o An approved acquisition project consisted of the acquisition and demolition of an operating commercial building in Lyon County, Kansas. At the request of the subgrantee, FEMA provided two advance payments constituting approximately 75% of the Federal share to pay off the outstanding mortgage, to clear the title for sale and to allow the business to obtain construction financing for the relocation to a new structure. These funds were dispersed to the property owner and approximately one year later the Kansas Division of Emergency Management (KDEM) requested a one year extension. It was noted that the acquisition had been completed approximately 10 months earlier, in order for the property owner to pursue a replacement facility and a waiver of the 90-day demolition rule was also requested. While funds had been dispersed to the property owner, the County had not obtained title to the property. FEMA Region VII terminated the award because of noncompliance, and Lyon County appealed.
• Reason for Denial
o Region VII based the denial of the 1st appeal on the fact that the project did not comply with program statutes, specifically the requirement that subapplicants take title on acquired properties within 14 days and that structures be demolished within 90 days.
o 44 CFR 206.434 Eligibility; 44 CFR 206.440 Appeals, 44 CFR 206.436(d) Application Procedures; The Stafford Act, Section 404; 44 CFR Parts 13.31 Real Property, 13.37 Subgrants, 13.40 Monitoring and 13.41 Financial Reporting; 80.1 Purpose and Scope, 80.19 Land Use and Oversight, 206.434 Eligibility, and 206.438 Project Management
o KDEM filed a second appeal on behalf of Lyon County, stating that the project was delayed due to the need for continued operation at the commercial facility and that the technical errors in grant implementation should not result in the termination of the project.
• FEMA Findings
o FEMA HQ denied the 2nd appeal, supporting Region VII’s decision to deny the 1st appeal.
o Rationale: Subapplicants are required to settle (take title) on acquired properties within 14 days of receipt of funds from the Grantee, and demolish acquired property within 90 days of settlement. The subapplicant had not settled or demolished the structure as of approximately ten months after funds were provided.
Reference(s): 44 CFR 206.440 Appeals; 44 CFR 206.434 Eligibility; 44 CFR 206.436(d) Application Procedures; HMGP Desk Reference; 44 CFR 13.43 Enforcement