HMGP: Managing a Buyout STEPHANIE W. GRIFFIN, P.E., CFM MIKE WAYTS, P.E., CFM CLOVIA ENGLISH, CITY OF LANCASTER September 23, 2011
Flooding history Ten Mile Creek area developed in 100 year flood plain City of Lancaster incorporated Ten Mile Creek area
Public relations Residents looked to City for help Lancaster sympathized with residents Lancaster lacked funding Storm Water Master Plan #1 project City hired FNI as floodplain administrator Flood damage documentation Substantial damage calculations Public involvement Rebuilding procedures High water mark
Property owner options
Obtaining HMGP Magic number = 3 Lancaster received funding from Hurricane Ike City asked FNI to manage the buyout
HMGP basics Federal grant Federal Emergency Management Agency (FEMA) Locally managed by the Texas Governor s Division of Emergency Management (TDEM) 75% federal match / 25% City match Benefit cost ratio > 1 Voluntary program Permanent open space
Benefit cost ratio (BCR) Used as grant qualification measure BCR influenced by first floor elevation, depth of water, square footage of structure, market value, etc. Overall project must have a BCR > 1 Low BCR properties depend on high BCR properties to participate BCR is fluid until all costs have been finalized
Public involvement Grant requires one public meeting City and residents wanted more (not covered by grant) Dedicated staff to respond to residents questions Monthly newsletters Web site PR hurdle = property being purchased at current market value
Spring 2010 FEMA approved properties 10 owners participated 2 owners did not participate Requested alternate properties be added to project Held public meeting Approximately 25 people attended Benefit cost ratio affects owner s ability to sell (dependent on neighbors with high BCRs to sell) Potential to include alternate properties Schedule Obtained required paperwork from participants
Appraisals and offers May Obtained appraisals for 10 FEMA approved houses Prepared compensation packages June Met one on one with owners to present compensation packages Provided time to consider offer
Closings August Requested funds for closing September Received funding from TDEM Paid relocation assistance to renters Issues with top two BCR properties Began closing in order of highest to lowest BCR to maintain BCR > 1 October Completed closings on 9 of 10 properties
Closings December Eviction process completed Remaining property closed Total of 10 properties purchased High water marks
Demolition and disposal January 2011 Began City s procedure to secure demolition contractor Completed asbestos surveys 9 of 10 properties had asbestos February Removed asbestos in 9 houses March Demolished 10 houses within 3 weeks
Alternate properties FEMA approved City s request to include 8 alternate properties to the project No additional funding granted BCR must remain above 1 High water mark
Alternate properties Obtained appraisals for first two properties Prepared compensation packages Met with each owner to present compensation package Provided review time and opportunity to appeal When an owner declined offer and opted out of program, City moved on to next owner on the list and repeated this process
Alternate properties 5 accepted the City s offer 2 with houses 3 with empty lots adjacent to properties purchased with this grant 3 declined City s offer Was not that interested in selling Offer did not pay off the mortgage Did not follow appeals process and missed the deadline
Closing on alternate properties August 2011 Closed on two properties with houses September Completed asbestos survey on two houses Closing on three vacant lots October Demolition and disposal activities TDEM audit
Ten Mile Creek
Lessons learned Property owners Updates on project Specific questions on properties Not the typical negotiation for selling a property Difficulty understanding the BCR and its impact on ability to sell Language barrier Issues with getting renters to move in a timely fashion Financial issues Upside down when selling Avoiding foreclosure Required to pay liens
Lessons learned Current vs. pre flood value = PR nightmare Alternate properties BCR is fluid until all costs are complete Project management averaged 35 man hours per property Before and happily ever after