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The Conservation Fund, Cade Ranch Vacant Land Acquisition

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

ApplicantTexas Division of Emergency Management
Appeal Type2nd
Project Number221
Date Signed2011-08-19T00:00:00
1st Appeal
• Issue
o The Conservation Fund applied for HMGP funding for project FEMA-1791-DR-TX-221, to acquire approximately 400 unimproved acres in the Coastal Barrier Resources System (CBRS) and a small adjacent portion (i.e., approximately 40 acres) in Otherwise Protected Areas (OPA). The 1st appeal included a proposed change in the scope of work (SOW) of the project to include the acquisition of an adjacent parcel of land (partly outside of the CBRS), but that change was not considered by the Region. FEMA Region VI denied funding and denied a 1st level appeal.
• Reason for Denial
o The project did not result in a reduction in property damages consistent with Section 404 of the Stafford Act and 44 CFR §206.434. Additionally, it did not satisfy 44 CFR Part 80 requirements relevant to the acquisition of vacant land (no adjacency to eligible property with existing structures); it was not appropriate to include it under the HMGP Five Percent Initiative; it was located in a CBRS zone where HMGP funding is prohibited; and demonstration of cost effectiveness was inadequate.
• Reference(s)
o Stafford Act; 44 CFR 206.434 HMGP Eligibility;  44 CFR Part 80.11;  44 CFR 206.440 Appeals
2nd Appeal
• Issue
o The 2nd appeal contended that the proposed acquisition project, submitted as a 5% Initiative project, does not have to meet FEMA Benefit-Cost Analysis (BCA) requirements, is consistent with a 44 CFR § 206.345(b)(5) exception that allows funding in a CBRS, and satisfies the application and SOW change requirements found in 44 CFR § 13.30(d) and § 206.436(d).
• FEMA Findings
o The 2nd appeal decision upheld the 1st appeal denial, with the determination that the Region's decision on the 1st appeal was consistent with the program regulations and policy.
o Rationale:  The project did not satisfy 44 CFR Part 80 requirements relevant to the acquisition of vacant land, and in addition was predominantly within a CBRS zone (small portion in Otherwise Protected Areas (OPAs)), where HMGP funds are prohibited from being used for open space acquisitions; Discretion regarding cost effectiveness may be allowable on a 5% Initiative project when a subapplication has been denied due to difficulty in measuring its cost-effectiveness against traditional program cost-effectiveness criteria, but the project did not incorporate into the total project cost those costs associated with the adjacent vacant land purchase; and grantees or subgrantees must obtain approval, as per 44 CFR § 13.30(d), when requesting SOW changes, but the SOW had not been considered by Region VI.
o Reference(s):  44 CFR 206.434 HMGP Eligibility;  44 CFR Part 80.11; 44 CFR 13.30 HMGP application procedures; 44 CFR 206.440 Appeals; PI-A5 Eligibility of the Purchase of Vacant Land

Appeal Letter

AUG 19 2011
 
W. Nim Kidd
Assistant Director
Texas Department of Public Safety
Texas Division of Emergency Management
5805 North Lamar Boulevard
Box 4087
Austin, Texas 78773-0001
 
RE: The Conservation Fund Cade Ranch Vacant Land Acquisition
FEMA-1791-DR-TX-221
 
Dear Mr. Kidd:
 
Thank you for your letter to the Department of Homeland Security, Federal Emergency Management Agency (FEMA), regarding The Conservation Fund Cade Ranch Vacant Land Acquisition Project in Galveston County, Texas. My office received the request to reconsider the denial for Hazard Mitigation Grant Program (HMGP) project FEMA-1791-DR-TX-221, in accordance with 44 Code of Federal Regulations (CFR) 206.440.
 
Background:
In June 2010, The Conservation Fund applied for HMGP funding for project FEMA-1791-DR-TX-221, to acquire approximately 400 unimproved acres in the Coastal Barrier Resources System (CBRS) and a small portion (i.e., approximately 40 acres) in Otherwise Protected Areas (OPA). On July 22, 2010, FEMA Region VI completed the review of the application and denied funding. This was due to the 44 CFR Subpart J requirements that prohibit HMGP funding for projects located in a CBRS zone, other 44 CFR Part 80 requirements relevant to the acquisition of vacant land, and the absence of an adequate demonstration of cost effectiveness. In a letter dated September 21, 2010, the Texas Division of Emergency Management (TDEM) appealed the Region's denial on behalf of The Conservation Fund. This first appeal included a proposed chanage in the scope of work of the project to include the acquisition of a parcel of land that formerly contained a Fishing Pier with a restaurant and three small apartments. However, this change was not considered by the Region. On October 27, 2010, the appeal was denied by FEMA Region VI. The Conservation Fund appealed a second time to TDEM on November !!, 2010, asserting that FEMA's reasons for denial were in error. On April 19, 2011, Region VI transmitted the appeal to FEMA Headquarters for review. On April 28, 2011, The Conservation Fund submitted a technical correction letter to FEMA Headquarters to explain that the Dirty Pelican parcel is contiguous to the overall project area, that a portion of the land to be acquired lies outside the CBRA zone, and that the Conservation Fund is in the process of finalizing funding for other large portions of the Cade Ranch property that are not included in this project.
 
Analvsis:
The project was denied by Region VI because it does not result in a reduction in property damages in a manner consistent with Section 404 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) and 44 CFR §206.434. Additionally, it does not satisfy 44 CFR Part 80 requirements relevant to the acquisition of vacant land, it is not appropriate to include it under the HMGP' s Five Percent Initiative policy project, and it is located in a CBRS zone. The Conservation Fund's second appeal requests reconsideration of the Region's denial based on alternate interpretations to these denial points. The second appeal contends that the proposed property acquisition project, submitted as a Five Percent Initiative project, does not have to meet FEMA Benefit-Cost Analysis (BCA) requirements, is consistent with a 44 CFR § 206.345(b)(5) exception that allows funding in a Coastal Barrier Resources Act (CBRA) Zone, and satisfies the application and scope of work change requirements found in 44 CFR § 13.30(d) and § 206.436(d).
 
Eligibility of Open Space Acquisitions within the CBRS: The project predominantly lies within a CBRS zone. Congress enacted the CBRA, P.L. 97-348, in 1982 in order to minimize the loss of human life, wasteful Federal expenditures, and the damages to natural resources associated with coastal barriers. The CBRA established the CBRS and restricts federal expenditures and financial assistance within the CBRS to accomplish the purposes of the CBRA. FEMA coordination with the United States Fish and Wildlife Service secured their 2010 interpretation that open space acquisition activities funded under FEMA 's Pre-Disaster Mitigation, Flood Mitigation Assistance, Repetitive Flood Claims and Severe Repetitive Loss Programs are consistent with Section 6 of CBRA, 16 USC 3505(a)(6)(A). While acquisitions under HMGP could in theory meet the exemption requirements under CBRA, the FEMA regulations in 44 CFR Section 206.344 are narrower than the CBRA and have the effect of limiting HMGP funds from being used for open space acquisitions in CBRS units.
 
HMA Cost Effectiveness Requirement: TDEM submitted the project for consideration under the HMGP Five Percent Intiative policy since the BCA modeling cound not produce a cost-effective result. Discretion may be allowable on a Five Percent Intiative project when a subapplication has been previously denied due to difficulty in measuring its cost-effectiveness against traditional program cost-effectiveness criteria. The Five Percent Initiative is essentially a cost effectiveness policy designed to address limitations regarding best available data and acceptable BCA methods used by FEMA to satisfy the HMGP's statutory cost-effectiveness requirement. All other HMGP statutes and regulations apply to projects funded under this initiative. Open space acquisitions that include adjacent vacant land must still demonstrate their cost effectiveness. These projects must incorporate the project costs associated with the vacant land purchase(s) into the total project cost assessed for cost effectiveness and cannot account for any benefits from the open space acquistion of vacant land. At this time, there are no identifiable eligible HMA benefits to purchase vacant land, however, if the eligible benefits from the adjacent developed land are more than the total project costs including the vacant land, then the project may be considered cost effective. Vacant land can be reviewed using FEMA-approved BCA methodology, however it does not produce significant benefits. It is possible that this project produces environmental benefits that cannot be captured using existing BCA modeling. However, the FEMA regulations in 44 CFR Subpart J Section 206.344 render this project ineligible, leaving this specific issue irrelevant to the decision.
 
Eligibility of Scope of Work Revisions:
The Conservation Fund's second appeal contends that they revised their proposed scope of work on September 2010 by adding the acquisition of an adjacent improved parcel that contained the Dirty Pelican Fishing Pier and associated structures that had all been destroyed during Hurricane Ike. The requirements of 44 CFR § 13 .30(d) direct HMGP application procedures and state that grantees or subgrantees must obtain the approval of the awarding agency when requesting scope of work changes. Per the Region's October 27, 2010 denial, this change in the scope of work was not considered by the Region and is therefore not part of this project.

In addition, the following issue was raised in the technical correction letter to FEMA Headquarters and was investigated to ensure a fully informed decision.
 
Eligibility of Open Space Acquisitions in OPAs: In 1990, the CBRA was amended by the Coastal Barriers Improvement Act (CBIA) which included the establishment of national, state and local areas held for conservation or recreation called OPAs, which include coastal barriers and are distinct from other CBRS units. Federal assistance and expenditures are not restricted these areas. Approximately 316 acres of the proposed project lie within the
CBRS zone, approximately 40 acres (i.e., 10 percent of the property) of Tract 1 lie within an OPA, and approximately one acre lies ouside of any protected area, all of which are vacant land. There is no statutory, regulatory or policy requirement that would have the effect of limiting the authorized HMGP funds for Hurricane Ike, DR-1791, for open space acquisitions in OPAs. However, the proposed project has not demontrated that acquiring this land would be cost-effective, as required under Section 404 of the Stafford Act.
 
Conclusion:
I have throughly reviewed all documentation that the State submitted with the appeal and have determined that the Region's decision on the first appeal is consistent with the program regulations and policy. Therefore, this office is denying the second appeal of project FEMA-1791-DR-TX-221/ The Conservation Fund - Cade Ranch Vacant Land Acquisition. No further appeals are available and this decision is final.

Please inform the applicant of this decision. My determination if FEMA's final decisision on this matter pursuant to 44 CFR 206.440, Appeals.

Sincerely,
 
Sandra K. Knight, PhD, PE
Deputy Federal Insurance and Mitigation Administrator, Mitigation
 
cc: Tony Russell, Regional Administrator, FEMA Region VI

 

Appeal Analysis

The project was denied by Region VI because it does not result in a reduction in property damages in a manner consistent with Section 404 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) and 44 CFR §206.434. Additionally, it does not satisfy 44 CFR Part 80 requirements relevant to the acquisition of vacant land, it is not appropriate to include it under the HMGP' s Five Percent Initiative policy project, and it is located in a CBRS zone. The Conservation Fund's second appeal requests reconsideration of the Region's denial based on alternate interpretations to these denial points. The second appeal contends that the proposed property acquisition project, submitted as a Five Percent Initiative project, does not have to meet FEMA Benefit-Cost Analysis (BCA) requirements, is consistent with a 44 CFR § 206.345(b)(5) exception that allows funding in a Coastal Barrier Resources Act (CBRA) Zone, and satisfies the application and scope of work change requirements found in 44 CFR § 13.30(d) and § 206.436(d).
 
Eligibility of Open Space Acquisitions within the CBRS: The project predominantly lies within a CBRS zone. The CBRA established the CBRS and restricts federal expenditures and financial assistance within the CBRS to accomplish the purposes of the CBRA. While acquisitions under HMGP could in theory meet the exemption requirements under CBRA, the FEMA regulations in 44 CFR Section 206.344 are narrower than the CBRA and have the effect of limiting HMGP funds from being used for open space acquisitions in CBRS units.
 
HMA Cost Effectiveness Requirement: TDEM submitted the project for consideration under the HMGP Five Percent Intiative policy since the BCA modeling cound not produce a cost-effective result.  The Five Percent Initiative is essentially a cost effectiveness policy designed to address limitations regarding best available data and acceptable BCA methods used by FEMA to satisfy the HMGP's statutory cost-effectiveness requirement. All other HMGP statutes and regulations apply to projects funded under this initiative. At this time, there are no identifiable eligible HMA benefits to purchase vacant land, however, if the eligible benefits from the adjacent developed land are more than the total project costs including the vacant land, then the project may be considered cost effective. Vacant land can be reviewed using FEMA-approved BCA methodology, however it does not produce significant benefits. It is possible that this project produces environmental benefits that cannot be captured using existing BCA modeling. However, the FEMA regulations in 44 CFR Subpart J Section 206.344 render this project ineligible, leaving this specific issue irrelevant to the decision.
 
Eligibility of Scope of Work Revisions:
The Conservation Fund's second appeal contends that they revised their proposed scope of work on September 2010 by adding the acquisition of an adjacent improved parcel that contained the Dirty Pelican Fishing Pier and associated structures that had all been destroyed during Hurricane Ike. The requirements of 44 CFR § 13 .30(d) direct HMGP application procedures and state that grantees or subgrantees must obtain the approval of the awarding agency when requesting scope of work changes. Per the Region's October 27, 2010 denial, this change in the scope of work was not considered by the Region and is therefore not part of this project.
 
In addition, the following issue was raised in the technical correction letter to FEMA Headquarters and was investigated to ensure a fully informed decision. Eligibility of Open Space Acquisitions in OPAs: In 1990, the CBRA was amended by the Coastal Barriers Improvement Act (CBIA) which included the establishment of national, state and local areas held for conservation or recreation called OPAs, which include coastal barriers and are distinct from other CBRS units. Federal assistance and expenditures are not restricted in these areas. Approximately 316 acres of the proposed project lie within the CBRS zone, approximately 40 acres (i.e., 10 percent of the property) of Tract 1 lie within an OPA, and approximately one acre lies ouside of any protected area, all of which are vacant land. There is no statutory, regulatory or policy requirement that would have the effect of limiting the authorized HMGP funds for Hurricane Ike, DR-1791, for open space acquisitions in OPAs. However, the proposed project has not demontrated that acquiring this land would be cost-effective, as required under Section 404 of the Stafford Act.

 

Last updated August 19, 2014