Pre-Award Consultation Agreement - Checklist

For the FEMA Severe Repetitive Loss (SRL) Pilot Program

Information required to complete the Consultation process can be found in Section V of the SRL Pilot Program Guidance

The purpose of this checklist is to support the Local government in successfully completing the consultation process, but does not replace the Pre-Award Consultation Agreement. As the Local government you are required to make the consultation process as simple and streamlined as possible for the property owner.

Please Note: The Pre-Award Consultation Checklist does take the place of the project subapplication checklist found in section 3.13 of the SRL Pilot Program guidance.

Property Owner(s): _______________________________________
Property Address: _______________________________________

NFIP Policy Number:____________ Repetitive Loss Number: ____________

Remember to inform the property owner that: Participation in the SRL program is voluntary. Neither the State nor the Local Government will use its eminent domain authority to acquire the property for open-space purposes if the property owner chooses not to participate, or if negotiations fail.

Preparation for Consultation:

Consider prioritizing SRL properties for funding. FEMA has provided a tool to assist in this process. The alternative benefit-cost methodology can be used to prioritize priorities based on expected future benefits if a mitigation project is completed. This information can be used in preparing the project Benefit-Cost Analysis (BCA).
Identify appropriate mitigation project activity types that are available to the property owner in accordance with local codes, standards, land-use, and contractual requirements, and consistent with the local mitigation plan.
Prepare a property-specific example of the potential insurance premium rate increase. Quantitative examples of the potential increase in the property owner's insurance premium rate, are provided in sections 5.3.2., Tables A and B of the SRL Program Guidance.
Notify the SRL property owner that a personal representative may accompany or attend the consultation on behalf of a property owner. If a property owner wants the personal representative to make decisions on his or her behalf, the property owner must provide authorization (i.e., notarized letter) to the personal representative. FEMA shall not pay for costs incurred by the property owners for a personal representative or legal counsel.

Consultation with the Property Owner:

Consultation Overview:
- Conduct the consultation in a format agreed upon by and convenient to the property owner (i.e., in person, via telephone). The consultation process may involve an initial meeting and follow-up meetings as necessary to complete the process.
- Advise the property owner that the Local government is required to complete the project subapplication and all technical paperwork.
- Advise the property owner of the insurance implications of refusing a Mitigation Offer by providing quantitative examples of the potential increase in the property owner's insurance premium rate.
- Advise the property owner that if FEMA does not award the grant for the mitigation project the property owner will be notified by the Local government.
- Advise the property owner that the Local government will continue to consult with the property owner on the mitigation offer process if FEMA awards a grant for the mitigation project.
- Explain that the Local government will conclude the Pre-Award Consultation meeting by securing the signature of the property owner on the Pre-Award Consultation Agreement at the conclusion of the consultation process.
- Explain that a final mitigation offer is contingent upon award of grant funds to the Local government.
Local Government Consideration of Project Type:
- Advise the property owner that their preferences will be taken into account for a specific project type, but the final determination is made by the Local government. A Local government may not select a project type that the Local government does not typically implement for legal, cost effectiveness, contractual, land-use, or other policy reasons, see 5.1.1.3 of the SRL Program Guidance.
Consultation Details:
- Explain that this property appears on the FEMA SRL Property List and the Local government intends to include the property in a subapplication.
- Verify National Flood Insurance Program (NFIP) claims information, which may include losses that occurred prior to current ownership of the property in order to explain their inclusion on the SRL list. This information is available from the Regional Office or State NFIP coordinator.
- Advise property owner that FEMA funds cannot duplicate amounts available to the property owner from other sources. The property owner must identify any other sources of funds that may be reasonably available to the property owner for the mitigation activity. The source and amount of duplication is documented on the Pre-Award Consultation Agreement.
- Advise property owner that in order to qualify for mitigation assistance they must maintain an NFIP insurance policy on the SRL structure from the time of application until at least the completion of the project or until property transfer is complete.
- For certain types of mitigation where the structure remains in the Special Flood Hazard Area (SFHA) an NFIP policy must be maintained in perpetuity after the project is completed.
- Obtain a copy of the original deed and any deeds of trust for the property from the property owner.
- Property deed information will be verified through a title search which will identify names and addresses of other persons, financial institutions, and/or government agencies with a recorded interest on the property.
- Advise property owner there are several eligible project types that may be available for mitigating the property, including: acquisition/relocation; elevation; mitigation reconstruction when traditional elevation cannot be implemented; and dry floodproofing (historic properties only). The Local government will discuss these project types with the property owner to determine the property owner's preferred activity type.
- Advise the property owner that the Local government's decision regarding the selected project type will be based on a combination of factors including the SRL property owner's preferences, cost effectiveness, technical feasibility, and the Local government's legal, land-use, and contractual requirements. The Local government shall make the final selection for the project type to be formally offered to the property owner, if SRL program funds are awarded.
- For property acquisition, in accordance with 44 CFR 80.7(c) and program guidance, advise property owners that the Local government will identify the highest estimated purchase offer amount available to the property owner. This estimate includes estimated property value; any anticipated additions (e.g. supplemental housing payments) and deductions (duplicated benefits or costs borne by the property owner); and the methodology used to determine the property value (i.e. current market value, pre-event market value, outstanding loans, original purchase price).
  - Explain the methodology used to determine property value (current market value, pre-event market value, outstanding loans, or original purchase price).
  - Advise the property owner that any second mortgages or home equity loans taken out following the initial consultation meeting will not be included in the purchase offer.
  - Advise the property owner that in order to receive pre-event market value, the property owner will be required to that they are either a National of the United States or qualified alien before the mitigation offer is made.
  - Estimate the cost borne by the property owner.
  - Advise the property owner that all existing buildings must be removed by relocation or demolition within 90 days of settlement.
  - The acquired land will be deed restricted in perpetuity and managed by the Local government or an acceptable third party organization.
  - Advise the property owner that tenants may be eligible for relocation assistance.
- For mitigation activities other than acquisition, the Local government must identify estimated costs for various mitigation activities
- Advise the property owner the final mitigation offer may be adjusted to meet all program regulatory and guidance requirements and to ensure no duplication of benefits (see number six above), as determined by the Local government, once grant funds for the SRL project application are approved by FEMA
- Advise the property owner of the estimated timeframe for implementing various project types and whether the property must be vacated during project implementation.
- Advise the property owner that if the property owner declines the final offer of mitigation made under the SRL program, their property will be subject to an increase in the flood insurance premium rate.
- Inform the property owner that they may appeal insurance premium rate increase that results from declining an SRL program mitigation offer based on criteria listed at 44 CFR Part 79.7 (d) and in program guidance.
- Advise the property owner that additional insurance premium rate increases will occur following each claim payment of $1,500 or more until actuarial rates are reached.
- Advise the property owner that any mitigation offer made under the SRL program remains open and available to the property owner as long as the SRL program exists and funds are available.
- All information related to the property and/or property owner that is collected during this consultation process shall be protected consistent with the Federal Privacy Act and similar State and local laws and ordinances.
- Any SRL mitigation grant funds received directly or indirectly are generally not taxable for Federal income tax purposes. The property owner may want to consult with a tax advisor with respect to any potential State, local or other tax implications.

Last Modified: Wednesday, 13-Feb-2008 13:14:16 EST