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Laguna Niguel, Niguel Summit/Crown Cove Acquisitions
Appeal Brief
Appeal Letter
Appeal Analysis
Appeal Brief
| Applicant | California Governor's Office of Emergency Services |
| Appeal Type | 2nd |
| Project Number | 101 |
| Date Signed | 2008-05-19T00:00:00 |
1st Appeal
• Issue
o Originally approved HMGP funding was for purchase of 30 properties to mitigate landslide risk in the location of a steep slope. However, it was found that homeowners were compensated by legal settlements with the developer of the project site, where the slope had been stabilized. The California Office of Emergency Services (OES) stated that the project no longer met a "public purpose" nor met HMGP priorities, because of the non-public settlement associated with compensation and the slope stabilization. When FEMA Region IX de-obligated the funds, the City of Laguna Niguel appealed. Region IX denied the appeal.
• Reason for Denial
o Region IX based the 1st appeal on the determination that the project no longer met the HMGP priorities and eligibility criteria for the previously funded project.
• Reference(s)
o 44 CFR 206.434 Eligibility; 44 CFR 206.440 Appeals
2nd Appeal
• Issue
o The subgrantee claimed that the issues raised by FEMA had been addressed and approved by OES, that there was a valid public purpose for the project, the scope of work (SOW) had been unchanged since the time of the approved application, all necessary environmental exceptions were obtained, land use restrictions and ordinances had been established, and that an eligible private non-profit owner had been established.
• FEMA Findings
o FEMA HQ denied the 2nd appeal, upholding Region IX’s decision to deny the 1st appeal.
o The rationale for the 2nd appeal denial was that the project did not comply with applicable statutory and regulatory requirements. The project violated the provision in the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) regarding the duplication of benefits (DOB), because a private third party agreed in settlements with the property owners to repurchase the properties included in the application SOW. Therefore, the HMGP assistance would have duplicated funding from another source for the same purpose, that of acquiring the properties.
o Reference(s): 44 CFR 206.440 Appeals; 44 CFR 206.434 Eligibility; Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), Section 312, Duplication of Benefits
• Issue
o Originally approved HMGP funding was for purchase of 30 properties to mitigate landslide risk in the location of a steep slope. However, it was found that homeowners were compensated by legal settlements with the developer of the project site, where the slope had been stabilized. The California Office of Emergency Services (OES) stated that the project no longer met a "public purpose" nor met HMGP priorities, because of the non-public settlement associated with compensation and the slope stabilization. When FEMA Region IX de-obligated the funds, the City of Laguna Niguel appealed. Region IX denied the appeal.
• Reason for Denial
o Region IX based the 1st appeal on the determination that the project no longer met the HMGP priorities and eligibility criteria for the previously funded project.
• Reference(s)
o 44 CFR 206.434 Eligibility; 44 CFR 206.440 Appeals
2nd Appeal
• Issue
o The subgrantee claimed that the issues raised by FEMA had been addressed and approved by OES, that there was a valid public purpose for the project, the scope of work (SOW) had been unchanged since the time of the approved application, all necessary environmental exceptions were obtained, land use restrictions and ordinances had been established, and that an eligible private non-profit owner had been established.
• FEMA Findings
o FEMA HQ denied the 2nd appeal, upholding Region IX’s decision to deny the 1st appeal.
o The rationale for the 2nd appeal denial was that the project did not comply with applicable statutory and regulatory requirements. The project violated the provision in the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) regarding the duplication of benefits (DOB), because a private third party agreed in settlements with the property owners to repurchase the properties included in the application SOW. Therefore, the HMGP assistance would have duplicated funding from another source for the same purpose, that of acquiring the properties.
o Reference(s): 44 CFR 206.440 Appeals; 44 CFR 206.434 Eligibility; Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), Section 312, Duplication of Benefits
Appeal Letter
MAY 19 2008
FEMA
500 C Street, SW
Washington, DC 20472
500 C Street, SW
Washington, DC 20472
Frank McCarton
Governor's Authorized Representative
Governor's Office of Emergency Services
3650 Schriever Avenue
Mather, California 95655
Governor's Authorized Representative
Governor's Office of Emergency Services
3650 Schriever Avenue
Mather, California 95655
Dear Mr. McCarton:
I am replying to the July 2003 submittal of information for the second appeal by the City of Laguna Niguel. As an initial action, on March 7, 2000, the California Governor's Office of Emergency Services (OES) requested that the Department of Homeland Security's Federal Emergency Management Agency (FEMA) de-obligate approved project funding for the Hazard Mitigation Grant Program (HMGP) Project 1203-1001-101, City of Laguna Niguel, Niguel Summit/Crown Cove Land Acquisition project. This funding was a subgrant of approximately $5.5 million to be used as the Federal share toward purchase of 30 properties in the City of Laguna Niguel (the subgrantee) to mitigate landslide risk. At that time, OES stated the project no longer met a "public purpose" because homeowners bad been compensated by legal settlements with the developer, and the slope had been stabilized.
As requested, the FEMA Region IX Office de-obligated the funds on March 14,2000. In a letter dated May 12, 2000, the City of Laguna Niguel appealed the de-obligation action to FEMA Region IX. On August 21,2000, FEMA denied this first-level appeal, based on the determination that the project no longer met the priorities and eligibility criteria for Project 1203-1001-101. On August 29, 2000, OES informed the city of the denial. OES also informed the city it could file a second and final appeal within 60 days, in accordance with appeal procedures cited in the Code of Federal Regulations (CFR) Title 44 -Emergency Management and Assistance, specifically 44 CFR 206.440(c). On February 12, 2001, the city sent a letter directly to FEMA Headquarters, requesting a second and final administrative appeal. Subsequently, additional coordination among the city, OES, and FEMA Region IX resulted in a request dated November 13, 2002, to re-obligate funds for the project. The request was denied by FEMA Region IX. As a result, the City of Laguna Niguel submitted, through OES, an additional "second appeal" request to FEMA Headquarters on May 29, 2003. The supplementary supporting material was sent on July 18, 2003.
After extensive review, I am denying the appeal, and the funds shall not be re-obligated for this project. The appeal is denied because the project does not comply with applicable statutory and regulatory requirements. Specifically, the project violates a provision in the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) regarding the duplication of benefits.
The Laguna Niguel landslide occurred on March 18, 1998. Lawsuits against the original property developer, a third party to the subgrant relationship between the city and the State, were settled throughout 1998. According to documentation submitted as part of the appeal, the City of Laguna Niguel stated the developer had reached, or was likely to reach, settlements with the home and condominium owners, and the properties would be part of a larger landslide mitigation project. Ultimately, all properties included in the project application scope of work were the subjects of settlements in which the developer agreed to repurchase the properties from the home and condominium owners.
In this case, the properties included in the application were already subject to acquisition by a third party pursuant to legal settlements, so the provision of Stafford Act assistance to the property owners would duplicate amounts available for the same purpose from another source. In this situation, funds were requested for an activity (acquiring property from homeowners) that had already been funded through an alternative mechanism - the agreement by a third party to acquire the properties. FEMA has no discretion to disregard the statutory prohibition against duplicating benefits. Therefore, HMGP funds cannot be authorized to fund compensation available from other sources or fulfill obligations arising from independent legal responsibilities.
FEMA has determined the project, as submitted, remains ineligible for funding. The primary basis for this determination is Section 312 of the Stafford Act (42 USC 5155), which prohibits the duplication of benefits reasonably available or received. Specifically, any program providing financial assistance to persons or other entities shall ensure those entities will not receive such assistance, if they receive or have assistance available to them from any other program, insurance, or any other source. In this particular case, the third party, which agreed to repurchase the properties from homeowners as a result of litigation, is considered to be such a source.
Accordingly, the second appeal is denied. If OES or you have any questions regarding this matter, please contact Sally Ziolkowski, Director, Mitigation Division of FEMA Region IX, by telephone at (510) 627-7103.
Sincerely,
David I. Maurstad
Assistant Administrator
Mitigation Directorate
Assistant Administrator
Mitigation Directorate
DM:cr
cc: Rebecca Wagoner, CA State Hazard Mitigation Officer, OES
Nancy Ward, Regional Administrator, FEMA Region IX
Sally Ziolkowski, Director, Mitigation Division, FEMA Region IX
Nancy Ward, Regional Administrator, FEMA Region IX
Sally Ziolkowski, Director, Mitigation Division, FEMA Region IX
Appeal Analysis
California OES requested FEMA Region IX in March 2000 to de-obligate $5.5 million on the basis that a HMGP acquistion project was no longer eligible, because it longer had a public purpose and nor met HMGP priorities. Region IX concurred with OES's request to de-obligate. When the subapplicant appealed and OES recommended denial, Region IX denied on August 21, 2000, based on the determination that the project no longer met the priorities and eligibility criteria for Project 1203-1001-101. By letter of February 12, 2001, the city requested a second and final administrative appeal.
Subsequently, additional coordination between the city, OES, and FEMA Region IX resulted in a request dated November 13, 2002, to re-obligate funds for the project. The request was denied by FEMA Region IX. The City of Laguna Niguel then submitted, through OES, an additional "second appeal" request to FEMA Headquarters on May 29, 2003. The supplementary supporting material was sent on July 18, 2003.
The second appeal was denied by letter of May 19, 2008, from FEMA HQ, stating that the project did not comply with applicable statutory and regulatory requirements, violating a provision in the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) regarding the duplication of benefits.
The Laguna Niguel landslide occurred on March 18, 1998. Lawsuits against the original property developer, a third party to the subgrant relationship between the city and the State, were settled throughout 1998. According to documentation submitted as part of the appeal, the City of Laguna Niguel stated the developer had reached, or was likely to reach, settlements with the home and condominium owners, and the properties would be part of a larger landslide mitigation project. Ultimately, all properties included in the project application scope of work were the subjects of settlements in which the developer agreed to repurchase the properties from the home and condominium owners.
In this case, the properties included in the application were already subject to acquisition by a third party pursuant to legal settlements, so the provision of Stafford Act assistance to the property owners would duplicate amounts available for the same purpose from another source. Funds were requested for an activity (acquiring property from homeowners) that had already been funded through an alternative mechanism - the agreement by a third party to acquire the properties.