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  • Scope of Work
    Appeal Type: 
    2nd
    Report Type: 
    PW
    Appeal Categories: 
    Applicant Name: 
    Ulster County Department of Public Works
    Disaster Number: 
    4020-DR-NY
    DSR: 
    3629
    Date Signed: 
    Monday, July 7, 2014
    PA ID: 
    111-99111-02
    Summary/Brief: 

    Conclusion:  On second appeal, the Ulster County Department of Public Works (Applicant) submitted sufficient documentation to demonstrate that the scope of work in PW 3629 does not fully address the work required to restore its culvert to pre-disaster design, function, and capacity. Accordingly, FEMA authorizes a change to the scope of work and is remanding the appeal to Region II to determine eligible costs associated with the work and to reconsider the HMP.

    Summary Paragraph

    Hurricane Irene caused major damage to the Applicant’s culvert and the road supported by the culvert.  In order to restore the culvert to its pre-disaster condition, the Applicant requested funding to excavate, remove and replace panels of the culvert.  The Applicant also submitted a Hazard Mitigation Proposal (HMP) that proposed excavating and removing the multi-plate steel arch culvert, creating and stabilizing abutments using sheet piling and fill, installing beam seats and precast concrete bridge decking, and installing box guardrails in lieu of W-panel guardrails.  In PW 3629, FEMA allocated $36,695.59 to repair the culvert.  However, FEMA determined that the HMP, as written for $61,152.73, was ineligible because the mitigation was 168 percent of the total eligible cost.  In its first appeal, the Applicant asserted that FEMA did not draft the scope of work in PW 3629 to accurately reflect the work necessary to repair its custom made culvert which requires considerable effort to attach and assemble the individual pieces of the culvert before it can function properly.  The FEMA Region II Acting Regional Administrator (RA) denied the first appeal because she determined that the Applicant needed to request a net small project overrun because PW 3629 was a small project.  In addition, she determined that the HMP exceeded 100 percent of the project cost and was not cost effective.  In the second appeal, the Applicant, again, asserts that the scope of work was not written to properly address the work necessary to repair its culvert.

    Authorities

    • Stafford Act § 406, 42 U.S.C. § 5170b.
    • 44 C.F.R. § 206.202(d)(1)(i).
    • 44 C.F.R. § 206.226(e).
    • PA Guide, at 95, 101, and 109.
    • Recovery Policy 9526.1, Hazard Mitigation Funding Under Section 406 (Stafford Act) (Mar. 30, 2010).

    Headnotes

    • 44 C.F.R. § 206.202(d)(1)(i) provides that the Project Worksheet must identify the eligible scope of work and must include a quantitative estimate for the eligible work.
      • The PW explains the disaster-related damage in the Damage Description and Dimensions section and necessary repair work in the Scope of Work section.
    • The PA Guide states that regarding small projects, if there are omissions or changes in scope, FEMA may revise an initial PW, which may result in changes in funding level and/or category.
      • The scope of work in PW 3629 does not demonstrate the necessary repair work to restore the Applicant’s culvert to pre-disaster condition, and should be revised
    • 44 C.F.R. § 206.226(e) authorizes FEMA to fund additional measures that will enhance a facility’s ability to resist similar damage in future events.
    • RP 9526.1 states mitigation measures that replace, realign, or relocate culverts are predetermined to be cost effective if they do not exceed 100 percent of project cost.
      • The Applicant submitted a HMP with PW 3629 to mitigate future damage to the culvert.
      • The Acting RA determined the HMP to not be cost effective because it exceeded 100 percent of the project cost.
      • HMP should be re-evaluated once the scope of work and cost are revised.


     

    Letter: 

    July 7, 2014

    William R. Davis, Jr.
    Acting Director
    New York Office of Emergency Management
    1220 Washington Avenue
    Building 22, Suite 101
    Albany, New York 12226

    Re: Second Appeal – Ulster County Department of Public Works, PA ID 111-99111-02, Scope of Work, FEMA-4020-DR-NY, Project Worksheet (PW) 3629

    Dear Mr. Feeney:

    This is in response to a letter dated January 10, 2014, from the New York State Division of Homeland Security and Emergency Services, which transmitted the referenced second appeal on behalf of Ulster County Department of Public Works (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) determination regarding the scope of work in PW 3629.

    As explained in the enclosed analysis, I have determined that the scope of work in PW 3629 does not accurately reflect the work required to repair the Applicant’s culvert.  Therefore, I am approving the appeal with respect to the change in the scope of work.  In addition, I am remanding the appeal to FEMA Region II to develop an appropriate scope of work, determine eligible costs, and reconsider the Hazard Mitigation Proposal (HMP) in light of the change in scope of work.  By copy of this letter, I am requesting the Regional Administrator take appropriate action to implement this determination.  In accordance with 44 CFR §206.206 (b)(1), Appeals, Levels of Appeal, the Applicant may appeal, to the Regional Administrator, any new issues that arise in determining eligible costs and reconsidering the HMP.

    Please inform the Applicant of my decision.  This determination is the final decision on this matter pursuant to 44 C.F.R. § 206.206, Appeals.

    Sincerely,

    /s/

    William W. Roche
    Director
    Public Assistance Division

    Enclosure

    cc: Jerome Hatfield
          Regional Administrator
          FEMA Region II

    Analysis: 

    Background

    From August 26 to September 5, 2011, Hurricane Irene caused substantial rainfall in Ulster County, New York.The storm caused a section of the shoulder and paved surface over a multi-plate steel arch culvert on County Road 24 to washout, leaving an undermined traffic lane, and the loss of the roadside guardrail.The road is owned and maintained by Ulster County through the Ulster County Department of Public Works (Applicant) and is not designated as a federal aid road.

    In order to restore the road and culvert to their pre-disaster condition, the Applicant requested funding to repave and fill in the road, install a guardrail, and excavate, remove and replace panels of the culvert.The Applicant also submitted a Hazard Mitigation Proposal (HMP) that proposed excavating and removing the multi-plate steel arch culvert, creating and stabilizing abutments using sheet piling and fill, installing beam seats and precast concrete bridge decking, and installing box guardrails in lieu of W-panel guardrails.

    In Project Worksheet (PW) 3629, FEMA allocated $36,695.59 to repair the culvert, fill and repave the road, and replace the guardrail.  The estimated cost for the proposed hazard mitigation was $61,152.73.  FEMA determined that the HMP, as written, was ineligible because the mitigation was 168 percent of the total eligible cost.  The PW noted that there was no history of damage to the site, which would be information relevant to a Benefit Cost Analysis (BCA).

    First Appeal

    In a first appeal letter submitted July 20, 2012, the Applicant asserted that the road and culvert experienced the same type of damage as the facilities referenced in two other PWs,[1] obligated by FEMA, in response to Hurricane Irene.  The Applicant also asserted that its policy was to replace this type of structure with sheet piling abutments and precast concrete decks because it can withstand backfill erosion without any damage to the superstructure.

    The FEMA Region II Acting Regional Administrator (RA) denied the first appeal on July 23, 2013.  Pursuant to FEMA policy, the Acting RA determined that the Applicant would need to request a net small project overrun for any additional FEMA funding because the work to repair the culvert was determined to be a small project.[2]  In addition, the Acting RA determined that the original PW was consistent with PA regulations and policy because FEMA policy allows for mitigation measures that do not exceed 100 percent of the cost of the eligible repair work on the project.  At the Applicant’s request, the Acting RA subtracted $7,500 from the HMP cost estimate because the item of work was not necessary for the repair of the culvert.  Accordingly, the Acting RA determined that the original PW was for $36,695.59 and the revised HMP cost estimate was $53,652.73, making the HMP cost estimate 146.21 percent of the total eligible cost. 

    Second Appeal

    In a second appeal letter, dated October 18, 2013, the Applicant again asserts that PW 3629 was not written properly and should have been written in the same manner as the two other PWs, referenced above, because all three PWs involve the same type of damage.  In a memorandum, dated December 23, 2013, the Grantee makes several assertions regarding this appeal.  The Grantee asserts that, unlike conventional corrugated metal pipe installations, the pipe-arch requires considerable effort to attach and assemble the individual pieces before it can function as an integral unit and is capable of supporting the design load.  In addition, the Grantee states that the Applicant objected to the way the scope of work was written, but was told that there was no time to change the PW.   Finally, the Grantee states that new documentation demonstrates that the project referenced in PW 3629 is a large project, and the cost for the project should be considered individually.

    Discussion

    Scope of Work

    Pursuant to Section 406 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), FEMA Public Assistance funding may be provided to a state or local government for the repair, restoration, and replacement of damaged or destroyed facilities under a major disaster.[3]  The PW explains the disaster-related damage in the Damage Description and Dimensions section and necessary repair work in the Scope of Work section.[4]  The scope of work must include the necessary repair work that corresponds directly to the cause of damage in quantifiable and descriptive terms.[5]  Other information documented in the scope of work includes, but is not limited to, eligible codes and standards; evidence of pre-disaster damage; pre-disaster inspection reports noting deficiencies; ineligible work, maintenance, or ineligible facilities; reference to a HMP; and any special equipment or construction approaches.[6]   Regarding small projects, if there are omissions or changes in scope, FEMA may revise an initial PW, which may result in changes in funding level and/or category.[7]  A change to the scope of work does not require the Applicant to appeal for a net small project overrun.[8]       

    The Applicant has consistently stated that the original scope of work in PW 3629 does not accurately and completely address the repair work necessary to restore its culvert to pre-disaster condition.  The Grantee asserts that the Applicant’s culverts are custom made, and repair of these culverts differs from the standard repair of typical culverts.  With its second appeal, the Applicant submitted a document entitled, Repair and Replacement of Ulster County Box Culverts, and plans and cost estimates reflective of the work associated with the repair of the Applicant’s culverts.[9]  In addition, the Applicant provided a Project Description for the replacement of the culvert in 2010.[10]  Analyzed together, these documents purport to demonstrate the additional work that is needed to repair the culvert, including excavating the culvert, taking it to a separate location, repairing it by hand, and reinstalling the culvert. 

    Upon considering the second appeal, a FEMA civil engineer reviewed the documents and plans submitted by the Applicant.  Based upon that review, it was determined that the original scope of work in PW 3629 does not fully address the repairs needed to restore the culvert to pre-disaster design, function, and capacity.  In short, the Applicant’s assertions regarding repair of the culvert and the need to revise the scope of work to reflect the additional work to repair the culvert to its pre-disaster condition are reasonable.  However, based on available information, the civil engineer was unable to determine the reasonableness of the Applicant’s cost estimates for labor and equipment to repair the culvert. 

    Hazard Mitigation

    Pursuant to Title 44 of the Code of Federal Regulations (C.F.R.) § 206.226, Restoration of damaged facilities, FEMA is authorized to fund additional measures that will enhance a facility’s ability to resist similar damage in future events.[11]  Mitigation measures that replace, realign, or relocate culverts are pre-determined to be cost effective if they: 1) do not exceed 100 percent of project cost, 2) are appropriate to the disaster damage, 3) will prevent similar damage, 4) are directly related to the eligible damaged elements, 5) do not increase risks or cause adverse effects on property elsewhere, and 6) are not otherwise prohibited by FEMA regulations or policy.[12]

    During the formulation of PW 3629, the Applicant submitted an HMP to replace the culvert with sheet pile abutments and a precast concrete superstructure.  In both PW 3629 and the first appeal determination, FEMA determined that the mitigation measures were not cost effective, as they exceeded 100 percent of the project cost.  Based on the revision to the scope of work of PW 3629, it is likely the cost associated with the revised scope of work will also change.  Accordingly, the HMP must be reconsidered in light of the changes to PW 3629, as it may no longer exceed 100 percent of the project cost.

    Conclusion

    The Applicant provided sufficient documentation to demonstrate that a change in the scope of work of PW 3629 is warranted.  Accordingly, Region II must develop an appropriate scope of work to fully address the work necessary to restore the culvert to pre-disaster condition, determine eligible costs associated with repair of the culvert, and, based on the revised scope, reconsider the HMP submitted by the Applicant.  In accordance with 44 C.F.R. § 206.206, the Applicant maintains the right to appeal any new issues that arise in determining eligible costs and reconsidering the HMP.


    [1] See Project Worksheet 4103, Ulster County Department of Public Works, Version 0 (June 14, 2012); see also Project Worksheet 5276, Ulster County Department of Public Works, Version 1 (Sept. 19, 2013).

    [2] The Acting RA cited to the Public Assistance Guide, FEMA 322 at 113 (June 2007) [hereinafter PA Guide] in her discussion of requests for net small project overruns.

    [3] The Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988 § 406, 42 U.S.C. § 5170b (2007). 

    [4] See 44 C.F.R. § 206.202(d)(1)(i) (2011).

    [5] PA Guide, at 101.

    [6] Id.

    [7] Id. at 95.

    [8] Id. at 109 (noting a request for a net cost overrun concerns additional funding for small projects, but not mentioning changes to the scope of work).

    [9] See Second Appeal, Ulster County Public Works Department, PA ID 111-99111-02, FEMA-4020-DR-NY, at Appendices B and D (Oct. 18, 2013).  

    [10] Id. at Appendix D (stating the replacement of the culvert would include excavation in or around the stream, installation of two cofferdams, removal of the existing culvert pipes, installation of a corrugated aluminum box culvert, installation of corrugated aluminum headwalls, backfill with suitable well graded material, and removal of the cofferdams).

    [11] 44 C.F.R. § 206.226(e).

    [12] Recovery Policy 9526.1, Hazard Mitigation Funding Under Section 406 (Stafford Act) at Appendix A (Mar. 30, 2010).

     

     



  • Reasonable Costs
    Appeal Type: 
    2nd
    Report Type: 
    PW
    Appeal Categories: 
    Applicant Name: 
    University of Iowa
    Disaster Number: 
    1763-DR-IA
    DSR: 
    3702
    Date Signed: 
    Tuesday, June 24, 2014
    PA ID: 
    103-03027-00
    Summary/Brief: 

    Conclusion: The building contents are eligible for funding because they are necessary to make the temporary facility functional.  The parking lot repair is maintenance and such repairs are not eligible for funding.  Although the additional plumbing work was outside of the scope of the work of the contract, if it is eligible under the Public Assistance program, FEMA may fund reasonable costs for the work. 

    Summary Paragraph

    From May 25 through August 13, 2008, severe storms caused flooding at two buildings on the University of Iowa (Applicant) campus.   The Applicant had to lease a temporary facility while it completed the repairs to the two buildings.  The Applicant made improvements to the leased facility and purchased items for art instruction.  The Applicant submitted a request for cost overruns.  FEMA found some items related to the improvements ineligible, indicating that certain costs were related to maintenance, captured on more than one invoice, and costs that are normally considered part of general contractor overhead and profit.  The Applicant submitted a first appeal for some of the funding found ineligible, and the FEMA Region VII Regional Administrator partially approved the first appeal.  In its second appeal, the Applicant argues that costs associated with three items should be found eligible: (1) building contents; (2) parking lot repair; and (3) additional plumbing contract work.

    Authorities and Second Appeals

    • 44 C.F.R. §13.43(a)(3).
    • OMB Circular A-87, 2 C.F.R. § 225.
    • DAP 9523.3, Provision of Temporary Relocation Facilities at 2-5.

    Headnotes

    • Disaster Assistance Policy 9523.3, Provision of Temporary Relocation Facilities states that reasonable alterations of the temporary facility are allowable costs, if they are required to make the space functional and meet the pre-disaster needs of the applicant; and FEMA will not fund utilities (power, water, heat, etc.), maintenance, or operating costs at temporary facilities.
      • The building contents were necessary to make the facility functional.
      • The parking lot repair was maintenance and is ineligible. 
    • 44 C.F.R. §13.43(a)(3) and OMB Circular A-87 allow FEMA to look at the reasonableness of costs and make an eligibility determination even when an applicant fails to follow procurement procedures.
      • With regard to the additional plumbing work, although the additional work was outside of the scope of the work of the contract, if the work itself is eligible under the Public Assistance program, FEMA can fund reasonable costs for the work.


     

    Letter: 

    June 24, 2014

    Mark Schouten
    Administrator
    Iowa Homeland Security and Emergency Management Division
    7105 NW 70th Avenue
    Camp Dodge, Bldg. W-4
    Johnston, Iowa 50131-1824

    Re: Second Appeal – University of Iowa, PA ID 103-03027-00, FEMA-1763-DR-IA, Project Worksheet (PW) 3702 – Reasonable Costs     

    Dear Mr. Schouten:

    This is in response your letter dated July 23, 2013, which transmitted the referenced second appeal on behalf of University of Iowa (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of its request for $201,233.16 for cost overruns for establishing a temporary facility.

    As explained in the enclosed analysis, I have determined that the building contents for an amount of $26,795.56 and at least a portion of the additional plumbing work, up to $141,607.60, are eligible for reimbursement because the items were necessary to make the temporary facility functional.  At project closeout, the Applicant must submit documentation with regard to the eligibility of the additional plumbing work that demonstrates:

    • The work was necessary to make the facility functional, and
    • The cost to do so was reasonable.

    The parking lot repair is considered maintenance and is ineligible for funding.  By copy of this letter, I am requesting the Regional Administrator to take appropriate action to implement this determination. 

    Please inform the Applicant of my decision.  This determination is the final decision on this matter pursuant to 44 C.F.R. § 206.206, Appeals.

    Sincerely,

    /s/

    William W. Roche
    Director
    Public Assistance Division

    Enclosure

    cc:  Beth Freeman
          Regional Administrator
          FEMA Region VII

    Analysis: 

    Background

    From May 25 through August 13, 2008, severe storms caused flooding to Art Building East and Art Building West, two buildings on the University of Iowa (Applicant) campus.  The flood waters inundated the two buildings to a depth of 10 feet, damaging walls, flooring, ceilings and building contents.  After the flooding, the buildings could not be occupied until repairs were made.  As an emergency measure to continue essential educational activities, the Applicant leased a temporary facility from a retail store and, in the lease, agreed that it would pay the building’s owner to make improvements to the facility to accommodate art studio classrooms.  In October 2008, FEMA obligated Project Worksheet (PW) 3702 for $57,500 to lease the facility for six months and $2,000,000 to complete leasehold improvements.  FEMA obligated additional funding to cover several extensions to the lease.  The Applicant performed the leasehold improvements for $5,889,269.60 and submitted a request for $3,889,269.60 in additional funding for cost overruns.  On February 8, 2012, FEMA obligated Version 5 of PW 3702, finding $663,914.69 for leasehold improvements to be ineligible, indicating that certain costs were related to maintenance, captured on more than one invoice, and costs that are normally considered part of general contractor overhead and profit.    

    First Appeal

    In a first appeal letter submitted April 16, 2012, the Applicant agreed that some costs are ineligible but challenged FEMA’s determination regarding $405,164.44.  The Applicant argued that these costs were either direct expenses incurred by the contractor or expenses generally related to construction.  The Applicant provided its lease agreement, an affidavit, and other documents in support of its appeal. 

    The FEMA Region VII Regional Administrator (RA) partially granted the first appeal on March 19, 2013.  The RA determined that the building’s owner sold the property to a general contractor after a “cost plus structure” contract was signed, and that the same general contractor did not follow the bid process stipulated in the lease agreement because there was no evidence of competitive bidding.  The RA indicated, that as a result of the sale, FEMA, in the initial analysis of the cost overrun, questioned items that exceeded the bid contract and determined those items ineligible.  As it relates to the Applicant’s request for costs associated with replacing certain building contents[1], the RA determined that those purchases were not required for the leasehold improvements but were to replace those contents/supplies lost at the damaged facilities.  As such, the RA indicated that those costs should be presented at project closeout for building contents project worksheets for the damaged facilities.  With regard to parking lot repairs, the RA determined that a parking lot repair made on November 18, 2008 was eligible but a repair made in July 2009 was not.  The RA considered the latter repair to be routine maintenance.  The RA also found that the Applicant’s request for costs associated with additional plumbing contract work were ineligible because the additional work was not agreed upon in the original contract and was not competitively bid in accordance with lease contract terms.[2]  Based on documentation provided with the appeal, the RA found $171,154.05 eligible and obligated funding in that amount; the RA found $234,010.39 ineligible.

    Second Appeal

    The Applicant maintains in a second appeal letter dated May 24, 2013, that it is entitled to reimbursement for three costs found ineligible on first appeal: (1) building contents; (2) parking lot repairs; and (3) contractor plumbing expenses.  The Applicant asserts that it purchased the building contents for use in the temporary facility not as permanent replacement items for those lost in the flooded buildings.  As such, the Applicant states that these contents were necessary to make the temporary facility functional and requests $26,812.65 in reimbursement.  Further, the Applicant asserts that the parking lot repair ($32,830) was not maintenance, as the RA concluded, but an essential repair to enable bus service to continue at the temporary facility.  The Applicant stated that the first two parking lot repairs, which FEMA found eligible, were to repair pavement damage and that the most recent repair involved removing and replacing pavement, which would allow the parking lot to handle the new weight and traffic volume at the temporary facility.  The Applicant also states that the contracted plumbing work was necessary to make the temporary facility functional and operational.  The Applicant attached the plumbing invoices, totaling $141,607.60, and a plumbing plan outlining the work.   

    Discussion

    The Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) Section 403 authorizes FEMA to “provide assistance essential to meeting immediate threats to life and property resulting from a major disaster” and allows for temporary facilities for schools, which includes higher education facilities.[3]  Disaster Assistance Policy DAP9523.3 Provision of Temporary Relocation Facilities, which was in effect at the time of the disaster, states that the capacity of the temporary facility must be comparable to the pre-disaster capacity of the facility that housed the displaced services.[4]  The policy also indicates that FEMA will not fund certain costs associated with temporary facilities, including utilities (power, water, heat, etc.), maintenance, or operating costs, nor will FEMA fund the differential should these costs increase.[5]  FEMA considers reasonable alterations of the temporary facility to be eligible work if they are required to make the space functional and meet the pre-disaster needs of the applicant.[6]  

    Building Contents

    In accordance with DAP9523.3 § (F)(1), relocation costs are costs associated with the transfer of the eligible pre-disaster service and costs for rent, purchase or construction of the temporary facility itself.  One allowable cost is reasonable alterations of the temporary facility that are required to make the space functional and meet the pre-disaster needs of the applicant.[7]  While the Applicant may have to permanently replace these same items in the two damaged art buildings, these items were also necessary to make the temporary facility functional for art instruction and the cost of the items ($26,795.56) [8]is eligible for reimbursement.  After the temporary facility closes, the Applicant must follow Disaster Assistance Policy DAP9525.12 Disposition of Equipment, Supplies and Salvageable Materials to dispose of equipment and residual unused supplies and, if required, compensate FEMA with the fair market value of the cost of the items no longer being used at the temporary facility.   

    Parking Lot Repair

    The lease between the Applicant and the building owner lists “repair and resurfacing of the existing parking lot” as one of the leasehold improvements for the temporary facility.  FEMA provided funding for two parking lot repairs: one in August 2008 consisting of temporary repairs and the second in November of 2008 to cover 4660 square feet of the parking lot with eight inches of asphalt.  The third repair, which is the subject of this appeal, occurred in July 2009 and consisted of placing rocks in a trench and patching two parts of the parking lot.  Due to the nature of the repair, FEMA finds that this repair was maintenance and not a full resurfacing of the parking lot.  Pursuant to DAP9523.3, FEMA does not fund maintenance at temporary facilities.   Since this third repair is maintenance, the work is not eligible for public assistance funding.

    Contract Plumbing Work

    The RA determined that the Applicant did not comply with competitive bidding regulations found in Title 44 Code of Federal Regulations (CFR) §13.36(c); the Applicant did not provide a reason or explanation for noncompliance.  44 CFR §13.43(a)(3) states that when an applicant for federal funding fails to comply with procurement procedures, FEMA may “wholly or partly suspend or terminate the current award.”  The Public Assistance Guide explains that FEMA implements this provision by evaluating project costs to determine reasonableness, and FEMA may reimburse reasonable costs for eligible work.[9]  In accordance with OMB Circular A-87, FEMA evaluates reasonable costs based on the standard “that a cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost.”[10]  Upon review of the invoices the Applicant provided with its second appeal, it appears as though at least a portion of the $141,607.60[11] of additional contract plumbing work was necessary to make the temporary facility functional for art instruction.  Although the additional work was outside of the scope of the work of the contract, if the work itself is eligible under the Public Assistance program, FEMA can fund reasonable costs for the work.  At project closeout, the Applicant must demonstrate that the actual costs of the work performed were necessary to make the temporary facility functional and will analyze the reasonableness of the actual costs claimed.  

    Conclusion

    The building contents are eligible for public assistance funding because the building contents were necessary to make the temporary facility functional.  With regard to the additional plumbing work, the Applicant should submit documentation with its request for project closeout to support the eligibility of the plumbing work performed as it relates to the necessity of making the facility functional and the reasonableness of the costs.  The third parking lot repair is ineligible for funding as that repair was maintenance, which is ineligible for temporary facilities.     


    [1] The RA indicated that the Applicant submitted sixty nine invoices for the purchase of fire extinguishers, first aid items, eye wash stations, a spray booth, refrigerator, shelving, display cases, wire, and other miscellaneous items.

    [2] The ineligible costs noted here are not the only costs found ineligible in the first appeal response.  These are the only costs discussed because they are the only costs the Applicant is appealing on second appeal.

    [3] The Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, Pub. L. No. 93-288, §403 (a), 42 U.S.C. § 5170b (a) (2006); 44 C.F.R. § 206.221(a)(3) & (e)(1) (2001).

    [4] Disaster Assistance Policy DAP9523.3, Provision of Temporary Relocation Facilities at 2 (July 16, 1998).

    [5] Id at 4.

    [6] Id at 5.

    [7] Id.

    [8] The Applicant states that it is appealing contents costs in the amount of “$26,795.56 and $17.09,” but the Applicant did not provide any documentation to support the $17.09.  FEMA will not find the $17.09 to be eligible as it is not linked to the building contents costs.

    [9] Public Assistance Guide, FEMA 322 at 53 (June 2007).

    [10] Office of Mgmt. & Budget, Exec. Office of the President OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments (2013) (codified at 2 C.F.R. § 225).

    [11] Invoices 6963 ($12,907.51), 6971 ($30,364.75), 6984 ($22,254.30), 6987 (25,464.45), 6993 ($14,499.04), 6995 ($5,800.00), 7004 ($13,717.55), 7027 ($1,500.00), 7029 ($12,000.00), and 7032 ($3,100.00).  

     



  • Debris Removal
    Appeal Type: 
    2nd
    Report Type: 
    PW
    Appeal Categories: 
    Applicant Name: 
    Los Angeles County
    Disaster Number: 
    1884-DR-CA
    DSR: 
    444
    Date Signed: 
    Monday, June 9, 2014
    PA ID: 
    037-99037-00
    Summary/Brief: 

    Conclusion:  The Applicant’s first appeal was not submitted in accordance with the substantive and procedural requirements.  While the Applicant did provide some photos showing potential eligible work, without a detailed scope of work, eligible costs cannot be determined. 

    Summary Paragraph

    From January 17 through February 6, 2010, rainstorms deposited vegetative debris, mud, and rock onto roads and blocked 453 culvert drains in Los Angeles County (Applicant) Road District 518.  FEMA prepared PW 444 for $353,730.13 to remove 120 cubic yards of debris, but it was never obligated.  FEMA determined that the debris removal costs were ineligible because photographs submitted showed minimal debris on public and maintained property and there was a general lack of documentation supporting the work.  In a first appeal letter, the Applicant appealed FEMA’s denial of debris removal without specifying a monetary figure or including any additional information. The Applicant stated that additional information and documentation would follow shortly.  In a subsequent letter submitted after the appeal deadline, the Applicant appealed $191,500.00 for debris removal and provided information to supplement the original appeal letter.  The Regional Administrator denied the first appeal because the Applicant did not timely submit a complete appeal, photos submitted showed debris on natural, unmaintained areas, and private property, and minimal debris on public property, and there was no documentation supporting the work.  On second appeal, the Applicant submitted more photos with captions and more detailed documentation.

    Authorities and Second Appeals

    • 44 C.F.R. § 206.206(c)(1).
    • PA Guide, at 67, 69, 101.

    Headnotes

    • 44 C.F.R. § 206.206(c)(1) states that “Appellants must file appeals within 60 days after receipt of a notice of the action that is being appealed.”
      • The Applicant did file an appeal within the 60-day period.  When additional information is required after the filing of an appeal, FEMA may issue a Request for Information (RFI) to which the Applicant has a specific date to respond.  The Applicant’s February 13th letter is equivalent to an RFI response from an appeal applicant.
    • The FEMA PA Guide states that debris removal must eliminate immediate threats of significant damage to improved property, and that debris on private property rarely affects the public at large and may not be the legal responsibility of a State or local government.
      • The Applicant did not provide sufficient evidence to show that all debris removal activities were due to immediate threats to improved property.
    • The PA Guide states that in the PW scope of work, work should be specified as an action with quantifiable and descriptive terms.
      • The Applicant did not provide sufficient information to determine an adequate scope of work.  Therefore, FEMA cannot determine eligible costs.
    Letter: 

    June 9, 2014

    Mark S. Ghilarducci
    Secretary
    California Emergency Management Agency
    3650 Schriever Avenue
    Mather, California 95655

    Re: Second Appeal – Los Angeles County, PA ID 037-99037-00, Debris Removal, FEMA-1884-DR-CA, Project Worksheet (PW) 444

    Dear Mr. Ghilarducci:

    This is in response to your letter dated September 9, 2013, which transmitted the referenced second appeal on behalf of Los Angeles County (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $191,500.00 in debris removal costs in Road District 518.

    As explained in the enclosed analysis, the Applicant’s first appeal was not submitted in accordance with the substantive and procedural requirements established in 44 C.F.R. § 206.206.  Even if the appeal had met these requirements, the documentation submitted did not adequately substantiate the eligibility of the work.  Accordingly, I am denying the appeal.  By copy of this letter, I am requesting the Regional Administrator to take appropriate action to implement this determination.

    Please inform the Applicant of my decision.  This determination is the final decision on this matter pursuant to 44 C.F.R. § 206.206, Appeals.

    Sincerely,

    /s/

    William W. Roche
    Director
    Public Assistance Division

    Enclosure

    cc:  Karen Armes
          Acting Regional Administrator
          FEMA Region IX

    Analysis: 

    Background

    From January 17 through February 6, 2010, rainstorms deposited vegetative debris, mud, and rock onto roads and blocked 453 culvert drains in Los Angeles County (Applicant) Road District 518.  On September 8, 2011, FEMA prepared Project Worksheet (PW) 444 for $353,730.13 to remove 120 cubic yards of debris, but it was never obligated.  On October 5, 2011, FEMA notified the State of California (Grantee) that the PW was ineligible because the “photographs supplied [did] not substantiate the work as eligible.”[1]  On October 27, 2011, the Grantee notified the Applicant that the PW was determined to be ineligible.[2]  The letter noted that the “photographs show minimal amounts of debris on public and maintained property which, according to the PW scope of work, has not been quantified or substantiated by supporting documentation.”[3]

    First Appeal

    In a first appeal letter submitted December 28, 2011, the Applicant appealed FEMA’s denial of debris removal in Road District 518.  There was no monetary figure or any other information included with the appeal letter, but the Applicant stated it would provide additional information and documentation.

    In a February 13, 2012, letter submitted after the appeal deadline, the Applicant claimed $191,500.00 as the amount in dispute for debris removal in Road District 518 and provided supplemental information to augment the original appeal letter.  The Applicant asserted that debris removal was not performed on private or unmaintained property.  In addition, the Applicant provided photos and spreadsheets listing employee names, dates worked, hours worked, labor rates, fringe benefit rates, rental equipment, and other miscellaneous costs.  The Grantee supported the appeal and forwarded it to FEMA on March 12, 2012. 

    On May 8, 2013, the FEMA Region IX Regional Administrator (RA) denied the first appeal stating that the Applicant “did not submit their appeal complete with documentation justifying their position within the time period allowed.”  The RA found that the photographs submitted show “natural, unmaintained areas, and some debris from private property, and minimal debris from public property.”  The RA provided the following reasons as to why the submitted documentation was insufficient:

    • Equipment and operator costs were not matched to verify the operated equipment time and the standby equipment time. 
    • Labor and equipment costs require job descriptions, dates, and the work location to determine eligibility for disaster-related work. 
    • A breakdown of fringe benefits with supporting documents has not been submitted.
    • Rental equipment invoices and daily work tickets have not been submitted.
    • Load tickets for quantity verification of the amount of debris and the dump site location have not been submitted.
    • Maintenance records for the cleaning of the inlet structures and road ditches have not been submitted.

    Second Appeal

    In the second appeal letter submitted July 22, 2013, the Applicant is appealing $191,500.00 in debris removal costs in Road District 518.  With the second appeal, the Applicant provided additional information, including:

    • Department of Public Works (DPW) ad hoc FEMA reports which provide summaries of force account labor overtime costs, force account equipment costs, rental equipment costs, and contract payments.
    • Samples of rental equipment tickets and daily work tickets.
    • Samples of daily haul truck tickets.
    • Samples of refuse disposal tickets.
    • A maintenance policy for the cleaning of inlet structures and road ditches.
    • Pictures with individual narratives to clarify what is being depicted.

    The Applicant states that a breakdown of fringe benefits with supporting documentation will be submitted at closeout.  The Applicant notes that it has always been its practice to provide FEMA with summaries of records and then to provide actual documentation at closeout.  The Applicant reiterates that “at no time [has it] requested reimbursement for debris removal activities on private property or provided pictures … that depict such efforts on private property or unmaintained forest property.”  The Grantee forwarded the second appeal reiterating the Applicant’s position. 

    Discussion

    Appeal Time Limits

    FEMA notified the Applicant of its decision that PW 444 was ineligible on November 2, 2011.  The 60-day deadline for the Applicant to file an appeal was January 1, 2012.  The Applicant submitted a letter on December 28, 2011, indicating its intent to appeal and stated that additional information would follow.  The Applicant sent the additional information in a letter on February 13, 2012.

    Pursuant to 44 C.F.R. § 206.206(c)(1), “[a]ppellants must file appeals within 60 days after receipt of a notice of the action that is being appealed.”[4]  In this case, the Applicant filed an appeal but not the necessary documentation to support it within the 60-day period.  When additional information is required after the filing of an appeal, FEMA may issue a Request for Information (RFI) pursuant to 44 C.F.R. § 206.206(c)(3) to which the Applicant has a specific date to respond.  The Applicant’s February 13, 2012, letter is essentially equivalent to an RFI response from an appeal applicant.  Although an RFI was not issued by the RA in his case, it is within the RA’s discretion to consider the supplemental submission.  Noting such, the RA’s finding that the appeal submission was procedurally and substantively defective was correct.

    Debris Removal on Private and Unmaintained Property

    Assuming arguendo the first appeal was not defective, the second appeal does not adequately address the substantive issues raised in the RA’s first appeal denial.  The Public Assistance Guide states that, “[t]o be eligible for Public Assistance, debris removal must be in the public interest, which is when removal is necessary to:  eliminate immediate threats to lives, public health and safety; [and] eliminate immediate threats of significant damage to improved public or private property.”[5]  It further states that, “[d]ebris on private property rarely meets the public interest standard because it does not affect the public at large and may not be the legal responsibility of a State or local government.”[6]  FEMA initially denied PW 444 because the “photographs supplied [did] not substantiate the work as eligible.”[7]  The RA upheld this decision on first appeal stating that “the submitted photographs show mostly natural, unmaintained areas and some debris from private property and minimal debris from public property.”  The Applicant submitted additional photographs and descriptions with the second appeal: 

    • In several photos, there is not sufficient evidence to determine if debris is located in a maintained area that is the Applicant’s responsibility, or if the debris is on private property.[8]  One photo does not display sufficient evidence to determine if an immediate threat exists.[9]
    • Photos show roads that were not listed in the PW scope of work and therefore, are not part of this project.[10]  Some photos do not state what road they are showing, so it is not known if they are included in the PW scope of work.[11]
    • Some photos claim to show plugged culverts.  Although the Applicant provided a policy stating that it is required to inspect the culverts and follow up with maintenance if required, it has not provided maintenance records demonstrating that the culverts were clear before the disaster.  Without maintenance records, there is no way to determine if the plugged inlet is a direct result of the disaster.[12]
    • When photos do show eligible work, the documentation provided does not show what work was completed at the location, who worked there, for how many hours, and what equipment was used.  Therefore, the costs for this debris removal cannot be determined.[13]

    The PA Guide states that in the PW scope of work, “work should be specified as an action with quantifiable (length, width, depth, capacity) and descriptive (brick, wood, asphalt, timber deck bridge) terms.”[14]  Without this information, an item of work cannot be determined to be eligible.

    Conclusion

    The Applicant’s first appeal was not submitted in accordance with the substantive and procedural requirements established in 44 C.F.R. § 206.206.  Even if it had been, the documentation submitted did not adequately substantiate the eligibility of the work.                                                                                                       

    [1] E-mail from Federal Emergency Management Agency to State Public Assistance Officer, California Emergency Management Agency (Oct. 5, 2011, 10:04am) [hereinafter Email].

    [2] Letter from State Public Assistance Officer, California Emergency Management Agency to Chief Executive Officer, Los Angeles County (Oct. 27, 2011).

    [3] Id.

    [4] 44 C.F.R. § 206.206(c)(1) (2009).

    [5] Public Assistance Guide, FEMA 322 at 67 (June 2007) [hereinafter PA Guide].

    [6] PA Guide, supra note 5, at 69.

    [7] Email, supra note 1.

    [8] For instance, the Applicant claims that several photos show a slope failure with debris covering a quarter of Glendora Ridge Road, but the relationship of the debris to the roadway is not evident.

    [9] For instance, a photo claims to show damage from a plugged inlet on Covina Hills Road, but the location of the roadway is not evident.

    [10] The following roads are not listed in the PW scope of work:  Queenside Drive, Queenside Road, Kirkwall Road, Kingside Drive, and Galanto Avenue.

    [11] For instance, two photos claim to show unnamed county roads.

    [12] For instance, a photo shows a plugged culvert inlet on Crystal Lake Road.

    [13] For instance, a photo shows a slope failure with debris covering almost half of Glendora Mountain Road.

    [14] PA Guide, supra note 5, at 101.

     



  • Direct Result of Disaster
    Appeal Type: 
    2nd
    Report Type: 
    PW
    Appeal Categories: 
    Applicant Name: 
    City of Sergeant Bluff
    Disaster Number: 
    1998-DR-IA
    DSR: 
    617
    Date Signed: 
    Monday, June 9, 2014
    PA ID: 
    193-71625-00
    Summary/Brief: 

    Conclusion:  The Applicant did not provide sufficient documentation to show the extent of the damages to a sewer pipe that it claimed were a result of a disaster and that those same damages necessitated sewer pipe replacement rather than repair.

    Summary Paragraph

    From May 25, 2011 through September 30, 2011, Iowa experienced heavy rainfall and flooding which resulted in pavement failures and damages to an underground sewer pipe.  The Applicant could not determine the total damage until after the deadline for reporting damages to FEMA.  The Applicant requested that it be able to submit a project worksheet beyond the deadline. FEMA denied the request because the Applicant made the request after the deadline.  In its first appeal, the Applicant asserted that it had difficulty in determining if the damages were related to the disaster and again requested to submit a project worksheet for emergency and permanent work.  The FEMA Region VII Regional Administrator partially approved the appeal, funding costs associated with emergency work but not permanent work.  The Applicant did not verify that an entire section of a sewer pipe was damaged as a result of the disaster or that the damage was so severe that the pipe had to be replaced instead of repaired at a lesser cost.  In addition, the RA was unsure as to whether the Applicant followed proper procurement procedures when hiring a contractor.  In its second appeal, the Applicant indicates that it is not able to determine the extent of the damage to the sewer pipe and that it followed proper bidding procedures for hiring a contractor.

    Authorities and Second Appeals

    • Stafford Act § 406, 42 U.S.C. § 5172.
    • 44 C.F.R. § 206.223(a)(1).
    • 44 C.F.R. § 13.36(a)(3), (c) & (b).
    • PA Guide, at 85.

    Headnotes

    • Stafford Act § 406 authorizes FEMA to make contributions to a “local government for the repair, restoration, reconstruction, or replacement of a public facility damaged or destroyed by a major disaster.”
    • Under 44 C.F.R. § 206.223(a)(1), to be eligible, an item of work must be required as the result of the emergency or major disaster event.  The applicant is responsible for determining the extent of the damage to a facility in order to make a determination about the measures that need to be taken to either repair or replace the facility. (PA Guide, at 85)
      • The Applicant could not verify the extent of damage to the sewer pipe, whether the damage was so severe that replacement rather than repairs was necessary, nor if the damage was a result of the disaster.
      • Because the Applicant is responsible for determining the extent of the damage, FEMA will de-obligate $7,873.20 for ineligible costs associated with video inspection the Applicant used to determine sewer line damage. 
    • According to 44 C.F.R. § 13.36(c), all procurement transactions have to be conducted in a way that provides “full and open competition.”  However, when procurement procedures are not followed, FEMA can analyze the costs to determine if the costs are reasonable.
      • The Applicant did not properly procure the contract for the sewer pipe replacement or the emergency repairs. FEMA found the actual cost of the emergency repairs reasonable. 

     

    Letter: 

    June 9, 2014

    Mark Schouten
    Administrator
    Iowa Homeland Security and Emergency Management Division
    7105 NW 70th Avenue
    Camp Dodge, Bldg. W-4
    Johnston, Iowa 50131-1824

    Re: Second Appeal – City of Sergeant Bluff, PA ID 193-71625-00, FEMA-1998-DR-IA, Project Worksheet (PW) 617 – Direct Result of Disaster

    Dear Mr. Schouten:

    This is in response to your letter dated July 15, 2013, which transmitted the referenced second appeal on behalf of the City of Sergeant Bluff (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of its request for funding to replace a sewer pipe.

    As explained in the enclosed analysis, I have determined that the work is not eligible because the Applicant cannot verify that the pipe replacement was required as the result of the disaster or the extent of the sewer pipe damage.  Accordingly, I am denying the appeal.  This determination is the final decision on this matter pursuant to 44 C.F.R. § 206.206, Appeals.

    FEMA’s review of this appeal revealed that in response to the Applicant’s first appeal the FEMA Regional Administrator approved $7,873.20 for ineligible video inspection of the sewer.  By this letter, I am requesting the Regional Administrator de-obligate that funding from PW 617.  In accordance with 44 C.F.R. § 206.206 (b)(1), Appeals, Levels of Appeal, the Applicant may appeal the video inspection determination to the Regional Administrator. 

    Please inform the Applicant of my decision. 

    Sincerely,

    /s/

    William W. Roche
    Director
    Public Assistance Division

    Enclosure

    cc:  Beth Freeman
          Regional Administrator
          FEMA Region VII

    Analysis: 

    Background

    From May 25, 2011 through September 30, 2011, Iowa experienced heavy rainfall and flooding, resulting in declaration FEMA-1998-DR-IA.  In the fall of 2011, two pavement failures occurred along Warrior Road, and the City of Sergeant Bluff (Applicant) completed the necessary repairs to the road by February 2012.  On both April 3 and 17, 2012, two sewer pipe collapses occurred in a sewer line running beneath the same street, and the Applicant completed emergency repairs of the damage.  After another pavement failure occurred in the same vicinity and based on information gained during an attempt at a video inspection of the pipe, the Applicant decided to replace a 1,323-foot long section of the pipe.  It awarded a change order for this work to its contractor, Minger Construction, which was completing another sewer project very close to the sewer pipe collapses.  Minger Construction also completed the emergency pavement and sewer repairs. 

    On April 27, 2012, the Applicant requested that the Iowa Homeland Security and Emergency Management Division (Grantee) allow it to submit a project worksheet to apply for public assistance funding for the repairs to the pipe.  It acknowledged that the request was untimely and explained that it was not able to predict that the disaster would cause the ground to become unstable and affect the underground piping systems.  The Applicant indicated that it could complete the necessary repairs for $500,000 utilizing micro-tunneling technology.  On May 30, 2012, FEMA denied the request, finding that the Applicant submitted its request beyond the required timeline for identifying damages.[1]

    First Appeal

    In a first appeal letter submitted on September 6, 2012, the Applicant maintained that it should be able to submit a PW because it had difficulty in determining the cause of the street collapse.  The Applicant explained that after the rain stopped and the flooding receded, the declining water table caused unseen mass movement events underground.  The Applicant requested $107,065.26 for the emergency repair of the pavement failures and sewer repairs and $608,726.95 for replacement of a 1,325-foot long section of sewer pipe.  In support of its appeal, the Applicant submitted groundwater level readings collected before the disaster and invoices for the repair of the pavement failures and pipe collapses. 

    FEMA conducted a technical review of the first appeal, which reset the timeframe for response to the Applicant’s appeal.  The FEMA Region VII Regional Administrator (RA) partially granted the first appeal on March 21, 2013. The RA determined that, based on the technical review, it is reasonable that the damages could have been caused by the event at such a late date and approved $102,676.14 for emergency repair of the two pavement failures and sewer pipe collapses.  The RA denied $4,389.12 for emergency repairs to a private residence.  The RA also denied the Applicant’s request for $608,726.95 for the replacement of a 1,323-foot[2] long section of sewer pipe under Warrior Road between D Street and Port Neal Road.  Based on the documentation submitted and the lack of a FEMA site inspection, the RA could not verify that the entire section of the sewer pipe replaced was damaged as the result of the disaster and that the damage was so severe that the pipe had to be replaced and could not be repaired at a lesser cost.  The RA was also unsure as to whether the Applicant followed proper procurement procedures when hiring Minger Construction to complete the permanent work. 

    Second Appeal

    The Applicant argues in a second appeal letter dated May 20, 2013, that it should be reimbursed $608,726.95 for the replacement of a 1,323-foot long section of sewer pipe under Warrior Road between D Street and Port Neal Road.   The Applicant explains that it followed the correct procedures for securing a contract with Minger Construction, the company who performed the sewer pipe replacement.  Before the disaster, the Applicant initiated and completed a bidding process for another city project entitled, “First Street Lift Station Elimination and Gravity Piping.”  The project did not involve federal or state funds, only funds from the Applicant’s general fund and sanitary sewer utility fund.  The Applicant asserts that it followed the state’s standard public improvements bidding process and provided documents showing that three companies submitted bids on the original project.  The Applicant selected Minger Construction for the original project which had begun in the vicinity of the April 3rd collapse.  The Applicant approved a change order to the original contract to replace the damaged sewer line and states the costs under the change order were “in line with the established bid prices for the project.” 

    The Applicant argues that it determined the extent of the damage to the sewer pipe by reviewing the places where the pavement failures occurred, through hydro-jetting and video inspection of the sewer line, and by analyzing groundwater monitoring data.  The Applicant provides the following timeline for the pavement failures and pipe collapses:

    • Pavement Failure – noticed and corrected in Fall 2011
    • Pipe Collapse – occurred April 3, 2012
    • Pipe Collapse – occurred April 17, 2012
    • Pavement Failure – noticed in May 2012

    The Applicant states that, based on the location of the various pavement failures and pipe collapses, the sewer system failure occurred along an 866.5-foot section of the sewer pipe.  The Applicant indicates that based on the video inspections, the experience of the contractor on site, and an engineering review of the repairs, “it was determined that the overall condition of the pipe between the first two emergency repairs was in a failed state.”  The Applicant admits it was not possible to know the full extent of the damage to that section of the sewer pipe, and states that it was estimated that additional collapses and failures would occur over time.  The Applicant also submitted groundwater monitoring data to support its position that the damage was caused by the event. 

    The Applicant recognizes that it cannot provide visual evidence of the total sewer system failure and provides the following four reimbursement options for FEMA’s consideration: 

    • $608,726.95 for the full 1,323-foot long section of the pipe, as requested in the first appeal;
    • $544,810.62 for replacement of 1,184 feet of the sewer pipe as documented in one of the groundwater data charts;
    • $398,716.15 for replacement of 866.5 feet of the sewer pipe from the location of the April 17th collapse east to Port Neal Road;
    • $102,676.14 for estimated costs for the emergency repair of two additional pavement failures that it would have had to complete if it had not replaced the 1,323-foot long section of the sewer pipe. 

    Discussion

    Extent of Damage to Sewer Pipe

    The Robert T. Stafford Disaster Relief and Emergency Assistance Act Section 406 authorizes FEMA to make contributions to a “local government for the repair, restoration, reconstruction, or replacement of a public facility damaged or destroyed by a major disaster.”[3]  Implementing such authority, Title 44 of the Code of Federal Regulations (C.F.R.) § 206.223 (a)(1) provides that to be eligible, an item of work must be required as the result of the emergency or major disaster event.[4]  The owner of a facility is responsible for determining the extent of the damage to a facility in order to make a determination about the measures that need to be taken to either repair or replace the facility.[5]

    In its second appeal, the Applicant makes a connection between receding flood waters and the cause of the damage but failed to provide information about the extent of the damage to the sewer pipe.  The Applicant reviewed the damaged areas and hired a company to conduct inspections of the pipe to determine the full extent of damage; however, the Applicant concluded it was not possible to do so.  Considering the pavement failures and pipe collapses that did occur and the determination that at least an 866.5-foot long section of the pipeline from the location of the April 17th collapse east to Port Neal Road failed, the Applicant determined a prudent approach to avoiding the risk of future damage to the pipe was to replace 1,323 linear feet of pipe.  Notwithstanding the decision made by the Applicant to replace 1,323 linear feet of pipeline, the Applicant has not provided the documentation necessary to support that any length of pipe replacement was required by the event. 

    Consistent with the Regional Administrator’s finding in the first appeal, the documentation does support that the emergency repairs were required by the event and those repairs remain eligible for funding.  However, contrary to FEMA policy, the funding approved by the RA in PW 617 includes $7,873.20 for video inspection of the sewer lines.  The Public Assistance Guide provides that “the owner of a facility is responsible for determining the extent of damage; as with any facility, FEMA does not provide funds for general surveys to look for damage, such as video inspection of sewer lines.”[6]

    Procurement Procedures

    Pursuant to 44 C.F.R. § 13.36 (b)(1), when procuring services under a federal grant, subgrantees (also referred to as applicants) “will use their own procurement procedures which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this section.”[7]  Moreover, all procurement transactions must “be conducted in a manner providing full and open competition.”[8]

    The Applicant did not follow the procurement procedures required by 44 C.F.R. § 13.36 when hiring Minger Construction to replace the sewer pipe.  While the Applicant competitively procured its original contract with Minger Construction, the Applicant did not competitively procure the sewer pipe replacement project or the emergency repair work.  44 C.F.R. § 13.43(a)(3) states that when an applicant for federal funding fails to comply with procurement procedures, FEMA may “wholly or partly suspend or terminate the current award.”[9]  The Public Assistance Guide explains that FEMA implements this provision by evaluating project costs to determine reasonableness, and FEMA may reimburse reasonable costs for eligible work.[10]  In accordance with OMB Circular A-87, FEMA evaluates reasonable costs based on the standard “that a cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost.”[11] In this case, FEMA considers the cost incurred for the emergency repairs reasonable.  The reasonableness of the cost to replace the pipe is not an issue, because the work itself is ineligible as described above.

    Reimbursement Options

    The first three options suggested by the Applicant involve replacing varying lengths of the sewer pipeline.  The Applicant has not shown that any length of pipeline replacement was required as the result of the event, as discussed above.  The fourth option suggested is for emergency work that was never performed, and it is based on the actual costs already approved in PW 617, $102,676.14.  FEMA has no authority to fund emergency work that was never performed.

    Conclusion

    The Applicant has not shown that the entire 1,323-foot long section, or 866.5-foot long section, of the sewer pipe was damaged by the disaster or that the damage was so severe that it warranted replacement rather than repair of the sewer pipe.  As such, the replacement of the pipe was not required as the result of the event and is not eligible for public assistance funding.    Further, in partially approving the first appeal, the RA inadvertently provided $7,873.20 for ineligible video inspection of the sewer line.  FEMA will de-obligate the ineligible funding.

    [1] Pursuant to 44 C.F.R. § 206.202(d)(ii), applicants have sixty (60) days following its first substantive meeting with FEMA to identify and report damages.  On September 12, 2011, the Federal Coordinating Officer extended the deadline to November 1, 2011 for all eligible applicants.  The Applicant submitted its request for a project worksheet on April 27, 2012.

    [2] In the Applicant’s September 6, 2012 First Appeal letter, it makes reference to a 1,325-foot sewer pipe not a 1,323-foot sewer pipe.  There’s no basis as to why this number was lowered based on the information in the administrative record.   In its second appeal, the Applicant appeals FEMA’s denial of funding for a 1,323-foot sewer pipe. 

    [3] The Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, Pub. L. No. 93-288, § 406 (a)(1)(A), 42 U.S.C. § 5172 (a)(1)(A) (2013). 

    [4] 44 C.F.R. § 206.223 (a)(1) (2013).

    [5] Public Assistance Guide, FEMA 322 at 85 (June 2007) [hereinafter PA Guide].

    [6] Id.

    [7] 44 C.F.R. § 13.36 (b)(1) (2013).

    [8] Id. at § 13.36 (c).

    [9] Id. at § 13.43(a)(3)

    [10] PA Guide, supra note 5, at 53.

    [11] Office of Mgmt. & Budget, Exec. Office of the President, OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments (2013) (codified at 2 C.F.R. § 225).

     

     



  • Hazard Mitigation Proposal (HMP) – Rockridge Sewer System
    Appeal Type: 
    2nd
    Report Type: 
    PW
    Appeal Categories: 
    Applicant Name: 
    Indian River County
    Disaster Number: 
    1561-DR-FL
    DSR: 
    6495
    Date Signed: 
    Monday, June 9, 2014
    PA ID: 
    061-99061-00
    Summary/Brief: 

    Conclusion:   The Applicant’s Hazard Mitigation Proposal (HMP) is not eligible under the Public Assistance Program because it addressed non-disaster-related damage, and Section 705(c) of the Stafford Act does not bar deobligation of the funding provided for the HMP because the funding was provided contrary to the Act and implementing regulations and policy.

    Summary Paragraph           

    In 2004, power outages from Hurricane Jeanne caused the sewer system in the Rockridge subdivision in Indian River County (Applicant) to fail.  FEMA prepared Project Worksheet (PW) 6495 to address the costs of restoring damaged drainage facilities throughout the subdivision. PW 6495 included $2,827,524 for a Hazard Mitigation Proposal (HMP) to replace the existing sewer system with a vacuum-based sewage collection system.  After a subsequent review of the project, FEMA determined that the HMP was not cost-effective and deobligated the funding.  In its first appeal, the Applicant primarily asserted that FEMA’s benefit-cost analysis was flawed.  The Regional Administrator denied the Applicant’s first appeal, determining that the HMP to replace the sewer system was not an eligible mitigation measure because it applied largely to elements of the facility that were undamaged by the event.  In its second appeal, the Applicant does not dispute FEMA’s position that the HMP applies to undamaged elements of the facility, but instead argues that Section 705(c) of the Stafford Act prevents the deobligation of funding for the project.

    Authorities    

    • Stafford Act § 705(c), 42 U.S.C. § 5205(c)
    • 44 C.F.R. § 206.434(c)(4)
    • Response and Recovery Policy 9526.1, Hazard Mitigation Under Section 406 (Stafford Act) (Aug. 13, 1998)

    Headnotes

    • Under Recovery Policy 9526.1, Hazard Mitigation Under Section 406 (Stafford Act), mitigation measures must be related to eligible disaster-related damages and must directly reduce the potential of future, similar disaster damages to the eligible facility.  Because the Applicant’s HMP included the replacement of the entire sewer system and addressed non-damaged elements of the system as well as damaged elements, the HMP was not eligible under the Public Assistance Program.
    • Under Stafford Act § 705(c), an applicant is not required to reimburse FEMA for any payment made under the Stafford Act if “(1) the payment was authorized by an approved agreement specifying the costs; (2) the costs were reasonable; and (3) the purpose of the grant was accomplished.”    Because the Applicant’s HMP addressed non-damaged elements of the subdivision’s collection system, the inclusion of funding for the HMP was contrary to Stafford Act implementing policy, and de-obligation of that funding does not fall within the scope of Section 705(c) of the Act.
    Letter: 

    June 9, 2014

    Bryan W. Koon
    Director
    State of Florida Division of Emergency Management
    2555 Shumard Oaks Boulevard
    Tallahassee, FL  32399-2100

    Re: Second Appeal – Indian River County, PA ID 061-99061-00, Hazard Mitigation Proposal (HMP) – Rockridge Sewer System, FEMA-1561-DR-FL, Project Worksheet (PW) 6495

    Dear Mr. Koon:

    This is in response to a letter from your office dated March 8, 2013, which transmitted the referenced second appeal on behalf of Indian River County (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) deobligation of $2,827,524 for a Hazard Mitigation Proposal (HMP) for the replacement of a damaged sewer system.

    As explained in the enclosed analysis, I have determined that the HMP addressed non-damaged elements of the collection system and is not eligible under Section 406 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act.  Therefore, I am denying the appeal.

    Please inform the Applicant of my decision.  This determination constitutes the final decision on this matter pursuant to 44 CFR §206.206, Appeals.

    Sincerely,

    /s/

    William W. Roche
    Director
    Public Assistance Division

    Enclosure

    cc:  Major Phil May
          Regional Administrator
          FEMA Region IV

    Analysis: 

    Background

    In 2004, power outages from Hurricane Jeanne caused the sewer system in the Rockridge subdivision in Indian River County (Applicant) to fail.  Without power, the system’s pumps were inoperable and sewage backed up into homes in the already inundated subdivision.  The flooding also damaged various drainage facilities located throughout the subdivision, including culverts, storm water pipes and inlets, drainage swales, and a drainage channel.  The Applicant replaced ninety destroyed grinder pumps to restore the damaged sewer system and supplied temporary generators and portable toilets while the repair was being completed. The Applicant also restored the damaged drainage facilities throughout the subdivision.  FEMA prepared PW 6494 for $161,202 for the replacement of the grinder pumps and the use of the temporary generators and portable toilets.  FEMA also approved PW 6495 for the restoration of the drainage facilities (with a project cost of $350,000) and a Hazard Mitigation Proposal (HMP) to replace the existing sewer system with a vacuum-based sewage collection system ($2,827,524).  After a subsequent review of the project, FEMA determined that the HMP was not cost-effective and, therefore, not eligible for funding.  FEMA prepared a version to PW 6495 deobligating $2,827,524.

    First Appeal

    The Applicant submitted a first appeal of FEMA’s determination on October 21, 2010, primarily asserting that FEMA’s benefit-cost analysis (BCA) was flawed.  The Applicant stated that while FEMA used damage costs totaling $350,000 in its BCA, the total amount of public damage associated with the sewer system failure was $2,067,831.  The Applicant also stated that it is responsible for $10,437,840 in damage to private homes and asserted that the private home damage should be included in the BCA.  The Applicant concluded that a BCA including the public damage costs ($2,067,831) and using a recurrence interval of 7.7 years, instead of the 10 years used by FEMA, yields a benefit-cost ratio greater than 1.  Lastly, the Applicant stated that while initially applying for funding for the HMP via the Hazard Mitigation Grant Program (HMGP) under Section 404 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), it only proceeded with applying for funding through the Public Assistance (PA) Program under 406 of the Stafford Act on the advice of FEMA personnel.

    The Florida Division of Emergency Management (Grantee) forwarded the Applicant’s appeal to FEMA on December 30, 2010.  While the Grantee did not support the Applicant’s position that the more than $10 million in private property damage should be included in the BCA, the Grantee asserted that public damage totaling $575,952 should be included.  Further, the Grantee stated that a recurrence interval of 2.5 years is the appropriate interval to use in the analysis, given that the storms took place between 2001 and 2010.  According to the Grantee, based on its analysis, the benefit-cost ratio is 1.09.

    On October 15, 2012, the FEMA Region IV Regional Administrator denied the Applicant’s first appeal, determining that the HMP to replace the sewer system was not eligible because it applied largely to elements of the facility that were undamaged by the event.  The Regional Administrator did not address the cost-effectiveness of the HMP in the appeal response.

    Second Appeal

    The Applicant submitted a second appeal on January 3, 2013 and a supplement to the appeal on February 12, 2013.  In its appeal, the Applicant reiterates its first appeal position regarding the BCA.  Further, in response to Regional Administrator’s determination that the HMP is not eligible because it applies largely to elements of the facility that were undamaged by the event, the Applicant states that it initially submitted the project for HMGP funding under Section 404, worked with FEMA for more than 3 years on the HMGP application, and only submitted an HMP under Section 406 based on direction provided by FEMA.  The Applicant asserts it should not be penalized for taking action based on a recommendation made by FEMA personnel and requests that, if the HMP cannot be funded under the PA Program, FEMA should consider the project for funding under Section 404’s HMGP.  Lastly, the applicant also states that Section 705(c) of the Stafford Act prevents the deobligation of funding for this project, arguing that the section “mandatorily prohibits deobligation of the County’s grant.”

    Discussion

    FEMA policy establishes specific eligibility criteria for HMPs.[1]  Pursuant to the policy in effect at the time of the disaster, mitigation measures must be related to eligible disaster-related damage and must directly reduce the potential of future, similar disaster damage to the eligible facility.[2]  In this case, the damage was limited to 90 out of more than 400 grinder pumps; the vast majority of the system was undamaged by the event.  The HMP included the replacement of the entire system and, thus, addressed non-damaged elements of the collection system.  Therefore, the HMP is not eligible under Section 406 of the Stafford Act.  Because the HMP addressed non-damaged elements, the cost-effectiveness of the HMP is not relevant, as cost-effectiveness applies only to eligible mitigation efforts.[3]   

    The Applicant asserts in its appeal that, according to Section 705(c) of the Stafford Act, FEMA cannot de-obligate the funding provided in PW 6495. Section 705(c) prohibits FEMA from de-obligating grant funds provided to a state or local government under the Stafford Act when three statutory preconditions are met.  Specifically, the law provides:

    A State or local government shall not be liable for reimbursement or any other penalty for any payment made under this Act if – (1) the payment was authorized by an approved agreement specifying the costs; (2) the costs were reasonable; and (3) the purpose of the grant was accomplished.[4]

    The Applicant asserts that the HMP funding included in PW 6495 meets these preconditions.  This conclusion is incorrect.  As the provision is written, it only applies to payments made “under this Act,” meaning payments authorized under the Stafford Act and its implementing regulations and policies.  In order for the first precondition to be met, the payment must be “authorized by an approved agreement.”  Accordingly, for the agreement to be the authorized act of an agency official, the approval must have been for an authorized use of the federally appropriated funds, consistent with applicable legal authorities and implementing policy guidance.  Consequently, if the approval is not consistent with applicable legal authorities, it follows that the approval was outside the scope of the authority of the official and does not constitute a binding agreement.

    In this instance, any funding provided for the Applicant’s HMP was not authorized under the Stafford Act and its implementing regulations and policies.  FEMA policy requires that mitigation measures must be related to eligible disaster-related damage and must directly reduce the potential of future, similar disaster damage.  The Applicant’s HMP, however, addressed non-damaged elements of the subdivision’s collection system.  Therefore, inclusion of funding for the HMP in PW 6495 was contrary to Stafford Act implementing policy, and de-obligation of that funding does not fall within the scope of Section 705(c) of the Act.

    Conclusion

    The HMP originally funded in PW 6495 was the replacement of an entire sewage collection system, even though the event only damaged a portion of the existing system.  The HMP addressed undamaged elements of the collection system and, therefore, is not eligible under Section 406 of the Stafford Act.  Section 705(c) of the Stafford Act does not bar the de-obligation of the HMP funding from PW 6495.

    [1]  See generally Response and Recovery Policy 9526.1, Hazard Mitigation Under Section 406 (Stafford Act) (Aug.. 13, 1998).

    [2]  Id. at 2.

    [3] In this appeal, the Applicant urges FEMA to consider the project for funding under Section 404’s HMGP.  FEMA already considered and took action on the Applicant’s HMGP application.  FEMA denied the HMPG application on October 30, 2007 because the Applicant began construction prior to FEMA completing its environmental review.  The Applicant thereafter submitted an appeal, which FEMA denied on April 28, 2008, citing the early construction commencement and further stating that, under 44 C.F.R. § 206.434(c)(4), the project “must solve a problem independently.”  In this case, the chief problem identified was the power loss.  As the project addressed the sewage backup problem, not the issue of the power, it was not eligible for funding under Section 404’s HMGP.

    [4]  Stafford Act § 705(c), 42 U.S.C. § 5205(c).

     

     



 

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