the application preparer. If the person completing the application is either the primary or alternate POC, write the appropriate name in the name field and write ìSee Aboveî in the other fields. q 15ñ18. Answer these questions regarding your communityís participation in the National Flood Insurance Program (NFIP). q 19ñ20. Only particular types of organizations are eligible to apply for a Hazard Mitigation Grant Program (HMGP) grant. Check the appropriate box to further identify your community. q 21. Assurances: This list of assurances comprises the policies an applicant should be aware of before submitting an application. All projects funded by FEMA must comply with these policies in order to maintain project funding and avoid legal prosecution. A representative of the applicant organization should initial each assurance to satisfy the State and FEMA that the community is aware of the policies and will follow them if their application is approved. PHASE II Application II-17 October 1998 q 22. Authorized Signature: The Chief Executive Officer (CEO) or another official representative of the community (e.g., mayor, city manager, county administrator, etc.) must acknowledge understanding and acceptance of all initialed assurances. The person who initialed the assurances can sign here. n Part 2: Problems and Solutions q 23. Project Location: This is your opportunity to explain the hazardous location of the properties the community wishes to acquire. Be sure to provide enough detail to show why these properties are in the path of damage and danger. Offer facts that support your claim, such as the Flood Zone Code, and the first floor and base flood elevations. Provide street names and the exact number and locations of the properties so reviewers can locate them on the map. Explain the terrain surrounding the project area so that the reviewers understand your project site even if they have never seen it. If possible, attach aerial photographs to illustrate your narrative. q 24. Explanation of the Problem/Event: Describe the most recent disaster. Clearly describe the damage caused by the disaster, citing specific facts such as the number of homes substantially damaged, the number of vehicles destroyed, the number of people injured or killed, etc. Provide a brief history of the past 25 years, citing dates of previous events and briefly describing the damage each caused. If your community has a history of natural disasters, describe any previous hazard mitigation measures. Also, attach the most recent Flood Insurance Study (FIS) of your community if one is available. If one is not available, provide documented data of damages caused by each previous event. For example, if your community suffers from flooding, include a table showing the date of each flood, the measured peak of the floodwaters at some locally documented point, and the estimated cost of damages from each event. (Tool II-6 assumes no FIS is available, and, therefore, provides a greater level of detail than is necessary if a FIS is available.) q 25. Solutions to the Problem: FEMA requires that you consider various mitigation alternatives and choose the best one for your community. Describe your proposed project (property acquisition) as your first alternative. Then, describe another alternative and the ìno- Application PHASE II II-18 October 1998 actionî alternative. You may describe more than three if you choose. Simply photocopy and attach additional alternative pages. For each alternative, provide a full description and cost estimate. (Include materials, labor, and equipment cost; fees; and other expenses associated with the project.) Estimate the cost of implementing and maintaining each alternative, as well as the potential future losses expected after the project is completed. q 26. Proposed Solution: Identify the preferred alternative (property acquisition) and explain how it benefits the declared area. Cite data provided in the description. Also explain why it is preferred over the other two alternatives. Discuss issues such as feasibility, benefits, present and future costs, and environmental effects. Describe the process you used for selecting the best solution. Identify the specialists you consulted and summarize their credentials and describe the meetings you held, the roles of local officials, and how the public was involved or showed their interest. n Part 3: Estimated Budget q 27. Budget Worksheet: Use this matrix to add all relevant estimated expenses and calculate the total estimated cost of the proposed project. If any expenses listed in the matrix do not apply to your project, leave those lines blank or use ìNAî for not applicable. If you expect an expense that is not listed in the matrix, specify the expense by name and estimated cost in one of the ìOtherî rows (e.g., NFIP reimbursements). The matrix contains the following: n Fair Market Value (FMV). When estimating the FMV of each property proposed for acquisition, consider using its tax assessment plus 25 percent. Since most tax assessment records are not updated yearly and are not always accurate, adding an additional 25 percent gives you a more accurate estimate of the FMV. However, when determining the actual purchase price, FEMA recommends using an appraisal conducted by a professional State-certified or -licensed appraiser. PHASE II Application II-19 October 1998 n Appraisal. Determine the average cost of conducting one appraisal and use it to estimate the total cost of appraising all properties being considered for acquistion. Contact two or three appraisers for verbal estimates. n Property Survey. Due to environmental considerations, some properties will require historical, environmental, or hazardous materials surveys. Depending on the previous land use and history of your community, the number of properties requiring surveys will vary. Determine the average cost of a property survey. Also estimate the number of properties likely to require surveys. Then estimate the total cost of completing surveys. Contact your Stateís environmental agencies for help. n Closing. As with any real-estate transaction, closing costs are necessary expenses. Estimate the costs of one closing and multiply it by the number of properties proposed for acquisition. Contact two or three title companies or real-estate attorneys for verbal estimates. n Structure Demolition. Contact two or three contractors to determine an average demolition cost, plus debris removal, to allot for each structure. Also, estimate the number of structures you expect to demolish. Then estimate the total cost of demolition and disposal. Include cost of asbestos abatement if that hazard might exist. If your community does not plan to demolish any structures, leave this row blank. n Structure Relocation. Estimate the number and average size of the structures you expect to relocate. Contact two or three contractors to determine an average relocation cost to allot for each structure. Then estimate the total cost of relocation. If your community does not plan to relocate any structures, leave this row blank. n Tenant relocation assistance. Determine the average rental assistance allocation and moving expense allocation that each tenant will be entitled to. Then estimate the total amount required for tenant relocation assistance. (If necessary, use the maximum amount allotted per Form II-3.) Application PHASE II II-20 October 1998 n Legal fees. Determine any legal fees that the community will incur. Will the attorney for the city or county be responsible for this project as part of his or her normal responsiblities? If not, you probably will need to hire an attorney who specializes in real-estate transactions. Contact two or three local real-estate attorneys to estimate the cost of legal fees. q 28. Basis for FMV: Explain the methodology that your community intends to use to determine a FMV of participating properties. q 29. Projected source of funds: The HMGP will cover no more than 75 percent of the cost of your project. Your community must generate the remaining funds necessary to carry out your project. Document the source(s) of those funds. Your State might contribute a portion of them. q 30. Work schedule: Include an estimated work schedule or project time line with your application. Provide the anticipated starting date and completion date, as well as important milestones or phases of implementation for the course of the proposed project. Include a general maintenance schedule for the open space area once the land is cleared. n Part 4: Property Inventory Summarize all properties eligible for acquisition. Use this section to guide your data gathering. q 31. Property Inventory ó Summary: List property ownersí names, lot or parcel numbers, addresses, and estimated FMV. Use a numbering system to tie the summary inventory in with the individual inventory described below. q 32. Property Inventory ó Individual: An individual property inventory must be completed for each property eligible for acquisition. You can complete much of this report using information provided by the property owner in the Property Owner Questionnaire I (Form I- 2). As these reports are collected, number them (1, 2, 3Ö) and record them on the Property Inventory ó Summary sheet. Decide if you prefer to number the reports in the order they are received or wait until all reports are received and number them in an order based on ownersí names or propertiesí street addresses. PHASE II Application II-21 October 1998 FEMA will use this inventory in addition to other data to calculate the benefit cost ratio (BCR) for each property. Therefore, be sure to explain all relevant information that has led the community to decide that this property should be acquired. Attach at least two color photographs (showing two different sides) of the main structure. q 33. Property Inventory ó Tenant Data: If a property owner wants to sell a rental property, all tenants of the property must be included in the individual property inventory. If the building has only one tenant or one tenant family, record that tenantís name in the appropriate space on the individual property inventory. If the building has more than one tenant or tenant family, leave the space on the individual property inventory blank and, instead, record all tenants on this Property Inventory ó Tenant Data summary. n Part 5: Environmental and Sociological Considerations q 34. Matrix of Environmental and Sociological Effects: Use this matrix to summarize the environmental and sociological concerns of each alternative your community is considering. q 35. Agency Contacts: Identify all State and Federal agencies that you have contacted to seek approval for your property acquisition project. At a minimum, contact your Stateís historic preservation office to gather information on your project area. Compose a letter to each relevant agency requesting a reply on letterhead stationary that states its official position on your proposed project. Your State might allow you to submit your application pending receipt of those letters. Check with your SHMO. If you may submit your application pending receipt of the letters, attach a photocopy of each request to your application. q 36. Sociological Questions: Answer each question as clearly as possible. Provide more detailed answers about issues that your community is facing. If the issue does not impact project development, explain briefly and move on. Application PHASE II II-22 October 1998 Tool II-8 n Part 6: Authorized Signatures 37. Authorized Signatures: Have the project official (e.g., project team leader or sub-grant administrator) and CEO of the community sign the application. n Part 7: Attachments and Enclosures 38. Attachments: Clearly identify all attachments and enclosures that you send with your application. Assign numbers and titles to them, arrange them in numerical order, and create an inventory listing them by number and title. If some attachments are less than 8½" x 11" (standard paper size), securely attach them to 8½" x 11" paper to ensure nothing is lost. Neatly fold attachments larger than 8½" x 11" to about that size. GOOD IDEA BOX SUBMIT APPLICATION TO STATE n Complete application checklist. Use the Application Checklist (Tool II-8) to complete a final internal review. Double-check to make sure you have included all attachments, enclosures, and property inventories and clearly labeled them. If you have questions or need clarification on any application requirement, check with your SHMO before you submit your application. GOOD IDEA BOX Good Idea Before sending your application to the State, make a copy of the entire document to keep in the project office. You can use it for future reference when calling your SHMO or administering your sub-grant. PHASE II Application II-23 October 1998 n Submit the completed application to your State. Deliver your application to the State before the deadline. Try not to wait until the date of the deadline to submit your application. A few days after the official deadline, call your SHMO to ask how many applications were received and to estimate the timeframe during which applications will be reviewed and decisions made. GOOD IDEA BOX Good Idea If you can, deliver your application personally. If that is unreasonable, use a mail or delivery service that ìtracksî its packages. Obtain a receipt. With such an important document, the peace of mind that comes with knowing the application was received by the deadline can make it worth the extra money. Application PHASE II II-24 October 1998 CHAPTER 3 ó WHILE YOU WAIT FOLLOW UP A few days after the review period has ended, contact your State Hazard Mitigation Officer (SHMO). Ask him or her if your sub-grant application has been received, if it will be included in the Stateís grant application, and where your application ranks among other sub-grant applicants. Also, ask your SHMO whether he or she is confident about the State receiving funds from FEMA. While your Stateís grant application is being reviewed by FEMA, your community can take advantage of this time to prepare for receipt of funds. However, carefully determine how much preparation you do. If, after talking to your SHMO, you determine your community has a high probability of receiving funds, you may want to complete most or all the activities in this chapter. However, if your community has a low probability, you may prefer to do only some or none of them. Your decision whether to do any preparation, and how much, depends on how confident you and your SHMO are about receiving funds, the availability of your project team members, and the systems your community already has in place. PREPARE TO RECEIVE A SUB-GRANT n Explore open space options. Put together an open space workgroup and think about how your community might best benefit from the open space your property acquisition project will create. Refer to Phase IV, Open Space Management. Your workgroup can start to research your communityís floodplain ordinances and land-use plans; and describe the project and surrounding areas in terms of their topography, resources, infrastructure, and development. PHASE II Application II-25 October 1998 n Identify a local sub-grant administrator. Preferably the sub-grant administrator will be the project team leader. In any case, the sub-grant administrator should have experience administrating federal grants or sub-grants, and if possible, be familiar with pertinent sections of the Code of Federal Regulations (CFR). If you need to hire a grant administrator, develop a job description (see Tool I-3), advertise your need, and interview candidates. Make clear to candidates that employment depends on receipt of the sub-grant. n Prepare for town meeting & prepare press release. If you are awarded a sub-grant, hold a town meeting to initiate your project and issue a press release announcing the award. Take this time to complete as much of the Town Meeting Checklist (Tool I-4) as possible. You can easily begin to look for a place to hold the meeting (choose a couple in case your first choice is not available once you determine the date and time of the meeting), identify possible speakers, and prepare an agenda and presentation notes (see Phase III, Implementation, for the purpose and detailed topics of this town meeting.) See Tool II-9, Tips for Writing an Effective Press Release, to help you prepare a press release announcing your award and project. n Draft contracts, policies, & procedures. You probably will need to hire contractors for some services, such as title examinations and demolitions. You must follow federal procurement procedures, which require you to solicit competitive bids. Contact your local procurement office or, in the absence of a procurement office, financial office for guidance. Your community probably has local procurement policies already in place that you can follow. If your community does not have procurement policies in place, contact your Stateís procurement office for guidance. Until your community is awarded a sub-grant, you cannot solicit bids. However, you can begin drafting bid specifications for all services your community intends to procure from consultants or contractors. To draft a bid specification: Tool II-9 Application PHASE II II-26 October 1998 q Identify the type of bid (e.g., cost-plus fixed-fee, fixed-unit-price, total-fixed-price, etc.). The type of bid determines the manner in which the selected contractor will be paid. Cost-plus means your community bears most of the financial risk associated with completion of services. Fixed-price means the contractor bears most of the risk. Which type you choose depends on your communityís local policy. q Develop a scope of work. A good scope of work fully explains the bidderís responsibilities, and the standards and specifications against which the bidderís performance will be measured. q Identify any and all bonding, permit, and certification requirements the bidder must have. q Compile documentation that might be useful to bidders (e.g., maps, photographs, etc.) All documentation should be readily available to all potential bidders on an equal basis. q Draft general contract terms and conditions. If your community has procurement policies in place, these general terms and conditions probably exist in template form. If your community does not have terms and conditions in place, contact your Stateís procurement office and request examples. q Advertise your intent to procure services pending receipt of a subgrant. Even though you cannot solicit bids yet, you can advertise your intent. This gives contractors an opportunity to consider whether or not they want to bid, and, if they do, plan their bids. Ensure your advertisement clearly states that you have not yet received a sub-grant. n Establish your communityís local buyout policy by drafting policies, procedures, and ordinances regarding: Property acquisition criteria In Phase I you identified criteria for choosing the properties you will acquire. Identify and explain those criteria in a way that can sustain a challenge from property owners, your State, and FEMA. They are an important foundation of your local buyout policy. PHASE II Application II-27 October 1998 Fair market value (FMV) of property Determine whether to base FMV on pre- or post-disaster ownership. If a property owner purchased flood-damaged property after the disaster declaration, the community cannot offer the post-disaster purchaser any more than the current fair market value of the property, even if the community plans to offer pre-disaster FMV to other owners. Which basis you choose directly impacts the calculation of duplication of benefits (DOB). If the community chooses to offer post-disaster property value, the offers will be lower, but the community will not deduct DOB from the appraised value. Therefore, consider the effect each option will have on final settlements before determining the method that your community will use. In communities that have suffered multiple disasters in a short time span, property owners might have had difficulty completing repairs before suffering further damage. In those cases, consider offering the FMV of the properties at the time that their values would be highest. For example, if the property has been damaged by two events and no repairs have been made, consider offering the FMV prior to the first disaster. But if the property was repaired and improved after the first disaster, consider offering the FMV from after the first disaster but before the second. The two most accepted means o