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HomeMy WebLinkAboutRes.2784.09-23-2013BILL NO. 13-141 RESOLUTION NO. A RESOLUTION ADOPTING A VOLUNTARY BUYOUT POLICY FOR THE 2013 FLOOD BUYOUT APPLICATION, FOR THE CITY OF CAPE GIRARDEAU, MISSOURI, AND AUTHORIZING THE CITY MANAGER TO IMPLEMENT SAID POLICY AND PROCEDURES BE IT RESOLVED BY THE COUNCIL OF THE CITY OF CAPE GIRARDEAU, MISSOURI, AS FOLLOWS: ARTICLE 1. The City Council of the City of Cape Girardeau, Missouri, hereby adopts the Voluntary Buyout Policy for the 2013 Flood Buyout Application, and authorizes the City Manager to implement said Policy and Procedures. A copy of said Policy and Procedures is attached to this Resolution and made a part hereof. PASSED AND ADOPTED THIS 'DAY OF 2013. ATTEST: arry E. Rediger, Mayor Gayl City of Cape Girardeau Voluntary Buyout Policy The City of Cape Girardeau Council hereby adopts the City of Cape Girardeau Voluntary Flood Buyout Policy as follows: Priorities of Buyout Program 1. Residential properties on the original application. 2. Residential properties added to the buyout will be given consideration based on: 1. Frequency of inundation; 2. Proximity to the creek, river, etc.; and 3. Elevation Properties will be bought out in the following order of preference: 1. 1451 Rand — Severe repetitive loss property 2. 2827 and 2829 South Sprigg — Has sustained flooding damage several times and was declared substantially damaged after the May 2011 flooding event. However, the property does not show up on the severe repetitive loss property list provided by SEMA. Therefore, preference will be given first to 1451 for the buyout. Open Space Assurance Statement 1. The City of Cape Girardeau, through adoption of this Policy does hereby provide the necessary assurance that all property acquired through the Hazard Mitigation Grant Program will be deed restricted, dedicated and maintained in perpetuity for uses outlined below in 44 CFR 206.434(e). 2. (e) Property acquisitions and relocation requirements. Property acquisitions and relocation projects for open space proposed for funding pursuant to a major disaster declared on or after December 3, 2007 must be implemented in accordance with part 80 of this chapter. For major disasters declared before December 3, 2007, a project involving property acquisition or the relocation of structures and individuals is eligible for assistance only if the applicant enters into an agreement with the FEMA Regional Administrator that provides assurances that: (1) The following restrictive covenants shall be conveyed in the deed to any property acquired, accepted, or from which structures are removed (hereafter called in section (d) the property): (i) The property shall be dedicated and maintained in perpetuity for uses compatible with open space, recreational, or wetlands management practices; and (ii) No new structure(s) will be built on the property except as indicated below: (A) A public facility that is open on all sides and functionally related to a designated open space or recreational use; (B) A rest room; or (C) A structure that is compatible with open space, recreational, or wetlands management usage and proper floodplain management policies and practices, which the Administrator approves in writing before the construction of the structure begins. (iii) After completion of the project, no application for additional disaster assistance will be made for any purpose with respect to the property to any Federal entity or source, and no Federal entity or source will provide such assistance. (2) In general, allowable open space, recreational, and wetland management uses include parks for outdoor recreational activities, nature reserves, cultivation, grazing, camping (except where adequate warning time is not available to allow evacuation), temporary storage in the open of wheeled vehicles which are easily movable (except mobile homes), unimproved, previous parking lots, and buffer zones. (3) Any structures built on the property according to paragraph (d)(1) of this section, shall be floodproofed or elevated to the Base Flood Elevation plus one foot of freeboard. General Eligibility Requirements In general, to be eligible to participate in the City of Cape Girardeau flood buyout program, all conditions listed below must be met: Property must be listed in the original buyout application submitted to the Federal Emergency Management Agency. 2. The property must be a primary residential home (no vacation homes, clubhouses or businesses). General Buyout Policy A residential buyout package must encompass no more than one (1) acre or less. Any survey fees will be paid for by the City with grant funds. Garages and outbuildings must be located on the same property and be considered as a part of the residential package. 3. The City will conduct a title search to determine the rightful owner(s) of the property prior to making an offer to buy. The cost for the title search will be paid for by the City with grant funds. 4. If a title search is not conclusive regarding true ownership, it will be the sole responsibility of the reported property owner to prove ownership. The City will not pay for any legal costs necessary to prove ownership or provide clear title. 5. The title to the property must be clear of all liens before the city will take title to the property. If the lien amounts cannot be satisfied prior to the closing, all lien amounts due will be deducted from the buyout proceeds at the time of closing. If clear title cannot be provided by the property owner, the property will be withdrawn from the project. 6. All properties will be appraised by a State of Missouri board certified, licensed appraiser. This process is outlined in more detail on page 3. The cost for the appraisal will be paid for with grant funds. 2 All property owners must sign a statement recognizing that this program is voluntary and therefore are not entitled to any relocation assistance under the Uniform Relocation Assistance Act. By signing the statement, the property owners also indicate their understanding that the City will not invoke any power of eminent domain to take the property as part of the grant program, if the property owner chooses to withdraw from the project. Property owners will be given two (2) weeks from the date of offer to decide if they will accept or reject the City's offer to purchase. Property owners will be required to vacate the premises entirely prior to closing. All personal property remaining on or in the structure(s) will be considered public property after closing. 10. Property owners are not allowed to remove structural items from the home or any outbuildings after the appraisal is completed. If a property owner wishes to remove an item that would normally remain in a real estate transaction (for example, light fixtures, windows, doors, hot water heaters, furnace etc.) the appraisal must be reduced by the current market value of the removed item. 11. Once a property has been acquired by the City, any items within the structure must be disposed of in a public manner. The City may choose to remove usable items and store them until a public auction can be held or bids received by all interested citizens. Or, salvage rights may be granted to the demolition contractor, in which case, citizens then would contact the demolition contractor if interested in select items. Any Program Income generated by the project will be documented. 12. Current property owners are responsible for the property taxes on the structure from the first of the year through the date of the closing on a pro -rated basis. 13. Demolition costs and liability expenses for the buyout structure will be the responsibility of the City upon transfer of title. Until the title is transferred, the property owner remains solely responsible for the property. 14. No structure may be demolished until the Missouri State Office of Historic Preservation and the Federal Emergency Management Agency have determined that the property is not historically significant or that historically significant properties have been recorded and documented sufficiently to enable the city to demolish the structure. 15. The Date of Negotiations for the City of Cape Girardeau is the day the City provides written notification to potential buyout participants that grant funding has been provided to the City for a voluntary buyout program. Fair Market Value determination All offers to property owners will be based on the pre -flood fair market value established by a State of Missouri board certified, licensed appraiser minus any Duplication of Benefits. 3 2. The City, in compliance with local procurement procedures, will hire a State of Missouri board certified, licensed appraiser to complete the appraisals. The cost for the appraisal will be paid for by the grant funds. The City's grant administrator will coordinate when the property will be appraised with each owner. The City encourages each property owner to be present during the site inspection by the appraiser to aid the appraiser in properly identifying property boundary lines and outbuildings etc. 4. If the property owner has an appraisal that was completed within the last twelve (12) months prior to the flooding event date by a State of Missouri board certified, licensed appraiser, he/she may submit that appraisal to the City for review. (NOTE: property owners are not required to submit the appraisal.) If the City determines that the appraisal was completed in accordance with the City's buyout program guidelines, this appraisal may be used to establish the fair market value of the property. The City will not reimburse property owners for appraisal costs they incurred when this appraisal was completed. 5. The appraisal completed by the City is the official fair market value. If a property owner is in disagreement with the value indicated, he/she may hire a State of Missouri board certified, licensed appraiser, at his/her own expense, and provide an original appraisal to the City for review. The City will then forward both the City of Cape Girardeau and owner appraisal to the Missouri State Emergency Management Agency (SEMA). The State's independent licensed appraiser will review both appraisals and determine the final fair market value. The State's decision is final. All property appraisals will be completed with the following special buyout provisions: • The pre -flood appraisal must clearly indicate the value of the entire buyout package and 1) the value of the residential structure only 2) the value of the underlying real property and outbuildings only • Appraisals will be based on comparable sales for properties located in a flood hazard area. If properties not located in a flood hazard area are used as comparable sales, a location adjustment must be reflected in the appraisal. • Property previously purchased by the City of Cape Girardeau as part of the flood buyout program may not be used as comparable sales for other buyout appraisals. • Rental property will be appraised on the sales comparison approach. In no event may rental property be acquired based on a market value established through the rental income approach. 7. All property appraisals (whether completed property owner) will be forwarded to the Agency prior to an offer being made. M by the City's appraiser or submitted by a Missouri State Emergency Management Duplication of Benefits (DOBs) Financial payments paid to homeowners for structural repairs to the flooded property will be deducted from the pre -flood appraisal if not used for the intended purpose. Each property owner participating in a FEMA flood buyout must sign an affidavit disclosing any benefits received from any sources in conjunction with the event leading to the buyout project. Some examples when a DOB may occur include the following: 1.The property owner has received insurance, loans, repair grants, compensation in compliance with a court order, or other assistance available to them to help address damages to the structure regardless of whether such benefits were sought or received. This is because payment of full pre - flood fair market value (FMV) compensates the owner for the loss of value that has occurred; 2. Legal claims are appropriate or legal obligations arise in connection to the property that may provide a benefit to the property owner. Parties involved in pending legal disputes must take reasonable steps to recover benefits available to them; 3. Relocated tenants receive relocation assistance and rental assistance but have received payments for the same purpose as part of the disaster assistance provided by any agency or payments from any other source. Any buyout -related assistance provided to tenants must be reduced accordingly. However, tenant -related DOB deductions do not affect amounts available to the property owner. Property owners who have an SBA loan will have to repay the loan or roll it over to a new property at closing as part of the settlement. Note, premiums paid for up to five years prior to the disaster event to the National Flood hisurance Program as reported by FEMA will be reimbursed where applicable. When property owners retain receipts for any repairs made, the property owner may submit them through the City to SEMA. SEMA then submits the receipts to FEMA for review and approval to offset some or all of the DOBs. (Note: Receipts must be from bonafide businesses recognized by local governments. The labor of properly owners, friends, family, or volunteers for clean up and repair is not eligible to offset the DOBs.) If a property owner carried insurance through the National Flood Insurance Program (NFIP) at the time of the event, a payment equal to the amount paid for insurance premiums for up to five years prior to the event will be refunded to the policy holder as part of the Duplication of Benefits calculation. 9 Buyout Categories The appraised value of a property and the occupancy status (owner occupied or renter occupied) will determine what type of buyout offer a participant will receive. The criteria for each type of offer is as follows: General Buyout Criteria: 1. Home and underlying real property is owned by the same owner 2. Property is occupied by the owner of the property (at time of event) or a tenant/renter* A property and property owner meeting the criteria listed above will be acquired at the pre - flood fair market value established by a qualified appraisal less any Duplication of Benefits. Example: Pre -flood property appraised at $40,000 Duplication of Benefits are $5,000 Property owner will be offered $35,000 *tenant may qualify for a tenant relocation assistance grant minus any Duplication of Benefits; (see page 8) Land Plus Owner Relocation Payment Criteria: 1. Home and underlying real property is owned by the same owner as a primary residence 2. Property is occupied by the owner of the property (i.e., owner -occupied) 3. Meet all requirements as outlined below per the Hazard Mitigation Assistance Unified Guidance For a property owner to receive a supplemental payment for Owner Relocation, the City must demonstrate that all of the following circumstances exist: • Decent, safe, and sanitary housing of comparable size and capacity is not available in non -hazard prone sites within the community at the anticipated acquisition price of the property being vacated; and/or • The project would otherwise have a disproportionately high adverse effect on low- income or minority populations because project participants within those populations would not be able to secure comparable decent, safe, and sanitary housing; and • Funds cannot be secured from other more appropriate sources, such as housing agencies or voluntary groups. Complete and notarized Replacement Housing Worksheets for each qualifying property will be attached at the time it is determined the property meets the above criteria. 0 Post -Flood Owner Purchase If for some reason, the property was acquired after the disaster event, the offer to the current property owner is (1) the documented purchase price plus any verifiable repairs or (2) the current fair market value, whichever is less. Note, the property owner is responsible for providing documentation verifying the purchase price and verifiable repairs, i.e. receipts, etc. Relocation Assistance Categories Based on the buyout categories listed above, two (2) types of "relocation" payments may be available: I. Replacement Housing Payment a.k.a. Owner Relocation (maximum $22,500) 2. Renter Relocation Assistance payment (maxiinum $5,250 plus moving costs) Replacement Housing (aka Owner Relocation) Payment Maximum owner relocation payment a buyout participant may receive is $22,500. Individuals and families entitled to a replacement housing payment are those that: I. Own and occupy the dwelling participating in the buyout program as a primary residence, and 2. Owned and occupied the dwelling participating during the incident period for the disaster, and 3. Meets all other requirements as listed under the Buyout Categories section of this document. • The property owner must purchase a replacement dwelling outside the Special Flood Hazard Area. Rental, lease, or other occupancy of a replacement dwelling does not qualify for a replacement housing payment. • The replacement housing payment is determined by the purchase price of the replacement dwelling minus the Fair Market Value of the flood damaged dwelling. • It is the responsibility of the homeowner to locate a new replacement home and provide all required documentation to the City's grant administrator. • Mobile homes are eligible replacement dwelling units provided that the mobile home has been purchased and transported to a dwelling site outside the Special Flood Hazard Area prior to any replacement housing payment being made. • The City will not make a replacement housing payment until the buyout site is vacated and the new dwelling purchased and occupied. The City's grant administrator will coordinate property closings to ensure that the property owner is provided with the replacement housing payment in the most expedient manner possible. VA The owner may choose between a straight buyout or a replacement housing payment offer, whichever creates a better financial assistance payment to the property owner. NOTE: All criteria listed above must be met and verified to be eligible for a replacement housing (owner relocation) payment. Example: Fair Market Value of Replacement Home $35,000 Fair Market Value of Flood -Damaged Home $21,000 Cost of new home: $35,000 Less: value of flood -damaged home: ($21,000) Replacement Housing Payment: $14,000 CANNOT EXCEED $22,500 Homeowner receives $21,000 Plus: $14,000 Total Buyout Offer:1QQ ** *This amount is subject to a deduction for Duplication of Benefits as outlined previously in this document, if applicable. Renter Relocation Assistance Payment 1. Due to the involuntary nature of the impact of a buyout project on tenants/renters, they MAY be eligible for relocation assistance should a property they reside in be acquired by the City through the flood buyout program. 2. The maximum renter relocation assistance grant may not exceed $5,250 plus the cost to move personal property located inside the property based on a standard table of costs. 3. It is the responsibility of the property owner or renter to contact the City to determine if a renter is eligible for a grant. 4. A Relocation Assistance to Tenants/Renters Worksheet must be completed and certain documentation provided by the renter/landlord to deterinine the level of assistance, if any. 5. The payment for moving personal property consists of household furniture and is determined by pre -established government charts based on the number of furnished rooms in the property. 6. No renter relocation assistance payment will be provided until the property in the buyout program has been acquired with completed closing procedures. 7. If a tenant/renter has received funds from other primary funding sources (FEMA, other grants, and/or funds from any other sources) such as insurance and other funds to address the same purpose or loss, Duplication of Benefits may apply. This includes any funds received by the tenant/renter provided through the FEMA disaster assistance programs including temporary housing and rental assistance. Any acquisition -related assistance provided to tenants/renters must be reduced accordingly. Tenant/renter-related Duplication of Benefits deductions do not affect amounts available to the property owner. 8. Tenants/renters must also certify that they are a U.S. citizen or are lawfully present in the United States to be considered eligible for this assistance. Environmental Considerations Participants in the buyout program must sign a Sales Contract plus all Exhibits (A, B, and C) which, by signing, represents and warrants to the City that: 1. There are no abandoned wells, agricultural drainage wells, solid waste disposal areas or underground storage tanks (as defined in Revised Statutes of Missouri) located in, on or about the property; 2. There is and has been no hazardous waste stored, generated, treated, transported, installed, dumped, handled or placed in, on or about the property; 3. At no time have any federal or state hazardous waste cleanup funds been expended with respect to any of the property; 4. There has never been any solid waste disposal site or underground storage tank located in, on or about the property, nor has there been any release from any underground storage tank on real property contiguous to the property which has resulted in any hazardous substance coming in contact with the property; 5. The seller has not received any directive, citation, notice, letter or other communication, whether written or oral, from the Environmental Protection Agency, the Missouri Department of Natural Resources, any other governmental agency with authority under any Enviromnental Laws, or any other person or entity regarding the release, disposal, discharge or presence of any hazardous waste on the property, or any violation of any Environmental laws; and 6. To the best of property owner's knowledge, neither the property nor any real property contiguous to the property nor any predecessors in title to the property are in violation of or subject to any existing, pending or threatened investigation or inquiry by any governmental authority or to any removal or remedial obligations under Environmental Laws. Special Considerations Any scenarios that have not been covered by the approved City of Cape Girardeau Buyout Policy will be reviewed by an advisory council consisting of representatives from SEMA and the City of Cape Girardeau Staff. In the event of disputes, differences of interpretation, or disagreements over these guidelines, the decision of the City, acting by and through the City Council shall be final and in all cases shall be the determining factor, after consultation with the State of Missouri. Approved and read by the City Council on City Manager City of Cape Girardeau I