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 of determining FMV are by independent
appraisal or by tax assessment. Since tax assessments are not completed
every year, they usually are lower than the true value. Appraisals are
more accurate and factually based. A licensed or certified appraisal
reviewer should review all appraisals to ensure they comply with the
Uniform Standards for Appraisals.
Appraisals
Professional appraisers can estimate the FMV of a damaged property by
inspecting the property, viewing similar properties in similar neighborhoods,
checking building permit data, and reviewing receipts for recent
improvements. Some property owners might disagree with the first
appraisal and want a second opinion or opportunity to challenge the
appraisal. If your community chooses to accept second appraisals,
establish a policy and timeframe for their conduct. Most communities
Application PHASE II
II-28 October 1998
require property owners to pay for a second appraisal and second
appraisals to meet the same guidelines as the first. Some communities
require property owners to choose from a list of pre-selected appraisers
in the area, or have identified qualifications a selected appraiser must
meet, such as being licensed or certified by the State.
Appeals process
Determine procedures for resolving conflicts that might arise between
property owners and the community. Design an appeals process
whereby property owners can challenge the FMVs of their properties,
DOB or other deductions, and the amounts of reimbursements for
repairs. Your procedures should addresses how the appeals must be
submitted, who will receive them, who will evaluate them, and what
criteria will be used to evaluate them.
Property taxes
Determine when the community will assume responsibility for property
taxes. Some communities require the property owner to pay property
taxes through the closing date on the sale of the property. Other communities
only require property owners to pay through the date of the
disaster event or declaration. Reimburse property owners on a prorated
basis for taxes already paid. When determining your policy, consider
how much your community can afford to lose from that yearís taxes.
Amount of acreage per property to be acquired
Determine the average amount of money your project can afford to
spend for each property in order to purchase a residence or business at
a FMV and still acquire the maximum number of eligible properties.
Consider the acreage that amount of money is likely to buy. Also consider
whether eligible properties can be purchased as contiguous lots.
Avoid overspending on land that is already being used in compliance
with open-space regulations. Consider acquiring a conservation easement
instead of a deed to the property.
Relocation
Describe your criteria for relocating structures (e.g., the types and
condition of structures). Also describe any incentive you might offer to
owners who relocate within the community.
PHASE II Application
II-29 October 1998
GOOD IDEA BOX
Demolition
Define requirements for demolition contractors regarding the removal
and disposal of structures and hazardous materials, such as asbestos,
lead paint, and utility and septic tanks.
Salvaging (what may and may not be removed from property)
Salvaging is another somewhat controversial issue because communities
and property owners often disagree on what affects the FMV of the
property, and thus is included in the final sale. Therefore, develop a
salvage policy that addresses removable and potentially salvageable
fixtures, such as doors, windows, lighting units, and trimming. Communities
often use the conduct of the appraisal as a benchmark for the
removal of any fixture from a property. Some do not allow the removal
of any fixture in place during the appraisal. Others allow the removal of
fixtures, but deduct from the offer the appraised value of each fixture
removed. Before determining your policy, consider how the property
will be used after it is acquired. If it simply will be destroyed, consider
that property owners might want salvaging rights. Even if the community
plans to resell any of the structures, it might smooth negotiations if
property owners can salvage before the appraisal so that no items of
value that they plan to remove would be in question. Also consider
possible health concerns related to salvaged materials, and who will be
responsible for removal of debris.
Good Idea
If the property owner who voluntarily sold his or her property
does not want to relocate a suitable structure, offer
it to a charity (e.g., Habitat for Humanity or a local group
fighting domestic violence that can use it for a shelter) or
use it as a local government building (e.g., a library or visitors
center). Negotiate relocation responsibilities and costs
on a case-by-case basis. Remember, the structure must be
relocated oiutside the hazard area.
Application PHASE II
II-30 October 1998
Date the property must be vacated
Residents should vacate the property on or before the date of closing.
Be as precise as possible when stating when residents must vacate. If
your community intends to give property owners some degree of flexibility,
establish specific conditions. Remember, as a rule, the property
must be cleared within 90 days of closing, so your policy must be
contained within that timeframe.
Mobile homes
Determine whether your community will acquire mobile homes, and if
so, what restrictions will exist. In making your decision, consider how
mobile homes in your area are generally taxed, and whether most
mobile-home owners also own their homepad. Also determine whether
mobile homes will be considered an acceptable replacement housing
option.
Decent, safe, and sanitary
Determine what major systems or conditions will satisfy the
communityís determination of decent, safe, and sanitary replacement
housing.
n Draft documents requiring the property ownerís
signature.
These documents are necessary for implementation of a property acquisition
project. Your State probably has templates or examples of many of
these. Ask your SHMO. If no templates are available, samples of each
of the following are included among the reproducible forms.
q Offer letter (Form II-8). The offer letter contains specific instructions
to the property owner for participation in the project, and two
enclosures. The enclosures are a statement of determination of fair
compensation, which states the FMV of the property less any DOB;
and an Offer to Sell Real Property, which is the legal offer from the
property owner to the community to sell the property for an agreedon
price.
Form II-8
PHASE II Application
II-31 October 1998
Form II-9
Form II-10
q Statement of Voluntary Participation (Form II-9). This statement
documents the property ownerís understanding of the voluntary
nature of property acquisition.
q Affidavit (receipt of structural repair assistance) (Form II-10). The
affidavit captures DOB-related data.
q Exhibit A (Restrictive Covenants) (Form II-11). This exhibit is the
restrictive convenants that must be attached to the deed to every
property acquired.
q Exhibit B (Restrictive Covenants) (Form II-12). This exhibit is the
restrictive convenants that must be attached to every easement
acquired.
q Tenant Relocation Assistance Application and Worksheet
(Form II-13). This worksheet helps you determine a tenantís eligibility
for assistance.
q Hazardous Materials Property Survey/Individual Property Survey
Form (Form II-14). Hazardous materials liability is a concern in any
real-estate transaction. This survey provides assurance to the community
and protection to both the community and the property
owner that any hazardous materials issues have been addressed.
n Periodically follow up with State until a decision
regarding funding is made.
If your communityís acquisition project has been approved and funded,
continue to Phase III.
If your project has not been approved and funded, consider other
possible sources of assistance and/or appeal the decision.
Form II-13
Form II-12
Form II-14
Form II-11