DHSEM Status Report on HMGP Funded Acquisitions of Landslide Impacted Properties in Colorado Springs

DHSEM Update for June 12, 2017

The Colorado DHSEM and the City of Colorado Springs are awaiting a final decision from FEMA related to a FEMA acquisition policy change concerning statutory pooling of oil and gas before moving forward with the City of Colorado Springs' Hazard Mitigation Grant Program (HMGP) application.  Under this policy, Colorado's statutory pooling laws disallow the use of HMGP funding to acquire property in Colorado.  DHSEM filed an appeal related to the statutory pooling policy and is waiting for a final FEMA policy decision that would allow the HMGP program to move forward in Colorado. FEMA Region VIII has been supportive of Colorado’s concerns and the need for a nationwide policy change that reflects the needs of states that have severed surface and subsurface property rights.  DHSEM was notified by FEMA Region VIII that a decision on the proposed policy change is imminent.  

What is Statutory Pooling?

Statutory pooling “[…] forces landowners—who do not wish the mineral resources underneath their land to be extracted—to become part of a drilling unit. Although this process does not allow extraction companies surface access to the non-consenting landowner’s property, it does allow drilling to occur underneath their land, while compensating the owner for the extracted resource” (National Conference of State Legislatures, NCSL).

Currently, FEMA has determined that Colorado’s oil and gas statutory pooling laws conflict with FEMA open space requirements of acquired property as State’s with these laws cannot categorically prevent future oil and gas development on deed restricted properties.  DHSEM has appealed this decision.

DHSEM will be contacting the FEMA Region VIII Regional Administrator for an update on Friday, June 16, 2017.

Timeline of Completed Actions

  • February 2016:  City of Colorado Springs held Property Acquisition Community Meetings and shared presentation materials.  Property owners learn of the multiple year, multiple process grant program.
  • May 2016:  City of Colorado Springs submitted its application for Hazard Mitigation Grant Program (HMGP) funding to DHSEM.
  • June 2016:  DHSEM reviewed and provided feedback to the City of Colorado Springs HMGP Property Acquisition project application.
  • July 2016:   DHSEM submitted application on behalf of the City to FEMA Region VIII for review.
  • September-October 2016:   DHSEM assisted the City with its response to FEMA's Request for Information (RFI) as it related to FEMA Region VIII's application review.
  • November 2016:   DHSEM assisted the City with its response to FEMA's second RFI as it related to FEMA Region VIII's application review.
  • March 2017:   DHSEM received FEMA Region VIII approval of its HMGP 4229 Administrative Plan.
  • March 2017:   DHSEM provided FEMA Region VIII a project funding analysis as required to identify available grant funding for property acquisitions.
  • May 2017:   DHSEM released the Acquisition Implementation Guidance Handbook.
  • June 2017:   DHSEM has drafted two State Grant Agreement to be executed upon FEMA award of HMGP funds under DR-4145 and DR-4229.

Next Steps

  • If project funding is awarded by FEMA, DHSEM will enter into a grant agreement with the City of Colorado Springs, this grant agreement will outline the terms and stipulations under which the State and the City will operate regarding this project while work remains ongoing (in addition to the Acquisition Implementation Guidance Handbook).  As stated above, this agreement has been drafted and will be ready for execution upon FEMA's award of funding.
  • Upon the execution of the grant agreement, the City may undertake the acquisition implementation process as outlined within the Acquisition Implementation Guidance Handbook. Specifically, the City will begin the property title search process, and subsequently it will undertake the property appraisal process.