Fema Situation Updates

13 Jan 2015
Appeal Type: 
2nd
Report Type: 
PW
Appeal Categories: 
Applicant Name: 
Clarke Electric Cooperative
Disaster Number: 
1737-DR-IA
DSR: 
Multiple PWs
Date Signed: 
Monday, January 12, 2015
PA ID: 
000-UOTLT-00
Summary/Brief: 

Conclusion:  The Applicant has provided sufficient documentation to support that an additional $518,346.73 is associated with the approved scopes of work in the six PWs.  The additional funding is partially eligible.    

Summary Paragraph

An ice storm damaged the power lines serviced by Clarke Electric Cooperative (Applicant).  FEMA approved $5,400,844.25 in six Project Worksheets (PWs) to rebuild and repair the damaged lines and approved the Applicant’s request for improved projects to upgrade the capacity of the power lines for all six PWs.  The Applicant requested additional funding for a final aggregate cost of $7,442,239.85 for the six PWs, a cost overrun of $2,041,395.60.  The Applicant claimed that the additional costs were for work to restore the utility to pre-disaster condition and were distinct from the costs of the improvements.  FEMA Region VII determined a portion of the costs claimed was for work associated with improvements, but approved an additional $1,177,719.80 based on revised cost estimates for the approved scopes of work in the six PWs.  The Applicant submitted a first appeal claiming it separated costs of the improvements from the costs to restore the facility to pre-disaster condition.  The Regional Administrator denied the appeal because the documentation did not demonstrate the additional funding requested was for work necessary to restore the facility to its pre-disaster condition.  The Applicant submitted a second appeal, requesting $528,170.76 for cost overruns for the six PWs, a decrease from its original requests.  The Applicant developed new cost estimates for the work that would have been required to restore the facility to pre-disaster condition and based its adjusted funding request on these new cost estimates.

Authorities and Second Appeals

  • 44 C.F.R. § 206.203(d)(1), 
    § 206.204(e).
  • PA Guide, at 110.

Headnotes

  • According to 44 C.F.R. § 206.203(d)(1),  federal funding for improved projects is limited to the federal share of the approved estimate of eligible costs.
  • The Public Assistance Guide provides that an applicant may appeal the approved funding amount if approved costs are tracked separately from improvement costs.
    • The Applicant provided documentation that distinguished the actual costs incurred for restoring the facility to its pre-disaster condition from those related to the improvements to the facility.

 

Letter: 

January 12, 2015

Mark Schouten
Director
Iowa Homeland Security and Emergency Management Division
7900 Hickman Road, Suite 500
Windor Heights, IA 50324

Re:  Second Appeal – Clarke Electric Cooperative, PA ID 000-UOTLT-00, FEMA-1737-DR-IA, Multiple Project Worksheets – Improved Projects

Dear Mr. Schouten:

This is in response to your letter dated May 6, 2013, which transmitted the referenced second appeal on behalf of Clarke Electric Cooperative (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of funding in the amount of $863,675.80 for cost overruns for six improved projects.  In its appeal, the Applicant reduced its funding request to $528,170.76.

As explained in the enclosed analysis, I have determined that the Applicant provided sufficient documentation that distinguishes the actual costs incurred for restoring the facility to its pre-disaster condition from those related to the improvements to the facility, and that such costs are reasonable with the exception of some arithmetic discrepancies.  Therefore, I am partially granting the appeal in the amount of $518,346.73.  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 constitutes the final decision on this matter pursuant to 44 C.F.R. § 206.206, Appeals.

Sincerely,

/s/

William R. Roche
Director
Public Assistance Division

Enclosure

cc:  Beth Freeman
       Regional Administrator
       FEMA Region VII
 

Analysis: 

Background

On December 10 and 11, 2007, an ice storm caused ice to accumulate on trees and power lines,  rendering power lines inoperable throughout the Clarke Electric Cooperative’s (Applicant) power distribution systems.  FEMA approved $5,400,844.25 in six Project Worksheets (PWs) (617, 619, 620, 621, 622, and 624) to rebuild some severely damaged power lines and to repair other lines including replacing or straightening damaged poles.  In March 2010, FEMA approved the Applicant’s request for improved projects for all six PWs. The improvements included upgrades of the line capacity from single-phase to three-phase, conversion of line sections, and installation of hardware to support the upgrades.

In May 2012, FEMA received requests from the Applicant to close out the six PWs for a final aggregate cost of $7,442,239.85, a cost overrun of $2,041,395.60.  The Applicant claimed that the additional costs were for work necessary to restore the utility to pre-disaster condition and were distinct from the costs related to the improvements.  Based on a review of the documentation submitted with the requests, FEMA Region VII determined that a portion of the costs claimed was for work associated with facility improvements.  FEMA also determined that based on unit prices provided by the contractor, the actual costs for the approved scopes of work would have been higher regardless of the improvements.  Therefore, FEMA Region VII developed new cost estimates for the approved scopes of work in the six PWs based on the actual contract unit prices and determined that costs for engineering and tree trimming were also eligible.  FEMA Region VII obligated funds to all six projects and approved an additional $1,177,719.80 to increase the eligible grant amount to a total of $6,578,564.05. 

First Appeal

The Applicant submitted a first appeal on October 10, 2012, of FEMA’s denial of $863,675.80 for cost overruns in response to its close-out requests for the six PWs.  The Applicant claimed the documentation provided to FEMA separated costs of the improvements from the costs to restore the power lines to their pre-disaster condition.  The Applicant also stated that it was unclear why FEMA based the final approved amount on new estimates and not the actual documented costs.  On January 15, 2013, the FEMA Region VII Regional Administrator denied the first appeal because the Applicant did not provide documentation demonstrating the additional funding requested was for work necessary to restore the facility to its pre-disaster condition.

Second Appeal

The Applicant submitted a second appeal on March 8, 2013, requesting a total of $528,170.76[1] for cost overruns for the six PWs, a decrease from its original appeal request.  The Applicant states that FEMA did not provide its new per-mile estimate for single or three-phase electrical distribution line or the “validation documents” for the estimates making it impossible for the Applicant to review and validate FEMA’s new estimates.  The Iowa Homeland Security and Emergency Management Division (Grantee) provided the Applicant with FEMA’s new estimate for the three-phase lines, but the Applicant states that it has never received FEMA’s cost estimate for single-phase lines.  The Applicant maintains that FEMA did not consider all of the construction assembly units in its new per-mile cost estimates nor did FEMA recognize the distinction between sections of line requiring a complete rebuild and lines only requiring repairs in developing its new cost estimates.  Further, the Applicant asserts that FEMA’s new cost estimates do not accurately reflect compliance with United States Department of Agriculture Rural Utility Service (RUS) standards and that some work classified by FEMA as “improvements” was necessary for compliance.  Lastly, the Applicant states that FEMA was inconsistent in its application of its new estimates in determining final eligible cost and states that in some cases FEMA “used a 16% factor” instead of its new per-mile estimate.

After identifying issues with FEMA’s cost estimates, the Applicant developed  revised cost data for the work that would have been required to restore the facility to pre-disaster condition and based its adjusted funding request on it.  The information submitted with the second appeal includes scopes of work with more detail than those in the PWs. Specifically, the scopes of work described each line item required to restore the facility’s pre-disaster design, function, and capacity.  The costs used are based on actual unit costs for labor and materials, as well as actual determination of the number of poles and assemblies required and the actual distance of the completed project.  On May 6, 2013, the Grantee transmitted the second appeal to FEMA.  On July 19, 2013, the Region VII Regional Administrator forwarded the second appeal to FEMA Headquarters.

Discussion

The Applicant requested and FEMA approved improved projects for all six of the PWs at issue under this appeal.  Federal funding for improved projects is limited to the federal share of the approved estimate of eligible costs.[2]  However, “if eligible repair or replacement costs exceed the original estimate and costs can be separately documented (i.e., if approved costs can be tracked separately from improvement costs), the applicant may appeal the amount of the grant.”[3]

FEMA Region VII did not concur with the Applicant’s position that its documentation submitted in support of its request for additional funding was sufficient to distinguish the actual costs of the eligible scopes of work from those of the improvements.  However, FEMA Region VII did recognize that based on the actual contract costs, the Applicant would have incurred additional costs regardless of the improvements and approved additional funding by applying a new per-mile cost estimate for a three-phase line ($51,004.25 per mile).  FEMA calculated this unit cost based on the approved scopes of work in the PWs and by applying actual contract unit costs to those approved scopes of work.  In calculating the final approved cost estimate for the approved scopes of work, FEMA also used the per-mile cost estimate for single-phase lines approved in the initial PWs ($42,345.60 per mile) and added actual contract costs for tree trimming and engineering services.  Contrary to the Applicant’s understanding, FEMA did not develop a new cost estimate for single-phase lines.  The revised cost estimates resulted in a total increase of $1,177,719.80 in eligible funding for the six PWs.  FEMA Region VII took this approach, because the documentation submitted by the Applicant up through the first appeal did not sufficiently separate out the actual costs of the improvements.

As part of the second appeal, the Applicant submitted a new methodology for determining the eligible cost.  Given the actual unit costs and actual scope of work, the Applicant developed new cost data for what the cost of the unimproved work would have been.   These included minor adjustments to distances, number of poles, assembly requirements, and other factors.  The Applicant requested that the cost data submitted as part of the second appeal be used in lieu of FEMA’s per-mile cost estimates to determine the cost of the unimproved work; these costs were much more detailed than those provided with previous submittals.  The Applicant then calculated the difference between the cost of the actual work completed and the new estimated cost of the unimproved work.  This difference is referred to as the “improved work credit.”  In the second appeal, the Applicant asserts that the total eligible project cost should be taken as the total overall cost of the project (i.e. the sum of the cost of all six PWs in question) less the calculated improved work credit.

FEMA consulted a professional engineer (PE) regarding the validity of the Applicant’s approach.  FEMA determined that the approach would be acceptable if: (1) the cost data submitted for the unimproved scope of work were reasonable and (2) the calculation of the improved work credit was reasonable. 

The Applicant’s cost data were assessed on two bases:  reasonableness of unit costs and alignment with the original (unimproved) scope of work.  Material and labor unit costs were evaluated against RS Means and other industry costs.  Material and labor unit costs were evaluated for conductors, poles, and assemblies.  In each case, the Applicant’s unit costs were verified against independent references.

To evaluate the scope of work, the scope of work used in the Applicant’s estimate was compared to the original scope of work listed in the six PWs (Versions 0) for each work order in question.  The Applicant’s scope of work was taken to be the paragraphs at the beginning of each work order estimate.  The PW scope of work was taken to be a combination of the narrative “Scope of Work” section in the PW and tables included as attachments listing specific segments, pre-disaster phasing and conductor type, and the replacement phasing and conductor type.  FEMA considered the Applicant’s scope of work to be “verified” if the phasing and conductor type listed in the Applicant’s scope of work matched the phasing and conductor type listed in the relevant PW.  Differences in segment distances and numbers of poles were considered minor changes and are to be expected between a preliminary estimate and the completion of work.  Based on this methodology, FEMA was able to substantiate that the Applicant’s unit costs were reasonable and that the scopes of work the Applicant used to complete their cost estimates aligned with the original, unimproved scope of work.[4]

Given that the Applicant’s estimates of the cost of the unimproved work were reasonable, FEMA then considered the question of the improved work credit.  According to the Applicant’s explanation, the improved work credit for each work order was equal to the difference between the actual cost of work and the estimated cost of the unimproved work.  The total improved work credit was equal to the sum of the improved work credits for each work order.[5]

While FEMA was able to recreate the Applicant’s improved work credit for PWs 619, 620, 621, and 622, it could not do so for PWs 617 and 624.  For those, no documentation provided by the Applicant accounts for the significant differences between the improved work credit calculated by FEMA based on the Applicant’s cost estimates and the improved work credit reported by the Applicant.  As such, the total improved work credit was found to be $9,824.01 higher than reported by the Applicant and therefore a corresponding reduction of $9,824.01 in the total amount to be approved is required.[6]

Conclusion

The Applicant is requesting additional funding for six PWs that FEMA approved as improved projects.  In order to appeal the amount of approved funding for an improved project, the Applicant must separately document and track that the incurred costs for eligible work exceeded the original cost estimate.  In this case, the Applicant has provided sufficient documentation to support that an additional $518,346.73 is reasonable and associated with the approved scopes of work in the six PWs, and therefore, is eligible.


[1] Note that the Applicant’s second appeal letter requests $528,180.76, but this was determined by FEMA to be an arithmetic error made by the Applicant.

[2] 44 C.F.R. § 206.203(d)(1) (2007).

[3] Public Assistance Guide, FEMA 322, at 110 (June 2007).

[4] See generally Email from Professional Engineer, FEMA to PA Appeals Analyst, FEMA (Nov. 24, 2014, 4:04 pm) (on file with FEMA).

[5] See Letter from General Manager, Clarke Electric Cooperative Inc., to Alternate Governor’s Authorized Representative, Iowa Homeland Security and Emergency Management Division (Mar. 8, 2013).

[6] See generally Email from Professional Engineer, FEMA to PA Appeals Analyst, FEMA (Dec. 5, 2014, 4:06 PM) (on file with FEMA).

 

12 Jan 2015
Appeal Type: 
2nd
Report Type: 
PW
Appeal Categories: 
Applicant Name: 
City of Galveston
Disaster Number: 
1791-DR-TX
DSR: 
N/A
Date Signed: 
Friday, January 9, 2015
PA ID: 
167-28068-00
Summary/Brief: 

Conclusion:  The City of Galveston is not legally responsible for the geo textile tube at Beachside Village Beach (Facility).

Summary Paragraph

During the declared event, heavy rain, wind, and storm surge caused devastation to the City of Galveston (Applicant).  The Applicant sought PA funding to repair the section of punctured and deflated beach geo textile tube and eroded sand dune system that runs through Beachside Village Beach.  FEMA representatives prepared several Project Worksheets (PWs) to cover the restoration of damage discovered to other sections of the geo tube and other tube systems.  However, FEMA did not prepare a PW for the section of the geo textile tube (Facility) at Beachside Village Beach because it determined the Applicant was not legally responsible for this Facility.  Later, the Applicant requested that a PW be written for the work performed to repair the disaster- related damage. FEMA denied the Applicant’s request, asserting that documentation provided “clearly” demonstrated that the Beachside Village Home Owners Association (HOA) had legal responsibility for the Facility.  In its first appeal, the Applicant submitted documentation to establish it was legally responsible.  The Regional Administrator denied the appeal, finding that the documentation submitted showed that legal responsibility remains with HOA in the event of a storm or disaster.  The Applicant failed to show that it had paid for Facility repairs.  In its second appeal, the Applicant submits two letters, articulating that it is responsible for project repairs.  The Applicant also claims failure to repair the section of the geotextile tube will cause unreasonable flood hazard to habitable structures because flood waters will be channeled to the structures through gaps in the existing geotextile tube.  In an appeal meeting at FEMA headquarters, the Applicant admitted that it had the discretion to refrain from reimbursing the HOA, that it had not reimbursed the HOA for Facility repairs, and had not included such reimbursement in their annual budget.

Authorities and Second Appeals

  • 44 C.F.R. § 206.223(a)(3)

Headnotes

  • Pursuant to 44 C.F.R. § 206.223(a)(3), to be eligible for financial assistance, an item of work must be the legal responsibility of an eligible applicant.
  • An easement for the construction of a project on the Facility does not constitute legal responsibility, especially where the easement has a termination clause.  Further, the Applicant has not reimbursed the HOA for repair work on the Facility, and doing so is not mandatory but rather within the Applicant’s discretion. 
Letter: 

January 9, 2015

W. Nim Kidd, CEM
Chief
Texas Division of Emergency Management
PO Box 4087
Austin, Texas 78773-0220

Re:   Second Appeal – City of Galveston, PA ID 167-28068-00, FEMA-1791-DR-TX – Legal Responsibility

Dear Chief Kidd:

This is in response to a letter from your office dated December 3, 2013, which transmitted the referenced second appeal on behalf of the City of Galveston (Applicant).  The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $393,961.70 in funding for the repair of a geotextile tube (Facility) at Beachside Village Beach.

As explained in the enclosed analysis, the Regional Administrator correctly determined that the Applicant did not have legal responsibility for the Facility.  As such, the Applicant is not eligible for Public Assistance funding for the repair of the Facility.  Therefore, I am denying this appeal.

Please inform the Applicant of my decision.  This determination constitutes 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:  George A. Robinson
       Regional Administrator
       FEMA Region VI


 

 

Analysis: 

Background

On September 13, 2008, heavy rain, wind, and storm surge from Hurricane Ike damaged beaches in the City of Galveston (Applicant).  Afterwards, the Applicant sought FEMA Public Assistance funding to repair punctured and deflated beach geotextile tubes and eroded sand dunes. 

FEMA representatives prepared several Project Worksheets (PWs) for the repair of the Applicant’s damaged facilities, including several geotextile tubes.  However, FEMA did not prepare a PW for the geotextile tube at Beachside Village Beach (Facility).  FEMA determined that the Facility was ineligible because the City of Galveston was not legally responsible for this portion of the geotextile tube. 

After later learning that a PW could be prepared to cover omitted damages, the Applicant began to aggregate documentation to prove its ownership of the Facility through easement[1] ownership of the property upon which it was placed.  On March 22, 2012, the Applicant sent a letter to the Grantee requesting a new project worksheet be written for the work performed to repair the Facility.  The Grantee forwarded this request to FEMA on May 1, 2012.  On July 3, 2012, FEMA denied the Applicant’s request, asserting that the documentation provided “clearly” demonstrated that the Beachside Village Home Owners Association (HOA), not the Applicant, had legal responsibility for the Facility.

First Appeal

On September 11, 2012, the Applicant submitted its first appeal to the Texas Division of Emergency Management (Grantee).  The Applicant asserted that the basis of FEMA’s denial was that the Applicant did not produce documentation to establish that it owned the Facility nor had it incurred costs for the repair of the Facility.  The Applicant provided the Agreement Regarding City of Galveston Shoreline Protection Project for West Galveston Island – Beachside Village (Agreement) to demonstrate ownership which explains that, upon completion, the HOA would donate the Facility to the Applicant.[2]  Additionally, the Applicant submitted invoices from the HOA to the Applicant for the work done to repair the Facility. 

On November 20, 2012, the Region VI Recovery Division Director sent a request for information to the Applicant, through the Grantee, requesting that the Applicant provide (1) conclusive evidence that the City of Galveston had legal responsibility for the repairs and (2) canceled checks or other appropriate documentation, substantiating that the City of Galveston paid for the repairs.  In response, the Applicant pointed to the Agreement and asserted that it had not yet processed the invoices for payment.

On July 11, 2013, the FEMA Region VI Regional Administrator (RA) denied the appeal.  The RA determined that the Applicant did not have the requisite legal responsibility for the facility because the Agreement states that legal responsibility remains with the HOA in event of storm or disaster, as the HOA will reimburse the City of Galveston for any costs that exceed FEMA or state reimbursement.  Additionally, the RA noted that the Applicant proposed to own the project, but provided no documentation demonstrating that it does own it, and that the easement merely grants access to landowner’s property for construction of the project, not legal responsibility.  Further, the RA indicated that the easement has an automatic termination clause in the event that a storm or disaster destroys the Project.

Second Appeal

In the Applicant’s second appeal, dated October 23, 2013, the Applicant submits additional information in support of its claim that it has legal responsibility for the Facility.  The Applicant claims the cost of repair to the Facility to its pre-disaster condition to be $393,961.70.  The Applicant provides two letters from then Director of Planning for the City of Galveston, a November 19, 2003, letter stating that the Applicant is sponsor of the installation of the subject geotextile tube shoreline protection project, and a November 10, 2010, letter, stating that the Beachfront Construction Permit Application for repair of the partially damaged tube is based in part on the City of Galveston giving reaffirmation by the City to Texas General Land Office of its “acknowledgement that [the] sponsor of the project originally permitted in 2004 are (sic) responsible for the ongoing maintenance of the project and, if necessary, the removal of the project.”  Also, the Applicant notes that failure to repair the existing geotextile tube will cause unreasonable flood hazard to habitable structures because flood waters will be channeled to structures through gaps in the existing geotextile tube.  

Discussion

Title 44 of the Code of Federal Regulations (C.F.R.) § 206.223(a)(3) specifies, to be eligible for financial assistance, a project or item of work must be the legal responsibility of an eligible applicant at the time of the disaster.[3]  Based on the documentation provided by the Applicant, it did not have the legal responsibility for the repairs to the Facility at the time of the disaster.  Specifically, the Agreement states the Applicant has “no obligation to enhance, maintain, repair or replace” the Facility.[4]  In addition, the Agreement provides that if the Facility is destroyed by a storm or other natural disaster, the Applicant had no obligation to seek funds from FEMA or from private contributions to repair or replace the Facility.[5]  Further, as indicated in the RA’s first appeal decision, the easement governing this appeal merely grants access on the individual land owner’s property for the purpose of construction on the project and has a termination clause in the event a disaster destroys the project.[6]   On June 27, 2014, FEMA hosted an appeal meeting with the Applicant.  During this meeting, the Applicant indicated it had not reimbursed the HOA for work to repair the damage to the Facility nor had the Applicant established a timeline for when it would.  Moreover, the Applicant acknowledged that reimbursing the HOA was discretionary, rather than a mandatory legal responsibility as required by 44 C.F.R. § 206.223(a)(3).[7]  Lastly, FEMA finds neither the November 19, 2003, nor November 10, 2010, letters as persuasive evidence of legal responsibility because they do not defeat the terms of Sections 4 and 5 of the Agreement.

Conclusion

The City of Galveston is not legally responsible for the geotextile tube at Beachside Village Beach.  As such, the costs associated with repairing the geotextile tube in question are not eligible for Public Assistance funding.


[1] Sand Sock Easement (November 17, 2003).

[2] See Agreement Regarding City of Galveston Shoreline Protection Project for West Galveston Island- Beachside Village, at 1(g) (Nov. 2003) [hereinafter Agreement]. 

[3] 44 C.F.R. § 206.223(a)(3) (2007).

[4] See Agreement, at 5(d), No Obligation to Maintain.

[5] Id., at 5(c), Destruction and Removal of the Project by Beachside.

[6] See Sand Sock Easement (November 17, 2003).

[7] Although the Applicant claims that the HOA submitted invoices with the expectation of reimbursement, there has been no indication, to date, that the Applicant has reimbursed the HOA.  In addition, the Applicant has gone through budget cycles without any indication that it will ever reimburse the HOA.

 

28 Dec 2014
Appeal Type: 
2nd
Report Type: 
PW
Appeal Categories: 
Applicant Name: 
Nashville-Davidson County
Disaster Number: 
1909-DR-TN
DSR: 
5598
Date Signed: 
Tuesday, December 16, 2014
PA ID: 
037-52004-00
Summary/Brief: 

Conclusion:  Pursuant to 44 C.F.R. § 206.223, the work items excluded in the original version of PW 5598 are eligible under the PA Program.  In addition, the Applicant provided sufficient documentation to substantiate $121,184.97 in additional PA funding.

Summary Paragraph

In May 2010, extensive flooding throughout Nashville-Davidson County caused damage to the Dry Creek Wastewater Treatment Plant (Facility).  The Facility is the sole source of wastewater treatment for the northeast area of Nashville-Davidson County.  FEMA drafted Project Worksheet (PW) 5598 to document damage to the Wet Weather Pump Station, Influent Pump Station, and Storm Water Pump Station of the Facility.  FEMA obligated PW 5598 for $183,362.47 based on a Cost Estimating Format (CEF).  In the first appeal, the Applicant asserted that FEMA failed to include funding for electrical wires and cables submerged in floodwaters and various other damaged items excluded from the scope of work.  The Regional Administrator (RA) partially approved PW 5598 for $91,313.50 for resident engineering costs, pipe insulation, metal door replacement, electrical testing work, and associated construction management costs.  However, the RA determined that the first appeal did not provide the level of information necessary to make eligibility determinations on the other excluded items.  In addition, the RA concluded that the Applicant failed to demonstrate that some of the excluded work items were the result of the disaster.  In the second appeal, the Applicant again asserts that FEMA made several errors concerning the scope of work and associated funding necessary to restore the Facility to its pre-disaster condition for PW 5598.

Authorities and Second Appeals

  • Stafford Act § 406, 42 U.S.C. § 5172.
  • 44 C.F.R. § 206.223(a).
  • OMB Circular A-87, 2 C.F.R. § 225.
  • FEMA P-348, at 2-27, 2-28, and 3.3-2.
  • FEMA 543, at 2-50.
  • FEMA P-936, at 4-22.
  • FEMA P-942, at 5-26.

Headnotes

  • Pursuant to 44 C.F.R. § 206.223(a), an eligible item of work must be required as the result of the disaster event.
    • Based on FEMA P-348, FEMA 543, FEMA P-936, and FEMA P-942, and further substantiated by analysis from a Professional Engineer, FEMA determined that the work items excluded from the original version of PW 5598 are eligible under the PA Program as they were required as a result of the disaster.   
  • Pursuant to OMB Circular A-87, allowable procurement costs must, among other things, be adequately documented.
    • The Applicant must provide adequate procurement process documentation.


 

Letter: 

December 16, 2014

David Purkey
Director
Tennessee Emergency Management Agency
3041 Sidco Drive, P.O. Box 41502
Nashville, TN 37204-1502

Re: Second Appeal – Nashville-Davidson County, PA ID 037-52004-00, FEMA-1909-DR-TN, Project Worksheet (PW) 5598 – Scope of Work

Dear Mr. Purkey:

This is in response to a letter from your office dated February 20, 2014, which transmitted the referenced second appeal on behalf of the Metropolitan Government of Nashville and Davidson County (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $121,184.97 in Public Assistance (PA) funding for various items excluded from PW 5598.

As explained in the enclosed analysis, I have determined that, pursuant to 44 C.F.R. § 206.223, the work items excluded in the original version of PW 5598 are eligible under the PA Program.  In addition, the Applicant provided sufficient documentation to substantiate $121,184.97 in additional PA funding.  Therefore, I am approving the appeal contingent upon the Applicant’s ability to produce documents substantiating proper procurement and actual costs.  By copy of this letter, I am requesting the Acting Regional Administrator 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: Robert Samaan
      Acting Regional Administrator
      FEMA Region IV

Analysis: 

Background

In May 2010, extensive flooding throughout Nashville and Davidson County caused damage to the Metropolitan Government of Nashville and Davidson County’s (Nashville-Davidson or Applicant) Dry Creek Wastewater Treatment Plant (Facility).  The Facility is the sole source of wastewater treatment for the northeast area of Nashville-Davidson County.  FEMA drafted Project Worksheet (PW) 5598 to document disaster-related damage to the Wet Weather Pump Station, Influent Pump Station, and Storm Water Pump Station of the Facility.  FEMA obligated PW 5598 for $183,362.47 based on a Cost Estimating Format (CEF).

First Appeal

In the first appeal letter, dated June 8, 2011, the Applicant asserted that FEMA made several errors concerning the scope of work and associated funding necessary to restore the Facility to its predisaster condition for PW 5598.  In that appeal the Applicant presented five distinct issues.  First, the Applicant disagreed with FEMA’s decision to reclassify the Direct Administrative Costs (DAC) as indirect costs, thereby reducing the eligible amount in PW 5598.  Second, the Applicant requested that FEMA revise PW 5598 to reflect the actual effort expended for on-site resident engineering tasks associated with the recovery of the Facility.  Third, the Applicant asserted that it should be reimbursed for the replacement of metal doors contaminated by floodwater.  Fourth, the Applicant asserted that, pursuant to FEMA Publication 348, Protecting Building Utilities from Flood Damage (FEMA P-348), FEMA should authorize the complete replacement of all electrical wires and cables because the Facility was submerged in nine feet of contaminated floodwaters and the electrical equipment was not salvageable.[1]  Finally, the Applicant asserted that a Technical Memorandum, prepared by Brown and Caldwell Engineers (Consulting Engineers), identified several areas where damaged items were missed and should have been included in PW 5598.[2]   

In a letter dated November 25, 2013, the Region IV Regional Administrator (RA) partially granted the appeal, approving $24,296.50 for the second and third issues presented by the Applicant (i.e., resident engineering costs, metal door replacement, and associated construction management costs).  In addition, the RA approved $67,017.10 for electrical testing work and its associated construction management cost.  However, the RA determined that Nashville-Davidson had not provided sufficient information to substantiate additional direct administrative costs, complete replacement of all electrical wires and cables, or other items that were excluded from the PW (first, fourth, and fifth issues, respectively). With specific regard to issues four and five, the RA determined that the format in which the Applicant documented costs made no distinction between existing line item costs included in PW 5598 (i.e., the FEMA generated CEF) and the appealed scope addition or cost increases.

Second Appeal

In the second appeal, dated February 12, 2014, the Applicant requests reimbursement for issues three and four (i.e., excluded work described above), in the amount of $121,184.97.  The second appeal includes $66,733.07 for replacement of a Grinder Control Panel, $14,636.60 for replacement of two unit heaters, and $39,815.30 for actual costs for the replacement of the various buckets in the electrical room—all of which the applicant claims were excluded in the original PW.  The Applicant raises no issue with regard to the Direct Administrative Costs.

The Applicant also asserts that it used, and submitted to FEMA, bid documents to establish the cost to restore the Facility to predisaster condition; whereas, as mentioned earlier, FEMA used a CEF.  In the Applicant’s second appeal, it challenges FEMA’s cost methodology, stating the CEF is not reflective of the work completed or scheduled to be completed because it does not include the Contractor’s general requirements.  In addition, the Applicant asserts that the costs identified in the CEF were lower than the actual costs.  The Applicant further argues that it is not realistic to compare actual costs to each CEF line item and cites the FEMA Public Assistance Guide as evidence that actual cost of eligible repairs is the preferred methodology in determining costs for large projects.

Discussion

Work Eligibility

The Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), Section 406, authorizes FEMA to make contributions to a local government to restore eligible facilities on the basis of the design of such facilities as they existed immediately prior to the disaster.[3]  Pursuant to Title 44 of the Code of Federal Regulations (44 C.F.R.) § 206.223(a), which implements that provision, an eligible item of work must be required as the result of the disaster event, be located within a designated disaster area, and be the legal responsibility of the applicant.[4] The Applicant has fulfilled the latter two requirements of § 206.223(a); the issue on appeal is whether the work is required as a result of the disaster event.

As stated earlier, in the first appeal determination, the RA noted that the items excluded from the scope of work may be eligible for Public Assistance (PA) funding.  However, the RA could neither determine whether all items were damaged by the disaster nor distinguish between line item costs already included in PW 5598 and additional scope or cost increases not previously included in PW 5598.

It must be noted that, among other things, the Applicant’s Consulting Engineers conducted a detailed flood damage assessment of the Facility.[5]  The assessment included high water mark locations and an inventory of equipment that was reviewed by a licensed Professional Engineer.[6]  The inventory list is a detailed record that accounts for all of the Facility’s electrical equipment and distinguishes between disaster-damaged and non-damaged equipment.[7]  The inventory list was the basis for the scope of work in bid documents.[8]  In addition to the water mark locations and inventory list, the assessment notes that the floodwater was contaminated and, therefore, likely had harmful impacts on electrical components.[9]  The Consulting Engineers substantiate this claim by providing laboratory reports that indicated the presence of contaminating factors, including pH and corrosivity levels above the Environmental Protection Agency’s recommended levels.[10]

Generally, FEMA policy and guidance states that wet electrical components must be replaced.[11]  Specifically, FEMA P-348 recommends replacing any wire or cable that is listed for dry locations that has been submerged in water[12] and notes that “sediments and contaminants contained in water may find their way into the internal components of installed electrical products and may remain there even after the products have been dried or washed….”[13]  Furthermore, it explains that “[i]nundation of electrical equipment in a building creates the danger of short circuits, electrical shock, damage of electric components and appliances, injury, fire, or even death.”[14]  Accordingly, FEMA P-348 recommends replacing damaged electrical components with new undamaged products because the damaged components are not suitable for continued use.[15]

FEMA 543, Design Guide for Improving Critical Facility Safety from Flooding and High Winds (FEMA 543), further explains that, in general, if electrical components get wet, they are likely to be damaged or destroyed.[16]  It provides that “electrical systems and components, and electrical controls of heating, ventilation, and air conditioning systems, are subject to damage simply by getting wet, even for short durations.”[17]  Additionally, unless specifically designed for wet locations, switches and other electrical components can short out due to deposits of sediment, or otherwise not function even when allowed to dry before operation.[18]  FEMA 543 also notes that wiring and components that have been submerged may be functional, although generally it is more cost-effective to discard flooded outlets, switches, and other less expensive components than to attempt thorough cleaning.[19]

In addition to FEMA 543, FEMA Publication 936, Floodproofing Non-Residential Buildings (FEMA P-936), describes conditions under which wiring and cables should be considered damaged.[20]  Specifically, FEMA P-936 explains that cable systems cannot be cleaned if floodwaters have entered the exterior sheaths of the cables.[21]  However, conduits inundated with flooding may be cleaned, provided the floodwaters are not corrosive or otherwise damaging and the conduits are routed and installed to prevent water from accumulating inside them.[22]  Furthermore, after flooding it should be assumed that conductors are damaged unless it can be proven otherwise.[23]

Based upon the Applicant’s supporting documents, and the above noted agency policy and guidance, FEMA has determined that contaminated floodwater inundated the Facility and, therefore, likely had detrimental impacts on its electrical components.[24]  As such, the items excluded from the original scope of work in PW 5598 are eligible for Public Assistance funding.

Allowable Costs

Pursuant to the Stafford Act § 406, FEMA is authorized to provide reimbursement for the associated expenses incurred by a local government during the repair, restoration reconstruction, or replacement of a facility damaged as the result of a declared disaster.[25]  Generally, costs that can be directly tied to the performance of eligible work are eligible for FEMA reimbursement.[26]  However, these costs must, among other things, be reasonable and necessary to accomplish the work, comply with applicable federal, state, and local laws, regulations and procurement requirements, and be adequately documented.[27]  Adequate documentation in this instance would include documents that validate actual costs for work items claimed in this appeal.

As explained above, the work items requested by the Applicant are necessary to restore the Facility to predisaster condition, design, and function.  With the second appeal, the Applicant provided bid documents, invoices, order forms, accounting reports, and other documentation that validate the scope and actual costs for the work items requested in this appeal.[28]  The costs associated with the requested work items were adequately documented by the Applicant.  Accordingly, the costs are eligible for FEMA reimbursement.     

Conclusion

Pursuant to 44 C.F.R. § 206.223(a), the work items excluded in the original version of PW 5598 are eligible under the PA Program.  In addition, pursuant to OMB Circular A-87, the Applicant provided sufficient documentation to substantiate its request for additional PA funding.  Accordingly, this appeal is granted contingent upon the Applicant’s ability to produce documents substantiating proper procurement.  Final costs for PW 5598 will be reconciled by FEMA during the closeout process. 


[1] See Protecting Building Utilities from Flood Damage, FEMA P-348, at 2-27 (Nov. 1999) [hereinafter FEMA 348].

[2] See generally Technical Memorandum from Maintenance and Reliability Specialist, Brown and Caldwell, prepared for Nashville Metropolitan Water Services, (Sep. 7, 2010) [hereinafter Technical Memorandum 1].

[3] The Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, Pub. L. No. 93-288, § 406, 42 U.S.C. § 5172 (2007).

[4] 44 C.F.R. § 206.223(a) (2009).

[5] See generally Technical Memorandum 1.

[6] Id.

[7] Id.

[8] Second Appeal, Nashville-Davidson County, FEMA-1909-DR-TN, at 2 (Feb. 12, 2014).

[9] Id.

[10] Id.; see also Technical Memorandum from Professional Engineer, Brown and Caldwell, prepared for Metropolitan Water Services Nashville, at Attachment A (May 27, 2011) (referencing the National Electric Code (NEC) that forbids the use of electrical equipment and connections “…deteriorated by corrosion, chemical action, or overheating” as support for the Applicant’s assertion that various electrical components had to be replaced)    [hereinafter Technical Memorandum 2].

[11] See Design Guide for Improving Critical Facility Safety from Flooding and High Winds, FEMA 543, (Jan. 2007) [hereinafter FEMA 543]; see also Floodproofing Non-Residential Buildings, FEMA P-936, (July 2013) [hereinafter FEMA P-936].

[12] FEMA P-348, at 2-27. 

[13] Id., at 2-28.

[14] Id., at 3.3-2.

[15] Id., at 2-28. 

[16] FEMA 543, at 2-50.

[17] Id.; see also FEMA Mitigation Assessment Team (MAT) Report: Hurricane Sandy in New Jersey and New York, FEMA P-942, at 5-26 (Nov. 2013) (providing, “[i]n general, all inundated electrical components had to be replaced, including electric controls and SCADA systems. Other equipment and systems damaged by floodwater included boilers, communication systems, fire protection systems, settling tanks, and biological systems for treatment.”) [hereinafter FEMA P-942].

[18] FEMA 543, at 2-50.

[19] Id.

[20] See FEMA P-936, at 4-22.

[21] Id.

[22] Id.

[23] Id. (providing that, “conductors should be replaced after flooding unless it can be confirmed that they have not been damaged from inundation”).

[24]During evaluation of the second appeal, FEMA consulted a professional engineer (PE) regarding the validity of the Applicant’s assertions regarding the excluded work items.  The PE reviewed the Applicant’s appeal documentation submitted on first and second appeal, FEMA policy, and FEMA guidance to form a professional opinion regarding the eligibility of work items the Applicant claims were improperly excluded in PW 5598.  The PE concluded that the Applicant’s documentation was sufficient to establish that the excluded items were damaged by the flood.  See generally Email from Professional Engineer, FEMA to PA Appeals Analyst, FEMA (Aug. 15, 2014, 5:24 pm) (on file with FEMA).

[25] Stafford Act § 406(a)(1)(A), 42 U.S.C. § 5172.

[26] Public Assistance Guide, FEMA 322, at 40 (June 2007).

[27] See Office of Mgmt. & Budget, Exec. Office of the President, OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, at Attachment A  (2004) (codified at 2 C.F.R. § 225).

[28] Nashville-Davidson County, FEMA-1909-DR-TN, Attachments.

 

28 Dec 2014
Appeal Type: 
2nd
Report Type: 
PW
Appeal Categories: 
Applicant Name: 
Nashville-Davidson County
Disaster Number: 
1909-DR-TN
DSR: 
5597
Date Signed: 
Tuesday, December 16, 2014
PA ID: 
037-52004-00
Summary/Brief: 

Conclusion:  Pursuant to 44 C.F.R. § 206.223, the work items excluded in the original version of PW 5597 are eligible under the PA Program.  In addition, the Applicant provided sufficient documentation to substantiate $1,560,819.15 in additional PA funding.

Summary Paragraph

In May 2010, extensive flooding throughout Nashville-Davidson County caused damage to the Dry Creek Wastewater Treatment Plant (Facility).  The Facility is the sole source of wastewater treatment for the northeast area of Nashville-Davidson County.  FEMA drafted Project Worksheet (PW) 5597 to document damage to the Secondary Treatment System building of the Facility.  FEMA obligated PW 5597 for $197,913.64 based on a Cost Estimating Format (CEF).  The Applicant prepared, and attached to the PW, a statement explaining that they were “signing this PW without proper review of scope and/or damage description elements due to FEMA’s self-imposed February 25, 2011 deadline for closing the Joint Field Office.”  In the first appeal, the Applicant asserted that FEMA failed to include funding for electrical wires and cables submerged in floodwaters and various other damaged items excluded from the scope of work.  The Regional Administrator (RA) partially approved PW 5597 for $84,960.76 for resident engineering costs, pipe insulation, and associated construction management costs.  However, the RA determined that the first appeal did not provide the level of information necessary to make eligibility determinations on the other excluded items.  In addition, the RA concluded that the Applicant failed to demonstrate that some of the excluded work items were the result of the disaster.  In the second appeal, the Applicant again asserts that FEMA made several errors concerning the scope of work and associated funding necessary to restore the Facility to its pre-disaster condition for PW 5597.

Authorities and Second Appeals

  • Stafford Act § 406, 42 U.S.C. § 5172.
  • 44 C.F.R. § 206.223(a).
  • OMB Circular A-87, 2 C.F.R. § 225.
  • FEMA P-348, at 2-27, 2-28, and 3.3-2.
  • FEMA 543, at 2-50.
  • FEMA P-936, at 4-22.
  • FEMA P-942, at 5-26.

Headnotes

  • Pursuant to 44 C.F.R. § 206.223(a), an eligible item of work must be required as the result of the disaster event.
    • Based on FEMA P-348, FEMA 543, FEMA P-936, and FEMA P-942, and substantiated by analysis from a Professional Engineer, FEMA determined that the work items excluded from the original version of PW 5597 are eligible under the PA Program as they were required as a result of the disaster.   
  • Pursuant to OMB Circular A-87, allowable procurement costs must, among other things, be adequately documented.
    • The Applicant must provide adequate procurement documentation.
Letter: 

December 16, 2014

David Purkey
Director
Tennessee Emergency Management Agency
3041 Sidco Drive, P.O. Box 41502
Nashville, TN 37204-1502

Re: Second Appeal – Nashville-Davidson County, PA ID 037-52004-00, FEMA-1909-DR-TN, Project Worksheet (PW) 5597 – Scope of Work

Dear Mr. Purkey:

This is in response to a letter from your office dated February 20, 2014, which transmitted the referenced second appeal on behalf of the Metropolitan Government of Nashville and Davidson County (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $1,560,819.15 in Public Assistance (PA) funding for various items excluded from PW 5597.

As explained in the enclosed analysis, I have determined that, pursuant to 44 C.F.R. § 206.223, the work items excluded in the original version of PW 5597 are eligible under the PA Program.  In addition, the Applicant provided sufficient documentation to substantiate $1,560,819.15 in additional PA funding.  Therefore, I am approving the appeal contingent upon the Applicant’s ability to produce documents substantiating proper procurement and actual costs.  By copy of this letter, I am requesting the Acting Regional Administrator 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:  Robert Samaan
       Acting Regional Administrator
       FEMA Region IV
 


 

Analysis: 

Background

In May 2010, extensive flooding throughout Nashville and Davidson County caused damage to the Metropolitan Government of Nashville and Davidson County’s (Nashville-Davidson or Applicant) Dry Creek Wastewater Treatment Plant (Facility).  The Facility is the sole source of wastewater treatment for the northeast area of Nashville-Davidson County.  FEMA drafted Project Worksheet (PW) 5597 to document disaster-related damage to the Secondary Treatment System building, consisting of a multi-level below grade equipment gallery and tunnel system, an aeration structure, and two final settling tanks, of the Facility.  FEMA obligated PW 5597 for $197,913.64 based on a Cost Estimating Format (CEF). 

First Appeal

In the first appeal letter, dated June 8, 2011, the Applicant asserted that FEMA made several errors concerning the scope of work and associated funding necessary to restore the Facility to its predisaster condition for PW 5597.  In that appeal the Applicant presented five distinct issues.  First, the Applicant disagreed with FEMA’s decision to reclassify the Direct Administrative Costs (DAC) as indirect costs, thereby reducing the eligible amount in PW 5597.  Second, the Applicant requested that FEMA revise PW 5597 to reflect the actual effort expended for on-site resident engineering tasks associated with the recovery of the Facility.  Third, the Applicant asserted that it should be reimbursed for removal, disposal, and replacement of contaminated pipe insulation because such action complied with FEMA policy and guidance regarding mold remediation.  Fourth, the Applicant asserted that, pursuant to FEMA Publication 348, Protecting Building Utilities from Flood Damage (FEMA P-348), FEMA should authorize the complete replacement of all electrical wires and cables because the Facility was submerged in nine feet of contaminated floodwaters and the electrical equipment was not salvageable.[1]  Finally, the Applicant asserted that a Technical Memorandum, prepared by Brown and Caldwell Engineers (Consulting Engineers), identified several areas where damaged items were missed and should have been included in PW 5597.[2]   

In a letter dated November 25, 2013, the Region IV Regional Administrator (RA) partially granted the appeal, approving $84,960.76 for the second and third issues presented by the Applicant (i.e., resident engineering costs, pipe insulation, and associated construction management costs).  However, the RA determined that Nashville-Davidson had not provided sufficient information to substantiate additional direct administrative costs, complete replacement of all electrical wires and cables, or other items that were excluded from the PW (first, fourth, and fifth issues, respectively). With specific regard to issues four and five, the RA determined that the format in which the Applicant documented costs made no distinction between existing line item costs included in PW 5597 (i.e., the FEMA generated CEF) and the appealed scope addition or cost increases.

Second Appeal

In the second appeal, dated February 12, 2014, the Applicant requests reimbursement for issues three and four (i.e., excluded work described above), in the amount of $1,560,819.15.  The second appeal includes $3,280.00 for labor used during the restoration of the Facility, $208,620.42 for replacement of cable and conduit, power and control cables, and flow tubes, $58,319.99 to field verify, supply, install, rewire, test, and replace various lighting and receptacle components, and $1,290,578.74 for actual costs for several items listed in PW 5597 that were priced using lower cost estimates—all of which the applicant claims were excluded in the original PW.  The Applicant raises no issue with regard to the Direct Administrative Costs.

The Applicant also asserts that it used, and submitted to FEMA, bid documents to establish the cost to restore the Facility to predisaster condition; whereas, as mentioned earlier, FEMA used a CEF.  In the Applicant’s second appeal, it challenges FEMA’s cost methodology, stating the CEF is not reflective of the work completed or scheduled to be completed because it does not include the Contractor’s general requirements.  In addition, the Applicant asserts that the costs identified in the CEF were lower than the actual costs.  The Applicant further argues that it is not realistic to compare actual costs to each CEF line item and cites the FEMA Public Assistance Guide as evidence that actual cost of eligible repairs is the preferred methodology in determining costs for large projects.

Discussion

Work Eligibility

The Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), Section 406, authorizes FEMA to make contributions to a local government to restore eligible facilities on the basis of the design of such facilities as they existed immediately prior to the disaster.[3]  Pursuant to Title 44 of the Code of Federal Regulations (44 C.F.R.) § 206.223(a), which implements that provision, an eligible item of work must be required as the result of the disaster event, be located within a designated disaster area, and be the legal responsibility of the applicant.[4] The Applicant has fulfilled the latter two requirements of § 206.223(a); the issue on appeal is whether the work is required as a result of the disaster event.

As stated earlier, in the first appeal determination, the RA noted that the items excluded from the scope of work may be eligible for Public Assistance (PA) funding.  However, the RA could neither determine whether all items were damaged by the disaster nor distinguish between line item costs already included in PW 5597 and additional scope or cost increases not previously included in PW 5597.

It must be noted that, among other things, the Applicant’s Consulting Engineers conducted a detailed flood damage assessment of the Facility.[5]  The assessment included high water mark locations and an inventory of equipment that was reviewed by a licensed Professional Engineer.[6]  The inventory list is a detailed record that accounts for all of the Facility’s electrical equipment and distinguishes between disaster-damaged and non-damaged equipment.[7]  The inventory list was the basis for the scope of work in bid documents.[8]  In addition to the water mark locations and inventory list, the assessment notes that the floodwater was contaminated and, therefore, likely had harmful impacts on electrical components.[9]  The Consulting Engineers substantiate this claim by providing laboratory reports that indicated the presence of contaminating factors, including pH and corrosivity levels above the Environmental Protection Agency’s recommended levels.[10]

Generally, FEMA policy and guidance states that wet electrical components must be replaced.[11]  Specifically, FEMA P-348 recommends replacing any wire or cable that is listed for dry locations that has been submerged in water[12] and notes that “sediments and contaminants contained in water may find their way into the internal components of installed electrical products and may remain there even after the products have been dried or washed….”[13]  Furthermore, it explains that “[i]nundation of electrical equipment in a building creates the danger of short circuits, electrical shock, damage of electric components and appliances, injury, fire, or even death.”[14]  Accordingly, FEMA P-348 recommends replacing damaged electrical components with new undamaged products because the damaged components are not suitable for continued use.[15]

FEMA 543, Design Guide for Improving Critical Facility Safety from Flooding and High Winds (FEMA 543), further explains that, in general, if electrical components get wet, they are likely to be damaged or destroyed.[16]  It provides that “electrical systems and components, and electrical controls of heating, ventilation, and air conditioning systems, are subject to damage simply by getting wet, even for short durations.”[17]  Additionally, unless specifically designed for wet locations, switches and other electrical components can short out due to deposits of sediment, or otherwise not function even when allowed to dry before operation.[18]  FEMA 543 also notes that wiring and components that have been submerged may be functional, although generally it is more cost-effective to discard flooded outlets, switches, and other less expensive components than to attempt thorough cleaning.[19]

In addition to FEMA 543, FEMA Publication 936, Floodproofing Non-Residential Buildings (FEMA P-936), describes conditions under which wiring and cables should be considered damaged.[20]  Specifically, FEMA P-936 explains that cable systems cannot be cleaned if floodwaters have entered the exterior sheaths of the cables.[21]  However, conduits inundated with flooding may be cleaned, provided the floodwaters are not corrosive or otherwise damaging and the conduits are routed and installed to prevent water from accumulating inside them.[22]  Furthermore, after flooding it should be assumed that conductors are damaged unless it can be proven otherwise.[23]

Based upon the Applicant’s supporting documents, and the above noted agency policy and guidance, FEMA has determined that contaminated floodwater inundated the Facility and, therefore, likely had detrimental impacts on its electrical components.[24]  As such, the items excluded from the original scope of work in PW 5597 are eligible for Public Assistance funding.

Allowable Costs

Pursuant to the Stafford Act § 406, FEMA is authorized to provide reimbursement for the associated expenses incurred by a local government during the repair, restoration reconstruction, or replacement of a facility damaged as the result of a declared disaster.[25]  Generally, costs that can be directly tied to the performance of eligible work are eligible for FEMA reimbursement.[26]  However, these costs must, among other things, be reasonable and necessary to accomplish the work, comply with applicable federal, state, and local laws, regulations and procurement requirements, and be adequately documented.[27]  Adequate documentation in this instance would include documents that validate actual costs for work items claimed in this appeal.

As explained above, the work items requested by the Applicant are necessary to restore the Facility to predisaster condition, design, and function.  With the second appeal, the Applicant provided bid documents, invoices, order forms, accounting reports, and other documentation that validate the scope and actual costs for the work items requested in this appeal.[28]  The costs associated with the requested work items were adequately documented by the Applicant.  Accordingly, the costs are eligible for FEMA reimbursement.   

Conclusion

Pursuant to 44 C.F.R. § 206.223(a), the work items excluded in the original version of PW 5597 are eligible under the PA Program.  In addition, pursuant to OMB Circular A-87, the Applicant provided sufficient documentation to substantiate its request for additional PA funding.  Accordingly, this appeal is granted contingent upon the Applicant’s ability to produce documents substantiating proper procurement.  Final costs for PW 5597 will be reconciled by FEMA during the closeout process. 


[1] See Protecting Building Utilities from Flood Damage, FEMA P-348, at 2-27 (Nov. 1999) [hereinafter FEMA 348].

[2] See generally Technical Memorandum from Maintenance and Reliability Specialist, Brown and Caldwell, prepared for Nashville Metropolitan Water Services, (Sep. 7, 2010) [hereinafter Technical Memorandum 1].

[3] The Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, Pub. L. No. 93-288, § 406, 42 U.S.C. § 5172 (2007).

[4] 44 C.F.R. § 206.223(a) (2009).

[5] See generally Technical Memorandum 1.

[6] Id.

[7] Id.

[8] Second Appeal, Nashville-Davidson County, FEMA-1909-DR-TN, at 3 (Feb. 12, 2014).

[9] Id.

[10] Id.; see also Technical Memorandum from Professional Engineer, Brown and Caldwell, prepared for Metropolitan Water Services Nashville, at Attachment A (May 27, 2011) (referencing the National Electric Code (NEC) that forbids the use of electrical equipment and connections “…deteriorated by corrosion, chemical action, or overheating” as support for the Applicant’s assertion that various electrical components had to be replaced)    [hereinafter Technical Memorandum 2].

[11] See Design Guide for Improving Critical Facility Safety from Flooding and High Winds, FEMA 543, (Jan. 2007) [hereinafter FEMA 543]; see also Floodproofing Non-Residential Buildings, FEMA P-936, (July 2013) [hereinafter FEMA P-936].

[12] FEMA P-348, at 2-27. 

[13] Id., at 2-28.

[14] Id., at 3.3-2.

[15] Id., at 2-28. 

[16] FEMA 543, at 2-50.

[17] Id.; see also FEMA Mitigation Assessment Team (MAT) Report: Hurricane Sandy in New Jersey and New York, FEMA P-942, at 5-26 (Nov. 2013) (providing, “[i]n general, all inundated electrical components had to be replaced, including electric controls and SCADA systems. Other equipment and systems damaged by floodwater included boilers, communication systems, fire protection systems, settling tanks, and biological systems for treatment.”) [hereinafter FEMA P-942].

[18] FEMA 543, at 2-50.

[19] Id.

[20] See FEMA P-936, at 4-22.

[21] Id.

[22] Id.

[23] Id. (providing that, “conductors should be replaced after flooding unless it can be confirmed that they have not been damaged from inundation”).

[24]During evaluation of the second appeal, FEMA consulted a professional engineer (PE) regarding the validity of the Applicant’s assertions regarding the excluded work items.  The PE reviewed the Applicant’s appeal documentation submitted on first and second appeal, FEMA policy, and FEMA guidance to form a professional opinion regarding the eligibility of work items the Applicant claims were improperly excluded in PW 5597.  The PE concluded that the Applicant’s documentation was sufficient to establish that the excluded items were damaged by the flood.  See generally Email from Professional Engineer, FEMA to PA Appeals Analyst, FEMA (Aug. 15, 2014, 5:24 pm) (on file with FEMA).

[25] Stafford Act § 406(a)(1)(A), 42 U.S.C. § 5172.

[26] Public Assistance Guide, FEMA 322, at 40 (June 2007).

[27] See Office of Mgmt. & Budget, Exec. Office of the President, OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, at Attachment A  (2004) (codified at 2 C.F.R. § 225).

[28] Nashville-Davidson County, FEMA-1909-DR-TN, Attachments.

 

28 Dec 2014
Appeal Type: 
2nd
Report Type: 
PW
Appeal Categories: 
Applicant Name: 
Nashville-Davidson County
Disaster Number: 
1909-DR-TN
DSR: 
5574
Date Signed: 
Tuesday, December 16, 2014
PA ID: 
037-52004-00
Summary/Brief: 

Conclusion:  Pursuant to 44 C.F.R. § 206.223, the work items excluded in the original version of PW 5574 are eligible under the PA Program.  In addition, the Applicant provided sufficient documentation to substantiate $3,189,722.88 in additional PA funding.

Summary Paragraph

In May 2010, extensive flooding throughout Nashville-Davidson County caused damage to the Dry Creek Wastewater Treatment Plant (Facility).  The Facility is the sole source of wastewater treatment for the northeast area of Nashville-Davidson County.  FEMA drafted Project Worksheet (PW) 5574 to document the facility’s various electrical system components, including substations, pad-mounted transformers, main breakers, fuses, and conductors, damaged by the disaster.  FEMA obligated PW 5574 for $131,419.77 based on a Cost Estimating Format (CEF).  In the first appeal, the Applicant asserted that FEMA failed to include funding for voltage lines, the U-3 transformer, repair, cleaning, and testing of the main switch, and other labor and materials associated with the restoration of the facility. The Regional Administrator (RA) partially approved PW 5574 for $49,791.00 for resident engineering costs.  However, the RA determined that the first appeal did not provide the level of information necessary to make eligibility determinations on the other excluded items.  In addition, the RA concluded that the Applicant failed to demonstrate that some of the excluded work items were the result of the disaster.  In the second appeal, the Applicant again asserts that FEMA made several errors concerning the scope of work and associated funding necessary to restore the Facility to its pre-disaster condition for PW 5574.

Authorities and Second Appeals

  • Stafford Act § 406, 42 U.S.C. § 5172.
  • 44 C.F.R. § 206.223(a).
  • OMB Circular A-87, 2 C.F.R. § 225.
  • FEMA P-348, at 2-27, 2-28, and 3.3-2.
  • FEMA 543, at 2-50.
  • FEMA P-936, at 4-22.
  • FEMA P-942, at 5-26.

Headnotes

  • Pursuant to 44 C.F.R. § 206.223(a), an eligible item of work must be required as the result of the disaster event.
    • Based on FEMA P-348, FEMA 543, FEMA P-936, and FEMA P-942, and further substantiated by analysis from a Professional Engineer, FEMA determined that the work items excluded from the original version of PW 5574 are eligible under the PA Program as they were required as a result of the disaster.   
  • Pursuant to OMB Circular A-87, allowable procurement costs must, among other things, be adequately documented. 
  • The Applicant must provide adequate procurement process documentation.


 

Letter: 

December 16, 2014

David Purkey
Director
Tennessee Emergency Management Agency
3041 Sidco Drive, P.O. Box 41502
Nashville, TN 37204-1502

Re: Second Appeal – Nashville-Davidson County, PA ID 037-52004-00, FEMA-1909-DR-TN, Project Worksheet (PW) 5574 – Scope of Work

Dear Mr. Purkey:

This is in response to a letter from your office dated January 22, 2014, which transmitted the referenced second appeal on behalf of the Metropolitan Government of Nashville and Davidson County (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $3,189,722.88 in Public Assistance (PA) funding for various items excluded from PW 5574.

As explained in the enclosed analysis, I have determined that, pursuant to 44 C.F.R. § 206.223, the work items excluded in the original version of PW 5574 are eligible under the PA Program.  In addition, the Applicant provided sufficient documentation to substantiate $3,189,722.88 in additional PA funding.  Therefore, I am approving the appeal contingent upon the Applicant’s ability to produce documents substantiating proper procurement and actual costs.  By copy of this letter, I am requesting the Acting Regional Administrator 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: Robert Samaan
      Acting Regional Administrator
      FEMA Region IV

Analysis: 

Background

In May 2010, extensive flooding throughout Nashville and Davidson County caused damage to the Metropolitan Government of Nashville and Davidson County’s (Nashville-Davidson or Applicant) Dry Creek Wastewater Treatment Plant (Facility).  The Facility is the sole source of wastewater treatment for the northeast area of Nashville-Davidson County.  FEMA drafted Project Worksheet (PW) 5574 to document the facility’s various electrical system components, including substations, pad-mounted transformers, main breakers, fuses, and conductors, damaged by the disaster.  FEMA obligated PW 5574 for $207,338.07 based on a Cost Estimating Format (CEF). 

First Appeal

In the first appeal letter, dated June 8, 2011, the Applicant asserted that FEMA made several errors concerning the scope of work and associated funding necessary to restore the Facility to its predisaster condition for PW 5574.  In that appeal the Applicant presented four distinct issues.  First, the Applicant disagreed with FEMA’s decision to reclassify the Direct Administrative Costs (DAC) as indirect costs, thereby reducing the eligible amount in PW 5574.  Second, the Applicant requested that FEMA revise PW 5574 to reflect the actual effort expended for on-site resident engineering tasks associated with the recovery of the Facility.  Third, the Applicant asserted that, pursuant to FEMA Publication 348, Protecting Building Utilities from Flood Damage (FEMA P-348), FEMA should authorize the complete replacement of all electrical wires and cables because the Facility was submerged in nine feet of contaminated floodwaters and the electrical equipment was not salvageable.[1]  Finally, the Applicant asserted that a Technical Memorandum, prepared by Brown and Caldwell Engineers (Consulting Engineers), identified several areas where damaged items were missed and should have been included in PW 5574.[2]    

In a letter dated November 8, 2013, the Region IV Regional Administrator (RA) partially granted the appeal, approving $49,791.00 for the second issue presented by the Applicant (i.e., resident engineering costs).  However, the RA determined that Nashville-Davidson had not provided sufficient information to substantiate additional direct administrative costs, complete replacement of all electrical wires and cables, or other items that were excluded from the PW (first, third, and fourth issues, respectively). With specific regard to issue three, the RA determined that the format in which the Applicant documented costs made no distinction between existing line item costs included in PW 5574 (i.e., the FEMA generated CEF) and the appealed scope addition or cost increases.  Regarding issue four, the RA determined that the Applicant had not demonstrated that the additional work items were the result of the disaster.   

Second Appeal

In the second appeal, dated January 17, 2014, the Applicant requests reimbursement for issues three and four (i.e., excluded work described above), in the amount of $3,189,722.88.  The second appeal includes $1,773,452.74 for restoration work performed on several transformers and their associated components, cables, and wires, and $1,416,270.14 for removal, cleaning, and replacement of damaged power and control cables and conduits in the U-4, U-7, U-8, U-9, and U-10 substations of the Facility—all of which the applicant claims were excluded in the original PW.  The Applicant raises no issue with regard to the Direct Administrative Costs.

The Applicant also asserts that it used, and submitted to FEMA, bid documents to establish the cost to restore the Facility to predisaster condition; whereas, as mentioned earlier, FEMA used a CEF.  In the Applicant’s second appeal, it challenges FEMA’s cost methodology, stating the CEF is not reflective of the work completed or scheduled to be completed because it does not include the Contractor’s general requirements.  In addition, the Applicant asserts that the costs identified in the CEF were lower than the actual costs.  The Applicant further argues that it is not realistic to compare actual costs to each CEF line item and cites the FEMA Public Assistance Guide as evidence that actual cost of eligible repairs is the preferred methodology in determining costs for large projects.

Discussion

Work Eligibility

The Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), Section 406, authorizes FEMA to make contributions to a local government to restore eligible facilities on the basis of the design of such facilities as they existed immediately prior to the disaster.[3]  Pursuant to Title 44 of the Code of Federal Regulations (44 C.F.R.) § 206.223(a), which implements that provision, an eligible item of work must be required as the result of the disaster event, be located within a designated disaster area, and be the legal responsibility of the applicant.[4] The Applicant has fulfilled the latter two requirements of § 206.223(a); the issue on appeal is whether the work is required as a result of the disaster event.

As stated earlier, in the first appeal determination, the RA noted that the items excluded from the scope of work may be eligible for Public Assistance (PA) funding.  However, the RA could neither determine whether all items were damaged by the disaster nor distinguish between line item costs already included in PW 5574 and additional scope or cost increases not previously included in PW 5574.

It must be noted that, among other things, the Applicant’s Consulting Engineers conducted a detailed flood damage assessment of the Facility.[5]  The assessment included high water mark locations and an inventory of equipment that was reviewed by a licensed Professional Engineer.[6]  The inventory list is a detailed record that accounts for all of the Facility’s electrical equipment and distinguishes between disaster-damaged and non-damaged equipment.[7]  The inventory list was the basis for the scope of work in bid documents.[8]  In addition to the water mark locations and inventory list, the assessment notes that the floodwater was contaminated and, therefore, likely had harmful impacts on electrical components.[9]  The Consulting Engineers substantiate this claim by providing laboratory reports that indicated the presence of contaminating factors, including pH and corrosivity levels above the Environmental Protection Agency’s recommended levels.[10]

Generally, FEMA policy and guidance states that wet electrical components must be replaced.[11]  Specifically, FEMA P-348 recommends replacing any wire or cable that is listed for dry locations that has been submerged in water[12] and notes that “sediments and contaminants contained in water may find their way into the internal components of installed electrical products and may remain there even after the products have been dried or washed….”[13]  Furthermore, it explains that “[i]nundation of electrical equipment in a building creates the danger of short circuits, electrical shock, damage of electric components and appliances, injury, fire, or even death.”[14]  Accordingly, FEMA P-348 recommends replacing damaged electrical components with new undamaged products because the damaged components are not suitable for continued use.[15]

FEMA 543, Design Guide for Improving Critical Facility Safety from Flooding and High Winds (FEMA 543), further explains that, in general, if electrical components get wet, they are likely to be damaged or destroyed.[16]  It provides that “electrical systems and components, and electrical controls of heating, ventilation, and air conditioning systems, are subject to damage simply by getting wet, even for short durations.”[17]  Additionally, unless specifically designed for wet locations, switches and other electrical components can short out due to deposits of sediment, or otherwise not function even when allowed to dry before operation.[18]  FEMA 543 also notes that wiring and components that have been submerged may be functional, although generally it is more cost-effective to discard flooded outlets, switches, and other less expensive components than to attempt thorough cleaning.[19]

In addition to FEMA 543, FEMA Publication 936, Floodproofing Non-Residential Buildings (FEMA P-936), describes conditions under which wiring and cables should be considered damaged.[20]  Specifically, FEMA P-936 explains that cable systems cannot be cleaned if floodwaters have entered the exterior sheaths of the cables.[21]  However, conduits inundated with flooding may be cleaned, provided the floodwaters are not corrosive or otherwise damaging and the conduits are routed and installed to prevent water from accumulating inside them.[22]  Furthermore, after flooding it should be assumed that conductors are damaged unless it can be proven otherwise.[23]

Based upon the Applicant’s supporting documents, and the above noted agency policy and guidance, FEMA has determined that contaminated floodwater inundated the Facility and, therefore, likely had detrimental impacts on its electrical components.[24]  As such, the items excluded from the original scope of work in PW 5574 are eligible for Public Assistance funding.

Allowable Costs

Pursuant to the Stafford Act § 406, FEMA is authorized to provide reimbursement for the associated expenses incurred by a local government during the repair, restoration reconstruction, or replacement of a facility damaged as the result of a declared disaster.[25]  Generally, costs that can be directly tied to the performance of eligible work are eligible for FEMA reimbursement.[26]  However, these costs must, among other things, be reasonable and necessary to accomplish the work, comply with applicable federal, state, and local laws, regulations and procurement requirements, and be adequately documented.[27]  Adequate documentation in this instance would include documents that validate actual costs for work items claimed in this appeal.

As explained above, the work items requested by the Applicant are necessary to restore the Facility to predisaster condition, design, and function.  With the second appeal, the Applicant provided bid documents, invoices, order forms, accounting reports, and other documentation that validate the scope and actual costs for the work items requested in this appeal.[28]  The costs associated with the requested work items were adequately documented by the Applicant.  Accordingly, the costs are eligible for FEMA reimbursement.   

Conclusion

Pursuant to 44 C.F.R. § 206.223(a), the work items excluded in the original version of PW 5574 are eligible under the PA Program.  In addition, pursuant to OMB Circular A-87, the Applicant provided sufficient documentation to substantiate its request for additional PA funding.  Accordingly, this appeal is granted contingent upon the Applicant’s ability to produce documents substantiating proper procurement.  Final costs for PW 5574 will be reconciled by FEMA during the closeout process. 


[1] See Protecting Building Utilities from Flood Damage, FEMA P-348, at 2-27 (Nov. 1999) [hereinafter FEMA 348].

[2] See generally Technical Memorandum from Maintenance and Reliability Specialist, Brown and Caldwell, prepared for Nashville Metropolitan Water Services, (Sep. 7, 2010) [hereinafter Technical Memorandum 1].

[3] The Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, Pub. L. No. 93-288, § 406, 42 U.S.C. § 5172 (2007).

[4] 44 C.F.R. § 206.223(a) (2009).

[5] See generally Technical Memorandum 1.

[6] Id.

[7] Id.

[8] Second Appeal, Nashville-Davidson County, FEMA-1909-DR-TN, at 3-4 (Jan. 17, 2014).

[9] Id.

[10] Id.; see also Technical Memorandum from Professional Engineer, Brown and Caldwell, prepared for Metropolitan Water Services Nashville, at Attachment A (May 27, 2011) (referencing the National Electric Code (NEC) that forbids the use of electrical equipment and connections “…deteriorated by corrosion, chemical action, or overheating” as support for the Applicant’s assertion that various electrical components had to be replaced)    [hereinafter Technical Memorandum 2].

[11] See Design Guide for Improving Critical Facility Safety from Flooding and High Winds, FEMA 543, (Jan. 2007) [hereinafter FEMA 543]; see also Floodproofing Non-Residential Buildings, FEMA P-936, (July 2013) [hereinafter FEMA P-936].

[12] FEMA P-348, at 2-27. 

[13] Id., at 2-28.

[14] Id., at 3.3-2.

[15] Id., at 2-28. 

[16] FEMA 543, at 2-50.

[17] Id.; see also FEMA Mitigation Assessment Team (MAT) Report: Hurricane Sandy in New Jersey and New York, FEMA P-942, at 5-26 (Nov. 2013) (providing, “[i]n general, all inundated electrical components had to be replaced, including electric controls and SCADA systems. Other equipment and systems damaged by floodwater included boilers, communication systems, fire protection systems, settling tanks, and biological systems for treatment.”) [hereinafter FEMA P-942].

[18] FEMA 543, at 2-50.

[19] Id.

[20] See FEMA P-936, at 4-22.

[21] Id.

[22] Id.

[23] Id. (providing that, “conductors should be replaced after flooding unless it can be confirmed that they have not been damaged from inundation”).

[24]During evaluation of the second appeal, FEMA consulted a professional engineer (PE) regarding the validity of the Applicant’s assertions regarding the excluded work items.  The PE reviewed the Applicant’s appeal documentation submitted on first and second appeal, FEMA policy, and FEMA guidance to form a professional opinion regarding the eligibility of work items the Applicant claims were improperly excluded in PW 5574.  The PE concluded that the Applicant’s documentation was sufficient to establish that the excluded items were damaged by the flood.  See generally Email from Professional Engineer, FEMA to PA Appeals Analyst, FEMA (Aug. 15, 2014, 5:24 pm) (on file with FEMA).

[25] Stafford Act § 406(a)(1)(A), 42 U.S.C. § 5172.

[26] Public Assistance Guide, FEMA 322, at 40 (June 2007).

[27] See Office of Mgmt. & Budget, Exec. Office of the President, OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, at Attachment A  (2004) (codified at 2 C.F.R. § 225).

[28] Nashville-Davidson County, FEMA-1909-DR-TN, Attachments.

 

28 Dec 2014
Appeal Type: 
2nd
Report Type: 
PW
Appeal Categories: 
Applicant Name: 
Nashville-Davidson County
Disaster Number: 
1909-DR-TN
DSR: 
5541
Date Signed: 
Tuesday, December 16, 2014
PA ID: 
037-52004-00
Summary/Brief: 

Conclusion:  Pursuant to 44 C.F.R. § 206.223, the work items excluded in the original version of PW 5541 are eligible under the PA Program.  In addition, the Applicant provided sufficient documentation to substantiate $119,311.80 in additional PA funding.

Summary Paragraph

In May 2010, extensive flooding throughout Nashville-Davidson County caused damage to the Dry Creek Wastewater Treatment Plant (Facility).  The Facility is the sole source of wastewater treatment for the northeast area of Nashville-Davidson County.  FEMA drafted PW 5541 to address damage to the Equalization Basin System of the Facility.  FEMA prepared PW 5541 for $52,690.94.  In the first appeal, the Applicant asserted that FEMA made several errors concerning the scope of work and associated funding necessary to restore the Facility to its pre-disaster condition for PW 5541.  The Regional Administrator (RA) partially approved PW 5541 for $10,105.14 for resident engineering costs, actuator wiring and conduit, and associated construction management costs.  However, the RA determined that the first appeal did not provide the level of information necessary to make eligibility determinations on the other excluded items.  In the second appeal, the Applicant asserts that FEMA failed to include funding for labor and materials to repair Motor Control Center buckets and replacement of lighting instrumentation.

Authorities and Second Appeals

  • Stafford Act § 406, 42 U.S.C. § 5172.
  • 44 C.F.R. § 206.223(a).
  • OMB Circular A-87, 2 C.F.R. § 225.
  • FEMA P-348, at 2-27, 2-28, and 3.3-2.
  • FEMA 543, at 2-50.
  • FEMA P-936, at 4-22.
  • FEMA P-942, at 5-26.

Headnotes

  • Pursuant to 44 C.F.R. § 206.223(a), an eligible item of work must be required as the result of the disaster event.
    • Based on FEMA P-348, FEMA 543, FEMA P-936, and FEMA P-942, and further substantiated by analysis from a Professional Engineer, FEMA determined that the work items excluded from the original version of PW 5541 are eligible under the PA Program as they were required as a result of the disaster.   
  • Pursuant to OMB Circular A-87, allowable procurement costs must, among other things, be adequately documented. 
  • The Applicant must provide adequate procurement process documentation.


 

Letter: 

December 16, 2014

David Purkey
Director
Tennessee Emergency Management Agency
3041 Sidco Drive, P.O. Box 41502
Nashville, TN 37204-1502

Re: Second Appeal – Nashville-Davidson County, PA ID 037-52004-00, FEMA-1909-DR-TN, Project Worksheet (PW) 5541 – Scope of Work

Dear Mr. Purkey:

This is in response to a letter from your office dated February 20, 2014, which transmitted the referenced second appeal on behalf of the Metropolitan Government of Nashville and Davidson County (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $119,311.80 in Public Assistance (PA) funding for various items excluded from PW 5541.

As explained in the enclosed analysis, I have determined that, pursuant to 44 C.F.R. § 206.223, the work items excluded in the original version of PW 5541 are eligible under the PA Program.  In addition, the Applicant provided sufficient documentation to substantiate $119,311.80 in additional PA funding.  Therefore, I am granting the appeal contingent upon the Applicant’s ability to produce documents substantiating proper procurement and actual costs.  By copy of this letter, I am requesting the Acting Regional Administrator 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, Appeal.

Sincerely,

/s/

William W. Roche
Director
Public Assistance Division

Enclosure

cc: Robert Samaan
      Acting Regional Administrator
      FEMA Region IV

Analysis: 

Background

In May 2010, extensive flooding throughout Nashville and Davidson County caused damage to the Metropolitan Government of Nashville and Davidson County’s (Nashville-Davidson or Applicant) Dry Creek Wastewater Treatment Plant (Facility).  The Facility is the sole source of wastewater treatment for the northeast area of Nashville-Davidson County.  FEMA drafted PW 5541 to address damage to the Equalization Basin System of the Facility.  FEMA prepared PW 5541 for $52,690.94 based on a project cost estimate using RS Means and other sources.   

First Appeal

In the first appeal letter, dated June 8, 2011, the Applicant asserted that FEMA made several errors concerning the scope of work and associated funding necessary to restore the Facility to its predisaster condition for PW 5541.  In that appeal the Applicant presented four distinct issues.  First, the Applicant disagreed with FEMA’s decision to reclassify the Direct Administrative Costs (DAC) as indirect costs, thereby reducing the eligible amount in PW 5541.  Second, the Applicant requested that FEMA revise PW 5541 to reflect the actual effort expended for on-site resident engineering tasks associated with the recovery of the Facility.  Third, the Applicant asserted that, pursuant to FEMA Publication 348, Protecting Building Utilities from Flood Damage (FEMA P-348), FEMA should authorize the complete replacement of all electrical wires and cables because the Facility was submerged in nine feet of contaminated floodwaters and the electrical equipment was not salvageable.[1]  Finally, the Applicant asserted that a Technical Memorandum, prepared by Brown and Caldwell Engineers (Consulting Engineers), identified several areas where damaged items were missed and should have been included in PW 5541.[2]    

In a letter dated November 25, 2013, the Region IV Regional Administrator (RA) partially granted the appeal, approving $4,607.00 for the second issue presented by the Applicant (i.e., resident engineering costs) and $5,498.14 for the actuator wiring and conduit and its associated construction management cost.  However, the RA determined that Nashville-Davidson had not provided sufficient information to substantiate additional direct administrative costs, complete replacement of all electrical wires and cables, or other items that were excluded from the PW (first, third, and fourth issues, respectively). With specific regard to issues three and four, the RA determined that the format in which the Applicant documented costs made no distinction between existing line item costs included in PW 5541 and the appealed scope addition or cost increases.

Second Appeal

In the second appeal, dated February 12, 2014, the Applicant requests reimbursement for issues three and four (i.e., excluded work described above), in the amount of $119,311.80.  The second appeal includes $103,500.80 for labor and materials procured to repair Motor Control Center (MCC) buckets and $15,811.00 to supply, install, rewire, test, and calibrate damaged lighting instrumentation—all of which the applicant claims were excluded in the original PW.  The Applicant raises no issue with regard to the Direct Administrative Costs.

The Applicant also asserts that the original PW is based on an inadequate cost level and explains that it used bid documents to establish the cost to restore the Facility to predisaster condition.  In the Applicant’s second appeal, it contends that, had FEMA used its bid documents during the preparation of PW 5541, the excluded work items that were damaged as the result of the disaster would have qualified for PA funding.  

Discussion

Work Eligibility

The Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), Section 406, authorizes FEMA to make contributions to a local government to restore eligible facilities on the basis of the design of such facilities as they existed immediately prior to the disaster.[3]  Pursuant to Title 44 of the Code of Federal Regulations (44 C.F.R.) § 206.223(a), which implements that provision, an eligible item of work must be required as the result of the disaster event, be located within a designated disaster area, and be the legal responsibility of the applicant.[4] The Applicant has fulfilled the latter two requirements of § 206.223(a); the issue on appeal is whether the work is required as a result of the disaster event.

As stated earlier, in the first appeal determination, the RA noted that the items excluded from the scope of work may be eligible for Public Assistance (PA) funding.  However, the RA could neither determine whether all items were damaged by the disaster nor distinguish between line item costs already included in PW 5541 and additional scope or cost increases not previously included in PW 5541.

It must be noted that, among other things, the Applicant’s Consulting Engineers conducted a detailed flood damage assessment of the Facility.[5]  The assessment included high water mark locations and an inventory of equipment that was reviewed by a licensed Professional Engineer.[6]  The inventory list is a detailed record that accounts for all of the Facility’s electrical equipment and distinguishes between disaster-damaged and non-damaged equipment.[7]  The inventory list was the basis for the scope of work in bid documents.[8]  In addition to the water mark locations and inventory list, the assessment notes that the floodwater was contaminated and, therefore, likely had harmful impacts on electrical components.[9]  The Consulting Engineers substantiate this claim by providing laboratory reports that indicated the presence of contaminating factors, including pH and corrosivity levels above the Environmental Protection Agency’s recommended levels.[10]

Generally, FEMA policy and guidance states that wet electrical components must be replaced.[11]  Specifically, FEMA P-348 recommends replacing any wire or cable that is listed for dry locations that has been submerged in water[12] and notes that “sediments and contaminants contained in water may find their way into the internal components of installed electrical products and may remain there even after the products have been dried or washed….”[13]  Furthermore, it explains that “[i]nundation of electrical equipment in a building creates the danger of short circuits, electrical shock, damage of electric components and appliances, injury, fire, or even death.”[14]  Accordingly, FEMA P-348 recommends replacing damaged electrical components with new undamaged products because the damaged components are not suitable for continued use.[15]

FEMA 543, Design Guide for Improving Critical Facility Safety from Flooding and High Winds (FEMA 543), further explains that, in general, if electrical components get wet, they are likely to be damaged or destroyed.[16]  It provides that “electrical systems and components, and electrical controls of heating, ventilation, and air conditioning systems, are subject to damage simply by getting wet, even for short durations.”[17]  Additionally, unless specifically designed for wet locations, switches and other electrical components can short out due to deposits of sediment, or otherwise not function even when allowed to dry before operation.[18]  FEMA 543 also notes that wiring and components that have been submerged may be functional, although generally it is more cost-effective to discard flooded outlets, switches, and other less expensive components than to attempt thorough cleaning.[19]

In addition to FEMA 543, FEMA Publication 936, Floodproofing Non-Residential Buildings (FEMA P-936), describes conditions under which wiring and cables should be considered damaged.[20]  Specifically, FEMA P-936 explains that cable systems cannot be cleaned if floodwaters have entered the exterior sheaths of the cables.[21]  However, conduits inundated with flooding may be cleaned, provided the floodwaters are not corrosive or otherwise damaging and the conduits are routed and installed to prevent water from accumulating inside them.[22]  Furthermore, after flooding it should be assumed that conductors are damaged unless it can be proven otherwise.[23]

Based upon the Applicant’s supporting documents, and the above noted agency policy and guidance, FEMA has determined that contaminated floodwater inundated the Facility and, therefore, likely had detrimental impacts on its electrical components.[24]  As such, the items excluded from the original scope of work in PW 5541 are eligible for Public Assistance funding.

Allowable Costs

Pursuant to the Stafford Act § 406, FEMA is authorized to provide reimbursement for the associated expenses incurred by a local government during the repair, restoration reconstruction, or replacement of a facility damaged as the result of a declared disaster.[25]  Generally, costs that can be directly tied to the performance of eligible work are eligible for FEMA reimbursement.[26]  However, these costs must, among other things, be reasonable and necessary to accomplish the work, comply with applicable federal, state, and local laws, regulations and procurement requirements, and be adequately documented.[27]  Adequate documentation in this instance would include documents that validate actual costs for work items claimed in this appeal.

As explained above, the work items requested by the Applicant are necessary to restore the Facility to predisaster condition, design, and function.  With the second appeal, the Applicant provided bid documents, invoices, order forms, accounting reports, and other documentation that validate the scope and actual costs for the work items requested in this appeal.[28]  The costs associated with the requested work items were adequately documented by the Applicant.  Accordingly, the costs are eligible for FEMA reimbursement.  

Conclusion

Pursuant to 44 C.F.R. § 206.223(a), the work items excluded in the original version of PW 5541 are eligible under the PA Program.  In addition, pursuant to OMB Circular A-87, the Applicant provided sufficient documentation to substantiate its request for additional PA funding.  Accordingly, this appeal is granted contingent upon the Applicant’s ability to produce documents substantiating proper procurement.  Final costs for PW 5541 will be reconciled by FEMA during the closeout process. 


[1] See Protecting Building Utilities from Flood Damage, FEMA P-348, at 2-27 (Nov. 1999) [hereinafter FEMA 348].

[2] See generally Technical Memorandum from Maintenance and Reliability Specialist, Brown and Caldwell, prepared for Nashville Metropolitan Water Services, (Sep. 7, 2010) [hereinafter Technical Memorandum 1].

[3] The Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, Pub. L. No. 93-288, § 406, 42 U.S.C. § 5172 (2007).

[4] 44 C.F.R. § 206.223(a) (2009).

[5] See generally Technical Memorandum 1.

[6] Id.

[7] Id.

[8] Second Appeal, Nashville-Davidson County, FEMA-1909-DR-TN, at 2-3 (Feb. 12, 2014).

[9] Id.

[10] Id.; see also Technical Memorandum from Professional Engineer, Brown and Caldwell, prepared for Metropolitan Water Services Nashville, at Attachment A (May 27, 2011) (referencing the National Electric Code (NEC) that forbids the use of electrical equipment and connections “…deteriorated by corrosion, chemical action, or overheating” as support for the Applicant’s assertion that various electrical components had to be replaced)    [hereinafter Technical Memorandum 2].

[11] See Design Guide for Improving Critical Facility Safety from Flooding and High Winds, FEMA 543, (Jan. 2007) [hereinafter FEMA 543]; see also Floodproofing Non-Residential Buildings, FEMA P-936, (July 2013) [hereinafter FEMA P-936].

[12] FEMA P-348, at 2-27. 

[13] Id., at 2-28.

[14] Id., at 3.3-2.

[15] Id., at 2-28. 

[16] FEMA 543, at 2-50.

[17] Id.; see also FEMA Mitigation Assessment Team (MAT) Report: Hurricane Sandy in New Jersey and New York, FEMA P-942, at 5-26 (Nov. 2013) (providing, “[i]n general, all inundated electrical components had to be replaced, including electric controls and SCADA systems. Other equipment and systems damaged by floodwater included boilers, communication systems, fire protection systems, settling tanks, and biological systems for treatment.”) [hereinafter FEMA P-942].

[18] FEMA 543, at 2-50.

[19] Id.

[20] See FEMA P-936, at 4-22.

[21] Id.

[22] Id.

[23] Id. (providing that, “conductors should be replaced after flooding unless it can be confirmed that they have not been damaged from inundation”).

[24]During evaluation of the second appeal, FEMA consulted a professional engineer (PE) regarding the validity of the Applicant’s assertions regarding the excluded work items.  The PE reviewed the Applicant’s appeal documentation submitted on first and second appeal, FEMA policy, and FEMA guidance to form a professional opinion regarding the eligibility of work items the Applicant claims were improperly excluded in PW 5541.  The PE concluded that the Applicant’s documentation was sufficient to establish that the excluded items were damaged by the flood.  See generally Email from Professional Engineer, FEMA to PA Appeals Analyst, FEMA (Aug. 15, 2014, 5:24 pm) (on file with FEMA).

[25] Stafford Act § 406(a)(1)(A), 42 U.S.C. § 5172.

[26] Public Assistance Guide, FEMA 322, at 40 (June 2007).

[27] See Office of Mgmt. & Budget, Exec. Office of the President, OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, at Attachment A  (2004) (codified at 2 C.F.R. § 225).

[28] Nashville-Davidson County, FEMA-1909-DR-TN, Attachments.

 

28 Dec 2014
Appeal Type: 
2nd
Report Type: 
PW
Appeal Categories: 
Applicant Name: 
Nashville-Davidson County
Disaster Number: 
1909-DR-TN
DSR: 
5495
Date Signed: 
Tuesday, December 16, 2014
PA ID: 
037-52004-00
Summary/Brief: 

Conclusion:  Pursuant to 44 C.F.R. § 206.223, the work items excluded in the original version of PW 5495 are eligible under the PA Program.  In addition, the Applicant provided sufficient documentation to substantiate $24,923.00 in additional PA funding.

Summary Paragraph

In May 2010, extensive flooding throughout Nashville-Davidson County caused damage to the Dry Creek Wastewater Treatment Plant (Facility).  The Facility is the sole source of wastewater treatment for the northeast area of Nashville-Davidson County.  FEMA drafted PW 5495 to address damage to the Ferric Chloride Building of the Facility.  FEMA obligated PW 5495 for $8,298.92.  In the first appeal, the Applicant asserted that FEMA made several errors concerning the scope of work and associated funding necessary to restore the Facility to its pre-disaster condition for PW 5495.  The Regional Administrator (RA) partially approved PW 5495 for $8,672.25 for resident engineering costs, metal door replacement, and associated construction management costs.  However, the RA determined that the first appeal did not provide the level of information necessary to make eligibility determinations on the other excluded items.  In the second appeal, the Applicant asserts that FEMA failed to include funding for replacement of cables, conduits, instrumentation, and other miscellaneous equipment. 

Authorities and Second Appeals

  • Stafford Act § 406, 42 U.S.C. § 5172.
  • 44 C.F.R. § 206.223(a).
  • OMB Circular A-87, 2 C.F.R. § 225.
  • FEMA P-348, at 2-27, 2-28, and 3.3-2.
  • FEMA 543, at 2-50.
  • FEMA P-936, at 4-22.
  • FEMA P-942, at 5-26.

Headnotes

  • Pursuant to 44 C.F.R. § 206.223(a), an eligible item of work must be required as the result of the disaster event.
    • Based on FEMA P-348, FEMA 543, FEMA P-936, and FEMA P-942, and further substantiated by analysis from a Professional Engineer, FEMA determined that the work items excluded from the original version of PW 5495 are eligible under the PA Program as they were required as a result of the disaster.   
  • Pursuant to OMB Circular A-87, allowable procurement costs must, among other things, be adequately documented.
    • The Applicant must provide adequate procurement process documentation.



 

Letter: 

December 16, 2014

David Purkey
Director
Tennessee Emergency Management Agency
3041 Sidco Drive, P.O. Box 41502
Nashville, TN 37204-1502

Re: Second Appeal – Nashville-Davidson County, PA ID 037-52004-00, FEMA-1909-DR-TN, Project Worksheet (PW) 5495 – Scope of Work

Dear Mr. Purkey:

This is in response to a letter from your office dated March 13, 2014, which transmitted the referenced second appeal on behalf of the Metropolitan Government of Nashville and Davidson County (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $24,923.00 in Public Assistance (PA) funding for various items excluded from PW 5495.

As explained in the enclosed analysis, I have determined that, pursuant to 44 C.F.R. § 206.223, the work items excluded in the original version of PW 5495 are eligible under the PA Program.  In addition, the Applicant provided sufficient documentation to substantiate $24,923.00 in additional PA funding.  Therefore, I am granting the appeal contingent upon the Applicant’s ability to produce documents substantiating proper procurement.  The Applicant must submit this documentation to FEMA Region IV within 30 days of this decision.  By copy of this letter, I am requesting the Acting Regional Administrator 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:  Robert Samaan
       Acting Regional Administrator
       FEMA Region IV


 

 



 

Analysis: 

Background

In May 2010, extensive flooding throughout Nashville and Davidson County caused damage to the Metropolitan Government of Nashville and Davidson County’s (Nashville-Davidson or Applicant) Dry Creek Wastewater Treatment Plant (Facility).  The Facility is the sole source of wastewater treatment for the northeast area of Nashville-Davidson County.  FEMA drafted PW 5495 to address damage to the Ferric Chloride Building of the Facility.  FEMA obligated PW 5495 for $8,298.92 based on a project cost estimate using RS Means and other sources.   

First Appeal

In the first appeal letter, dated June 8, 2011, the Applicant asserted that FEMA made several errors concerning the scope of work and associated funding necessary to restore the Facility to its predisaster condition for PW 5495.  In that appeal the Applicant presented four distinct issues.  First, the Applicant requested that FEMA revise PW 5495 to reflect the actual effort expended for on-site resident engineering tasks associated with the recovery of the Facility.  Second, the Applicant asserted that it should be reimbursed for the replacement of metal doors contaminated by floodwater.  Third, the Applicant asserted that, pursuant to FEMA Publication 348, Protecting Building Utilities from Flood Damage (FEMA P-348), FEMA should authorize the complete replacement of all electrical wires and cables because the Facility was submerged in nine feet of contaminated floodwaters and the electrical equipment was not salvageable.[1]  Finally, the Applicant asserted that a Technical Memorandum, prepared by Brown and Caldwell Engineers (Consulting Engineers), identified several areas where damaged items were missed and should have been included in PW 5495.[2]   

In a letter dated December 20, 2013, the Region IV Regional Administrator (RA) partially granted the appeal, approving $8,672.25 for the first and second issues presented by the Applicant (i.e., resident engineering costs, metal door replacement, and associated construction management costs).  However, the RA determined that Nashville-Davidson had not provided sufficient information to substantiate complete replacement of all electrical wires and cables or other items that were excluded from the PW (third and fourth issues, respectively). Specifically, the RA determined that the format in which the Applicant documented costs made no distinction between existing line item costs included in PW 5495 and the appealed scope addition or cost increases.

Second Appeal

In the second appeal, dated March 10, 2014, the Applicant requests reimbursement for issues three and four (i.e., excluded work described above), in the amount of $24,923.00.  The second appeal includes $811.00 for replacement of conduits and $24,112.00 for replacement of various conductors—items which the applicant claims were excluded in the original PW. 

The Applicant also asserts that the original PW is based on an inadequate cost level and explains that it used bid documents to establish the cost to restore the Facility to predisaster condition.  In the Applicant’s second appeal, it contends that, had FEMA used its bid documents during the preparation of PW 5495, the excluded work items that were damaged as the result of the disaster would have qualified for PA funding.  

Discussion

Work Eligibility

The Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), Section 406, authorizes FEMA to make contributions to a local government to restore eligible facilities on the basis of the design of such facilities as they existed immediately prior to the disaster.[3]  Pursuant to Title 44 of the Code of Federal Regulations (44 C.F.R.) § 206.223(a), which implements that provision, an eligible item of work must be required as the result of the disaster event, be located within a designated disaster area, and be the legal responsibility of the applicant.[4] The Applicant has fulfilled the latter two requirements of § 206.223(a); the issue on appeal is whether the work is required as a result of the disaster event.

As stated earlier, in the first appeal determination, the RA noted that the items excluded from the scope of work may be eligible for Public Assistance (PA) funding.  However, the RA could neither determine whether all items were damaged by the disaster nor distinguish between line item costs already included in PW 5495 and additional scope or cost increases not previously included in PW 5495.

It must be noted that, among other things, the Applicant’s Consulting Engineers conducted a detailed flood damage assessment of the Facility.[5]  The assessment included high water mark locations and an inventory of equipment that was reviewed by a licensed Professional Engineer.[6]  The inventory list is a detailed record that accounts for all of the Facility’s electrical equipment and distinguishes between disaster-damaged and non-damaged equipment.[7]  The inventory list was the basis for the scope of work in bid documents.[8]  In addition to the water mark locations and inventory list, the assessment notes that the floodwater was contaminated and, therefore, likely had harmful impacts on electrical components.[9]  The Consulting Engineers substantiate this claim by providing laboratory reports that indicated the presence of contaminating factors, including pH and corrosivity levels above the Environmental Protection Agency’s recommended levels.[10]

Generally, FEMA policy and guidance states that wet electrical components must be replaced.[11]  Specifically, FEMA P-348 recommends replacing any wire or cable that is listed for dry locations that has been submerged in water[12] and notes that “sediments and contaminants contained in water may find their way into the internal components of installed electrical products and may remain there even after the products have been dried or washed….”[13]  Furthermore, it explains that “[i]nundation of electrical equipment in a building creates the danger of short circuits, electrical shock, damage of electric components and appliances, injury, fire, or even death.”[14]  Accordingly, FEMA P-348 recommends replacing damaged electrical components with new undamaged products because the damaged components are not suitable for continued use.[15]

FEMA 543, Design Guide for Improving Critical Facility Safety from Flooding and High Winds (FEMA 543), further explains that, in general, if electrical components get wet, they are likely to be damaged or destroyed.[16]  It provides that “electrical systems and components, and electrical controls of heating, ventilation, and air conditioning systems, are subject to damage simply by getting wet, even for short durations.”[17]  Additionally, unless specifically designed for wet locations, switches and other electrical components can short out due to deposits of sediment, or otherwise not function even when allowed to dry before operation.[18]  FEMA 543 also notes that wiring and components that have been submerged may be functional, although generally it is more cost-effective to discard flooded outlets, switches, and other less expensive components than to attempt thorough cleaning.[19]

In addition to FEMA 543, FEMA Publication 936, Floodproofing Non-Residential Buildings (FEMA P-936), describes conditions under which wiring and cables should be considered damaged.[20]  Specifically, FEMA P-936 explains that cable systems cannot be cleaned if floodwaters have entered the exterior sheaths of the cables.[21]  However, conduits inundated with flooding may be cleaned, provided the floodwaters are not corrosive or otherwise damaging and the conduits are routed and installed to prevent water from accumulating inside them.[22]  Furthermore, after flooding it should be assumed that conductors are damaged unless it can be proven otherwise.[23]

Based upon the Applicant’s supporting documents, and the above noted agency policy and guidance, FEMA has determined that contaminated floodwater inundated the Facility and, therefore, likely had detrimental impacts on its electrical components.[24]  As such, the items excluded from the original scope of work in PW 5495 are eligible for Public Assistance funding.

Allowable Costs

Pursuant to the Stafford Act § 406, FEMA is authorized to provide reimbursement for the associated expenses incurred by a local government during the repair, restoration reconstruction, or replacement of a facility damaged as the result of a declared disaster.[25]  Generally, costs that can be directly tied to the performance of eligible work are eligible for FEMA reimbursement.[26]  However, these costs must, among other things, be reasonable and necessary to accomplish the work, comply with applicable federal, state, and local laws, regulations and procurement requirements, and be adequately documented.[27]  Adequate documentation in this instance would include documents that validate actual costs for work items claimed in this appeal.

As explained above, the work items requested by the Applicant are necessary to restore the Facility to predisaster condition, design, and function.  With the second appeal, the Applicant provided bid documents, invoices, order forms, accounting reports, and other documentation that validate the scope and actual costs for the work items requested in this appeal.[28]  The costs associated with the requested work items were adequately documented by the Applicant.  Accordingly, the costs are eligible for FEMA reimbursement.  

Conclusion

Pursuant to 44 C.F.R. § 206.223(a), the work items excluded in the original version of PW 5495 are eligible under the PA Program.  In addition, pursuant to OMB Circular A-87, the Applicant provided sufficient documentation to substantiate its request for additional PA funding.  Accordingly, this appeal is granted contingent upon the Applicant’s ability to produce documents substantiating proper procurement.  The Applicant must submit this documentation to FEMA Region IV within 30 days of this decision.


[1] See Protecting Building Utilities from Flood Damage, FEMA P-348, at 2-27 (Nov. 1999) [hereinafter FEMA 348].

[2] See generally Technical Memorandum from Maintenance and Reliability Specialist, Brown and Caldwell, prepared for Nashville Metropolitan Water Services, (Sep. 7, 2010) [hereinafter Technical Memorandum 1].

[3] The Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, Pub. L. No. 93-288, § 406, 42 U.S.C. § 5172 (2007).

[4] 44 C.F.R. § 206.223(a) (2009).

[5] See generally Technical Memorandum 1.

[6] Id.

[7] Id.

[8] Second Appeal, Nashville-Davidson County, FEMA-1909-DR-TN, at 3 (Mar. 10, 2014).

[9] Id.

[10] Id.; see also Technical Memorandum from Professional Engineer, Brown and Caldwell, prepared for Metropolitan Water Services Nashville, at Attachment A (May 27, 2011) (referencing the National Electric Code (NEC) that forbids the use of electrical equipment and connections “…deteriorated by corrosion, chemical action, or overheating” as support for the Applicant’s assertion that various electrical components had to be replaced)    [hereinafter Technical Memorandum 2].

[11] See Design Guide for Improving Critical Facility Safety from Flooding and High Winds, FEMA 543, (Jan. 2007) [hereinafter FEMA 543]; see also Floodproofing Non-Residential Buildings, FEMA P-936, (July 2013) [hereinafter FEMA P-936].

[12] FEMA P-348, at 2-27. 

[13] Id., at 2-28.

[14] Id., at 3.3-2.

[15] Id., at 2-28. 

[16] FEMA 543, at 2-50.

[17] Id.; see also FEMA Mitigation Assessment Team (MAT) Report: Hurricane Sandy in New Jersey and New York, FEMA P-942, at 5-26 (Nov. 2013) (providing, “[i]n general, all inundated electrical components had to be replaced, including electric controls and SCADA systems. Other equipment and systems damaged by floodwater included boilers, communication systems, fire protection systems, settling tanks, and biological systems for treatment.”) [hereinafter FEMA P-942].

[18] FEMA 543, at 2-50.

[19] Id.

[20] See FEMA P-936, at 4-22.

[21] Id.

[22] Id.

[23] Id. (providing that, “conductors should be replaced after flooding unless it can be confirmed that they have not been damaged from inundation”).

[24]During evaluation of the second appeal, FEMA consulted a professional engineer (PE) regarding the validity of the Applicant’s assertions regarding the excluded work items.  The PE reviewed the Applicant’s appeal documentation submitted on first and second appeal, FEMA policy, and FEMA guidance to form a professional opinion regarding the eligibility of work items the Applicant claims were improperly excluded in PW 5495.  The PE concluded that the Applicant’s documentation was sufficient to establish that the excluded items were damaged by the flood.  See generally Email from Professional Engineer, FEMA to PA Appeals Analyst, FEMA (Aug. 15, 2014, 5:24 pm) (on file with FEMA).

[25] Stafford Act § 406(a)(1)(A), 42 U.S.C. § 5172.

[26] Public Assistance Guide, FEMA 322, at 40 (June 2007).

[27] See Office of Mgmt. & Budget, Exec. Office of the President, OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, at Attachment A  (2004) (codified at 2 C.F.R. § 225).

[28] Nashville-Davidson County, FEMA-1909-DR-TN, Attachments.

 

23 Dec 2014
Appeal Type: 
2nd
Report Type: 
PW
Appeal Categories: 
Applicant Name: 
Galveston Center for Transportation and Commerce
Disaster Number: 
1791-DR-TX
DSR: 
12407, 8521, and 9103
Date Signed: 
Tuesday, December 16, 2014
PA ID: 
167-U7MAQ-00
Summary/Brief: 

Conclusion:  NFIP reductions for PW 12407 are not appropriate because insurance proceeds were not available to the Applicant.  Mold-related NFIP reductions for PWs 8521 and 9103 are appropriate because NFIP covers mold remediation when mold abatement activities are performed following flood-related damages.

Summary Paragraph

The Galveston Center for Transportation and Commerce (Applicant) is responsible for operating and maintaining the Galveston Railroad Depot Museum.  Hurricane Ike damaged several museum buildings including the Depot Building, the Theater, and the West Ticket Office.  FEMA prepared PWs 12407, 8521, and 9103 for the repairs to the three buildings for $87,329.00, $62,647.00, and $115,749.00, respectively.  FEMA applied mandatory National Flood Insurance Program (NFIP) reductions to all three PWs and deducted the maximum proceeds available under the NFIP from the approved cost estimates.  The Applicant submitted a first appeal requesting FEMA reconsider the insurance reductions and the requirement to obtain and maintain insurance for each PW.  The FEMA Regional Administrator partially approved the Applicant’s first appeal.  The Applicant submitted a second appeal of FEMA’s determination regarding the mandatory NFIP reductions for PWs 12407, 8521, and 9103.  For PW 12407, the Applicant states that NFIP insurance coverage for the Railroad Depot Building was not available because the owner of the building had already purchased the maximum amount of insurance allowed for one structure.  The Applicant also asserts that the insurance reductions taken by FEMA on PWs 8521 and 9103 were excessive because the NFIP would not have covered mold remediation.

Authorities and Second Appeals

  • Stafford Act § 406(d), 42 U.S.C § 5172.
  • SFIP § V(D)(4).

Headnotes

  • Stafford Act § 406(d) states that any facility located in a special flood hazard area, identified more than  year by the Director, that is damaged by flooding in a major disaster and is not covered by flood insurance on the date the flooding occurred will have any federal assistance available reduced by the maximum amount of insurance proceeds which would have been payable through the National Flood Insurance Act of 1968.
    • None of the Applicant’s facilities included in the second appeal were covered on the date the flooding occurred.
  • Standard Flood Insurance Policy (SFIP) § V(D)(4) states that mold damage resulting from “failure to inspect and maintain the property after a flood recedes” is not covered by NFIP.

The Applicant performed mold remediation approximately one year after the flooding; however, initial mold abatement activities were conducted to include the application of mildewcide and fungicide to prevent further contamination.

Letter: 

December 16, 2014

W. Nim Kidd, CEM
Chief
Texas Division of Emergency Management
PO Box 4087
Austin, TX 78773-0220

Re: Second Appeal-Galveston Center for Transportation and Commerce, PA ID 167-U7MAQ-00 FEMA-1791-DR-TX; Project Worksheets (PW) 12407, 8521, and 9103 - Insurance

Dear Chief Kidd:

This is in response to a letter from your office dated October 9, 2012, which transmitted the referenced second appeal on behalf of the Galveston Center for Transportation and Commerce (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) mandatory National Flood Insurance Program (NFIP) reductions for PW 12407 in the amount of $194,241.90, and mold-related NFIP reductions for PWs 8521 and 9103 in the amounts $169,945.00 and $103,512.00, respectively.

As explained in the enclosed analysis, I have reviewed the information submitted with the appeal and have determined that the NFIP reductions of the eligible funding provided by PW 12407 are not appropriate.  Accordingly, I am granting this portion of the appeal.  However, the mold-related NFIP reductions of the eligible funding provided by PWs 8521 and 9103 are appropriate; therefore, this portion of the appeal is denied.  By copy of this letter, I am requesting the Regional Administrator take appropriate action to implement this determination. 

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

Sincerely,

/s/

William W. Roche
Director
Public Assistance Division

Enclosure

cc:  George A. Robinson
       Regional Administrator
       FEMA Region VI

Analysis: 

Background

The Galveston Center for Transportation and Commerce (Applicant) is a private non-profit organization legally responsible for the facilities identified in PWs 12407,  8521, and 9103. The Applicant operates the Galveston Railroad Museum.  Hurricane Ike, which struck Galveston County on September 13, 2008, damaged several museum buildings including the Railroad Depot, the Theater, and the West Ticket Office.  FEMA prepared Project Worksheets (PWs) 12407 (Railroad Depot), 8521 (Theater), and 9103 (West Ticket Office) for the repairs to the three buildings for $87,329.00, $62,647.00, and $115,749.00, respectively.  FEMA applied mandatory National Flood Insurance Program (NFIP) reductions to all three PWs and deducted the maximum proceeds available under the NFIP from the approved cost estimates.

First Appeal

The Applicant submitted their first appeal of nine PWs, including PWs 12407, 8521, and 9103, on March 1, 2012, requesting FEMA reconsider the insurance reductions and the requirement to obtain and maintain (O&M) insurance.  In response to the first appeal, FEMA performed a comprehensive insurance review on all nine PWs.  On June 8, 2012, the FEMA Region VI Regional Administrator (RA) partially approved the Applicant’s first appeal.  The RA’s determinations relative to PWs 12407, 8521, and 9103 are summarized below.

  • PW 12407 (Railroad Depot) – The mandatory NFIP reduction of $194,241.90 was appropriate; however, FEMA removed the O&M requirement, because the Moody Foundation, the owner of the building,  previously purchased the maximum NFIP coverage.  No additional coverage was available.
  • PW 8521 (Theater) – FEMA reduced the mandatory NFIP reduction of $260,822.00 to $259,575.00, increasing funding to $63,894.00.  The O&M requirement was appropriate.
  • PW 9103 (West Ticket Office) – The mandatory NFIP reduction of $154,867.00 was appropriate as was the O&M requirement.

Second Appeal

On August 28, 2012, the Applicant submitted its second appeal of FEMA’s determination regarding the mandatory NFIP reductions for PWs 12407, 8521, and 9103.  For PW 12407, the Applicant states that NFIP insurance coverage for the Railroad Depot, which occupies a portion of the first floor of an eleven story building, was not available because the owner of the building purchased the maximum amount of insurance allowed for one structure.  Furthermore, the policy holder received the maximum NFIP insurance proceeds of $500,000.00--which did not cover damages incurred by the museum portion of the building.  Therefore, the Applicant asserts that FEMA should not have applied an NFIP reduction to PW 12407.  The Applicant also asserts that the insurance reductions taken by FEMA on PWs 8521 and 9103 were excessive because the NFIP would not have covered mold remediation.  Further, the Applicant states that the cost estimates approved under PWs 8521 and 9103 are low due to building upgrades required by codes and standards.  The Applicant is preparing to submit a claim to FEMA for the costs associated with the code and standard upgrades and asserts that FEMA should not apply an NFIP reduction to those costs because code and standard upgrades are not covered under the NFIP.  The Applicant is requesting that the FEMA Recovery Directorate Assistant Administrator advise the Region VI closeout staff that no NFIP reduction should be applied to costs associated with code and standard upgrades.  The Texas Division of Emergency Management (Grantee) transmitted the appeal to FEMA on October 9, 2012, supporting the Applicant’s request.

Discussion

If a facility located in a special flood hazard area identified for more than one year is damaged by flooding and the facility is not covered by flood insurance, the federal assistance for the repair of the facility will be reduced by the lesser of the value of the facility or the maximum amount of insurance proceeds which would have been payable if the facility had been covered by flood insurance under the National Flood Insurance Act of 1968.[1]  The three facilities at issue are located in a special flood hazard area and were not covered by flood insurance when Hurricane Ike struck. 

PW 12407 – Railroad Depot Building

FEMA applied a mandatory NFIP reduction of $194,241.90 to PW 12407.  The Applicant asserts that the mandatory insurance deduction was inappropriate because the depot is not an insurable building.  The applicant explains that the Railroad Depot is not a stand-alone building rather it occupies approximately 5,340 square feet of the first floor in the Shearn Moody Plaza Building.  At the time of the event the owner of the building had obtained the maximum coverage available under the NFIP for that building, $500,000.00, and pursuant to the terms of the insurance, the area occupied by the Railroad Depot was excluded from coverage.[2]  In short the Applicant concludes that the NFIP reductions were inappropriate because they were effectively precluded from obtaining insurance, and therefore the NFIP reduction of $194,241.90 should be restored.

PWs 8521 and 9103

FEMA applied mandatory NFIP reductions of $259,575.00 and $154,867.00 to PWs 8521 and 9103, respectively.  The cost estimates approved under both PWs include costs for mold remediation, $169,945.00 and $103,512.00, respectively, and FEMA applied the NFIP reduction to those costs as well as to the disaster damage repair costs.  The Applicant asserts that NFIP coverage for mold remediation is extremely limited citing the Standard Flood Insurance Policy (SFIP) § V(D)(4) which states, “We do not insure for direct physical loss caused directly or indirectly by … water, moisture, mildew, or mold damage that results primarily from any condition … that is within your control including but not limited to… failure to inspect and maintain the property after a flood recedes.”[3]  The Applicant includes an affidavit with its appeal from a retired Director of Claims for the NFIP who states:

  • “The likelihood that the NFIP would have paid any significant portion of the mold remediation costs is remote;”[4]
  • “The unlikely payment of insurance proceeds under the SFIP is the result of the extended time between emergency abatement and final restoration, the significant uncovered expenses incurred for monitoring and testing and assessment and reporting of mold and asbestos remediation, the presence of asbestos, the impact of that asbestos on remediation costs, and the limited coverage for mold and asbestos provided by the SFIP.”[5]

Further, the Applicant argues that the SFIP limits any coverage involving asbestos to $10,000.00.  The Applicant cites the SFIP § III(C)(3), which provides that the coverage for damage caused by pollutants is limited to $10,000.00 and does not include testing for or the monitoring of pollutants.[6]

While the SFIP does not specifically state whether the mold remediation funded under PWs 8521 and 9103 would be covered in the Applicant’s case, FEMA’s NFIP Adjuster Claims Manual provides examples of coverage related to mold remediation.  For instance, if after the insured has taken mitigation measures, mold reappears and causes damage to the upper portions of walls, ceilings, etc., the NFIP will honor such claims if the insured can show that mitigation attempts were made.[7]  In this case, the Applicant took prudent mitigation measures by hiring a contractor to perform emergency mold abatement and to apply mildewcide shortly after Hurricane Ike.  Therefore, it is likely that the mold remediation work funded under PWs 8521 and 9103 would have been covered.  Further, the section of the SFIP cited by the Applicant regarding pollutants does not apply to the work at issue under PWs 8521 and 9103.  That section refers to damage caused by pollutants.  The asbestos contained in the building materials did not cause any damage.

Based on the documentation submitted by the Applicant with its appeal, had the Theater and the West Ticket Office been insured under the NFIP, the Applicant likely would have received insurance proceeds to cover the mold remediation work included in the scopes of work of PWs 8521 and 9103 and the coverage for the removal and replacement of asbestos containing materials would not have been limited to $10,000.00.  Accordingly, applying the mandatory NFIP reduction to the costs associated with mold remediation is appropriate.

In its appeal, the Applicant provides its actual, incurred mold and asbestos remediation costs which include costs for mold consulting and testing, microbial inspection, and asbestos surveys ($8,489.00 for PW 8521 and $2,377.00 for PW 9103).  The Applicant states that the NFIP does not cover costs for the assessment and monitoring of mold.  While this is the case, the estimates approved for mold remediation under PWs 8521 and 9103 do not include costs for consulting, inspection, and surveys performed prior to the remediation work.  Therefore, no adjustment to the NFIP reductions under PWs 8521 and 9103 to account for the lack of coverage for such activity is necessary.

Regarding the Applicant’s request that the FEMA Recovery Directorate Assistant Administrator advise the Region VI closeout staff on the applicability of NFIP reductions to costs associated with code and standard upgrades, it would not be appropriate to address this request as part of a second appeal response because the FEMA Regional Administrator has not made a prior determination on the issue.

Conclusion

The Railroad Depot is a portion of an insured building located in a Special Flood Hazard Area.  However, because the maximum proceeds available under the existing policy were distributed to the policy holder and did not include any flood-related damages specific to the museum, no NFIP proceeds were available to the Applicant. Therefore, any NFIP-related reductions to PW 12407 should not apply.  The mandatory NFIP reductions applicable to mold-related damages for PW 8521 and PW 9103 are appropriate given the emergency mold abatement activities conducted, and funded by FEMA, following Hurricane Ike.


[1] The Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, Pub. L. No. 93-288, § 406(d)(1) and (2), 42 U.S.C. § 5172(d) (2007); see also 44 C.F.R. §§ 206.250(d) and 206.252(a) (2008). 

[2] See Moody Foundation insurance declarations; see also letter from President, Shearn Moody Plaza Corporation, to Executive Director, Galveston Railroad Museum (Mar. 17, 2014) (stating no insurance proceeds were payable to the Applicant) [hereinafter Letter from President].

[3] National Flood Insurance Program (NFIP) General Property Form: Standard Flood Insurance Policy (SFIP) § V(D)(4)(b)(3) (2007) (codified at 44 C.F.R. Pt. 61, App. A(2)).

[4] Affidavit  from James Shortley, (September 29, 2012) [hereinafter Affidavit 2]. 

[5] Affidavit 2, supra note 4.

[6] 44 C.F.R. Pt. 61, App. (A)(2) at § III(C)(3)

[7] National Flood Insurance Policy (NFIP) Adjuster Claims Manual § VIII(C)(2) at VIII11 (2004) [hereinafter NFIP Adjuster Claims Manual].

 

23 Dec 2014
Appeal Type: 
2nd
Report Type: 
PW
Appeal Categories: 
Applicant Name: 
Village of Pardeeville
Disaster Number: 
1768-DR-WI
DSR: 
2624
Date Signed: 
Tuesday, December 16, 2014
PA ID: 
021-61100-00
Summary/Brief: 

Conclusion:  The Applicant completed work on a dam project, and the Grantee requested an improved project, without first allowing FEMA officials to conduct a review for compliance with EHP authorities.  In addition, the environmental review conducted as part of another federal agency’s grant program did not encompass the work on the dam.  Therefore, FEMA correctly denied funding for the project.

Summary Paragraph

The Village of Pardeeville (Applicant) performed repairs to a stoplog dam facility on Park Lake damaged by a summer 2008 flooding event.  The Applicant proceeded to make improvements to the facility, and the State of Wisconsin Department of Military Affairs, Division of Emergency Management (Grantee), requested approval of an improved project after the work had been completed, before FEMA could perform a review for compliance with environmental and historic preservation (EHP) authorities.  Moreover, an environmental review the Applicant’s contractor completed as part of the process for receiving grant funding under the U.S. Department of Housing and Urban Development’s Community Development Block Grant Emergency Assistance Program (HUD CDBG-EAP) did not address the work performed on the dam structure.  Based on the after-the-fact request for an improved project and inapplicability of the environmental review that had been performed, FEMA denied funding under PW 2624.  The Applicant filed a first appeal, asserting that the environmental review encompassed the work on the stoplog dam.  The FEMA Region V Regional Administrator denied the first appeal, concluding that the environmental assessment did not apply to the stoplog dam work.  On second appeal, the Applicant again asserted that the environmental review applied to the stoplog dam project, and set forth additional arguments.

Authorities and Second Appeals

  • Stafford Act § 316, 42 U.S.C. § 5159
  • 44 C.F.R. § 206.203(c)(2); 44 C.F.R. §§ 10.8(c) and (d)
  • PA Guide, at 127-128
  • City of El Dorado Springs, FEMA 1847-DR-MO
  • Houston County, FEMA-1835-DR-AL
  • Mendocino County, FEMA-1628-DR-CA

Headnotes

  • When providing funding for a project under the PA Program, FEMA must consider a range of federal statutes, regulations, and Executive Orders related to EHP. 
  • FEMA must ensure compliance with EHP authorities before providing funding.  When an applicant initiates or completes work on a project before FEMA is able to conduct the necessary environmental and historic preservation compliance review, PA funding generally is not eligible.

Exemptions from the National Environmental Protection Act, whether statutory or categorical, do not exempt FEMA’s actions from compliance with all other applicable EHP authorities.

Letter: 

December 16, 2014

Brian M. Satula
Executive Director
Wisconsin Emergency Management
2400 Wright Street
Madison, WI  53707-7865

Re: Second Appeal—Village of Pardeeville, PA ID 021-61100-00, FEMA-1768-DR-WI, Project Worksheet (PW) 2624 – Environmental Compliance

Dear Mr. Satula:

This is in response to a letter from your office dated October 9, 2013, which transmitted the referenced second appeal on behalf of the Village of Pardeeville (Applicant).  The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency (FEMA) determination that Public Assistance funding for a dam project because work was completed before an environmental and historic preservation (EHP) review was completed.

As explained in the enclosed analysis, the Applicant completed the work on the dam under Project Worksheet (PW) 2624, and your office requested an improved project, without first allowing FEMA to conduct a review for compliance with EHP authorities.  Moreover, the environmental review conducted as part of another federal agency’s grant program, which the Applicant submitted in support of its appeal, does not encompass the work on the dam under PW 2624.  FEMA correctly determined that funding was not eligible for this project.  Therefore, I am denying the second appeal. 

Please inform the Applicant of my decision.  This determination constitutes 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:  Andrew Velasquez, III
      Regional Administrator
      FEMA Region V

Analysis: 

Background

In the summer of 2008, heavy rains and severe storms caused flooding throughout the Village of Pardeeville (Applicant), including flooding of the Fox River and its tributaries within the village.  The flooding caused damage to two of the Applicant’s dam structures located along Park Lake.  One structure is a hydroelectric facility located between Park Lake and Spring Lake, and the other is a spillway consisting of stoplog gates located approximately one-third of a mile north of the hydroelectric facility, along the Fox River and Park Lake.  FEMA prepared separate Project Worksheets (PWs) to document the work and costs of repairing these structures.  PW 2566 addressed the hydroelectric facility, and PW 2624 addressed the stoplog dam.  For both projects, the Applicant pursued repairs both to restore the facilities to their pre-disaster condition, as well as to make improvements.  The repair work was performed using contract labor. 

The U.S. Housing and Urban Development’s (HUD) Community Development Block Grant Emergency Assistance Program (CDBG-EAP) funded portions of the work on the projects.  In July 2010, as part of the CDBG-EAP process, the Applicant’s contractor prepared an environmental review.

On December 6, 2011, the State of Wisconsin Department of Military Affairs, Division of Emergency Management (Grantee), requested approval of an improved project for the stoplog dam structure (PW 2624) after work already had been completed.  FEMA environmental and historic preservation (EHP) officials reviewed the request and determined that the environmental review prepared under the CDBG-EAP grant process did not address the work associated with the stoplog dam.  FEMA determined, therefore, that the work had been performed without the agency having the opportunity to review it for compliance EHP laws and perform necessary consultations.  Thus, FEMA found that costs associated with the stoplog dam work were ineligible, and in February 2013 deobligated associated funding (totaling $33,637.50) from PW 2624.

First Appeal

The Applicant submitted a first appeal in a letter dated May 2, 2013.  The Applicant stated that FEMA “was aware that we were doing a combined project”[1] with the HUD CDBG-EAP and cited a March 25, 2013 letter from the State of Wisconsin Department of Administration’s Division of Housing as stating that the environmental review conducted as part of the CDBG-EAP grant process covered “all aspects of the projects.”[2]  The Applicant asserted that, according to the letter, the state believed that the Applicant’s project “is in compliance, and that it met with all applicable laws and requirements.”[3]

The FEMA Region V Regional Administrator denied the first appeal in a letter dated
June 13, 2013.  The decision noted FEMA EHP’s determination that the project was non-compliant because “additional work was completed on the project before a necessary FEMA environmental review was completed,” which “circumvented FEMA’s ability to complete the review and consultations that would have been necessary.”[4]        The decision stated that FEMA considered the environmental review prepared under the HUD CDBG-EAP grant and could not find any “evidence that the Park Lake stop-log dam or components were included within that review.”[5]  Because the environmental review did not include the Park Lake stoplog dam structure, the RA concluded, the FEMA EHP officials correctly determined that the project was not in compliance with applicable environmental authorities.

Second Appeal

The Applicant submitted a second appeal in a letter dated August 9, 2013.  The Applicant sets forth numerous arguments in support of its position that its stoplog dam project is eligible for funding.  The Applicant argues, among other things, that:

  • The environmental assessment completed as part of the HUD CDBG-EAP process included the entire scope of work of repairs under PW 2624.
  • PW 2624 involved a small project that doesn’t require an environmental review.
  • PW 2624 was subject to a statutory exclusion (STATEX) from the National Environmental Policy Act (NEPA), but FEMA did not apply the exclusion.
  • PW 2624 was eligible for a categorical exclusion (CATEX) from NEPA, but FEMA did not apply the exclusion.
  • The Applicant never had an opportunity to comply, upfront, with EHP requirements as they were made known to it only after construction had been completed.

The Grantee transmitted the second appeal to the FEMA Region V Regional Administrator in a letter dated October 9, 2013.  The Grantee supports the Applicant’s appeal, stating that the environmental review encompassed the work completed on the stoplog dam.

Discussion

When providing funding for a project under the PA Program, FEMA must consider a range of federal statutes, regulations, and Executive Orders related to EHP, including the NEPA[6], the Endangered Species Act[7], and the National Historic Preservation Act.[8]  FEMA must ensure compliance with these authorities before providing funding.[9]  The compliance review process must be completed before FEMA approves funding and before work is started because “the review may identify steps to be taken or conditions to be met before the project can be implemented,” including possible consultation with other federal agencies and public notification.[10]  When an applicant initiates or completes work on a project before FEMA is able to conduct the necessary EHP compliance review, PA funding generally is not eligible.[11]

Here, the Grantee requested approval of an improved project after work on the Park Lake stoplog dam already had been completed.  The work was completed, and the request submitted, before FEMA EHP officials had an opportunity to conduct necessary reviews for compliance with applicable EHP authorities.  FEMA, therefore, properly denied funding for PW 2624.  

The Applicant and Grantee argue that the July 2010 environmental review prepared by the Applicant’s contractor as part of the HUD CDBG-EAP process encompassed the work performed at the stoplog dam under PW 2624.  Contrary to their assertions, the environmental review does not address the stoplog dam but, instead, the construction of a new Park Lake overflow spillway structure approximately one-third  of a mile south of the stoplog dam, near the hydroelectric facility addressed in PW 2566.  As FEMA EHP officials and the Regional Administrator noted, the environmental review’s narrative, pictures, maps, and schematics did not reference the stoplog dam; the review only addressed the new spillway structure located near the existing hydroelectric facility.

The Applicant’s remaining arguments are without merit.  As to the stoplog dam project being a small PA project,[12] such projects are not exempt from the environmental review process, as the Applicant asserts.  As to whether a statutory exemption from NEPA[13] applied to this project, a November 11, 2008 comment in PW 2624 does state that, based on-scope-of-work information provided by the applicant at the time, the stoplog dam work qualified for an exemption.  However, as discussed, the Applicant completed an improved project, and the Grantee requested approval for it after construction had been completed.  For PA permanent work, the statutory exemption applies only to repair or reconstruction projects that restore facilities substantially to their pre-disaster footprint, function and size; the exemption does not apply to improvements.[14]  As to the possibility of a statutory exemption as well as a categorical exemption[15] from NEPA, even if one or both of those exemptions applied, NEPA represents only one part of the necessary EHP review FEMA must undertake before a project may be funded.  Exemptions from NEPA, whether statutory or categorical, do not exempt FEMA’s actions from compliance with all other applicable EHP authorities.  Finally, the Applicant’s assertion that it was made aware of EHP compliance requirements only after work had been completed is baseless, as the November 11, 2008, PW 2624 entry expressly stated that any changes to the approved scope of work would require further EHP review and that “non-compliance with this requirement may jeopardize the receipt of federal funding.”  The Applicant, therefore, was on notice that any deviations from the approved scope of work would require EHP review.

Conclusion

The Applicant completed an improved project on the Park Lake stoplog dam under PW 2624— and the Grantee requested approval for the improved project—before FEMA could conduct a necessary EHP review.  Moreover, the environmental assessment prepared under the HUD CDBG-EAP process did not apply the stoplog dam project.  FEMA correctly determined that, with the work completed in the absence of the EHP compliance review process, the stoplog dam project was not eligible for funding.


[1] Letter from Administrator, Village of Pardeeville to FEMA Regional Administrator requesting an appeal (May 2, 2013).

[2] Id.

[3] Id.

[4] FEMA First Appeal Analysis, City of Pardeeville, FEMA-1768-DR-WI (June 13, 2013).

[5] Id.

[6] The National Environmental Policy Act of 1969, Pub. L. No. 91-190.

[7] The Endangered Species Act of 1973, Pub. L. No. 93-205.

[8] The National Historic Preservation Act of 1966, Pub. L. No.89-665.

[9] See Public Assistance Guide, FEMA 322 at 127-128, at 127 (June 2007) [hereinafter PA Guide].

[10]  Id. at 128.

[11]  See, e.g., FEMA Second Appeal Analysis, Houston County, Environmental Compliance, FEMA-1835-DR-AL (Feb. 13, 2013); and Mendocino County, Eel River Road,  FEMA-1628-DR-CA (April 9, 2008).

[12]  See 44 C.F.R. § 206.203(c)(2).

[13]  See 42 U.S.C. § 5159; 44 C.F.R. § 10.8(c).

[14]  See 44 C.F.R. § 10.8(c)(2); PA Guide at 129.

[15]  See 44 C.F.R. § 10.8(d).

 

3 Dec 2014
Appeal Type: 
2nd
Report Type: 
PW
Appeal Categories: 
Applicant Name: 
City of Minot
Disaster Number: 
1981-DR-ND
DSR: 
4744 and 4745
Date Signed: 
Tuesday, December 2, 2014
PA ID: 
101-53380-00
Summary/Brief: 

 

Conclusion: The contracted electrical repair work was necessary to restore the City of Minot’s (Applicant) lift stations and the bid costs were reasonable.  The cost increase related to the change in scope of work approved at first appeal is eligible; however, as these are small projects, the cost increase not associated with scope changes must be requested through small project netting.  The Applicant did not substantiate that claimed costs for engineering and design services were tied to the approved scope of work.  Further, heating and ventilation system upgrades performed at both lift stations were not required by a code or standard and are not eligible for funding.

Summary Paragraph

The Applicant’s Carney and Burdick Lift Stations were damaged during a 2011 flood event.  FEMA prepared PWs 4744 and 4745 for the permanent repairs to the damaged pumps and electrical and mechanical components at each lift station. The Applicant’s first appeals asserted that the funding approved was for emergency repair and did not include costs for permanent repairs or required code upgrades for certain mechanical components.  The Applicant also requested funding for engineering and design services for each lift station.  FEMA partially approved the appeal, providing additional estimated costs for permanent repairs and engineering and design services, but denied funding for upgrades to the mechanical components because they were not required by codes or standards.  The Applicant’s second appeal asserted that the plans provided to FEMA included a detailed description of the permanent electrical repairs and that the PWs did not encompass all of the necessary repair work.  The Applicant also asserted that FEMA underestimated project costs; the mechanical upgrades were required by code; and that its design engineer evenly divided actual costs for work performed for multiple facilities at each impacted ones.

Authorities Discussed

  • 44 C.F.R. § 206.204(e)(2).
  • 44 C.F.R. § 206.226(d).
  • PA Guide, at 40.

Headnotes

  • 44 C.F.R. § 206.204(e)(2) provides that the applicant may submit an appeal for additional funding for small projects within 60 days following the completion of all its small projects
  • 44 C.F.R. § 206.226(d) provides that codes and standards must apply to the type of repair required.  The standards referenced in the Applicant’s appeals provide recommendations for the safe design of wastewater treatment facilities, but neither standard requires upgrades to damaged components of a ventilation system.
  • The PA Guide states that costs must be directly tied to the performance of eligible work
    • The Applicant failed to demonstrate its claimed costs for engineering and design services were directly tied to the approved scope of work. 
  • The contracted electrical repair work was necessary to restore the lift stations and the bid costs were reasonable.
    • A technical specialist reviewed the documented damage descriptions and repair work detailed in the bid documents and determined the electrical work described in the plans and specifications was necessary to repair the lift stations and the bid costs for that work were reasonable.


 

  •  
Letter: 
 

December 2, 2014

Major General David Sprynczynatyk
Director
North Dakota Department of Emergency Services
PO Box 5511
Bismarck, North Dakota 58506-5511

Re:  Second Appeal – City of Minot, PA ID 101-53380-00, Sewer Lift Station Repairs, FEMA-1981-DR-ND, Project Worksheets (PW) 4744 and 4745

Dear General Sprynczynatyk:

This is in response to letters from your office dated February 11, 2013, transmitting the referenced City of Minot (Applicant) second appeals.  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of a portion of the funding requested for repairs to the Carney and Burdick Lift Stations, $95,734.78 and $63,750.84, respectively.

As explained in the enclosed analysis, cost increases for small projects must be addressed through a net small project overrun. As such, the additional cost for such repairs in PWs 4744 and 4745, including the explosion proof lights, should be addressed in a request for a net small project overrun.  However, I have determined that the bid cost for an additional $23,443.00 for the electrical repairs for PW 4744, associated with changes of scope approved at first appeal is reasonable.

With regard to the Applicant’s request for the actual costs for engineering and design services for each lift station, the amount claimed may be reasonable based on the eligible work performed.  However, because the Applicant did not demonstrate that the costs claimed are directly related to the repair of the specific lift stations, FEMA applied the cost curves for above-average complexity projects, to estimate additional costs of $10,475.00 for PW 4744 and $3,661.00 for PW 4745. 

Lastly, the heating and ventilation system upgrades performed at both lift stations were not required by a formally adopted code or standard.  Consequently, these costs are not eligible.

Accordingly, I am partially granting the two appeals for PW 4744 and 4745 in the amount of $37,579.00. By copy of this letter, I am requesting the Regional Administrator take appropriate action to implement this determination.

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
Recovery Directorate

Enclosure

cc:  Sharon Loper
       Acting Regional Administrator
       FEMA Region VIII

Analysis: 

Background

During the flooding event that occurred from February 14 to July 20, 2011, numerous sanitary sewer and storm water lift stations owned and operated by the City of Minot (Applicant) were inundated and damaged.  This analysis collectively addresses the appeals related to Project Worksheets (PWs) 4744 and 4745 that were prepared for repairs to the Carney and Burdick Lift Stations, respectively. 

Carney Lift Station

The Carney Lift Station is comprised of a wet and dry well and a one-story well house.  The flooding filled the 25.5-foot deep wet and dry wells and inundated the well house to a depth of six feet.  The flooding damaged two pumps in the dry well, two electric motors in the motor house, ventilation fans in the wet and dry wells, and associated electrical and mechanical equipment.  FEMA prepared PW 4744 for $11,730.91 for the permanent repairs to the damaged pumps and electrical and mechanical components.

Burdick Lift Station

The Burdick Lift Station is also comprised of a wet and dry well and a one-story well house.  The flooding inundated the well house to a depth of two feet and damaged ventilation fans in the wet and dry wells, two motor starters for the sewage pumps, and associated electrical and mechanical equipment.  The sewage pumps in the dry well were not submerged or damaged.   FEMA prepared PW 4745 for $17,812.11 for the permanent repairs to the damaged electrical and mechanical components.

First Appeal

Carney Lift Station- PW 4744

The Applicant submitted a first appeal of PW 4744 on May 21, 2012, asserting the funding approved did not include costs for all required permanent repairs. The Applicant requested approval of an additional $121,262.78, including $47,696.00 for repairs to the electrical system, $33,400.02 for upgrades to the heating and ventilation systems, $18,253.96 for engineering and design, and $21,912.80 for cost adjustments to account for the bid cost of the approved scope of work.

On October 31, 2012, the FEMA Region VIII Regional Administrator (RA) partially approved the appeal providing an additional $25,446.00 for permanent repairs to the electrical system and engineering and design services.  The RA first requested additional information regarding the Applicant’s bid process, the bids received, and a detailed description of the permanent repairs.  The Applicant did not provide all of the requested information.  FEMA reviewed the available documentation and determined that PW 4744 did not include all of the eligible electrical scope of work items.  The RA approved $19,801.00 for the additional eligible scope of work items based on a cost estimate FEMA developed using RS Means.  Further, FEMA used its Engineering and Design Services of Average Complexity graph[1] to estimate $4,490.00 for engineering and design services because the Applicant’s requested amount was based on a percentage of its overall engineering and design costs for all damaged lift station repairs. 

The RA denied most of the Applicant’s request for additional funding to repair heating and ventilation systems.  While the RA approved $655.00 for the repair of damaged controls, the remaining requested funding associated with upgrades to the heating and ventilation system that the Applicant asserted was required by code was denied.  The RA determined that the extent of the repair of disaster damage did not trigger the referenced code and standard requirements and consequently the work associated with the upgrades was not eligible for funding.  The RA also found that the work associated with upgrading the facility from electric to gas heat was ineligible because it was not required by code.

Lastly, the RA denied the additional funding requested to adjust approved costs in accordance with bid costs.  The RA found that because PW 4744 is a small project, cost adjustments should be handled through a request for a net small project overrun.

Burdick Lift Station- PW 4745

The Applicant submitted a first appeal of PW 4745 on July 2, 2012, stating that the funding approved did not include the cost of all required permanent repairs. The Applicant requested approval of an additional $74,819.84, including $50,706.02 for upgrades to the heating and ventilation systems, $18,253.96 for engineering and design, and $5,859.86 for cost adjustments to account for the bid cost of the approved scope of work.

On October 31, 2012, the RA partially approved the appeal providing an additional $10,484.00 for permanent repairs to the ventilation system and engineering and design services.  As it did for the PW 4744 appeal issues, the RA first requested additional information regarding the Applicant’s bid process, the bids received, and a detailed description of the permanent repairs.  Similarly, when the Applicant did not provide all of the requested information, FEMA reviewed the available documentation and determined PW 4745 did not include all of the eligible scope of work items.  To remedy such, the RA approved $6,581.00 for the additional eligible scope of work items based on a cost estimate FEMA developed using RS Means.  Further,  FEMA applied its policy based Engineering and Design Services of Average Complexity graph[2] to estimate $3,903.00 for engineering and design services because the Applicant’s requested amount was based on a percentage of its overall engineering and design costs for all damaged lift station repairs.

The RA denied the majority of the Applicant’s request for additional funding for repair to the heating and ventilation systems but approved $1,310.00 for the repair of damaged controls.  The remaining funding requested was associated with upgrades to the heating and ventilation system that the Applicant asserted was required by code.  Like it did for PW 4744, the RA determined that the extent of the repair of disaster damage did not trigger the referenced code and standard requirements and the work associated with the upgrades therefore was not eligible for funding.  Similarly, the RA determined that work associated with upgrading the facility from electric to gas heat was not required by code and consequently not eligible for funding. 

Finally, the RA denied the additional funding requested to adjust approved costs in accordance with bid costs.  Like PW 4744, the RA found that PW 4745 is a small project and consequently cost adjustments should be handled through a request for a net small project overrun.

Second Appeal

Carney Lift Station- PW 4744

On December 18, 2012, the Applicant submitted a second appeal of the scope of work and funding provided in PW 4744, arguing for $95,734.78 in additional funding based on bid costs for electrical (including explosion proof lights) and mechanical repairs and code upgrades and the actual cost for engineering and design services.  The Applicant asserts that the plans and specifications provided to FEMA included a detailed description of the necessary permanent repairs and that the scope of work of PW 4744 did not encompass all of the repair work nor code mandated upgrades required to restore the lift station.  Further, the Applicant, maintaining it procured the contract for the work properly and competitively, asserts that FEMA’s approach of using RS Means to develop the cost of the repairs FEMA approved in PW 4744 underestimated the project costs.  The Applicant maintains it competitively bid the lump sum contract for the electrical and mechanical work based on items detailed on the plans and specifications and therefore the eligible cost should be based on the bid cost for the detailed work.  While the contracts are lump sum contracts for both the electrical work and the mechanical work at multiple lift stations, the Applicant provided a breakdown of the bid cost by site.

Regarding the code upgrades, the Applicant asserts that the heating and ventilation fans and motors damaged by the flood did not provide enough air flow to meet National Fire Protection Association 820 (NFPA 820), Standard for Fire Protection in Wastewater Treatment and Collection Facilities, and the Ten States Standards (Ten States), Recommended Standards for Wastewater Facilities.  In addition, the Applicant states that the existing ductwork was not large enough to distribute sufficient air flow generated by the larger fans.  The Applicant replaced the entire system to ventilate the lift station and the Applicant argues the upgrades were triggered by NFPA 820 and Ten States ventilation standards.  The Applicant also installed a new makeup air unit (MAU) to provide sufficient airflow and connected the new MAU to gas heating and asserts in its appeal that a “connection to gas service is more cost effective than attempting to heat the increased influent air flow by ceiling-mounted electric heaters.”

With respect to engineering and design services, the Applicant objects to FEMA’s application of Curve B (average complexity) rather than Curve A (above average complexity) to the Engineering and Design Services graph in its Public Assistance Guide to estimate costs because FEMA’s policy describes pumping stations within Curve A activities.[3]  Further, the Applicant asserts the cost curves do not include expenses for bidding services and shop drawing reviews, which are services its design engineer performed.  Finally, the Applicant explains that its approach of using one engineering and design firm for all of its damaged lift stations was less expensive than procuring engineering and design services for each lift station and that its design engineer divided costs for activities performed that impacted multiple facilities evenly against each impacted facility.

Burdick Lift Station- PW 4745

The Applicant submitted its second appeal of the scope of work and funding provided in PW 4745 on December 27, 2012.   Through it, the Applicant is requesting $63,750.84 in additional funding based on bid costs for explosion proof lights (no additional electrical work included in appeal), mechanical repairs and code upgrades and the actual costs for engineering and design services.  The Applicant asserts that the plans and specifications provided to FEMA included detailed descriptions of the permanent repairs and that the scope of work of PW 4745 did not encompass all of the necessary repair work and code mandated upgrades.  Further, the Applicant, maintaining it procured the contract for the work properly and competitively, argues that FEMA’s approach of using RS Means to develop the cost of the repairs that FEMA approved in PW 4745 underestimated the project costs.  The Applicant asserts it competitively bid the lump sum contract for the electrical (including replacement of explosion proof lights) and mechanical work based on work detailed on the plans and specifications and therefore the eligible cost should be based on the bid cost for the detailed work.  While the contracts are lump sum contracts for both the electrical work and the mechanical work at multiple lift stations, the Applicant provided a breakdown of the bid cost by site.  Regarding the code upgrades and engineering and designs services, the Applicant reiterates the position advanced in its appeal for PW 4744. 

Discussion

Electrical Repairs

Pursuant to Title 44 Code of Federal Regulation (C.F.R.) § 206.206(d), FEMA submitted the appeal documentation for PWs 4744 and 4745 to a specialist with expertise in electrical components of lift stations for technical review.  Based upon information received through that process as well as review of all materials included with the appeal process, FEMA finds that the electrical work detailed in the plans and specifications was necessary to repair the lift stations. Regarding PW 4744, at first appeal the Applicant requested $26,693.00 for an omitted control panel and safety disconnect.  FEMA approved the additional scope of work, calculating the cost as $3,250.00 using RS Means. Upon review, FEMA finds the bid costs to be reasonable, and as such the remaining $23,443.00 is eligible.  

As to the electrical repairs covered in PW 4745 (Burdick Lift Station), the Applicant’s appeal addresses only the replacement of the explosion proof lights, not all electrical repairs.  FEMA has approved $5,484.00 for the demolition and replacement of four explosion proof lights, while the Applicant states that the bid cost for the lights is $14,081.00.  The Applicant provided a spreadsheet which includes the bid cost of the lights as a line item, but provided no source documentation for that entry.  As this item is requested as a cost increase and not a change in scope of work, the Applicant should include this increase in a request for a net small project overrun, however, sufficient documentation supporting the actual cost of the explosion proof lights would need to be provided. 

HVAC Upgrades

Section 406(e)(1) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act authorizes FEMA to reimburse an eligible applicant for the “cost of repairing, restoring, reconstructing, or replacing a public facility or private nonprofit facility on the basis of the design of such facility as it existed immediately prior to the major disaster and in conformity with current applicable codes, specifications, and standards.” [4]  However, for costs related to repair or replacement standards that change the predisaster construction of a facility to be eligible, the standards must:

(1) Apply to the type of repair or restoration required[ ] (Standards may be different for new construction and repair work)[;] (2) Be appropriate to the predisaster use of the facility; (3) (i) Be found reasonable, in writing, and formally adopted and implemented by the State or local government on or before the disaster declaration date or be a legal Federal requirement applicable to the type of restoration…. (4) Apply uniformly to all similar types of facilities within the jurisdiction of [the] owner of the facility; and (5) For any standard in effect at the time of a disaster, it must have been enforced during the time it was in effect.[5]

The Applicant asserts that NFPA 820 and the Ten States ventilation standards “are triggers requiring upgrades to the fans, motors, and ductwork,” and new makeup air units (MAU) were also required to provide sufficient airflow as required by the standards.  The Applicant’s consultant prepared a Technical Memorandum titled Lift Station – Required HVAC Code Compliance Upgrades (March 7, 2012) which states that both Carney and Burdick Lift Stations “had mechanical HVAC systems submerged,” and “must have the required repairs brought up to current HVAC code.”  The memo states that the ventilation systems in both lift stations should be replaced to comply with ventilation rates recommended in NFPA 820, because the fans, motors, and the ductwork are not large enough to handle the current ventilation standards.  While such recommendations may be sound and prudent, they do not equate to legally enforceable or enforced codes or standards for purposes of eligibility for Public Assistance grants.[6]   

Moreover, codes and standards must apply to the type of repair required.[7]  Both NFPA 820 and the Ten States standards provide recommendations for the safe design of wastewater treatment facilities.  However, neither the NFPA 820 nor the Ten States standards require upgrades to damaged components of a ventilation system to meet the safety requirements set forth in the standards.  Engineering design firms are obligated to follow safety standards such as those set forth in NFPA 820 and Ten States when designing wastewater treatment facilities; however, neither NFPA 820 nor Ten States standards apply to the repair of damaged ventilation system components.  In the first appeal response, the FEMA Region VIII Regional Administrator stated that the damaged fans and motors were repairable and the ductwork was not damaged.  Further, there is no documentation to support that the MAUs in either lift station were damaged and required replacement.  The Applicant does not contest these facts in its appeal, but only asserts that the components were undersized and had to be replaced to meet current NFPA 820 and Ten States requirements.

It is the Applicant’s responsibility to provide documented justification supporting its position.[8] The Applicant did not provide documentation demonstrating that upgrades of the damaged ventilation systems at the Carney and Burdick Lift Stations were required by a formally adopted code or standard.  Therefore, the costs associated with those upgrades are not eligible for funding.  Further, the work associated with the connection of the new MAUs to gas heating was not required as the result of the disaster and is not eligible for funding. [9]

Engineering and Design Services    

The Applicant requests $18,253.96 for engineering and design services for each lift station based on its total actual costs divided amongst all facilities addressed in its contract for engineering and design services.  The PA Guide provides that “costs that can be directly tied to the performance of eligible work are eligible.”[10]  The Applicant has not substantiated that the amount requested is directly related to the repair of the specific lift stations.  At first appeal, FEMA calculated the engineering and design services using the PA Guide Curve B for projects of average complexity.[11]  The Applicant has correctly stated that pumping stations should be calculated with Curve A for projects of above-average complexity.[12]  The engineering and design cost for PW 4745 is increased by $3,661.00 for a total of $7,564.00; and for PW 4744 by $10,475.00 for a total of $15,465.00.

Conclusion

The Applicant followed competitive procurement procedures for the repair of the Carney and Burdick Lift Stations and demonstrated that the contracted electrical repair work was necessary to restore both lift stations.  The cost increase related to the change in scope of work approved at first appeal is eligible in the amount of $23,443.00 for PW 4744.  However, as mentioned in the first appeal response, since both projects are small projects, the cost increase not associated with scope changes, including the explosion proof lights, must be requested through a small project netting. [13]  Regarding the ventilation system upgrades performed at both lift stations, the standards referenced in the Applicant’s appeals do not apply to the repair of the damaged ventilation system components nor has the Applicant sufficiently demonstrated that the state of North Dakota or the City of Minot has formally adopted the standards.  Therefore, all work associated with the ventilation system upgrades is not eligible.  Finally, while the amount claimed by the Applicant for engineering and design services at each lift station may be reasonable, the Applicant did not demonstrate that the costs are directly related to the repair of each specific lift station.  As such, FEMA recalculated these costs applying appropriate cost curves for an additional amount of $3,661.00 for PW 4745 and $10,475.00 for PW 4744.


[1] See Public Assistance Guide, FEMA 322, at 60 (June 2007) [hereinafter PA Guide].

[2] Id.

[3] PA Guide, supra note 1 at 57-60.

[4] The Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, Pub. L. No. 93-288, § 406, 42 U.S.C. § 5172 (2007).

[5] 44 C.F.R. § 206.226(d).

[6] During the review of the Applicant’s second appeal documentation, FEMA requested additional information from the Grantee to confirm if either the State of North Dakota or City of Minot formally adopted NFPA 820 or Ten States as state or local codes in accordance with 44 CFR §206.226(d)(3).  The Grantee forwarded a response from the Applicant’s design engineer that indicated that the state of North Dakota had formally adopted Ten States, but did not confirm the assertion.  Regarding NFPA 820, in the request for additional information, FEMA specifically requested “information and supporting documentation regarding the authority having jurisdiction for enforcing NFPA 820 in the City of Minot and information and supporting documentation regarding any evaluations/assessments performed by that authority addressing the condition of the ventilation systems at the Burdick and Carney Sanitary Lift Stations post event.”  The response was silent on the matter.  In an attempt to validate if the NFPA 820 or Ten States Standards had been formally adopted, FEMA’s Professional Engineer searched State, local and the City Engineer’s web sites, and found no formal adoption of them.

[7] 44 C.F.R. § 206.226(d)(1).

[8] 44 C.F.R § 206.206(a).

[9] See 44 C.F.R. § 206.223(a)(1).

[10] PA Guide, at 40.

[11] PA Guide, at 60.

[12] PA Guide, at 58.

[13] PA Guide, at 109.  (“[I]f the applicant incurs costs significantly greater than the total amount approved for all small projects, the applicant may appeal for additional funding.”) (emphasis in original).