Coastal Barrier Resources System
Status of Development That Has Occurred and Financial Assistance Provided by Federal Agencies Gao ID: GAO-07-356 March 19, 2007In 1982, Congress enacted the Coastal Barrier Resources Act. The Coastal Barrier Resources Act, as amended (CBRA), designates 585 units of undeveloped coastal lands and aquatic habitat as the John H. Chafee Coastal Barrier Resources System (CBRS). CBRA prohibits most federal expenditures and assistance within the system that could encourage development, but it allows federal agencies to provide some types of assistance and issue certain regulatory permits. In 1992, GAO reported that development was occurring in the CBRS despite restrictions on federal assistance. GAO updated its 1992 report and reviewed the extent to which (1) development has occurred in CBRS units since their inclusion in the system and (2) federal financial assistance and permits have been provided to entities in CBRS units. GAO electronically mapped address data for structures within 91 randomly selected CBRS units and collected information on federal financial assistance and permits for eight federal agencies.
An estimated 84 percent of CBRS units remain undeveloped, while 16 percent have experienced some level of development. About 13 percent of the developed units experienced minimal levels of development--typically consisting of less than 20 additional structures per unit since becoming part of the CBRS, and about 3 percent experienced significant development--consisting of 100 or more structures per unit--since becoming part of the CBRS. According to federal and local officials, CBRA has played little role in the extent of development within the CBRS units that we reviewed because they believe that other factors have been more important in inhibiting development. These include (1) the lack of suitably developable land in the unit; (2) the lack of accessibility to the unit; (3) state laws discouraging development within coastal areas; and (4) ownership of land within the unit by groups, such as the National Audubon Society, who are seeking to preserve its natural state. In units that GAO reviewed where development had occurred, federal and local officials also identified a number of factors that have contributed to development despite the unit's inclusion in the CBRS. These include (1) a combination of commercial interest and public desire to build in the unit, (2) local government support for development, and (3) the availability of affordable private flood insurance. Multiple federal agencies have provided some financial assistance to property owners in CBRS units that is expressly prohibited by CBRA; some assistance allowed under CBRA; and hundreds of permits for federally regulated development activities within the unit. Specifically, four agencies--the Department of Housing and Urban Development, the Department of Veterans Affairs, the Federal Emergency Management Agency, and the Small Business Administration--provided financial assistance, such as flood insurance and loan guarantees, totaling about $21 million that is prohibited by CBRA to property owners in CBRS units. Although most of these agencies had processes in place to prevent such assistance from being provided, they cited problems with inaccurate maps as being a key factor leading to these errors. With regard to financial assistance allowed by CBRA, GAO found that three federal agencies have provided such assistance but did not track how much assistance they provided, so the total extent of this assistance is unknown. With regard to permits issued in CBRS units for federally regulated activities, GAO identified hundreds of permits issued by the Army Corps of Engineers and state agencies authorized to issue permits on behalf of the Environmental Protection Agency. These permits covered various activities such as the construction of piers, the discharge of dredged or fill material into federally regulated waters, and permits associated with water discharges from construction sites or wastewater treatment systems.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-07-356, Coastal Barrier Resources System: Status of Development That Has Occurred and Financial Assistance Provided by Federal Agencies
This is the accessible text file for GAO report number GAO-07-356
entitled 'Coastal Barrier Resources System: Status of Development That
Has Occurred and Financial Assistance Provided by Federal Agencies'
which was released on March 19, 2007.
This text file was formatted by the U.S. Government Accountability
Office (GAO) to be accessible to users with visual impairments, as part
of a longer term project to improve GAO products' accessibility. Every
attempt has been made to maintain the structural and data integrity of
the original printed product. Accessibility features, such as text
descriptions of tables, consecutively numbered footnotes placed at the
end of the file, and the text of agency comment letters, are provided
but may not exactly duplicate the presentation or format of the printed
version. The portable document format (PDF) file is an exact electronic
replica of the printed version. We welcome your feedback. Please E-mail
your comments regarding the contents or accessibility features of this
document to Webmaster@gao.gov.
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. Because this work
may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this
material separately.
Report to the Honorable Wayne T. Gilchrest, House of Representatives:
United States Government Accountability Office:
GAO:
March 2007:
Coastal Barrier Resources System:
Status of Development That Has Occurred and Financial Assistance
Provided by Federal Agencies:
GAO-07-356:
GAO Highlights:
Highlights of GAO-07-356, a report to the Honorable Wayne T. Gilchrest,
House of Representatives
Why GAO Did This Study:
In 1982, Congress enacted the Coastal Barrier Resources Act. The
Coastal Barrier Resources Act, as amended (CBRA), designates 585 units
of undeveloped coastal lands and aquatic habitat as the John H. Chafee
Coastal Barrier Resources System (CBRS). CBRA prohibits most federal
expenditures and assistance within the system that could encourage
development, but it allows federal agencies to provide some types of
assistance and issue certain regulatory permits. In 1992, GAO reported
that development was occurring in the CBRS despite restrictions on
federal assistance. GAO updated its 1992 report and reviewed the extent
to which (1) development has occurred in CBRS units since their
inclusion in the system and (2) federal financial assistance and
permits have been provided to entities in CBRS units.
GAO electronically mapped address data for structures within 91
randomly selected CBRS units and collected information on federal
financial assistance and permits for eight federal agencies.
What GAO Found:
An estimated 84 percent of CBRS units remain undeveloped, while 16
percent have experienced some level of development. About 13 percent of
the developed units experienced minimal levels of development”typically
consisting of less than 20 additional structures per unit since
becoming part of the CBRS, and about 3 percent experienced significant
development” consisting of 100 or more structures per unit”since
becoming part of the CBRS. According to federal and local officials,
CBRA has played little role in the extent of development within the
CBRS units that we reviewed because they believe that other factors
have been more important in inhibiting development. These include (1)
the lack of suitably developable land in the unit; (2) the lack of
accessibility to the unit; (3) state laws discouraging development
within coastal areas; and (4) ownership of land within the unit by
groups, such as the National Audubon Society, who are seeking to
preserve its natural state. In units that GAO reviewed where
development had occurred, federal and local officials also identified a
number of factors that have contributed to development despite the
unit‘s inclusion in the CBRS. These include (1) a combination of
commercial interest and public desire to build in the unit, (2) local
government support for development, and (3) the availability of
affordable private flood insurance.
Multiple federal agencies have provided some financial assistance to
property owners in CBRS units that is expressly prohibited by CBRA;
some assistance allowed under CBRA; and hundreds of permits for
federally regulated development activities within the unit.
Specifically, four agencies”the Department of Housing and Urban
Development, the Department of Veterans Affairs, the Federal Emergency
Management Agency, and the Small Business Administration”provided
financial assistance, such as flood insurance and loan guarantees,
totaling about $21 million that is prohibited by CBRA to property
owners in CBRS units. Although most of these agencies had processes in
place to prevent such assistance from being provided, they cited
problems with inaccurate maps as being a key factor leading to these
errors. With regard to financial assistance allowed by CBRA, GAO found
that three federal agencies have provided such assistance but did not
track how much assistance they provided, so the total extent of this
assistance is unknown. With regard to permits issued in CBRS units for
federally regulated activities, GAO identified hundreds of permits
issued by the Army Corps of Engineers and state agencies authorized to
issue permits on behalf of the Environmental Protection Agency. These
permits covered various activities such as the construction of piers,
the discharge of dredged or fill material into federally regulated
waters, and permits associated with water discharges from construction
sites or wastewater treatment systems.
What GAO Recommends:
GAO recommends, among other things, that the four agencies that
provided prohibited loan guarantees or insurance policies to CBRS units
first verify and then cancel those that are in violation of CBRA. Three
agencies agreed with our recommendation; VA did not, stating that it
would inflict unfair harm to the affected veterans.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-356].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Anu Mittal at (202) 512-
3841 or mittala@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
CBRS Remains Largely Undeveloped:
The Extent to Which Federal Agencies Have Provided Financial Assistance
and Permits to Entities in CBRS Units Varies:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: CBRS Units We Reviewed:
Appendix III: Snapshots of Selected CBRS Units:
Massachusetts:
Rhode Island:
South Carolina:
Florida:
North Carolina:
Appendix IV: Programs and Types of Federal Assistance Analyzed:
Appendix V: Comments from the Department of Housing and Urban
Development:
Appendix VI: Comments from the Department of the Interior:
Appendix VII: Comments from the Department of Veterans Affairs:
Appendix VIII: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Examples of FEMA Disaster Assistance Since 1998:
Table 2: CBRS Units Included in Random Sample and Approximate Number of
New Structures:
Table 3: CBRS Units Included in GAO's Random Sample That Were Analyzed
to Determine the Extent of Federal Expenditures and Permits:
Table 4: Additional CBRS Units Suggested for Review by FWS That Were
Analyzed to Determine the Extent of Federal Expenditures and Permits:
Figures:
Figure 1: Boat Meadow CBRS Unit in Massachusetts:
Figure 2: CBRS Units We Visited in Massachusetts:
Figure 3: House and Beach on the Squaw Island, CBRS Unit in
Massachusetts:
Figure 4: CBRS Units We Visited in Rhode Island:
Figure 5: Home with a Backyard in the Prudence Island, Rhode Island
CBRS Unit:
Figure 6: Portion of the Prudence Island Complex CBRS Unit:
Figure 7: Inlet Where Proposed Dredging Project Would Occur in the
Prudence Island CBRS Unit:
Figure 8: CBRS Units We Visited in South Carolina:
Figure 9: CBRS Units We Visited in Florida:
Figure 10: CBRS Units We Visited in North Carolina:
Figure 11: House in North Topsail CBRS Unit on the Edge of the Ocean:
Abbreviations:
CBRA: Coastal Barrier Resources Act as amended:
CBRS: John H. Chafee Coastal Barrier Resources System:
DHS: Department of Homeland Security:
DOI: Department of the Interior:
EPA: Environmental Protection Agency:
FEMA: Federal Emergency Management Agency:
FHWA: Federal Highway Administration:
FWS: Fish and Wildlife Service:
HUD: Department of Housing and Urban Development:
IHP: FEMA's Individuals and Households Program:
NFIP: FEMA's National Flood Insurance Program:
NOAA: National Oceanic and Atmospheric Administration:
NPDES: EPA's National Pollutant Discharge Elimination System:
OPA: Otherwise Protected Areas:
SBA: Small Business Administration:
VA: Department of Veterans Affairs:
United States Government Accountability Office:
Washington, DC 20548:
March 19, 2007:
The Honorable Wayne T. Gilchrest:
House of Representatives:
Dear Mr. Gilchrest:
The U.S. coasts are among the most rapidly growing and developed areas
in the nation. From 1980 to 2003, the population in U.S coastal areas
is estimated to have increased by 33 million people and is projected to
increase by another 7 million people by 2008. Coastal barriers, such as
islands and broad sandy barrier beaches, serve as the mainland's first
line of defense against the impacts of hurricanes and coastal storms.
These areas are also biologically rich and provide protection for a
variety of fish and wildlife species, including migratory birds,
shellfish, and sea turtles. While the geological composition of coastal
barriers makes them highly unstable areas on which to build, their
desirable waterfront locations make them attractive for development. As
development and population increase, the risk to human life, property,
and valuable habitat increases, and the natural buffers that minimize
storm damage are degraded. For example, when Hurricane Isabel made
landfall along North Carolina's Outer Banks in 2003, it caused
widespread wind and storm surge damage to several piers, several
thousand homes and businesses, and damaged or washed away sections of a
highway.
Recognizing that development in coastal barrier areas can be impacted
by the actions and programs of the federal government, Congress enacted
the Coastal Barrier Resources Act in 1982. The stated purpose of the
Coastal Barrier Resources Act as amended (CBRA) is to minimize (1) the
loss of human life; (2) wasteful expenditures of federal revenue; and
(3) damage to fish, wildlife, and other natural resources associated
with coastal barriers along the Atlantic and Gulf Coasts and the shores
of the Great Lakes by restricting future federal expenditures and
financial assistance, which have the effect of encouraging development
of coastal barriers. Through CBRA, Congress designated 585 units of
undeveloped coastal land and associated aquatic habitats comprising
nearly 1.3 million acres as the John H. Chafee Coastal Barrier
Resources System (CBRS).[Footnote 1] Congress, through the Coastal
Barrier Improvement Act of 1990, also designated an additional 1.8
million acres already held for conservation or recreation, such as
national wildlife refuges, national parks and seashores, and state and
county parks, as otherwise protected areas (OPA).
CBRA does not prohibit development in CBRS units by owners willing to
develop their properties without the benefit of federal financial
assistance, such as federal flood insurance, loans, grants, subsidies
or other forms of direct or indirect federal assistance.[Footnote 2]
Instead, with certain exceptions, CBRA prohibits federal expenditures
or financial assistance within CBRS units that might encourage
development. The prohibition includes--but is not limited to--the
issuance of flood insurance policies, home loans, loan guarantees, and
new or expanded infrastructure construction within CBRS units. However,
the act does exempt certain federal expenditures or financial
assistance from the general prohibition, such as emergency operations
that are essential to saving lives, maintaining and replacing existing
publicly owned infrastructure, energy development, and activities
related to national security. In addition, CBRA allows agencies to
issue permits to entities within the CBRS for certain federally
regulated activities, such as the construction of bridges and docks or
the discharge of dredged or fill materials into waters that fall under
federal jurisdiction.
Under CBRA, no single federal agency is assigned overall responsibility
for administering activities in the CBRS; instead, all federal agencies
must abide by the provisions of the act and are required to certify
annually that they are in compliance with CBRA.[Footnote 3] CBRA does
assign the Secretary of the Interior responsibility for, among other
things, the tasks of consulting with other federal agencies that
propose spending funds within the CBRS, maintaining maps for each CBRS
unit, and recommending modifications to CBRS unit boundaries, as
needed. These maps are used by property owners; federal, state, and
local agencies; and other parties, such as insurance agents, to
determine whether a property or planned project is within a CBRS unit
and therefore whether it is ineligible for federal financial
assistance. Within the Department of the Interior (DOI) these
responsibilities belong to the U.S. Fish and Wildlife Service (FWS).
The existing maps that depict CBRS unit boundaries are outdated
technologically and present challenges to users. In May 2006, the
Congress directed the Secretary of the Interior to initiate a map
modernization project for all of the units in the CBRS that is to be
completed by 2013.[Footnote 4] This effort is designed to create
digital maps of all CBRS units that are more accurate and less time
consuming for agencies and others to use than the maps currently
available.
In 1992, we reported that development was occurring in some CBRS units
despite restrictions on federal assistance.[Footnote 5] CBRA has been
amended several times and the CBRS has expanded to include
significantly more units. In this context, you asked us to update our
1992 report and review the extent to which (1) development has occurred
in the CBRS and (2) federal agencies have provided financial assistance
and issued permits to entities in CBRS units.
To determine the extent of development that has occurred within CBRS
units, we selected a stratified random sample of 91 units located
throughout the system. The sample included units designated as part of
the system in 1982 and 1990. We did not include otherwise protected
areas in our analysis. For each unit, we obtained and electronically
mapped address or parcel data for structures within the unit
boundaries.[Footnote 6] Throughout this report, the percentage of units
that have experienced development is a statistical estimate based on
our analysis of the development in the 91 randomly selected units,
which can be projected to the entire system. The random sample was
stratified by region to select an equal number of units in northern and
southern regions. In addition, we conducted site visits and/or
interviewed officials for a subset of 59 units in 13 states to
determine the extent of and reasons for development. To determine the
extent of federal expenditures and financial assistance made to
individuals and entities within CBRS units, we identified and collected
information on financial assistance provided in selected CBRS units
from those federal agencies that, based on our previous report and our
discussions with FWS, were the most likely to have provided assistance.
These agencies include the Department of Homeland Security's (DHS)
Federal Emergency Management Agency (FEMA), Federal Highway
Administration (FHWA), Small Business Administration (SBA), U.S. Army
Corps of Engineers (the Corps), U.S. Department of Agriculture,
Department of Housing and Urban Development (HUD), and the Department
of Veterans Affairs (VA). We also interviewed officials with these
agencies about the agencies' procedures for preventing prohibited
expenditures from being provided to individuals and entities in CBRS
units. To determine the extent to which federal agencies issued permits
for projects within selected CBRS units, we interviewed officials and
analyzed data provided by the Corps, the Environmental Protection
Agency (EPA), and state agencies authorized to administer EPA programs.
The information we gathered on federal financial assistance and permits
cannot be generalized to the entire universe of CBRS units. We
determined that the agency data were sufficiently reliable for the
purposes of our review. A more detailed description of our scope and
methodology is presented in appendix I. We performed our work between
February 2006 and February 2007 in accordance with generally accepted
government auditing standards.
Results in Brief:
Most units within the CBRS remain undeveloped; however, about 3 percent
of units have experienced significant levels of development.
Specifically, an estimated 84 percent of all CBRS units have remained
undeveloped (no new structures were built) since they were included in
the system, while about 13 percent have experienced minimal levels of
development--consisting of less than 20 additional structures per unit
since becoming part of the CBRS. An estimated 3 percent of units
experienced significant development--consisting of 100 or more
structures per unit--since becoming part of the CBRS. According to
federal and local officials, CBRA has played little role in the extent
of development within the CBRS units that we reviewed. For those units
that have remained undeveloped, officials identified the following
factors as being primarily responsible for inhibiting development (1)
the lack of suitably developable land in the unit; (2) the lack of
accessibility to the unit; (3) state laws discouraging development
within coastal areas; and (4) ownership of land within the unit by
groups, such as the National Audubon Society, who are seeking to
preserve the natural state of the unit. For those units that we
reviewed where development has occurred, local officials said that CBRA
did little to discourage development and identified the following
factors as being primarily responsible for contributing to development:
(1) a combination of commercial interest and public desire to build in
the unit, (2) local government support for development to improve the
economic base of the area, and (3) the availability of affordable
private flood insurance. Overall, we found that CBRS units in the
southern region of the United States are experiencing greater
development than units in the north. This is largely because the amount
of developable land is greater in the south.
Federal agencies have provided some financial assistance that is
prohibited by CBRA, some assistance that is allowed under CBRA, and
issued hundreds of permits for federally regulated construction
projects to property owners and other entities in CBRS units. More
specifically,
* Four agencies--FEMA, HUD, SBA, and VA--provided financial assistance
to property owners in CBRS units that is prohibited by CBRA. For
example, we determined that 73 FEMA flood insurance policies with total
policy values of $20 million and 5 HUD insured loans totaling $384,000
were made to entities in CBRS units and were active in 2006. While
FEMA, SBA, and VA have procedures in place intended to prevent
prohibited financial assistance from being provided to property owners
in CBRS units, HUD does not have such procedures. FEMA officials cited
the lack of updated CBRS maps and limitations with mapping technology
as the primary reasons why errors were made and assistance was provided
to entities within the CBRS. FWS has begun a congressionally directed
effort to modernize and correct CBRS unit maps. However, according to
FWS officials, completing that effort is contingent upon receiving
specific funding for the effort. In the meantime, FWS is working with
FEMA to update the digital flood maps used by FEMA--an effort that
should improve FEMA's, insurance agents' and other's ability to
determine if a property is eligible for federal flood insurance. VA and
SBA officials acknowledged that they had provided assistance prohibited
by CBRA and told us that they will monitor compliance with their
procedures more carefully in the future. HUD officials told us that
they have no procedures under their single-family mortgage insurance
programs related to CBRA because it would be unnecessary in practical
terms. For example, agency officials believed it was unlikely that
these programs would fund projects in the CBRS because of the high-
priced homes generally found in these areas. In response to our
findings, HUD officials said that they would be developing CBRA policy
guidance and associated training to ensure future compliance.
* Three federal agencies have provided some financial assistance that
is allowed under CBRA, but the total extent of this assistance is
unknown. For example, in the past 10 years, FEMA has provided at least
$5.6 million in disaster assistance to the unit in North Topsail, North
Carolina, for debris removal and repairs. Similarly, FHWA has provided
$1.1 million for road repair to the unit in Cape San Blas, Florida.
However, because these federal agencies do not track the amount of
allowable financial assistance they provide to CBRS units, they could
not provide us with the complete and reliable data needed to estimate
the total extent of such assistance.
* The Corps and states authorized by the EPA have issued hundreds of
permits allowed by CBRA to entities within the CBRS. Since 1983, in 20
CBRS units the Corps issued at least 194 permits to allow, among other
things, the construction of piers, mosquito control ditches, erosion
control areas, and the raising of fish and shellfish. Similarly, since
1983, in 9 CBRS units EPA-authorized state agencies issued 41 permits,
primarily for storm water runoff from construction activities and the
discharge of water from treatment systems.
We are recommending that FEMA, HUD, SBA, and VA obtain official
determinations from FWS on whether the properties we identified as
receiving federal assistance in violation of CBRA are in fact located
within a CBRS unit and cancel all inappropriate loan guarantees and
insurance policies. We are also recommending that these agencies
examine their policies and procedures to ensure that they are adequate
to prevent federal assistance from being provided to entities in CBRS
units. In addition, so that federal agencies and other parties can more
accurately determine whether a property is within CBRA and whether it
is eligible for assistance, we recommend that FWS place a high priority
on completing its efforts to develop digital maps that more accurately
depict unit boundaries. In commenting on our report, DHS, DOI, and HUD
generally agreed with our recommendations. SBA had no comment on the
draft report. VA agreed with our findings and one of our
recommendations but did not concur with the recommendation to cancel
all inappropriate loan guarantees, stating that it would inflict
disproportionate harm on lenders and veterans. While we understand VA's
concerns about the adverse effect that this could have on the
potentially affected parties, we believe that VA should rescind these
loan guarantees because they were made in violation of CBRA.
Background:
Coastal barriers are unique land forms that function as buffers,
protecting the mainland against the destructive forces of hurricanes
and other coastal storms. Coastal barriers also provide habitat for
migratory birds and other wildlife; and they provide essential nesting
and feeding areas for commercially and recreationally important species
of fish and other aquatic organisms such as sea turtles. In the United
States, coastal barriers are predominantly distributed along the
Atlantic and Gulf coasts but can also be found in areas surrounding the
Great Lakes, the Virgin Islands, and Puerto Rico. From the Gulf of
Maine to Padre Island, Texas, coastal barriers form an almost unbroken
chain along the coastline. Coastal barriers are generally unsuitable
for development because the movement of unstable sediments undermines
man-made structures. Despite this threat, coastal areas that include
coastal barriers are among the most rapidly growing and developed areas
in the nation, accounting for 53 percent of the total population in the
United States according to a 2004 report by the National Oceanic and
Atmospheric Administration (NOAA), National Ocean Service.
In 1982, Congress enacted the Coastal Barrier Resources Act to minimize
(1) the loss of human life; (2) wasteful expenditures of federal
revenue; and (3) damage to fish, wildlife, and other natural resources
associated with coastal barriers along the Atlantic and Gulf coasts by
restricting future federal expenditures and financial assistance, which
have the effect of encouraging development of coastal barriers. The act
designated 186 units, comprising about 453,000 acres along 666 miles of
shoreline from Maine to Texas, which would later be known as the John
H. Chafee Coastal Barrier Resources System (CBRS).
Subsequently, the CBRS was further expanded to include additional units
along coastal states from Maine to Texas, plus units in the Great
Lakes, the Virgin Islands, and Puerto Rico. Currently, the CBRS
includes 585 units, which consist of undeveloped coastal barrier lands
and aquatic habitat that comprises nearly 1.3 million acres of land and
associated aquatic habitat. The CBRS was also expanded to include 272
OPAs that comprise an additional 1.8 million acres of land and
associated aquatic habitat. Most of the land in these OPAs is publicly
held for conservation or recreational purposes, such as national
wildlife refuges, national parks and seashores, and state and county
parks; but some OPAs may also include some private property that may or
may not be held for conservation.
Under CBRA, no single federal agency has overall responsibility for
administering activities within the CBRS; instead, all federal agencies
must abide by the provisions of the act. CBRA does assign the Secretary
of the Interior responsibility for, among other things, maintaining
maps of each CBRS unit and recommending modifications to CBRS unit
boundaries, as needed.[Footnote 7] Within the Department of Interior,
these responsibilities belong to the FWS. Both agencies and property
owners can request decisions from FWS regarding whether specific
properties are within CBRS boundaries. Finally, agencies must consult
with FWS to determine whether a proposed project is within the CBRS,
and if so, whether the project is consistent with CBRA.
The Coastal Barrier Resources Reauthorization Act of 2000 directed the
Secretary of the Interior to complete a Digital Mapping Pilot Project
for at least 50 but not more than 75 units in the CBRS and submit a
report to the Congress that describes the results of the pilot project
and the feasibility, data needs, and costs of completing digital maps
for the entire CBRS.[Footnote 8] Currently, FWS is conducting a pilot
project to create updated digital CBRS maps that would provide federal
agencies and others with an enhanced tool for determining accurate
boundary locations. Later, the Coastal Barrier Resources
Reauthorization Act of 2005 directed the Secretary of the Interior to
create digital maps by 2013 for all CBRS units not included in the
pilot project. However, according to agency officials, the ability to
conduct this project and the actual completion date will depend upon
the specific funding that the agency receives for this project.
CBRA does not prohibit development in CBRS units by owners who are
willing to develop their properties without the benefit of federal
financial assistance. Instead, with certain exceptions, CBRA prohibits
federal expenditures or financial assistance within CBRS units that
might encourage development. The prohibitions include, but are not
limited to the following:
* the construction or purchase of any structure, facility, or related
infrastructure;
* the construction or purchase of any road, airport, boat landing
facility, or other facility on, or bridge or causeway to, any CBRS
unit;
* any project to prevent the erosion of, or to otherwise stabilize, any
inlet, shoreline, or inshore area for the purpose of encouraging
development; and:
* the issuance of flood insurance coverage under the National Flood
Insurance Act of 1968 for any new construction or substantially
improved property.
CBRA allows certain federal assistance within the CBRS for limited
activities after consultation with FWS. However, the act does not
require the agencies to obtain FWS' approval before acting. Such
assistance includes, but is not limited to the following:
* the exploration, extraction, or transportation of energy resources
that can be carried out only on, in, or adjacent to a coastal water
area;
* the maintenance or construction of improvements of existing Federal
navigation channels and related structures;
* the maintenance, replacement, reconstruction, or repair, but not the
expansion, of publicly owned or operated roads, structures, or
facilities that are essential links in a larger network or system;
* military activities essential to national security; and:
* assistance for emergency operations essential to saving of lives and
protecting property.
CBRA has no provisions prohibiting the administration of federal
regulatory activities, such as issuing certain permits, within the
CBRS. Three federal agencies--the Corps, EPA, and the U.S. Coast Guard-
-issue permits that regulate, among other things, the discharge of
dredged or fill material into federally regulated waters, including
wetlands; the discharge of wastes into navigable waters; and the
construction of bridges over navigable waters. Because much of the CBRS
is comprised of wetlands and aquatic habitat, activities undertaken in
these areas can require a permit from one or more of these agencies.
Federal legislation other than CBRA provides the authority for issuing
these permits. Among these are the Clean Water Act, the Rivers and
Harbors Appropriation Act of 1899, and the Bridge Act of 1906, as
amended.
CBRS Remains Largely Undeveloped:
Despite the concentration of significant levels of development in a few
units, most of the CBRS remains undeveloped. Specifically, we found an
estimated 84 percent of all CBRS units remain undeveloped--with no new
structures built since the unit was included in the CBRS. We found that
factors such as the lack of suitably developable land in the unit and
state laws discouraging development were responsible for inhibiting
development. We also determined that an estimated 13 percent of CBRS
units experienced minimal levels of development--consisting of less
than 20 additional structures per unit since becoming part of the CBRS-
-while 3 percent of CBRS units experienced significant development--100
or more additional structures per unit. According to local officials,
commercial interest and public desire to build in some units and local
government support for development were some of the key factors
contributing to the development in the CBRS units we reviewed. Appendix
II lists the units in our review and the status of development in those
units.
The Majority of CBRS Units Have Not Experienced Development:
On the basis of our analysis of a random sample of CBRS units, we
estimate that 84 percent of the units experienced no new development
since their inclusion in the CBRS.[Footnote 9] For the units in our
sample, the undeveloped units were generally smaller in total acreage
and had less developable acreage than the developed units.
Although CBRA does not appear to have been a primary factor in
discouraging development in the units we reviewed, officials indicated
that in those areas where CBRA prohibitions are complemented by local
and state government objectives for development, it is unlikely that
there will be significant increases in development. Local officials
cited several factors as being primarily responsible for inhibiting
development.
The Lack of Suitably Developable Land. This was a primary factor for
the lack of development in a number of CBRS units that we
reviewed.[Footnote 10] For example, the Boat Meadow unit in
Massachusetts is comprised almost entirely of salt marshes with small
sand bars scattered throughout shallow water, making the land
unsuitable for development. Similarly, in the Wrightsville Beach unit
in North Carolina, the sand continuously shifts, making the land too
unstable for development. Figure 1 is an example of the type of terrain
generally found in the Boat Meadow CBRS unit in Massachusetts.
Figure 1: Boat Meadow CBRS Unit in Massachusetts:
[See PDF for image]
Source: GAO.
[End of figure]
Lack of Accessibility to the Unit. A number of federal and local
officials noted that some CBRS units are not easily accessible or are
located in remote locations that are not desirable to developers. For
example, a number of units, such as the Bay Joe Wise Complex in
Louisiana, are only accessible by boat. Other units, such as the Boca
Chica unit in Texas, are in such remote locations that an official said
developers are not willing to build there. In addition, several remote
and inaccessible locations do not currently have the infrastructure
needed to develop the unit. For example, an official said the lack of
existing infrastructure and the high cost of constructing development-
quality water and sewage infrastructure have discouraged development on
the North Padre Island unit in Texas.
State Laws Discouraging Development. State laws were cited by a number
of officials as reasons why development had not occurred in some CBRS
units. Some states have adopted specific restrictions to prevent
development in coastal or wetland areas, which are often found in CBRS
units. For example, a number of units in Massachusetts--such as Black
Beach and Squaw Island--have not experienced development due in part to
wetland and coastal protection laws enacted by the state.[Footnote 11]
In addition, both Maine and Massachusetts do not allow state funds or
grants to be used for projects to encourage development in barrier
beaches.[Footnote 12] In Rhode Island, any coastal development project
must receive a permit from the Rhode Island Coastal Resources
Management Council, and an official explained that it was highly
unlikely that permits would be issued for new development in coastal
regions of the state.
Preservation Efforts by Conservation Groups. A number of CBRS units
include land owned by entities seeking to preserve the area in its
natural state. In some cases, CBRS units have lands that are owned by
federal, state, or local governments, such as local parks or national
forests. For example, the Whitefish Point unit in Michigan is part of
the Hiawatha National Forest. In other cases, land in CBRS units is
owned by conservation groups seeking to prevent development. For
example, a significant portion of the Southgate Ponds unit in the U.S.
Virgin Islands is owned by the St. Croix Environmental Association; the
Fox Islands unit in Virginia is owned by the Chesapeake Bay Foundation;
and the Pine Island Bay unit in North Carolina is mostly owned by the
National Audubon Society. Although these owners have sought to prevent
development within the unit, as the land becomes more valuable, owners
may experience pressure to sell it for development purposes. Private
home owners have also taken actions to prevent continued development in
one CBRS unit we reviewed. Some portions of the Prudence Island Complex
unit in Rhode Island are located in private home owners' backyards.
Home owners have voluntarily placed their land into a conservation
easement to formally protect it from future development.
A Small Percentage of Units Have Experienced Some Level of Development,
but Significant Development Has Been Concentrated in a Few Units:
Although the majority of CBRS units remain undeveloped, 16 percent have
experienced some level of development. While the range of development
varies between one additional structure for some units to over 400 new
structures for another unit, the amount of development in most of the
units has been small. Thirteen percent of the units have added less
than 20 structures. Where there has been significant development, it
has been concentrated in a relatively small number of units. We
estimate that only 3 percent of CBRS units have experienced the
addition of 100 or more new structures since their inclusion in the
CBRS.
The majority of the CBRS units within our sample that have experienced
development are located in the southern United States. Two units
experiencing the most extensive development were the Topsail, North
Carolina unit and the Cape San Blas, Florida unit. Several other units
in the south, such as the Four Mile Village unit in Florida and Bird
Key Complex in South Carolina, have plans for continued development.
None of the units in our sample located in the northern United States
had experienced such extensive development. One factor contributing to
increased development in the south is the greater amount of developable
acres; 80 percent of the developable land in the CBRS is located in
southern units--those located south of New Jersey.
Local officials cited several factors as being primarily responsible
for the development that has occurred.[Footnote 13]
Commercial Interest and Public Desire to Build in the Unit. Officials
told us that development had occurred in several areas because the
public's desire to develop in the unit was stronger than the
disincentive of CBRA. For example, the Currituck Banks unit in North
Carolina has experienced an increase of at least 400 new residential
homes since its inclusion in the CBRS. Although this unit only has
beach access for four-wheel drive vehicles, approximately 75 percent of
the land south of the unit is currently built to capacity, and the
increasing demand for residential structures is sending developers into
the adjoining CBRS unit. Local officials stated that the lack of
federal assistance did not appear to have any affect on the rate of
development in the area. Similarly, the Cape San Blas unit in Florida
has continued to experience increased development with at least 900 new
structures--primarily single family vacation homes--being built since
the unit's inclusion in the CBRS. Officials in Cape San Blas believe
that as other coastal locations around Florida became too expensive to
find affordably priced ocean front homes, the area of Cape San Blas
became a highly desirable location. Accounting for the significant
development that has occurred in the Topsail unit in North Carolina,
officials stated that the basic reason was simply supply and demand:
people want to live on the coast of North Carolina, and the area that
includes the CBRS unit had developable land available.
Local Government Support for Development. Local officials explained
that local governments with a pro-development attitude aided in
increasing development in CBRS units. For example, local officials in
Topsail, North Carolina told us that most of the 1,600 structures
located in the Topsail CBRS unit were constructed after the unit's
inclusion in the CBRS.[Footnote 14] These officials indicated that the
county government had begun development plans for land within the unit
prior to its inclusion in CBRS. These officials noted that the county
had targeted the area for development to promote tourism and increase
the local tax base, and that certain infrastructure was built to
support this increased development. As the result of these pro-
development policies, a large portion of the unit has been developed
with residential homes--many of which serve as vacation rentals during
the summer months. Similarly, in the Cape San Blas unit in Florida the
local government had development plans for the area prior to the
adoption of CBRA. Local officials there said that the area was already
subdivided into lots for development and that some existing
infrastructure, such as roads, water systems, and telephone systems,
was already built when the unit was added to the CBRS.
Availability of Affordable Private Flood Insurance. Officials familiar
with several CBRS units told us that initially restrictions on the
availability of federal flood insurance had little impact on the
development that occurred in some CBRS units. Lenders did not require
flood insurance in order for home owners to obtain mortgage loans at
the time most of the development occurred. According to these
officials, home owners within CBRS units that chose to get flood
insurance could readily get private flood insurance at rates comparable
with federal flood insurance. However, in the past few years FEMA has
updated its flood-zone maps and has designated some CBRS areas as
special flood hazard areas. This change in designation has made areas
that once did not require owners to obtain flood insurance in order to
receive financing into areas where owners are now required to have
flood insurance prior to obtaining mortgage loans. At the same time,
officials said that in several CBRS units the cost of private insurance
has skyrocketed and is no longer comparable to national flood insurance
program rates. According to a local banker in Cape San Blas, a $250,000
home outside the CBRS unit can obtain flood insurance through the
National Flood Insurance Program for $470 per year, but private flood
insurance for homes located in the CBRS unit that are not eligible for
national flood insurance could cost between $5,070 and $12,500 a year,
depending on the insurance company.
The new requirements mandating flood insurance for mortgages in some
units and the increased costs of private flood insurance may begin to
impact development in the CBRS in the future, according to local
officials. For example, officials in Currituck County noted that the
flood zone determination change had significantly reduced the number of
building permits issued for new development in the CBRS unit since 2005
and suggested that the unit will now experience less future
development. Likewise, the Cape San Blas unit in Florida has also been
affected by the flood zone determination change. A local official
stated that since FEMA adopted a special flood hazard area for the CBRS
unit in 2002, property values in the unit have decreased by 30 percent.
Because the cost of private flood insurance has risen dramatically in
the last couple of years, a number of residents and officials
representing areas within the CBRS, including Cape San Blas and
Topsail, have unsuccessfully attempted to remove the areas from the
CBRS, primarily so that residents would be eligible to obtain flood
insurance through the National Flood Insurance Program.
Our review of CBRS units did not include OPAs because FWS officials
informed us that these areas were classified separately from system
units and that the land was already protected from development by other
mechanisms--such as its designation as a state or federal park. OPAs
are not under the same limitations as CBRS units; the only restriction
placed on federal spending within these areas is the prohibition on
federal flood insurance. However, we found instances where land within
OPAs was sold to private developers and development had increased in
the area. For example, in the St. Andrews Complex unit in Florida, the
Bahia de Tallaboa unit in Puerto Rico, and the Mustang Island unit in
Texas, development has continued despite the units' designation as an
OPA.
The Extent to Which Federal Agencies Have Provided Financial Assistance
and Permits to Entities in CBRS Units Varies:
We found that federal agencies have provided some financial assistance
prohibited by CBRA, some assistance allowed by CBRA, and hundreds of
permits for federally regulated construction projects to entities
within the CBRS units included in our review. Four agencies provided
financial assistance expressly prohibited by CBRA to property owners in
CBRS units. Three federal agencies also provided financial assistance
to entities in CBRS units that is allowed under CBRA, but they do not
track the amount of assistance they provided. As a result, we were
unable to determine the total extent of such assistance. Finally, the
Corps and EPA-authorized state agencies have issued hundreds of permits
for a variety of federally regulated construction projects within CBRS
units.
Four Federal Agencies Have Provided Some Financial Assistance That Is
Prohibited by CBRA:
Four federal agencies--FEMA, HUD, SBA, and VA--provided some financial
assistance that is expressly prohibited by CBRA to property owners in
CBRS units. Our review of approximately 4,500 addresses uncovered 73
active FEMA flood insurance policies, 37 inappropriate FEMA disaster
assistance payments, 5 HUD home loan guarantees, 3 SBA disaster loans,
and 11 VA home loan guarantees that should not have been made to
property owners in CBRS units. Although three of the four agencies have
procedures to prevent and detect assistance to property owners in CBRS
units, agency officials cited several reasons why this erroneous
assistance was provided in violation of CBRA, including the lack of
updated CBRS maps, which makes determining the precise locations of
properties and CBRS unit boundaries difficult.
FEMA National Flood Insurance Program:
FEMA provides federally backed flood insurance for home owners,
renters, and business owners in participating communities that are not
in the CBRS. Structures that are built or substantially improved
following their inclusion within the CBRS are not eligible for federal
flood insurance. However, our review of policies active as of May 2006
identified 73 National Flood Insurance Program (NFIP) policies for
properties in CBRS units. The flood insurance policies ranged from
$26,500 to $350,000 and totaled approximately $20 million. Although
these policies violated the CBRA, FEMA officials said it is unlikely
that the agency would actually pay a claim on these policies, because
before paying a claim, FEMA adjusters would first conduct a physical
inspection of the property and determine whether it was in a CBRS unit.
If a property was found to be within the CBRS, FEMA would deny the
claim and refund the policy owner's insurance premium.
To prevent flood insurance policies from being issued for properties in
CBRS units, FEMA's Flood Insurance Manual requires that private
insurance companies participating in the NFIP determine if a property
is eligible for flood insurance. Prior to issuing a policy, the agent
is required to review FEMA's flood insurance maps to determine if the
property is located within the CBRS and collect information to
determine if the structure was built prior to the unit's inclusion in
the CBRS. However, according to FEMA, insurance agents have made
mistakes and issued policies in violation of CBRA for two reasons:
* It may be difficult to locate a property and determine whether it is
in a CBRS unit, especially when a property is near or adjacent to a
CBRS boundary. For example, at one location we visited, we identified
homes adjacent to each other where one property was in the CBRS and the
other was not. In other CBRS units, some homes had backyards that fell
within the CBRS. Furthermore, new streets may not be depicted on
existing maps. According to FEMA officials, the insurance agent must
often make a judgment call when determining whether a property is
within the CBRS.
* The agent may not be familiar with CBRA prohibitions and may not
follow procedures. According to FEMA officials and officials from a
private insurance agency with whom we spoke, some home owners obtain
flood insurance from insurance agents located inland, away from coastal
areas, who might not have been aware of the CBRA restrictions.
According to FEMA officials, the agency takes a number of steps to
identify properties that may have inappropriately received federal
flood insurance. Since 1998, FEMA has sought to assist private
companies with identifying flood insurance policies that potentially
were ineligible for flood insurance coverage because the property was
within the CBRS. To accomplish this task, FEMA uses computer mapping
technology to plot addresses and determine whether they are potentially
in a CBRS unit.[Footnote 15] However, the computer software FEMA relies
on cannot always correctly locate all addresses on the map. For
example, this can occur if a street or address range is not included in
the software, which can happen when a street or a range of addresses is
new. Twenty of the 73 flood insurance policies that we determined were
issued for a property that was in a CBRS unit could not be located on a
map by FEMA's computer software. In addition, computer mapping
technology has inherent inaccuracies and may plot properties in the
wrong location. For example, using our mapping software, we determined
another 20 of the 73 flood insurance policies were for a property in
the CBRS but were not identified as being in a CBRS unit by FEMA's
mapping software.[Footnote 16] FEMA officials said they recognize that
their software may not always identify new addresses and streets in
CBRS units, and so the agency obtains quarterly updates of new streets
and addresses and rechecks insured properties against the updated
information to identify any that might be located in CBRS units.
When FEMA's computer plotting reveals that a property for which a
federal flood insurance policy has been issued may be in a CBRS unit,
FEMA reports the error to the insurance company. Once an insurance
company receives notification in the form of an error message that they
may have written an ineligible policy, the company may take one of four
actions:
1. The company can agree that the property is located in a CBRS unit
and cancel the policy back to the inception date of coverage.
2. The company may agree that the property is located in a CBRS unit
but prove that the building was constructed prior to the CBRS
designation. In these cases, the policy is deemed valid and may remain
in effect.
3. The company can disagree that the property is located in a CBRS unit
and assume responsibility for the risk. In these cases, the policy
would remain active, FEMA would continue to collect the premiums, but
the insurance company would be responsible for paying any claims filed.
Insurance companies have assumed liability for the risks associated
with 29 of the 73 flood insurance policies that we identified had been
issued for properties located in CBRS units.
4. The company can request that FWS make an official determination
regarding whether the property is in the CBRS. If FWS determines that
the property is in a CBRS unit, the policy is then cancelled back to
the inception date of coverage. However, FEMA officials expressed
concern about the length of time FWS takes to make a property
determination. Typically, it takes FWS a year to respond to inquiries
for a property determination. As of January 17, 2007, FEMA was waiting
for determinations on 544 addresses from FWS.
According to FWS officials, the process for making property
determinations is labor intensive because they are using CBRS maps that
were created more than 15 years ago and are not available in digital
format. FWS officials told us that modernized digital maps of the CBRS
would improve the accuracy and efficiency of the property determination
process, allowing its customers and partners, in many cases, to
determine within minutes whether a property is located within the CBRS.
In 2000, the Congress directed the Secretary of the Interior to create
draft digital maps for at least 50 and not more than 75 units, or
nearly 10 percent of the CBRS.[Footnote 17] FWS has created draft
digital maps of 60 CBRS units that it must submit to the Congress for
its consideration.[Footnote 18] In May 2006, the Congress also
instructed the Secretary of the Interior to create maps for the rest of
the CBRS by May 2013.[Footnote 19] According to FWS, digital maps would
replace the paper maps currently being used that are (1) outdated
technologically and (2) sometimes inaccurate and may not align
precisely with the natural or man-made features that the Congress
intended the boundaries to follow. FWS officials believe that
modernizing the CBRS maps will address the inaccuracies of the existing
maps.
To implement the map modernization project, FWS officials said that
they investigated several options for procuring data to produce the
required draft digital maps, including federal, state, local, and
private sources. In many cases, FWS was able to obtain data internally
or from other federal agencies at little or no cost, including wetlands
data and national wildlife refuge boundaries from within FWS, aerial
imagery from the U.S. Geological Survey, hydric soils data from the
Department of Agriculture's Natural Resources Conservation Service, and
digital boundaries for many federally protected areas from NOAA.
FEMA is also conducting a map modernization effort that includes
preparing digital flood insurance maps. In 2006, FWS entered into an
interagency agreement with FEMA whereby FWS will place current CBRS
boundaries onto FEMA's digital flood maps. FEMA provided FWS with
$40,000 for an initial set of maps for some units. While the FEMA maps
are not the "official" CBRS maps adopted by the Congress, FWS officials
said that these digital maps will allow property owners, insurance
agents, and others to have a much more accurate and precise tool for
determining whether a property or project site is located near a CBRS
area and would require an official determination from FWS.
FEMA Individuals and Households Program:
FEMA's Individuals and Households Program (IHP)[Footnote 20] provides
housing assistance and other assistance, such as medical or funeral
assistance, for needs arising from a declared emergency or major
disaster. For owners or renters residing in CBRS units, FEMA
regulations allow providing temporary housing assistance (rent) but
generally do not allow providing funds for housing repairs or
construction assistance. However, we found that since August 26, 1998,
FEMA provided 37 disaster assistance payments to individuals in CBRS
units included in our review totaling $25,393. Most of the payments
were for purposes labeled by FEMA as "Other Eligible Property Items."
According to FEMA officials, "Other Eligible Property Item" payments
were for post-disaster purchases for emergency needs such as chainsaws,
generators, heating fuel, dehumidifiers, air purifiers, and wet/dry
vacuums.[Footnote 21] These payments were made under six different
disaster declarations, all to individuals living in CBRS units in North
Carolina and Florida. The units included Coconut Point, Cape San Blas,
Blue Hole, Ponce Inlet, and Ormond-by-the-Sea in Florida, and Currituck
Banks and Topsail in North Carolina. In addition to payments for "Other
Eligible Property Items," one payment of $645.95 was made for home
repairs. FEMA procedures require officials making payment
determinations in potential CBRS areas to document that the property is
not in a CBRS unit prior to approving assistance for those types of
assistance not allowed in such areas. However, according to a FEMA
official, in these cases the procedures were not followed when these
payments were approved.[Footnote 22]
Department of Housing and Urban Development:
Through its Mortgage Insurance Homes program, HUD insures lenders
against losses on mortgage loans used to finance the purchase of
proposed, under construction, or existing housing, as well as to
refinance indebtedness on existing housing as long as these properties
are not located in the CBRS. In our review of insured home loans active
as of June 2006, we identified five HUD-insured loans for properties
located in CBRS units. Three of the loans were for properties in the
Prudence Island Complex unit in Rhode Island; one in the Topsail unit
in North Carolina; and one in the Cape San Blas unit in Florida. These
insured loans were approved by HUD between 1985 and 2000, with loan
amounts ranging from approximately $50,000 to $137,000, for a total of
about $384,000.
Despite the fact that all of HUD's programs are subject to CBRA
restrictions, HUD officials said that they have no procedure under
their single family (one-to four-family property) mortgage insurance
programs related to CBRA. HUD officials further indicated that while
they could implement better controls for restrictions on providing
single family mortgage insurance in the CBRS, it would be unnecessary
in practical terms. HUD officials provided three primary reasons why it
was unlikely that a HUD-insured loan would be provided for a property
in a coastal area. First, HUD regulations require that flood insurance
be obtained under the NFIP before HUD will insure single family
mortgages for properties in FEMA-identified special flood hazard areas.
HUD officials stated that because properties located in the CBRS would
likely be in special flood hazard areas and the NFIP flood insurance is
prohibited in the CBRS, HUD would not be able to insure single family
mortgages for these properties. However, HUD's explanation does not
account for the fact that portions of CBRS units may not be in a
special flood hazard area and that FEMA prohibitions are not universal
as the NFIP flood insurance may be available to homes built before the
area's inclusion in the CBRS. Second, most HUD insurance for single
family mortgages is for first-time home owners who typically are not
buying homes in the higher priced ranges found in the CBRS. Third,
property values in the CBRS are such that mortgage amounts would likely
exceed the program limits for typical HUD-insured single family
mortgages, as the mortgage limit for a one family property ranges from
approximately $170,000 to $310,000, depending on the location. In
response to our findings, HUD officials said that the department would
be developing CBRA policy guidance and associated training to ensure
future compliance.
Small Business Administration:
Following the issuance of a disaster declaration, SBA provides disaster
loans to eligible home owners for repair or replacement of their
primary residences. However, residences located in CBRS units are
ineligible for this disaster loan assistance. During our review of the
period January 1, 1990, through May 30, 2006, we found that SBA had
made three disaster loans for home repairs for properties in CBRS
units.[Footnote 23] The three loans ranged from $5,000 to $10,000 and
totaled $24,200. These loans have been paid in full and were made to
individuals in the Florida CBRS units of Blue Hole and Cape San Blas,
and the Creek Beach unit in New York. To prevent disaster loans from
being provided to properties within the CBRS, SBA procedures call for
agency staff to consult FEMA's flood maps to determine whether a
property is within a CBRS unit before approving disaster loans. SBA
officials acknowledge that two of these loans should not have been
approved, but did not agree that the third loan was for a property
within CBRS. These officials stated that it is sometimes difficult for
agency staff to determine if a property is within the CBRS with the
existing FEMA flood maps. SBA officials said that as a result of our
review the agency will increase the number of quality assurance reviews
conducted in any disaster area that includes a CBRS unit.
Department of Veterans Affairs:
VA issues home loan guarantees to help eligible recipients obtain homes
or refinance home loans except in CBRS units. However, our review of
home loan guarantees active as of September 2006 found that VA had
provided 11 loan guarantees for homes in a CBRS unit. Nine of these 11
loan guarantees were issued to home owners in the Topsail unit in North
Carolina, while the other two were provided to home owners in the
Ormond-by-the-Sea unit in Florida. The amount of the 11 loan guarantees
ranged from a low of about $14,340 to a high of about $45,900 for a
total value of $352,188.
VA officials told us that the agency's Lenders Handbook includes
provisions that inform readers that properties in CBRS units are
ineligible as security for a VA-guaranteed loan. VA appraisers are
instructed during training sessions to reject assignments appraising
such properties. Also, to verify that loan guarantees are provided
lawfully, agency officials said that they or their designees (1)
examine appraisal paperwork for all loan applications looking for
anomalies; (2) inspect 10 percent of all loan applicant properties to
verify, among other things, that they are not in CBRS units; (3) review
paperwork for 10 percent of all closed loans; and (4) visit lender
offices and sample VA loans for compliance. In reviewing the provisions
included in VA's handbook, we determined that it inaccurately instructs
appraisers to obtain the maps for determining the location of a
property from the U.S. Geological Survey rather than from FWS.
VA officials acknowledge that agency staff should have identified the
11 properties we discovered as located within the CBRS during their
initial review of the appraisal paperwork. VA officials explained that
as a result of our findings, they have (1) corrected the Lenders
Handbook provisions to instruct staff to use maps maintained by FWS and
(2) instructed officials at VA regional loan centers to modify their
training to both lenders and appraisers to emphasize the procedures
designed to prevent issuing loans to persons who reside in CBRS units.
Federal Agencies Have Provided Assistance That Is Allowable under CBRA,
but the Extent of Such Assistance Is Unknown:
We found that three federal agencies had provided financial assistance
allowable under CBRA to entities within the CBRS. We were unable to
determine the total extent of such assistance, because these federal
agencies do not track the amount of allowable financial assistance they
provide to entities in CBRS units, and they could not provide us with
the data necessary to estimate the total assistance provided.
Federal Emergency Management Agency:
After a disaster, FEMA may provide disaster funding in CBRS units for
emergency assistance such as debris removal and emergency protection
measures. FEMA may also provide disaster funding following an emergency
for activities like repairing roads or utilities, repairing existing
water channels, or disposing of sand. Because FEMA could not provide
reliable data on whether this disaster assistance was within a CBRS
unit for each project, we could not determine the full extent of the
allowable disaster assistance provided by FEMA. However, with FEMA's
data, we were able to identify that some of the projects were within
CBRS units. For example, since 1998, FEMA provided at least $5.6
million in disaster assistance to the Topsail unit in North Carolina to
fund projects to remove debris, replace signs, and repair beach access
crosswalks and public beach facilities after Hurricanes Ophelia, Floyd,
Irene, and Isabel. Similarly, in both the Cape San Blas, Florida and
Topsail, North Carolina CBRS units, FEMA provided funds to construct an
emergency berm in order to protect existing development after storms
destroyed protective dunes and caused beach erosion. Table 1 provides
examples of some of the disaster assistance FEMA has provided to CBRS
units since 1998.
Table 1: Examples of FEMA Disaster Assistance Since 1998:
Storm and year: Floyd and Irene, 1999;
Unit: Topsail Beach, North Carolina;
Project description: Replace traffic control signage;
Total obligated: $13,979.
Storm and year: Floyd and Irene, 1999;
Unit: Topsail Beach, North Carolina;
Project description: Debris removal;
Total obligated: 1,304,417.
Storm and year: Charley and Bonnie, 2004;
Unit: Ormond-by-the Sea, Florida;
Project description: Restore an electrical substation;
Total obligated: 11,361.
Storm and year: Ivan, 2004;
Unit: Cape San Blas, Florida;
Project description: Construct an emergency berm;
Total obligated: 1,423,766.
Storm and year: Frances, 2004;
Unit: Ponce Inlet, Florida;
Project description: Restore Turtle Rehabilitation Laboratory at the
Marine Science Center;
Total obligated: 23,666.
Storm and year: Dennis, 2005;
Unit: Dog Island, Florida;
Project description: Repair damaged road surfaces;
Total obligated: 37,372.
Storm and year: Dennis, 2005;
Unit: Dog Island, Florida;
Project description: Debris removal;
Total obligated: 470,833.
Storm and year: Ophelia, 2005;
Unit: Topsail Beach, North Carolina;
Project description: Construct emergency berms;
Total obligated: $1,167,146.
Source: GAO analysis of FEMA data.
[End of table]
As mentioned earlier, FEMA is also allowed to provide limited disaster
assistance to individuals through the IHP after the President declares
an emergency or major disaster in an area, including CBRS units. We
found that since August 26, 1998, FEMA provided $8,237 to 16
individuals in CBRS units for emergency rental assistance. These
payments were made to individuals in CBRS units in Florida and North
Carolina.
Federal Highway Administration:
An exception to the limitations within CBRA allows FHWA to administer
federal funding for projects on publicly owned or operated roads that
are essential links in a larger transportation network and do not
expand the existing transportation system. Because, as stated in agency
guidance, FHWA determined that all roads within the federal highway
system, including those in CBRS units, are usually "essential links" in
a larger transportation network, most projects within CBRS units are
permissible under CBRA after a consultation process with FWS. Although
FHWA does not maintain data on which projects were located within CBRS
units, we were able to identify--based on information provided by state
officials--some examples of allowable projects in CBRS units that
received federal funds from FHWA. For example, according to data from
the Florida Department of Transportation, federal funding totaling
approximately $1.1 million was provided to repair a road in the Cape
San Blas unit after each of three hurricanes--Opal, Earl, and Ivan.
Corps of Engineers:
An exception to the limitations within CBRA allows the Corps to provide
assistance in CBRS units after consultation with FWS as part of its
mission to maintain and improve existing navigation channels. We found
that since 1983, the Corps performed at least 24 such projects in CBRS
units, and most were to dredge channels. Many of these projects
occurred along the Atlantic Intracoastal Waterway or in channels
connecting this waterway to the Atlantic Ocean. Of the 24 projects, two-
thirds occurred in CBRS units in South Carolina while the others were
located in North Carolina, Florida, and Massachusetts. However, it is
difficult to calculate the value of the Corps' assistance to CBRS units
because nearly all of the Corps' projects involve activities both
inside and outside CBRS units, and the Corps does not breakout project
costs based on CBRS boundaries.
EPA-Authorized State Agencies and the Corps Have Issued Permits for
Federally Regulated Construction Projects in CBRS Units:
EPA-authorized state agencies and the Corps have issued permits to
property owners and entities within CBRS units for a number of
different projects.[Footnote 24] Since 1983, EPA-authorized state
agencies issued at least 41 permits to property owners and entities in
nine different CBRS units. All of the permits were associated with the
National Pollutant Discharge Elimination System (NPDES), primarily to
allow storm water discharges from construction sites or for discharges
from water or wastewater treatment systems. Florida, as an EPA-
authorized permitting state, issued 38 of the 41 permits. Of the
remaining three permits, two were issued by New York and one by the
U.S. Virgin Islands, both of which are authorized by EPA to issue NPDES
permits.
The Corps was unable to provide a complete list of all the permits it
had issued since CBRA was enacted. However, we have determined that
since 1983, the Corps issued at least 194 permits in 20 different CBRS
units for purposes such as erosion control, constructing piers and
mosquito control ditches, filling wetlands, and raising fish and
shellfish. Of these 194 permits:
* Eighty-three were authorized under Section 10 of the Rivers and
Harbors Appropriation Act of 1899. The act gives the Corps authority to
issue permits to construct piers or marinas in navigable waters.
* Eighty-seven were authorized under Section 404 of the Clean Water
Act. Section 404 provides the Corps with the authority to issue or deny
permits for discharges of dredged or fill material into waters under
federal jurisdiction, including wetlands.
* Twenty-four involved activities covered by both Section 10 of the
Rivers and Harbors Appropriation Act and Section 404 of the Clean Water
Act. Almost two-thirds of these permits were issued to property owners
and entities in CBRS units in Florida; the remaining permits were
issued to entities in units in the Carolinas and New England.
Conclusions:
Although CBRA has limited the amount of federal financial assistance
provided to some CBRS units, it does not appear to have been a major
factor in discouraging development in those CBRS units that have
developable land, local government and public support for development,
and access to affordable private flood insurance. Despite CBRA's
prohibitions on federal assistance to units in the CBRS, four federal
agencies--FEMA, HUD, SBA, and VA--have provided such assistance. While
the amount of assistance provided in violation of CBRA is not large, it
does raise concerns about the ability of federal agencies to fully
comply with the requirements of the act. Unless federal agencies follow
the procedures they have established to prevent the provision of
prohibited assistance and have access to up-to-date and reliable maps
to ensure that accurate determinations are made for properties located
in CBRS units, it is likely that some violations of CBRA may continue
to occur.
Recommendations for Executive Action:
In light of the federal financial assistance that was provided in
violation of CBRA, we are recommending that the Secretaries of DHS,
HUD, and VA, and the Administrator of SBA direct their agencies to (1)
obtain official determinations from the FWS on whether the properties
we identified as receiving federal assistance in violation of CBRA are
in fact located within a CBRS unit and if they are, cancel all
inappropriate loan guarantees and insurance policies that have been
made to the owners of these properties and (2) examine their policies
and procedures to ensure that they are adequate to prevent federal
assistance that is prohibited by CBRA from being provided to entities
in CBRS units.
In addition, given the importance of digital maps to making accurate
CBRS determinations, we are recommending that the Secretary of the
Interior direct FWS to place a high priority on completing its efforts
to develop digital maps that more accurately depict unit boundaries.
Agency Comments and Our Evaluation:
We provided a draft of this report to the Department of Defense, DHS,
DOI, HUD, SBA, and VA. We received comments via e-mail from the
Department of Defense, DHS, and SBA, and we received written comments
from the DOI, HUD, and VA.
The Department of Defense and the SBA stated that they had no comments
on the draft report, and DHS provided only technical comments and
stated that it concurred with the report's recommendations. In its
written comments, DOI stated that it supports efforts to improve CBRS
property determinations and ensure compliance with CBRA. DOI also
indicated that it will consider our recommendation concerning
prioritization of the completion of digital maps as it develops future
budget requests. In its written comments, HUD stated that the loan
guarantees in question have already been terminated. HUD also noted
that it is now developing policy guidance and associated training to
ensure that no future violations of CBRA occur. In its written
comments, VA stated that it agreed with our findings and one of our
recommendations but did not agree with our recommendation to cancel the
inappropriate loan guarantees that it had made in violation of CBRA. VA
stated that it did not believe that the small number of loan guarantees
that we found indicated a pattern of abuse of CBRA and that canceling
these guarantees would inflict a disproportionate harm on lenders and
veterans who were not responsible for the erroneous property
determinations that the loan guarantees were based on. While we
understand VA's concerns for the adverse impacts that could affect the
parties involved, we believe that because these loan guarantees violate
CBRA they should be rescinded.
We have also incorporated the technical comments provided by DHS and
DOI, as appropriate, throughout this report. HUD's written comments are
presented in appendix V, DOI's written comments are presented in
appendix VI, and VA's written comments are presented in appendix VII.
We are sending copies of this report to interested congressional
committees as well as the Administrator, Small Business Administration;
the Commander, U.S. Army Corps of Engineers; and the Secretaries of the
Army, Defense, Homeland Security; Housing and Urban Development,
Interior, and Veterans Affairs. We also will make copies available to
others upon request. In addition, the report will be available at no
charge on the GAO Web site at http://www.gao.gov.
If you have any questions about this report, please contact me at (202)
512-3841 or mittala@gao.gov. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last
page of this report. GAO staff who made major contributions to this
report are listed in appendix V.
Sincerely yours,
Signed by:
Sincerely yours,
Anu K. Mittal:
Director, Natural Resources and Environment:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
We were asked to address issues related to the Coastal Barrier
Resources Act, as amended, (CBRA) by reviewing development that has
occurred and federal funding that has been provided within the John H.
Chafee Coastal Barrier Resources System (CBRS). Specifically, we were
asked to determine (1) the extent of development within the CBRS and
(2) the extent of federal assistance provided to CBRS units.
Determining the Extent of Development in CBRS Units:
To determine the extent of development in the system, we determined the
number of structures within each unit. We accomplished the task by
electronically mapping addresses with MapInfo and layering electronic
boundaries of CBRS units from the Federal Emergency Management Agency's
(FEMA) Q3 Digital Flood Insurance Rate Map data product with the mapped
addresses. FEMA's Q3 data provides the external boundaries for CBRS
units, though it is not an exact replica of the boundaries. Our results
are representative of the extent of development within the CBRS.
We focused our review on a stratified random sample of 91 units drawn
from the 584 total units in the system, excluding otherwise protected
areas.[Footnote 25] The sample was drawn so that the results from the
sample would have a precision margin of about plus or minus 10
percentage points at the 95 percent confidence interval. We were able
to collect and analyze data for 84 of the 91 CBRS units, representing a
weighted response rate of 92 percent.[Footnote 26] Of the 84 units, 42
units are located in the north and 42 units are located in the south.
Northern units include those located in Connecticut, Maine,
Massachusetts, Michigan, New Jersey, New York, and Rhode Island.
Southern units are those located in Alabama, Florida, Louisiana,
Maryland, Mississippi, North Carolina, South Carolina, Virginia, Texas,
Puerto Rico, and the Virgin Islands. As a result of the high response
rate, we reweighted the sample to represent the entire population of
units.
Because we followed a probability procedure based on random selections,
our sample is only one of a large number of samples that we might have
drawn. Since each sample could have provided different estimates, we
express our confidence in the precision of our particular sample's
results as a 95 percent confidence interval. This is the interval that
would contain the actual population value for 95 percent of the samples
we could have drawn. As a result, we are 95 percent confident that each
of the confidence intervals in this report will include the true values
in the study population. All percentage estimates from the sample have
margins of error of plus or minus 10 percentages points or less.
To identify the number of structures within the CBRS units in our
sample, we obtained address or parcel data from local government
offices--including tax assessor's offices and on-line databases,
geographic information system departments, and information technology
departments. The exact dates for the parcel and address datasets vary
by location--however, we requested the most recent available data. We
also collected year-built data, value, and type of structure when
available. After determining whether the structure was within the CBRS
unit, we reviewed the year-built data to determine how many structures
were built since the unit's inclusion in the CBRS. We did not
independently assess the reliability of each address dataset provided
by the local governments. However, for a number of address datasets we
assessed the reliability of the data through interviews with
knowledgeable local officials and verification of the addresses in the
dataset by visual inspection during site visits.
The electronic mapping was performed using roads and highways data
provided by MapInfo's 2002 StreetSmart program. As a result, our
analysis would not be able to map structures located on a street not
included in the 2003 roads and highways dataset. Once the addresses
were mapped, they were layered in MapInfo with FEMA's Q3 data. On the
basis of conversations with FEMA and FWS officials, we believe these
data are sufficiently reliable for the purposes of this study. Since
the FEMA Q3 data CBRS boundaries may not be precise, the results of our
analysis could incorrectly reflect whether a structure is within a CBRS
unit. As with any electronic mapping technology, accuracy issues are
inherent and may impact reliability of the results.
We conducted site visits to 18 CBRS units in Florida, Massachusetts,
North Carolina, Rhode Island, and South Carolina. During the site
visits, we observed the CBRS units and interviewed local, state, and
federal officials, home owners, realtors, insurance agents, and
environmental officials to discuss the extent of development and
factors encouraging or discouraging development in the units.
In addition to the site visits, we conducted telephone interviews with
local, state, or federal officials in Louisiana, Massachusetts,
Maryland, Michigan, Rhode Island, Texas, Virginia, and Puerto Rico.
Using the data collected during the site visits and the telephone
interviews, we were able to determine reasons why development has or
has not occurred in those units.
Determining the Extent of Federal Assistance Provided to CBRS Units:
To determine the extent of federal assistance provided to CBRS units,
we identified eight agencies with programs that may have provided
assistance to these areas. Appendix IV includes a complete list of
these programs. We reviewed and analyzed federal legislation and
regulations that are applicable to federal assistance to CBRS units,
including the CBRA. For each of the programs that provide assistance
that is prohibited in a CBRS unit, we interviewed officials regarding
their agency procedures for preventing assistance to CBRS units. In
instances where we identified violations, we collected additional
information about the assistance provided and interviewed agency
officials regarding the agency's plans to prevent prohibited assistance
from being provided in the future.
We compiled a list of 4,472 addresses in 37 CBRS units that had at
least one address. (See app. II for a list of CBRS units in our
review.) As the section above details, we obtained address data from
local county government sources and electronically mapped addresses
within the boundaries of CBRS units. Next, we obtained data from each
agency on program assistance provided and determined whether this
assistance was provided within one of the CBRS units or to an address
in a CBRS unit.
We gathered additional data to determine whether civil works projects
administered by the Corps and permits issued by the Corps or EPA-
authorized state agencies were for an activity within a CBRS unit. We
asked agency officials to provide latitude and longitude data for every
project that occurred or permit that was issued in any of the counties
that contained at least one of the 37 CBRS units. Then we
electronically mapped the coordinates to determine if the activity
occurred within the boundaries of a CBRS unit. Corps officials,
however, were unable to provide latitude and longitude data for a large
percentage of the permits issued.
For each agency program, we assessed the accuracy and reliability of
the data system by obtaining from the agency written responses
regarding (1) the agency's methods of data collection and quality
control reviews, (2) practices and controls over accuracy of data
entry, and (3) any limitations of the data. We determined that the
agencies' data were sufficiently reliable for the purposes of our
review unless noted below. The details of our analysis for each agency
program are provided below.
FEMA National Flood Insurance Program:
To identify flood insurance policies in CBRS units, we obtained data
from FEMA's National Flood Insurance Program for all policies as of May
8, 2006. As mentioned above, we compiled a list of 4,472 addresses in
37 CBRS units. Because structures built prior to a CBRS unit's
inclusion in the system may still obtain flood insurance, we had to
determine whether each structure was built prior to the unit's
inclusion in the CBRS. Of the 4,472 addresses, we were able to
determine that 648 structures were built prior to the unit's inclusion
in the CBRS, and we deleted these addresses from our analysis. We
reviewed the addresses of all the structures built after the unit's
inclusion in the CBRS and addresses where we could not determine the
year built in our flood insurance analysis. Thus, we reviewed 3,824
addresses in 21 units to determine if the structure had federal flood
insurance. Structures that were built prior to the CBRS unit's
inclusion in the system cannot obtain federal flood insurance if the
property has been substantially improved. We did not collect data on
whether properties had been improved. If we identified a flood
insurance policy among the addresses where we were unable to determine
the year built, we reviewed the year-built data in FEMA's database. If
FEMA's data revealed that the structure was built prior to the unit's
inclusion in CBRA, we eliminated the match from our review.
FEMA IHP Program:
We provided FEMA our list of addresses located in 37 CBRS units. FEMA
compared our list of addresses with addresses for which Individuals and
Households Program (IHP) payments had been provided from its National
Emergency Management Information System. FEMA reviewed payments from
the system from August 26, 1998, to August 2, 2006.
SBA:
The Small Business Administration (SBA) provided loan data for business
and disaster loans in all states with CBRS units from its Loan
Accounting System. SBA provided us records for loans approved January
1, 1990, through May 30, 2006. While we did not find any matches for
business loans, SBA officials told us that the address in the database
could be a mailing address and not the physical address of the
business. For SBA disaster loans, the SBA officials said that the
address in the database is the location where the assistance was
provided.
HUD Housing Programs:
We obtained data for 13 of the Department of Housing and Urban
Development's (HUD) single family and multifamily housing programs.
(See app. IV for a list of the programs reviewed.) HUD provided data
from its Real Estate Management System and Single Family Housing
Enterprise Data Warehouse database for loans as of June 2006.
VA Home Loan Guaranty Program:
The Department of Veterans Affairs (VA) provided loan guarantee data
from its Home Loan Guaranty database. VA provided us records for active
loan guarantees as of October 2006.
USDA Business and Industry, Community Facilities, and Housing Programs:
We obtained data for 22 of the U.S. Department of Agriculture's (USDA)
business and industry, community facilities and single family and
multifamily housing programs. USDA provided this information from its
Automated Multi-Family Housing Accounting System, Guaranteed Loan
System, MortgageServ Loan Servicing System databases, and Multi-Family
Information System. The information was as of July 2006.
USDA Utility Programs:
For USDA's utility programs, we used a different methodology because
the projects are not associated with one structure as with a flood
insurance policy or a housing loan. For USDA's electric programs, USDA
officials reviewed the construction work plans and the environmental
reports for recent loans to electric service providers who provide
service to selected counties in Florida, North Carolina, and Virginia
that include one or more of the CBRS units included in our review. USDA
officials determined that it does not appear that they have financed
projects serving a CBRS unit.
For USDA's water and waste programs, we requested the environmental
assessment forms statements for the projects in the counties that
included a CBRS unit we identified as having 100 or more structures. We
then reviewed these records to determine if they indicated that USDA
officials had considered whether the projects would impact a CBRS unit
when reviewing them.
FEMA Public Assistance Grant Program:
FEMA provided data from its National Emergency Management Information
System on disaster assistance provided to counties and territories in
our review, including data for the U.S. Virgin Islands and Puerto Rico.
The data were from November 1998 through July 2006. We reviewed
assistance designated by FEMA as being within a CBRS unit. However, we
determined that this designation was not sufficiently reliable to
identify all projects within the CBRS. We could not determine the full
extent of assistance provided to CBRS units because the CBRS
designation in the data was not always reliable. In addition, some
assistance was provided countywide, and we could not determine if this
assistance was provided to the unit. As a result, we provide examples
of disaster assistance in our report. Where data were available, we
electronically mapped the location of the assistance to verify it was
within a CBRS unit.
Federal Highway Administration:
We obtained data for projects receiving federal aid that received
federal funds between January 1996 and July 2006 in counties with a
CBRS unit that we identified as having 10 or more structures. Federal
Highway Administration (FHWA) officials extracted the data for these
projects from the Financial Management Information System---a database
that tracks projects that receive federal funding. To determine whether
assistance was provided that is prohibited by law, we identified new
construction projects or projects that added capacity to existing
roadways. To determine whether these projects were within a CBRS unit,
we relied upon interviews and location analysis provided by FHWA
officials and Department of Transportation officials from New Jersey,
North Carolina, Puerto Rico, Rhode Island, South Carolina, and the
Virgin Islands. For projects in New Jersey, state officials provided
aerial photographs with the location of federally funded projects. For
North Carolina, we met with FHWA officials to review maps displaying
the location of federally funded projects. For Puerto Rico, FHWA and
Puerto Rico Department of Transportation officials electronically
mapped the location of projects. For Florida, we relied upon analysis
conducted by an official at the Florida FHWA division office. For Rhode
Island, South Carolina, and the U.S. Virgin Islands, Department of
Transportation officials or public works department officials provided
a paper map marked with the location of the projects.
Because of the volume of projects that are allowable, we did not
determine the number of allowable projects in every CBRS unit. However,
we did review the allowable projects in Gulf County, Florida, and
Onslow County, North Carolina.
[End of section]
Appendix II: CBRS Units We Reviewed:
This appendix provides information on the CBRS units that we reviewed.
Table 2 shows the units included within our random sample and the
approximate number of new structures in each unit.
Table 2: CBRS Units Included in Random Sample and Approximate Number of
New Structures:
[See PDF for Table- did not compute properly]
Source: GAO analysis of CBRS units.
Note: There was no development in any unit between 16 and 100
structures.
[A] The number of new structures is unknown for these units.
[End of table]
Tables 3 and 4 show the CBRS units we included in our analysis to
determine the extent of federal expenditures and permits made to
entities in the CBRS. Table 3 displays the CBRS units included within
our sample that had structures--regardless of whether the structures
were built prior to or after the units inclusion in the CBRS. Table 4
lists the additional CBRS units that were suggested for inclusion in
our review by FWS because the agency had information suggesting that
development was occurring in these areas.
Table 3: CBRS Units Included in GAO's Random Sample That Were Analyzed
to Determine the Extent of Federal Expenditures and Permits:
Unit number: CT-13;
CBRS unit: Kelsey Island;
State: CT.
Unit number: CT-01;
CBRS unit: Mason Island;
State: CT.
Unit number: E09;
CBRS unit: Norwalk Islands;
State: CT.
Unit number: FL-46;
CBRS unit: Boot Key Island;
State: FL.
Unit number: P31A;
CBRS unit: Four Mile Village;
State: FL.
Unit number: P05A;
CBRS unit: Matanzas River;
State: FL.
Unit number: P18;
CBRS unit: Sanibel Island Complex;
State: FL.
Unit number: P10;
CBRS unit: Vero Beach;
State: FL.
Unit number: C19;
CBRS unit: Black Beach;
State: MA.
Unit number: C11A;
CBRS unit: Boat Meadow;
State: MA.
Unit number: C00;
CBRS unit: Clark Pond;
State: MA.
Unit number: C16;
CBRS unit: Dead Neck;
State: MA.
Unit number: C31;
CBRS unit: Elizabeth Islands;
State: MA.
Unit number: C14;
CBRS unit: Squaw Island;
State: MA.
Unit number: L01;
CBRS unit: Currituck Banks;
State: NC.
Unit number: L08;
CBRS unit: Wrightsville Beach;
State: NC.
Unit number: NJ-04B;
CBRS unit: Metedeconk Neck;
State: NJ.
Unit number: NY-59;
CBRS unit: Fire Island;
State: NY.
Unit number: NY-30;
CBRS unit: Hog Neck Bay;
State: NY.
Unit number: NY-42;
CBRS unit: Mill Creek; State: NY.
Unit number: F10;
CBRS unit: Napeague;
State: NY.
Unit number: NY-16;
CBRS unit: Stony Brook Harbor;
State: NY.
Unit number: RI-12;
CBRS unit: East Matunick Beach;
State: RI.
Unit number: D02B;
CBRS unit: Prudence Island Complex;
State: RI.
Unit number: M07;
CBRS unit: Bird Key Complex;
State: SC.
Unit number: M08;
CBRS unit: Captain Sams Inlet;
State: SC.
Unit number: VA-45;
CBRS unit: Harveys Creek;
State: VA.
Source: GAO analysis of CBRS units.
[End of table]
Table 4: Additional CBRS Units Suggested for Review by FWS That Were
Analyzed to Determine the Extent of Federal Expenditures and Permits:
Unit Number: P10A;
CBRS unit: Blue Hole;
State: FL.
Unit Number: P30;
CBRS unit: Cape San Blas;
State: FL.
Unit Number: P09A;
CBRS unit: Coconut Point;
State: FL.
Unit Number: FL-94;
CBRS unit: Deer Lake Complex;
State: FL.
Unit Number: P28;
CBRS unit: Dog Island;
State: FL.
Unit Number: FL-92;
CBRS unit: Indian Peninsula;
State: FL.
Unit Number: P07;
CBRS unit: Ormond-by-the-Sea;
State: FL.
Unit Number: P08;
CBRS unit: Ponce Inlet;
State: FL.
Unit Number: FL-98;
CBRS unit: Santa Rosa Island;
State: FL.
Unit Number: L06;
CBRS unit: Topsail;
State: NC.
Source: GAO analysis of CBRS units.
[End of table]
[End of section]
Appendix III: Snapshots of Selected CBRS Units:
Massachusetts:
Within the state of Massachusetts, there are 62 CBRS units. The units
consist of 64,076 total acres of land, with 88 percent of the land
considered wetlands by FWS.[Footnote 27] We visited six CBRS units--
Black Beach, Boat Meadow, Centerville, Herring Brook, Sandy Neck, and
Squaw Island. These units were primarily salt marsh or wetland areas
with narrow coastal beach areas. Only the Boat Meadow unit had
experienced any new development since inclusion in the CBRS. Figure 2
displays the CBRS units we visited during our site visit.
Figure 2: CBRS Units We Visited in Massachusetts:
[See PDF for image]
Source: GAO.
[End of figure]
The Herring Brook and Sandy Neck units both include land used as a
public beach destination. The Sandy Neck unit is a coastal barrier
beach, with both public and private beach areas, approximately 6 miles
long varying in width from 200 yards to one-half mile. The unit is
classified by the local government as a conservation and recreation
area. Several homes are located on the unit, but one local official
noted they are all registered by the state as historic places.
The Centerville unit and the Squaw Island unit each have a barrier
beach, but the beach is privately owned. The Centerville unit serves as
a private beach and protective buffer for the homes bordering the unit.
A local official noted the residents annually pay for a beach
nourishment project in order to keep the protective buffer for their
homes. The Squaw Island unit is a barrier beach and wetlands
surrounding an area of developed land that was excluded from CBRS. The
excluded area consists of homes valued between $1.7 and $6.9 million.
Figure 3 displays a portion of Squaw Island.
Figure 3: House and Beach on the Squaw Island, CBRS Unit in
Massachusetts:
[See PDF for image]
Source: GAO.
[End of figure]
Both the Black Beach and Boat Meadow units consist primarily of salt
marshes and wetlands. The southern portion of the Black Beach unit has
one street of homes that were built prior to CBRA. One local official
described the homes as "traditional Cape Cod" style houses. The Boat
Meadow unit has several neighborhoods bordering the unit with one
neighborhood partially included in the unit. It is within this area
that new development--three single-family homes--has occurred since the
unit's inclusion in the CBRS.
Rhode Island:
Within the state of Rhode Island, there are 21 CBRS units. The CBRS
units consist of 10,320 total acres, with 83 percent considered
wetlands by the FWS. During our site visit to Rhode Island, we focused
our review on the Prudence Island Complex unit. The Prudence Island
Complex unit consists of numerous separate pieces of land all included
in one CBRS unit. The unit is located in residential neighborhoods in
several counties around the Narragansett Bay. Although approximately 50
homes are located within the CBRS unit, only 8 of the homes have been
built since inclusion within CBRS. Figure 4 shows the CBRS units that
we visited in Rhode Island.
Figure 4: CBRS Units We Visited in Rhode Island:
[See PDF for image]
Source: GAO.
[End of figure]
Several areas included in the Prudence Island Complex are backyards of
private homes. Home owners voluntarily included the CBRS land in their
backyards in conservation easements, limiting the right of future
owners of the property to develop the land. Figure 5 is one of the
homes with a backyard that falls in the CBRS unit boundaries.
Figure 5: Home with a Backyard in the Prudence Island, Rhode Island
CBRS Unit:
[See PDF for image]
Source: GAO.
[End of figure]
Another area included in the unit is owned by the Rhode Island Country
Club and serves as a golf practice area. Figure 6 is the country club
land that is included in the CBRS.
Figure 6: Portion of the Prudence Island Complex CBRS Unit:
[See PDF for image]
Source: GAO.
[End of figure]
The unit also includes a small beach and a wetland inlet located in a
residential neighborhood. The inlet leads to the Rhode Island Country
Club. A local official stated that the County Club has asked the U.S.
Army Corps of Engineers to re-dredge the inlet to improve the
playability of the golf course--which gets heavily saturated during
rains. Dredging within the CBRS unit would allow water to run off the
course faster. Figure 7 shows the area within the CBRS unit that would
be dredged.
Figure 7: Inlet Where Proposed Dredging Project Would Occur in the
Prudence Island CBRS Unit:
[See PDF for image]
Source: GAO.
[End of figure]
South Carolina:
Within the state of South Carolina, there are 16 CBRS units. FWS
officials determined that the units consist of 97,856 total acres, with
90 percent of land considered wetlands. We visited two units in South
Carolina--Bird Key Complex and Captain Sams Inlet (see fig. 8). Each of
the units has experienced the addition of 10 or fewer residential homes
since its inclusion in the CBRS. The developed portions of both of
these units are located on coastal islands--the Captain Sams Inlet
homes are located on Seabrook Island, and the Bird Key Complex homes
are located on Kiawah Island.
Figure 8: CBRS Units We Visited in South Carolina:
[See PDF for image]
Source: GAO.
[End of figure]
Development in the Captain Sams Inlet CBRS unit is located in the
Seabrook Island Resort--a 2,200-acre, privately gated, beachfront
community on Seabrook Island. According to local officials, the title
to the land where these homes are located was in dispute for years,
which delayed its development, unlike the rest of the island. Local
officials also stated that they believe that if the title to the land
had not been in dispute, the area would have developed at the time of
the CBRS unit designations and most likely would not have been included
in the CBRS. Because of the CBRS inclusion, the property owners in the
unit are no longer eligible for certain types of federal assistance, in
particular federal flood insurance, which they noted is much less
expensive than privately available insurance. Officials with whom we
met on neighboring Kiawah Island stated that a developer has plans to
build up to 50 units on a 20-acre portion of the Captain Sams Inlet
CBRS unit that is located on Kiawah Island.
Development in the Bird Key Complex CBRS unit is located on the
northeast portion of Kiawah Island, which is also a privately gated,
beachfront community with approximately 3,000 homes. The southern
portion of the CBRS unit includes a few homes that we identified as
being located in the unit, an 18-hole golf course, and an area of land
called "Cougar Island." Kiawah officials told us that a private
developer has plans to build 360 homes on 24 acres of Cougar Island at
a future date.
Florida:
Within the state of Florida, there are 67 CBRS units. The units range
extensively in size and composition and encompass 285,937 total acres
along both the Atlantic and Gulf Coasts. Overall, 87 percent of the
land within the units is considered wetlands by FWS. We visited three
units--Four Mile Village, Cape San Blas, and Deer Lake Complex (see
fig. 9). All three units we visited had experienced some level of
development. However, the development ranged from 11 new structures in
Deer Lake Complex to at least 900 new structures in Cape San Blas since
the units inclusion in the CBRS.
Figure 9: CBRS Units We Visited in Florida:
[See PDF for image]
Source: GAO.
[End of figure]
The Four Mile Village unit in Florida has experienced an increase of at
least 100 new residential structures since its inclusion in CBRS. This
unit is expected to continue to experience development, as a 167-home
private development project called Cypress Dunes is completed. The
Cypress Dunes project consists of a 44-acre gated community and will
include a clubhouse, pool, exercise center, dining facility, and tennis
courts, all entirely within the CBRS unit.
The 1,637-acre Topsail Hill Preserve State Park makes up more than one-
half of the Four Mile Village CBRS unit. The preserve was purchased in
1992 with funds from the Conservation Acquisition of Recreation Lands
program, also known as Forever Florida. Topsail was purchased for its
unique natural ecosystems, including freshwater coastal dune lakes, wet
prairies, scrub, pine flatwoods, marshes, cypress domes, seepage slopes
and 3.2 miles of sparkling white sand beaches. The park also includes
areas to bike, walk, swim, fish, and access to the beach, plus a full-
facility campground features a swimming pool, tennis courts, and
shuffleboard courts.
The Cape San Blas CBRS unit is located on a peninsula in the Florida
panhandle. It has experienced significant development since its
inclusion within the CBRS with the addition of at least 900 new homes.
Primarily, the homes are single-family residences used as vacation
homes and rentals.
In November 2002, FEMA designated parts of Cape San Blas as a special
flood hazard area. Mortgage lenders require home owners in these zones
to obtain flood insurance. Because federal flood insurance is not
available in CBRS, home owners with mortgages must obtain private flood
insurance. At the same time, officials told us that the cost of private
insurance has skyrocketed and is no longer comparable to national flood
insurance program rates. According to local officials, tourism in the
Cape San Blas area is important to the economy of the county. They told
us that property values in the unit have decreased since FEMA adopted a
special flood hazard area for the CBRS unit. Residents and local
officials have unsuccessfully attempted to remove Cape San Blas from
the CBRS so that residents would be eligible to obtain flood insurance
through the National Flood Insurance Program. In the 109th Congress,
legislation was introduced in the House of Representatives that would
exempt Cape San Blas, along with another unit, from CBRA's prohibitions
and the limitations on flood insurance.[Footnote 28] However, the bill
never came to a vote.
We identified some development in the Deer Lake Complex unit since its
inclusion within the CBRS. A total of 11 new single-family homes have
been constructed within the unit.
North Carolina:
Within the state of North Carolina, there are 10 CBRS units consisting
of 52, 215 total acres--approximately 6,809 of those are considered
developable acres by FWS. We visited four CBRS units--Topsail, Lea
Island, Currituck Banks, and Wrightsville Beach (see fig. 10). Both
Topsail and Currituck have experienced significant levels of
development since inclusion within the CBRS. In contrast, Lea Island
and Wrightsville Beach are impractical locations for development as
they are significantly affected by erosion and shifting sands.
Figure 10: CBRS Units We Visited in North Carolina:
[See PDF for image]
Source: GAO.
[End of figure]
The Topsail unit in North Topsail is a barrier island with low
elevation without the protection of substantial dunes. It has a total
of approximately 1,600 structures and local officials stated that most
of the structures were built after CBRA was enacted. The unit consists
of single and multifamily homes, a few hotels/motels, a convenience
store, and the North Topsail Beach Town Hall.
In recent years, the unit has been hit several times by hurricanes. For
example, in 1996, Hurricanes Bertha and Fran caused significant damage.
The storms leveled dunes, cut new channels across the island, dumped
tons of sand, and destroyed more than 300 buildings. The federal
government provided funds that assisted in repairing the streets,
repairing water and sewer lines, replacing signs, and removing
substantial debris. Since that time, the area has been rebuilt, but
other storms have continued to cause damage. We identified at least
$5.6 million in disaster assistance that was provided to entities in
the unit since November 1998.
Portions of the Topsail CBRS unit have experienced substantial levels
of erosion. As the soil erodes, the ocean becomes dangerously close to
the homes. Figure 11 pictures one of several homes in the Topsail area
where the ocean waves make contact with the home's foundation.
Figure 11: House in North Topsail CBRS Unit on the Edge of the Ocean:
[See PDF for image]
Source: GAO.
[End of figure]
Several areas outside of the CBRS unit have approved plans for a
federally funded Corps beach renourishment project. However, because
areas within the CBRS unit are ineligible for federal funding for a
beach renourishment project, local officials are pursuing other
opportunities to fund the portion of the project that falls within the
CBRS boundaries. For example, the Town of North Topsail Beach recently
proposed a $34 million bond package to pay for the beach renourishment
project, but the voters rejected the proposal in November 2006.
According to local officials, during the time when much of the
development occurred in the Topsail unit, affordable private flood
insurance was generally available. However, in recent years the cost of
private flood insurance has increased tremendously. Currently, these
officials said that many residents are frustrated with CBRA's
prohibitions on the availability of federal flood insurance and federal
funding for beach renourishment projects. According to these officials,
residents in the Topsail CBRS unit are upset that they must pay
significantly higher insurance premiums than their neighbors who own
properties just outside of the unit who can obtain federal flood
insurance.
The Currituck Banks CBRS unit is located on the outer banks of North
Carolina, with the northern boundary at the Virginia state line. The
unit has also experienced significant new development, with at least
400 new residential homes built since inclusion in CBRS. Local
officials stated that rapid development has occurred in the area since
the late 1980s and that as of June 2006, there were 550 single-family
dwellings within the unit. However, officials noted this only
represents 18 percent of the total capacity of homes that can be built
in the unit. County planning staff noted that the area currently has
3,088 actual or planned building lots available. Although the Currituck
Banks unit does not have any paved roads and is only accessible by four-
wheel drive vehicle or boat, it still continues to be developed, partly
because people on the Outer Banks are seeking the solitude that living
in the CBRS unit can provide. Moreover, the unit has an extensive canal
system that allows residents direct boat access to their homes and the
mainland.
The Lea Island CBRS unit is a tiny barrier island, accessible only by
boat, and located south of the Figure Eight Island. The island is
privately owned, but local officials stated that conservation groups
are slowly trying to buy more of the island. The island is
approximately 60 acres long with most of the land less than 10 feet
above sea level. The island is in a constant state of flux due to
erosion and shifting sand. According to a local coastal official, 15
homes previously existed on Lea Island, but all of them--except for one
small cabin--had been destroyed by natural disasters.
At the time CBRA was enacted, FWS determined that the Wrightsville
Beach unit had 83 developable acres of land. However, sand continuously
shifts within the unit. At one point, the majority of sand in the unit
had shifted to such an extent that the entire unit was under water.
According to local officials, to keep the unit above water, local
entities must continually dredge an inlet adjacent to the unit to
replenish the unit with sand.
[End of section]
Appendix IV: Programs and Types of Federal Assistance Analyzed:
U.S. Army Corps of Engineers:
Permits - Section 404 and Section 10:
Civil Works programs:
U.S. Department of Agriculture:
Business and Industry Programs:
Business and Industry Direct Loans:
Business and Industry Guaranteed Loans:
Intermediary Relending Program:
Rural Business Enterprise Grants:
Rural Business Opportunity Grants:
Rural Economic Development Loans:
Rural Economic Development Grants:
Renewable Energy and Energy Efficiency Program:
Community Facilities Programs:
Community Facilities Direct Loans:
Community Facilities Guaranteed Loans:
Community Facilities Grants:
Electric Programs:
Hardship Loans:
Municipal Loans:
Treasury Loans:
FFB Guaranteed Loans:
Single Family Housing Programs:
Rural Housing Guaranteed Loan:
Rural Housing Direct Loan:
Housing Repair and Rehabilitation Loan:
Housing Repair and Rehabilitation Grant:
Rural Housing Site Loans:
Mutual Self-Help Housing Grants:
Homes for Sale:
Multifamily Housing Programs:
Farm Labor Housing Loans and Grants:
Rural Rental Housing Loans:
Guaranteed Rental Housing:
Rental Assistance Program:
Water and Waste Programs:
Water and Waste Disposal Loans:
Water and Waste Disposal Grants:
Emergency Community Water Assistance Grants:
Revolving Fund Program:
Household Water Well System Program:
Department of Homeland Security:
Federal Emergency Management Agency:
National Flood Insurance Program:
Individuals and Households Program:
Public Assistance Program (Disaster):
U.S. Coast Guard:
Permits for bridges over navigable waters of the United States:
Department of Housing and Urban Development:
Single Family Housing Programs:
Mortgage Insurance - Section 203(b):
Rehabilitation Mortgage Insurance - Section 203(k):
Mortgage Insurance for Condominium Units - Section 234(c):
Home Equity Conversion Mortgage - Section 255:
Multifamily Housing Programs:
Supportive Housing for the Elderly - Section 202:
Mortgage Insurance for Cooperative Housing - Section 213:
New Construction/Substantial Rehabilitation of Apartments with
Nonprofit Sponsors - Section 221(d)(3):
New Construction/Substantial Rehabilitation of Apartments with For-
profit Sponsors - Section 221(d)(4):
Refinancing of Apartment Primary Loans - Section 223(a)(7):
Healthcare Facilities - Section 232:
Refinancing of Healthcare Facilities - Section 232:
Supplemental Loan Insurance - Section 241(a):
Supportive Housing for Persons with Disabilities - Section 811:
Environmental Protection Agency:
National Pollution Discharge Elimination System (NPDES) permits:
Federal Highway Administration:
Federal Aid Highway Program:
Small Business Administration:
7 (a) and 504 Loan programs:
Disaster Loan program:
Department of Veterans Affairs:
Veterans Benefits Administration Home Loan Guaranty Program:
[End of section]
Appendix V: Comments from the Department of Housing and Urban
Development:
U.S. Department Of Housing AND Urban Development:
Washington, DC 20410- 3000:
Assistant Secretary For Housing-Federal Housing Commissioner:
Feb 9 2007:
Anu K. Mittal, Director:
Natural Resources and Environment:
United States Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Ms. Mittal:
The Department of Housing and Urban Development (HUD) appreciates the
opportunity to respond to the Government Accountability Office (GAO)
draft report. Coastal Barrier Resources System: Status of Development
That Has Occurred and Financial Assistance Provided by Federal Agencies
(GAO-07-356). GAO states it has sampled 91 of the 585 Coastal Barrier
Resource System (CBRS) units that have been designated under the
Coastal Barrier Resources Act, as amended (CBRA). GAO has determined
that HUD has provided Single Family Mortgage Insurance (SFMI) for five
properties located among three of these units: Cape San Blas, Florida;
Topsail, North Carolina; and Prudence Island, Rhode Island.
Based on its determinations, GAO has recommended that, as SFMI is
prohibited within CBRS units, HUD obtain official determinations from
the Fish and Wildlife Service (FWS) as to whether the five properties
are truly in CBRS units, and, where so detennined, cancel all
inappropriate loan guarantees. GAO has recommended further that HUD
examine its policies and procedures to ensure that they are adequate to
prevent SFMI within CBRS units.
In regard to the first set of recommendations relating to the five
properties in question; HUD has determined that between the years 1986
and 2003 all of the mortgage loans have been satisfactorily paid-off,
with the mortgage insurance thus terminated. Therefore, further
analysis and determinations, as well as cancellations, are not needed.
In regard to the second set, HUD is now developing policy guidance and
an associated training module for its SFMI programs to ensure that
there will be no future violations of CBRA. HUD expects this to be
completed within the year and with training to occur as soon afterwards
as possible.
Thank you for providing this most useful draft report to HUD.
Sincerely,
Signed by:
Brian D. Montgomery:
Assistant Secretary for Housing-Federal Housing Commissioner:
[End of section]
Appendix VI: Comments from the Department of the Interior:
United States Department of the Interior:
Office Of The Secretary:
Washington, DC 20240:
Mar 6 2007:
Ms. Anu Mittal:
Director, Natural Resources and Environment:
U.S. Government Accountability Office:
441 G Street, N.W.
Washington, D.C. 20548:
Dear Ms. Mittal:
Thank you for providing the Department of the Interior the opportunity
to review and comment on the draft U.S. Government Accountability
Office report entitled, "Coastal Barrier Resources System: Status of
Development That Has Occurred and Financial Assistance Provided by
Federal Agencies," GAO-07-356, transmitted on January 30, 2007. In
general, we agree with the findings that pertain to the U.S. Fish and
Wildlife Service and the report's recommendations.
The Department concurs with the Recommendations for Executive Action in
the report. Any additional workload associated with these
recommendations will be addressed as we are able, given existing
resources and other competing priorities. The Department supports
efforts to improve the John H. Chafee Coastal Barrier Resources System
property determination and consistency consultation processes and
ensure compliance with the Coastal Barrier Resources Act.
With regard to the recommendation concerning prioritizing the
completion of digital maps, the Service will consider this
recommendation as it develops future budget requests. The Department
supports CBRS map modernization. Modernizing the entire set of CBRS
maps with digital technology would help improve customer service -and
government efficiency; correct mapping errors that adversely affect
private property owners; conserve natural resources; and maintain the
long-term integrity of the CBRS. The Service has demonstrated its
commitment to digital CBRS mapping by recently completing the
Congressionally-directed Digital Mapping Pilot Project which includes
draft digital maps of 60 CBRS units and a report to Congress that
describes the results of the pilot project and the costs and
feasibility associated with creating digital maps for the remainder of
the CBRS. We anticipate that the pilot project and report, which are
undergoing review within the Department, will be submitted to Congress
this year. Congress has directed the Secretary of the Interior to
complete digital maps for the entire CBRS by 2013.
Additionally, we note one of GAO's conclusions that "Although CBRA has
limited the amount of Federal financial assistance provided to some
CBRS units, it does not appear to have been a major factor in
discouraging development in those CBRS units that have developable land
and local government and public support for development." The
Department believes that CBRA has affected the extent of development
within the CBRS. CBRA's influence on development is reflected in the
numerous efforts by property owners to remove land from the CBRS
through legislation so that the properties can be developed with
Federal financial assistance. Since the CBRS was designated in 1982,
Congress has enacted technical correction legislation to revise the
boundaries of 42 CBRS units. Currently, the Service has a backlog of
requests from property owners and other interested parties who seek to
remove private land from 26 units.
The enclosure provides technical comments from the Service. We hope
these comments will assist you in preparing the final report.
Sincerely,
Signed by:
Assistant Secretary for and Wildlife and Parks:
[End of section]
Appendix VII: Comments from the Department of Veterans Affairs:
The Deputy Secretary Of Veterans Affairs:
Washington:
February 23, 2007:
Ms. Anu K. Mittal:
Director, Natural Resources and Environment:
U. S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Ms. Mittal:
The Department of Veterans Affairs (VA) has reviewed your draft report,
Coastal Barrier Resources System: Status of Development That Has
Occurred and Financial Assistance Provided by Federal Agencies (GAO-07-
356) and agrees with your findings as they pertain to VA.
However, VA does not concur with your recommendation to cancel the 11
possibly inappropriate loan guaranties identified in the draft report.
This small number of incidents does not indicate a pattern of abuse of
the Coastal Barriers Resources Act and cancelling the subject
guarantees would inflict a disproportionate harm on lenders and
veterans who were not responsible for the potential errors.
The enclosure details VA's comments to your specific recommendations.
VA appreciates the opportunity to comment on your draft report.
Sincerely,
Signed by:
Gordon H. Mansfield:
Enclosure:
Department of Veterans Affairs (VA) Comments to Government
Accountability Office (GAO) draft report, Coastal Barrier Resources
System: Status of Development That Has Occurred and Financial
Assistance Provided by Federal Agencies (GAO-07-356):
GAO Recommends that the Secretaries of the Departments of Homeland
Security, Housing and Urban Development, and VA, and the Administrator
of Small Business should direct their agencies to:
1. obtain official determinations from the U. S. Fish and Wildlife
Service on whether the properties GAO identified as receiving Federal
Assistance in violation of the Coastal Barriers Resources Act (CBRA)
are in fact located with a Coastal Barriers Resources System (CBRS)
unit and if they are, cancel all inappropriate loan guarantees and
insurance policies that have been made to the owners of these
properties; and:
Do Not Concur - GAO has identified merely 11 such loans. VA is not
inclined to cancel the guaranties on these 11 loans insofar as it was
the responsibility of the private fee appraiser on each of these loans
to identify that these properties were not eligible. Neither the
lenders nor the veterans were responsible for the erroneous property
determinations. Holding the lender responsible by canceling the
guaranty on a loan would not be fair and could well adversely impact
the veteran. Instead, VA is prepared to assume the risk involved in
keeping the guaranty on these loans. The total value of these loans, at
origination, was $352,188. We have a portfolio of approximately 2.2
million active loans, currently valued at over $203 billion, on which
our contingent liability is $61 billion. We believe that our
willingness to accept potential losses on the 11 loans identified by
GAO is an acceptable risk, in light of (1) the size of our overall
portfolio and (2) the benefit to these veterans of preserving the VA
guarantee on their loans.
2. examine their policies and procedures to ensure that they are
adequate to prevent Federal assistance that is prohibited by CBRA from
being provided to entities In CBRS units.
Concur - VA concurs with the second recommendation of this report. In
fact, the Veterans Benefits Administration's Loan Guaranty Service is
examining its policies and handbook guidance to ensure that they are
adequate to prevent VA guaranteed loans from being made within a CBRS
unit. Towards that end, we are already providing specific instructions
in our Lenders' Handbook informing program participants that properties
located in CBRS units are ineligible as security for VA-guaranteed
loans. In addition, in mandatory training sessions, VA appraisers are
instructed to reject assignments to appraise such properties.
[End of section]
Appendix VIII: GAO Contact and Staff Acknowledgments:
GAO Contact:
Anu K. Mittal (202) 512-3841 or mittala@gao.gov:
Staff Acknowledgments:
In addition to the contact named above, Sherry McDonald, Assistant
Director; Natalie Herzog; Stuart Ryba; Jay Spaan; Amy Ward-Meier; and
Leigh M. White made key contributions to this report. Also contributing
to this report were Kevin Bray, John Delicath, Nancy Hess, Gloria
Saunders and Jay Smale.
FOOTNOTES
[1] For the purposes of CBRA, a coastal barrier was considered
undeveloped if the density of development was less than one structure
per 5 acres of land above mean high tide.
[2] Financial assistance as defined by the act does not include general
revenue sharing grants; deposit or account insurance for customers of
financial institutions; the purchase of mortgages or loans by federal
associations or corporations such as the Federal National Mortgage
Association; assistance for environmental studies, planning, and other
assessments that are required incident to the issuance of permits or
other authorizations under federal law; and assistance for programs
entirely unrelated to development, such as the federal old-age
survivors or disability insurance program.
[3] Such reports and certifications shall be submitted annually to the
Secretary of the Interior. 16 U.S.C. § 3506(b).
[4] Coastal Barrier Resources Reauthorization Act of 2005, Pub. L. No.
109-226, § 4(a), 120 Stat 381.
[5] GAO, Coastal Barriers: Development Occurring Despite Prohibitions
Against Federal Assistance, GAO/RCED-92-115 (Washington, D.C.: July 17,
1992). Our 1992 report only covered units designated by the original
1982 act.
[6] We electronically mapped the location of the addresses using
MapInfo Software.
[7] Aside from minor exceptions, only Congress, through new
legislation, can modify the boundaries of the CBRS. To determine
whether the revisions constitute appropriate technical corrections, FWS
conducts objective reviews to examine whether or not the area was
undeveloped when it was included in the CBRS and whether or not the
boundaries on the map correctly follow the natural or man-made features
they were intended to follow on the ground. When technical mapping
errors are found, FWS has supported legislation to modify boundaries
accordingly. Since the CBRS was designated in 1982, Congress has
enacted technical correction legislation to revise the boundaries of 42
CBRS units.
[8] FWS anticipates the draft maps and report will be submitted to the
Congress in 2007.
[9] The random probability sample included 91 geographically dispersed
CBRS units. All percentage estimates from the sample have margins of
error of plus or minus 10 percentage points, unless otherwise noted.
[10] Developable land is the number of fastland acres in each unit.
Fastland is situated above the mean high-tide line and is generally not
wetlands. FWS determined the fastland acres for each unit within the
CBRS.
[11] According to Massachusetts state officials, the Wetlands
Protection Act regulations established a "no net loss of wetlands"
policy for all coastal areas and barrier beaches. Under the
Massachusetts Coastal Wetlands Restriction Act, the Massachusetts
Commissioner of Environmental Protection can regulate and prohibit
dredging, filling, or otherwise altering coastal wetlands.
[12] In 1980, Massachusetts Governor Edward J. King issued Executive
Order No. 181 preventing the use of state funds and grants for
construction projects to encourage growth and development in hazard
prone barrier beaches. See also Me. Rev. Stat. Ann. tit. 38, §§ 1901-
1905.
[13] To determine the reasons development occurred, we interviewed
local officials in a number of developed units in our sample as well as
officials for the Cape San Blas unit in Florida and the Topsail unit in
North Carolina.
[14] The date structures were built in the Topsail unit was not readily
available when we conducted this analysis, so we could not determine
the exact number of structures built since the unit's inclusion in the
CBRS.
[15] According to FEMA officials, FEMA does this plotting for all
properties in a community where a CBRS unit is located. Every month
FEMA plots addresses of new policies or policies that have changed. All
addresses in a community with a CBRS unit are reviewed at least once a
year.
[16] FEMA uses MapInfo software with MapMarker to plot locations. This
software is updated more frequently than the software that we use. In
these 20 instances, our software located properties within the CBRS
boundary, but FEMA's software did not. However, we physically verified
that 14 of these 20 properties appeared to be within CBRS boundaries
during a site visit to the unit. We did not visit the locations where
the remaining 6 properties were located.
[17] The Coastal Barrier Resources Reauthorization Act of 2000, Pub. L.
No. 106-514, §6, 114 Stat. 2394, 2396, required FWS to prepare draft
digital maps for a portion of the CBRS.
[18] The Coastal Barrier Resources Act of 2005 directs the Secretary of
the Interior to finalize the pilot project maps by conducting a public
review of the draft maps, making adjustments as necessary, and
presenting final recommended maps to the Congress its consideration. At
that point, the Congress could adopt the pilot project maps as the
official CBRS maps through legislation.
[19] The Coastal Barrier Resources Reauthorization Act of 2005, Pub. L.
No. 109-226 § 4, 120 Stat. 381, 382 (2006).
[20] Our study also includes data from disasters that predate IHP, from
its predecessor program called "Disaster Housing/Individual and Family
Grant Program."
[21] CBRA exempts from its general prohibition assistance for emergency
actions essential to saving lives and the protection of property and
the public health, as performed under particular sections of the Robert
T. Stafford Disaster Relief and Emergency Assistance Act, as amended.
16 U.S.C. § 3505(a)(6)(E). In its regulations, FEMA describes these
actions to include, among other things, removing debris and repairing
primary residences to make them habitable. However, for the
expenditures described above as "Other Eligible Property Items," such
as chainsaws and generators, FEMA officials said those payments were
prohibited.
[22] We issued a report on the challenges that the IHP program
experienced during Hurricanes Katrina and Rita and recommended that
FEMA address the potential for fraud and abuse identified in the
program. GAO, Hurricanes Katrina and Rita: Unprecedented Challenges
Exposed the Individuals and Households Program to Fraud and Abuse;
Actions Needed to Reduce Such Problems in Future, GAO-06-1013
(Washington, D.C.: Sept. 27, 2006).
[23] SBA approved seven loans in CBRS units, however, individuals did
not initiate four of these loans and they were cancelled.
[24] In most cases, permits to regulate point sources that discharge
pollutants into waters of the United States are issued by EPA-
authorized states rather than by EPA itself.
[25] According to the Fish and Wildlife Service (FWS), there are 585
units in the system. However, FWS considers the Waites Island Complex
to be two units because portions of the units are in North Carolina and
South Carolina. We counted this as one unit for our analysis. We
excluded OPAs from our review based on discussions with FWS officials.
According to the officials, they did not believe that OPAs were subject
to the same level of development as full system units since they were
often protected from development by other mechanisms.
[26] We were unable to obtain data for seven units within the sample
because the local governments were unable to provide address data or
year built for the structures in these areas.
[27] For purposes of this appendix, wetlands include associated aquatic
habitat such as nearshore waters and inlets.
[28] H.R. 3280, 109th Cong. (2005)
GAO's Mission:
The Government Accountability Office, the audit, evaluation and
investigative arm of Congress, exists to support Congress in meeting
its constitutional responsibilities and to help improve the performance
and accountability of the federal government for the American people.
GAO examines the use of public funds; evaluates federal programs and
policies; and provides analyses, recommendations, and other assistance
to help Congress make informed oversight, policy, and funding
decisions. GAO's commitment to good government is reflected in its core
values of accountability, integrity, and reliability.
Obtaining Copies of GAO Reports and Testimony:
The fastest and easiest way to obtain copies of GAO documents at no
cost is through GAO's Web site (www.gao.gov). Each weekday, GAO posts
newly released reports, testimony, and correspondence on its Web site.
To have GAO e-mail you a list of newly posted products every afternoon,
go to www.gao.gov and select "Subscribe to Updates."
Order by Mail or Phone:
The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent
of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or
more copies mailed to a single address are discounted 25 percent.
Orders should be sent to:
U.S. Government Accountability Office 441 G Street NW, Room LM
Washington, D.C. 20548:
To order by Phone: Voice: (202) 512-6000 TDD: (202) 512-2537 Fax: (202)
512-6061:
To Report Fraud, Waste, and Abuse in Federal Programs:
Contact:
Web site: www.gao.gov/fraudnet/fraudnet.htm:
E-mail: fraudnet@gao.gov:
Automated answering system: (800) 424-5454 or (202) 512-7470:
Congressional Relations:
Gloria Jarmon, Managing Director, JarmonG@gao.gov (202) 512-4400:
U.S. Government Accountability Office, 441 G Street NW, Room 7125
Washington, D.C. 20548:
Public Affairs:
Paul Anderson, Managing Director, AndersonP1@gao.gov (202) 512-4800:
U.S. Government Accountability Office, 441 G Street NW, Room 7149
Washington, D.C. 20548:
