Occasionally an applicant may determine that the public welfare would not be best served by restoring a damaged facility or its function using FEMA funds. This usually occurs when the service provided by the facility is no longer needed, although the facility was still in use at the time of the disaster. Under these circumstances, the applicant may apply to FEMA to use the eligible funds for an Alternate Project. Alternate projects include:
Repair or expansion of other public facilities
Construction of new public facilities
Demolition of the original structure
Purchase of capital equipment
Funding of cost-effective hazard mitigation measures in the area affected by the disaster
Funding project shortfalls due to mandatory NFIP reductions on applicant buildings in floodplains
Supplemental funds used on an improved project
The alternate project option may be proposed for both small and large projects, but only for permanent restoration projects located within the declared disaster area. All requests for alternate projects must be made within 12 months of the Kickoff Meeting and approved by FEMA prior to construction.
Alternate projects for governmental entities are eligible for 90 percent of the approved Federal share of the estimated eligible costs associated with repairing the damaged facility to its pre-disaster design, or of the approved Federal share of the actual costs of completing the alternate project, whichever is less. Alternate projects for PNP entities are eligible for 75 percent of the approved Federal share, or of the approved Federal share of the actual costs of completing the alternate project, whichever is less.
The proposed alternate project may not be located in the regulatory floodway and will have to be insured if located in the 100-year floodplain (see Insurance). Funding may not be used for operating costs or to meet the State or local share requirement on other public assistance projects or projects that utilize other Federal grants. Section 406 Hazard Mitigation funds cannot be applied to an alternate project (see Hazard Mitigation, Section 406). FEMA must ensure that the proposed projects are an appropriate use of funds and comply with environmental and historic preservation laws.
References: Section 406 (c) of the Stafford Act 44 CFR §206.203(d)(2)
Public Assistance Guide, FEMA 322, pages 79, 111-112, 134