Public projects raise a laundry list of issues that those on private projects do not face. For instance, missing payments on public projects can lead to grave consequences even though mechanics liens don’t come into the equation. Other considerations such as record keeping and anti-corruption laws can also come into play. Any way you slice it, contractors on public projects are often subject to more red tape than those on private projects. Considering these projects utilize taxpayer money, many of these restrictions are necessary. Such is the case with FEMA’s proposed new regulations which would directly affect projects which lie within flood zones that accept federal funding.
FEMA Proposes New Restrictions on Projects Within Floodplain
While Louisiana recovers from the historic flood, analysis on the event will begin to shape current and future planning methods. FEMA rewrote its floodplain maps in the aftermath of Hurricane Sandy, and now the organization is calling for building restrictions on projects within floodplains. In the past, FEMA has come under heavy scrutiny for its (lack of) response to disasters, reactionary regulation, and determining disaster aid.
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Effects on Federally Funded Projects
For the last 55 years, FEMA has based regulations on the 100-year flood model. With the 100-year model, contractors on public projects were required to build at least to the elevation where a flood is calculated to rise every 100 years. Now, for standard projects, meaning non “critical action” projects, builders will have 3 options to comply with new FEMA regulations. Contractors can build two feet above the 100-year floodplain, build to the 500-year floodplain, or “use the best available scientific models.” These models typically combine records with other data, such as projected sea-level rise. Projects that fall under the “critical action,” designation must be built 3 feet above the 100-year floodplain. Critical action projects include, but are not limited to: facilities containing dangerous materials; hospitals, nursing homes, or other housing which is likely to contain occupants who may not have the mobility to avoid injury during flood or storm events, and generating plants/ principle points of utility lines.
Because contractors would have to adhere to these heightened requirements (as always, pun intended), the resulting increase in dirt work will surely have an impact on contract prices going forward. Ultimately, the costs will probably be passed along by contractors, but someone down the chain will have to pay.
These regulations may only directly affect federal projects, but they have far reaching implications on private projects, too. Insurers use FEMA’s designated floodplain to inform its flood insurance rates and policies. With FEMA calling for higher elevation on federally funded projects, flood insurers will take notice. Rates on flood insurance, depending on insurers’ reaction to FEMA’s new guidelines, could really balloon. Mortgage backers typically require flood insurance on homes, meaning most homeowners will be required to keep flood insurance on their homes. Should elevation requirements by mortgage backers and insurers influence private projects, and they almost certainly will, prices would go up for homeowners as well as for those awarding public projects.
Much of the effects from FEMA’s changes will fall squarely on architects, engineers, designers, and homeowners. Still, contractors on public projects, and even those on private jobs, should pay attention. They may be building to the new specified requirements going forward. Knowing which options an authority or homeowner has to comply could save a lot of headaches. Plus, failing to build to the correct elevation, whether imposed by FEMA or demanded by a private entity, could give rise to litigation.
FEMA will be accepting comments on the new regulations until October 21, 2016. To comment, click here and follow the instructions.