What’s Next With FEMA’s Pre-Implementation Compliance Measures (PICM)?

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by Armand Resto-Spotts

As many cities are aware, last year, the Federal Emergency Management Agency (FEMA) notified National Flood Insurance Program (NFIP) participating communities that certain “Pre-Implementation Compliance Measures” (PICM) must be implemented by December 1, 2024, to ensure compliance with the Endangered Species Act (ESA). Specifically, the PICM are intended to prevent “take” – or “harm” – of certain threatened and endangered species from permitted floodplain development.

FEMA provided three options for NFIP communities to select before December 1, 2024. In sum: 1) prohibit all new development within the floodplain; 2) evaluate impacts to the floodplain on a permit-by-permit basis, effectively requiring a habitat assessment for floodplain development permits to show what functions the floodplain in question serve to threatened or endangered species, and how the development would achieve “no net loss” to those functions; or 3) adopt FEMA’s 2024 Model Ordinance.

Since the December 1, 2024 deadline passed, we have seen NFIP communities throughout the state choose each of these different pathways in PICM integration. In contrast, other cities outright rejected FEMA’s PICM requirements, and instead adopted unique approaches, like requiring development applicants to affirm whether any “take” is likely from their proposal.

Model Ordinance and Code Amendments

Today, NFIP communities are working towards implementing their chosen PICM option. For those jurisdictions moving forward with the model ordinance, that ordinance must be fully adopted and in effect by July 31, 2025. Considering state and local requirements for notice and process, cities should begin this land use ordinance procedure no later than mid-February.

For those jurisdictions moving forward with permit-by-permit review, land use amendments are also likely required. Unless city code today authorizes imposition of FEMA’s new PICM standard – i.e., identifying floodplain functions and how the development would achieve a “no net loss” to those functions – cities will need to adopt minor code amendments to be able to require compliance with this new federal directive. FEMA and the Oregon Department of Land Conservation and Development (DLCD) have yet to provide any sample or template language that cities can reference for adoption under their floodplain ordinance, leaving NFIP communities to address this code authority question on their own.

If you are in this position, we recommend a few steps. First, review your entity’s current floodplain ordinance to ensure that it lacks sufficient authority to require this new “no net loss” assessment. Some older FEMA-approved ordinances actually include language requiring applications to comply with all applicable federal requirements, which may be enough to impose this new standard on applications for floodplain development. In most instances, however, our experience is that city codes today do not contemplate this new requirement. Those codes must be amended before applicants can be required to supply information required for a permit-by-permit review. We continue to monitor DLCD for publication of guidance or language that cities can use for said amendments.

In the interim, when permitting floodplain development, we recommend including disclaimer language. Such a disclaimer should notify the permittee of the change in federal requirements and law, and allocate responsibility for compliance to the applicant. This interim approach should provide at least some level of defense, if FEMA chooses to challenge any issued permit as violating the ESA.

If you have further questions about land use amendments for this PICM pathway or permit disclaimer language, please contact our office.

New Lawsuit May Pause PICM Integration

Notwithstanding those ongoing PICM integration concerns, when and how cities ultimately implement their PICM choice may be a moot point, given a recent lawsuit filed by the Oregonians for Floodplain Protection (OFP). Early this year, OFP sued FEMA, and other federal agencies, requesting declaratory and injunctive relief from the PICM requirements. Among the many arguments presented, OFP argued that FEMA failed to follow requisite rulemaking procedures under the Administrative Procedures Act before requiring NFIP communities to implement one of the PICM options. OFP filed for a preliminary injunction, which asks the court to halt FEMA from enforcing the PICM.

Although the federal district court has yet to hear arguments or render a decision on the requested injunction, the lawsuit highlights underlying legal concerns with FEMA’s approach to PICM integration. Taking a “wait-and-see” approach before adopting the model ordinance or code amendments to implement permit-by-permit review now makes practical sense. Ultimately, if the court agrees with OFP’s arguments and issues an injunction, cities can pause their ongoing PICM work.

The risk of avoiding PICM implementation remains very real – namely, FEMA’s ability to revoke NFIP coverage. However, the cost to adopt a new code or amend an existing code is not insignificant either. This is especially the case without any formal guidance on code language or applicable federal regulation for cities to rely upon when imposing this new “no net loss” standard. OFP’s lawsuit comes at a time of widespread uncertainty and confusion about how to address and implement FEMA’s PICM requirements lawfully and – as FEMA has required of planning jurisdictions – very quickly.

We will continue to monitor the PICM landscape. Our team is here to work with you in navigating this unique federal and local issue.

Public Contracting Rules 2024

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Public Contracting Rules 2024

By: Carolyn H. Connelly

For those clients who have adopted our public contracting rule packet, the determination has been made – no public contracting rule update is required or will be issued for 2024!  As you likely know, a contracting agency that does not adopt its own rules is governed by the Attorney General’s model rules.  ORS 279A.065(5).  Contracting agencies that opt out of the AG’s model rules are required to review changes in public contracting laws to determine whether rule updates are needed to ensure compliance with Oregon’s Public Contracting Code (ORS 279A, 279B, and 279C.)

Our office most recently updated our rule packet in 2023.  If you have yet to adopt that update, you may want to give us a call in order to take advantage of authorized procurement threshold increases.  Direct award is now available for public improvement and goods and service contracts of no more than $25,000.  The intermediate procurement upper threshold similarly increased from $150,000 to $250,000 – but only for goods and service contracts.

Similar significant changes were not adopted during the legislature’s 2024 short session.  However, two changes may impact certain of your entity’s contract award and negotiation procedures over the next year.

  1. SB 1575:  Effective January 1, 2025, the legislature is prohibiting public entities from contractually requiring architects, engineers and surveyors to indemnify the public body for their work until liability has been established during adjudication. Essentially, this will eliminate our standard requirement for architects and engineers “to defend” the entity in the event of third-party claims associated with their work.  We believe indemnification and hold harmless requirements may remain – as long as they apply only after a judge allocates fault.  The bill does not apply to Design Build contracts.  This prohibition sunsets in 2035 – unless the industry successfully lobbies for an extension.  Architects and engineers (or at least their insurance carriers) are well aware of this provision, so be prepared to update your standard contract terms on and after January 1, 2025.
  2. HB 4006: Effective March 7, 2024, a contractor now has the option to provide a surety bond in lieu of retainage to ensure completion of a project to specifications.  As a result, your agency is required to accept a bond, when offered, unless your project manager can identify good cause to require retainage and provides that finding in writing to the contractor.  If or when you receive such a request during any public improvement project over the next year, we would be happy to help assess the sufficiency of the offered bond.

In the meantime, happy public contracting over the coming year!  Be assured, LGLG attorneys and staff are always available to assist with your entity’s procurement and contracting questions and required documentation.  Stay tuned –the legislature is likely to amend ORS 279A, 279B and/or 279C during its 2025 regular session.  If so – we will issue an updated 2025 public contracting rule packet next year.