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New Floodplain Ordinance Targets Oil and Gas Operations
April 26, 2013
 The County Commission in Doddridge County, West Virginia is currently considering amendments to its Floodplain Ordinance as a result of a December 17, 2012 decision by the Circuit Court of Doddridge County. (Comments to the amended floodplain ordinance were due by March 25, 2013.) The facts and procedural posture of the Doddridge County case are convoluted. Essentially, in a civil action filed with the Circuit Court of Doddridge County regarding the issuance and then withdrawal of a floodplain permit, the Court took it upon itself to declare the Doddridge County Floodplain Ordinance unconstitutional, in part. 

In its five page decision, the Court found that the “Doddridge County Flood Plain Ordinance is in violation of the West Virginia Constitution to the extent that the Ordinance fails to provide Due Process to surface and adjoining landowners potentially affected by the development for which EQT Production Company seeks a permit.” The Court further stated that “[i]n order to comply with the standard requirements of due process afforded property owners under the West Virginia Constitution the subject Ordinance when being applied under circumstances involving the request for a permit which potentially affects surface owners who are situate within or adjoining the subject floodplain must afford notice and an opportunity to be heard upon the requested permit to this class of property owners.”

By way of background, each county and many municipalities in West Virginia have adopted an individual version of floodplain ordinance designed to comply with the National Flood Insurance Act of 1968 (“NFIA”) and implement West Virginia Code § 7-1-3v (“Floodplain and mudslide area management” passed by West Virginia legislature to implement the NFIA). The primary purpose of NFIA was to provide a government source for flood insurance which had become virtually unobtainable from private insurers due to severe flooding in the early 1960s. The National Flood Insurance Program (“NFIP”), managed by the Federal Emergency Management Administration (“FEMA”), implements the NFIA. The NFIP aims to provide flood insurance, improve floodplain management and develop flood hazard zone mapping. Accordingly, floodplain ordinances provide a regulatory framework for reviewing any construction development projects in a flood zone and authorizing, by permit, those projects meeting ordinance requirements. West Virginia county commissions in the core regions of Marcellus Shale development, including Brooke, Doddridge, Hancock, Harrison, Marshall, Ohio, Tyler and Wetzel Counties, have passed new or updated floodplain ordinances. Currently, all of these ordinances are nearly uniform and are based on a model floodplain ordinance generated by the West Virginia Department of Homeland Security and Emergency Management (“WVDHS&EM”). 

County floodplain ordinances generally define “base flood elevation,” “one hundred year flood,” “development,” “lowest floor,” “floodplain area” and other floodplain related terms. The ordinances also impose restrictions on construction within a floodway or floodplain and set design standards for permitted construction within the floodplain. The ordinances further establish forms and procedures for applications to the designated floodplain administrator for a determination of whether a development is within the floodplain and requires a permit. Whether a permit is required is essentially determined by where the project is located on FEMA approved floodplain mapping. From one county to another there are numerous minor differences between the ordinances. These differences arise from the counties utilizing different year versions of the model ordinance provided by the state and also of minor alterations made specifically by each county. These floodplain ordinances are extensive in scope, generally spanning 30 or more pages. Accordingly, businesses should review carefully the specific county ordinances applicable to any construction activity they may be planning. 

Despite the relative uniformity of county floodplain ordinances historically, the Doddridge County Commission is proposing changes to its Floodplain Ordinance that vary significantly from prior incarnations. A non-exhaustive list of the more unique provisions includes:
  1. expressly adding to the definition of “development” the phrase “oil/gas well sites, pads, pits, retention ponds”;
  2. requiring the filing of all “contract(s)” related to the proposed development for review and retention, subject to redaction of proprietary and confidential information;
  3. requiring the Floodplain Administrator to “review all objections, comments, protest letters and other writings submitted in opposition of said Permit Application and give due consideration to the same before granting or denying said Permit”;
  4. authorizing the Floodplain Administrator, “in his sole discretion, to hold a public meeting wherein evidence can be taken or given by interested persons or parties. Said hearing shall have a court reporter present to record all testimony and receive all exhibits and evidence”;
  5. requiring a detailed Floodplain Permit Application, including the “amount in dollars of the actual total construction costs of the complete project irrespective of whether all or any part of the subject proposed construction project is within the Floodplain Area,” prior to determining whether the proposed work is located in a floodplain area or not;
  6. requiring the County Clerk to serve notice of the permit application to each “property owner” and “all adjacent property owners and at least one adult resident for each residence on said properties . . . by Certified Mail,” and service by the County Sheriff if the certified mail return receipt is not returned within 10 days, and to publish a Class II legal advertisement notice of the permit application;
  7. requiring the Floodplain Administrator to “notify any appropriate agency or authority if the Floodplain Administrator finds a violation of any non-Floodplain law, regulation or ordinance”; and
  8. establishing an application for Floodplain Permit fee based upon a schedule set by the Doddridge County Commission using the “actual construction costs amount of the proposed construction as determined by the Floodplain Administrator,” only 80% of which will be refunded if the Floodplain Administrator “determines the complete proposed project is not within the Floodplain.”
None of the provisions noted above is found in floodplain ordinances for the other Marcellus counties mentioned above. The other county ordinances provide for a flat Floodplain Determination fee ranging from $20 to $30. A county’s determination whether a project is in a floodplain area could cost a significant amount for a substantial development project. Doddridge County’s proposed determination fee based on project cost, with 80% refund as applicable, is unique.

None of the previously mentioned Marcellus counties’ floodplain ordinances, at least as originally passed, contain provisions that directly target oil and gas development, nor any other specific type of industrial development. The revisions being proposed by the Doddridge County Commission appear to reflect a significant departure from the model and the message that Doddridge County appears to be sending to the oil and gas industry does not appear to be a positive one.  The question is whether these new provisions, if adopted, will spread to other counties. 

In a subsequent article we will address the legal issues that may arise in the event that Doddridge County adopts the proposed floodplain ordinance and the interplay between the federal, state and local requirements of the NFIA/NFIP in connection with oil and gas development. 
Mark D. Clark