Fema Situation Updates

1 Oct 2014
Appeal Type: 
2nd
Report Type: 
PW
Appeal Categories: 
Applicant Name: 
Nashville-Davidson County
Disaster Number: 
1909-DR-TN
DSR: 
5596
Date Signed: 
Tuesday, September 30, 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 5596 are eligible under the PA Program.  In addition, the Applicant provided sufficient documentation to substantiate $147,214.93 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 5596 to address damage to two buildings on the Facility—the Grit Room, consisting of three below grade concrete tunnel sections, and the Grit Sampling Room.  FEMA obligated PW 5596 for $102,080.02.  In the first appeal, the Applicant asserted that FEMA made several errors concerning the scope of work necessary to restore the Facility to pre-disaster condition and associated funding for PW 5596.  The Regional Administrator (RA) partially approved PW 5596 for $14,354.34 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 the second appeal, the Applicant asserts that FEMA failed to include funding for instrumentation, lighting, and labor and materials.   

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 5596 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 provided adequate documentation, such as bid documents, invoices, and cancelled checks, to demonstrate actual costs for the requested work items. 
Letter: 

September 30, 2014

David Purkey
Interim 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) 5596 – Scope of Work

Dear Mr. Purkey:

This is in response to a letter from your office dated December 11, 2013, 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 $147,214.93 in Public Assistance (PA) funding for various items excluded from PW 5596.

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 5596 are eligible under the PA Program.  In addition, the Applicant provided sufficient documentation to substantiate $147,214.93 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 to take appropriate action to implement this determination. 

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

Sincerely,

/s/

William W. Roche
Director
Public Assistance Division

Enclosure

cc:  Andrew Velasquez, III
      Regional Administrator
      FEMA Region IV

Analysis: 

Background

In May 2010, extensive flooding throughout Nashville-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) 5596 to address damage to two buildings on the Facility—the Grit Room, consisting of three below grade concrete tunnel sections, which were adjacent to the bottom edges of the grit basins, and the Grit Sampling Room.  FEMA obligated PW 5596 for $102,080.02 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 5596.  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 5596.  Second, the Applicant requested that FEMA revise PW 5596 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 it 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 asserts 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 5596.[2]   

In a letter dated September 27, 2013, the Region IV Regional Administrator (RA) partially granted the appeal, approving $14,354.34 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 5596 (i.e., the FEMA generated CEF) and the appealed scope addition or cost increases.

Second Appeal

In the second appeal, dated December 5, 2013, the Applicant requests reimbursement for issues four and five (i.e., excluded work described above), in the amount of $147,214.93.  The second appeal  includes $64,413.35 for materials and labor associated with wire, conduit, and cable installation, $37,461.00 for electrical and mechanical recovery, and $45,340.58 for work to supply, install, rewire, test, calibrate replace non-repairable 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 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 5596 and additional scope or cost increases not previously included in PW 5596.

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 asserts 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 FEMA 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 5596 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 5596 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 and actual costs.  Final costs for PW 5596 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 P-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 4 (Dec. 5, 2013).

[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 5596.  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.

 

1 Oct 2014
Appeal Type: 
2nd
Report Type: 
PW
Appeal Categories: 
Applicant Name: 
Nashville-Davidson County
Disaster Number: 
1909-DR-TN
DSR: 
5585
Date Signed: 
Tuesday, September 30, 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 5585 are eligible under the PA Program.  In addition, the Applicant provided sufficient documentation to obligate $317,860.13 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 5585 to address damage to the overall plant site including the below grade steel reinforced cast concrete tunnels, plant perimeter gates and fencing, materials stocked in the open yard, and other miscellaneous items.  FEMA obligated PW 5585 for $61,684.19. 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 5585.  The Regional Administrator (RA) partially approved PW 5585 for $88,149.56 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 the second appeal, the Applicant asserts that FEMA failed to include funding for wire and conduit replacements, lighting, and receptacles. 

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 5585 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 provided adequate documentation, such as bid documents, invoices, and cancelled checks, to demonstrate actual costs for the requested work items. 
Letter: 

September 30, 2014

David Purkey
Interim 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) 5585 – Scope of Work

Dear Mr. Purkey:

This is in response to a letter from your office dated December 11, 2013, 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 $317,860.13 in Public Assistance (PA) funding for various items excluded from PW 5585.

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 5585 are eligible under the PA Program.  In addition, the Applicant provided sufficient documentation to substantiate $317,860.13 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:  Andrew Velasquez, III
      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) 5585 to address damage to the overall plant site including the below grade steel reinforced cast concrete tunnels, plant perimeter gates and fencing, materials stocked in the open yard, and other miscellaneous items.  FEMA obligated PW 5585 for $61,684.19 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 5585.  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 5585.  Second, the Applicant requested that FEMA revise PW 5585 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 5585.[2]    

In a letter dated September 27, 2013, the Region IV Regional Administrator (RA) partially granted the appeal, approving $88,149.56 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 5585 (i.e., the FEMA generated CEF) and the appealed scope addition or cost increases.

Second Appeal

In the second appeal, dated December 5, 2013, the Applicant requests reimbursement for issues four and five (i.e., excluded work described above), in the amount of $317,860.13.  The second appeal  includes $50,450.40 for wire and conduit replacement, $13,826.00 for lighting and receptacle replacement, $64,513.73 for damaged items in tunnels, and $189,070.00 for replacement of damaged 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 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 5585 and additional scope or cost increases not previously included in PW 5585.

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 asserts 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 FEMA 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 5585 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 5585 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 and actual costs.  Final costs for PW 5585 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 4 (Dec. 5, 2013).

[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 5585.  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.

 

29 Sep 2014
Appeal Type: 
2nd
Report Type: 
PW
Appeal Categories: 
Applicant Name: 
Terrebonne Parish Consolidated Government
Disaster Number: 
1786-DR-LA
DSR: 
6241
Date Signed: 
Friday, September 26, 2014
PA ID: 
109-99109-00
Summary/Brief: 

Conclusion: The Applicant’s insurance policy is a blanket policy that covers the same building that was damaged in a previous disaster and, as a result, any current eligible project costs must be reduced by the amount of funding provided in the previous disaster.    

Summary Paragraph

Hurricane Gustav caused damage to Terrebonne Parish Consolidated Government’s (Applicant’s) civic center.  Hurricane Katrina damaged the same facility before Hurricane Gustav and FEMA provided funding with the condition that the Applicant had to obtain and maintain insurance to cover this facility.  When calculating the eligible project costs, FEMA reduced the amount of eligible costs, $410,415, by the amount of disaster assistance that the Applicant received following Hurricane Katrina, $104,915.  The Applicant submitted a first appeal, arguing that the Grantee’s Insurance Commissioner’s certification after Hurricane Katrina waived the insurance reduction requirements in the federal regulations.  FEMA Region VI Regional Administrator denied the appeal, finding that the reduction was warranted because of the Applicant’s blanket insurance coverage and that the commissioner’s certification cannot waive the reduction.  In its second appeal, the Applicant argues that (1) its coverage is not a blanket policy and therefore the regulations do not apply; and (2) even if the regulation applies, the commissioner’s certification supersedes the regulation.

Authorities and Second Appeals

  • Stafford Act § 311 (a) – (b), 42 U.S.C. § 5154 (a) – (b)

  • 44 C.F.R. §§ 206.252, 206.253.

Headnotes

  • Stafford Act § 311 requires that applicants for assistance under Section 406 must obtain and maintain the type and extent of insurance required by FEMA on the facility to protect against future loss to such property.

    • The Applicant obtained a blanket insurance policy after the previous disaster, Hurricane Katrina.  The insurance policy covered flood events and “other than flood” events.    

  • Pursuant to 44 C.F.R. § 206.253(b)(2), FEMA is required to reduce assistance when an applicant uses a blanket policy to meet its requirement to obtain insurance.  FEMA determines that a policy is a blanket policy when it covers multiple properties to a level less than their full value.

    • The Applicant’s policy covered multiple facilities below full value, so FEMA determined that the proper reduction is the amount of eligible damage sustained on the previous disaster. 

    • The Louisiana Insurance Commissioner’s certifications after Hurricane Katrina do not waive FEMA’s ability to reduce the eligible cost amount and does not supersede federal regulations.    

Letter: 

September 26, 2014

Kevin Davis
Director
Governor’s Office of Homeland Security and Emergency Preparedness
7667 Independence Boulevard
Baton Rouge, LA 70806

Re: Second Appeal – Terrebonne Parish Consolidated Government, PA ID 109-99109-00, FEMA-1786-DR-LA, Project Worksheet (PW) 6241 – Insurance     

Dear Mr. Davis:

This is in response your letter dated June 22, 2012, which transmitted the referenced second appeal on behalf of Terrebonne Parish Consolidated Government (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of its request for $104,415 for repair costs.

As explained in the enclosed analysis, I have determined that the Applicant’s insurance coverage is a blanket policy, which requires FEMA to reduce the eligible costs amount of $410,415 by $104,915, the amount of eligible damage sustained in Hurricane Katrina.  Your Insurance Commissioner’s certifications from Hurricane Katrina do not apply to the current facility or supersede 44 C.F.R. § 206.253(b)(2).  Accordingly, I am denying this appeal.

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/

Brad J. Kieserman
Assistant Administrator
Recovery Directorate

Enclosure

cc: George A. Robinson
      Regional Administrator
      FEMA Region VI

Analysis: 

Background

Hurricane Gustav’s high winds and wind-driven rain damaged portions of the roof, fascia, and interior of the Applicant’s facility, the Houma-Terrebonne Civic Center (Civic Center).  The Civic Center previously suffered the same type of damage from high winds and wind-driven rain during Hurricane Katrina. 

Prior Disaster—Hurricane Katrina

Following Hurricane Katrina, FEMA provided the Applicant with $104,915 in Federal disaster assistance for the Civic Center under PW 2892 in accordance with Section 406 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (“Stafford Act”),[1] Repair, Restoration, and Replacement of Damaged Facilities.  Section 311 of the Stafford Act, Insurance, establishes that applicants for assistance under section 406 must obtain and maintain the type and extent of insurance required by FEMA on the facility “to protect against future loss to such property.”[2]  FEMA regulations and policy interpret this to mean that an applicant must “obtain and maintain such types and amounts of insurance as are reasonable and necessary to protect against future loss to such property from the types of hazard which caused the major disaster.”[3]

The Stafford Act also prohibits FEMA from requiring greater types and extent of insurance than a state insurance commissioner certifies as reasonable.[4] Following Hurricane Katrina, the Commissioner of the Louisiana Department of Insurance (Commissioner) provided FEMA a certification that:  1) commercial insurance for flood and wind perils was not reasonably available to applicants; and 2) waived for applicants the insurance reduction requirements in 44 C.F.R. § 206.253(b)(2), Insurance requirements for facilities damaged by disasters other than flood, known as a “code 5903 reduction.”[5]  Further, the certification instructed applicants to obtain and maintain insurance if it would be a reasonable expenditure from the applicant’s current annual operating budget.[6]  This certification was non-specific to any particular applicant and issued to apply to all applicants.[7]  The Commissioner also asserted that FEMA would reimburse deductibles in a subsequent disaster.[8]

The Applicant obtained insurance coverage as a condition for receiving assistance in an amount that exceeded the $104,915 in Federal disaster assistance for PW 2892.  The Applicant also received two certifications from the Commissioner: an April 25, 2008 letter certifying that the Applicant obtained reasonable coverage for nine PWs (3342, 3489, 2052, 3442, 4046, 3528, 3431, 231, and 1716),[9]  and a March 12, 2009 letter certifying that for all of its Hurricane Katrina projects, the Applicant “has purchased insurance under a blanket or scheduled policy” for its facilities and that “the [A]pplicant’s request complies with the criteria” he previously established regarding the purchase of insurance.

Subsequent Disaster—Hurricane Gustav

The Civic Center sustained damage again from Hurricane Gustav.  Prior to receiving any Federal disaster assistance for this facility, per Section 311(b) of the Stafford Act, the Applicant had to demonstrate that the Civic Center was still insured when Hurricane Gustav struck the area.[10]  FEMA found the Applicant had satisfied this requirement and, accordingly, prepared PW 6241 to fund the Civic Center’s repairs.  A subsequent version of the PW adjusted the costs to reflect approval of an improved project scope of work. 

FEMA estimated eligible project costs of $410,415 to repair the Civic Center.  This amount fell within the Applicant’s insurance deductible, which, according to its policy, was $420,000.  FEMA then applied 44 C.F.R. § 206.253(b)(2) to reduce the amount of eligible assistance for Hurricane Gustav disaster damage by $104,915—the amount of disaster assistance the Applicant received following Hurricane Katrina—because the Applicant had insured the facility under a blanket insurance policy.

First Appeal

In a letter dated July 15, 2011, the Applicant appealed FEMA’s reduction, arguing that the Insurance Commissioner’s certification criteria precluded such reduction.  The State of Louisiana Governor’s Office of Homeland Security and Emergency Preparedness (Grantee) forwarded the appeal to FEMA Region VI in a letter dated September 12, 2011.  The Grantee supported the Applicant’s argument that the Insurance Commissioner’s certification precluded the reduction.  The Grantee also argued that the “deductible represents a level of exposure for which the Insurance Commissioner has determined that insurance coverage is financially not reasonably available.”[11]  On this basis, the Grantee believes FEMA cannot apply a reduction that would result in the Applicant paying a portion of the deductible under application of Section 311(a)(2).[12]  The Regional Administrator denied the first appeal in a letter dated February 2, 2012, stating that, although the Applicant satisfied its obligation to obtain and maintain insurance, the reduction is warranted because the Applicant obtained blanket insurance coverage.  The Regional Administrator also explained that the Insurance Commissioner cannot waive this reduction.

Second Appeal

The Applicant submitted a second appeal in a letter dated April 30, 2012, arguing that (1) the insurance coverage it obtained was not a blanket insurance policy, rendering 44 C.F.R. § 206.253(b)(2) inapplicable; and (2) even if 44 C.F.R. § 206.253(b)(2) applied, it is subordinate to the Insurance Commissioner’s certification.  The Grantee forwarded the second appeal in a letter dated June 22, 2012.  The Grantee again supports the appeal based on the arguments set forth by the Applicant and by arguing that FEMA’s policy on reimbursement of deductibles in subsequent disasters is subordinate to an insurance commissioner’s certification.  The Grantee cites to portions of a November 10, 2008 letter from FEMA’s Public Assistance Division Director to the Assistant Deputy Director of GOHSEP, a July 22, 2009 letter from the FEMA Acting Director of the Louisiana Transitional Recovery Office to the Executive Counsel of the Louisiana Department of Insurance, and an April 23, 2012 letter from Region VI Regional Administrator to the Director of GOHSEP in support of its position.

Discussion

Applicant Argument One: Blanket Policy

In reviewing the Applicant’s insurance information regarding PW 6241, FEMA had three primary tasks.  First, FEMA had to determine that the applicant maintained its insurance in accordance with section 311(b) of the Stafford Act.[13]  A failure to maintain insurance prohibits assistance to “any property or part thereof for which the applicant has previously received assistance . . . .”[14]  FEMA determined that the Applicant had met this requirement to maintain insurance.  Second, FEMA had to determine which insurance regulations to apply.  FEMA regulations differentiate between flood events and “other than flood” events.[15]  The facility suffered damage from wind and wind-driven rain, making this an “other than flood” event, meaning 44 C.F.R. § 206.253 applied.  Third, FEMA had to determine what reductions, if any, were required by regulation or policy.

Under 44 C.F.R. § 206.253(b)(2), FEMA is required to reduce assistance when an applicant uses a blanket policy, insurance pool, or some combination of these options to meet its requirement to obtain insurance.[16]  FEMA determines that a policy is a blanket policy when it covers multiple properties to a level less than their full value; here, the Applicant used nine insurance policies to achieve a per occurrence coverage limit of $75 million, but the value of its properties totaled approximately $270 million.  The Applicant’s policy covered multiple facilities below value.   Therefore, FEMA determined it is a blanket policy, meaning the proper reduction is “the amount of eligible damage sustained on the previous disaster,”[17] which, in this case, is $104,915. 

Argument Two: Effect of Commissioner Certifications

Under the Stafford Act requirements, the Commissioner’s certifications from Hurricane Katrina would not apply to the Civic Center.  The Stafford Act requires an applicant for Public Assistance permanent work to obtain and maintain insurance as a condition of assistance.[18]  In doing so, FEMA cannot require greater types and extent of insurance than a State insurance commissioner certifies as reasonable.[19]  Here, the Applicant received $104,915 following Hurricane Katrina.  FEMA required $104,915 in coverage as a condition of that grant.  The Applicant obtained insurance coverage in amounts that far exceeded the Federal assistance.  Therefore, for this facility, the facts clearly demonstrate that FEMA did not require a greater type and extent than was reasonable.  The Commissioner’s various certifications play no role for the following reasons:

  1. Not specific to Applicant’s Facility. The Commissioner’s certifications do not specifically address this facility.  The Commissioner sent letters to the President in August 2007 and July 2010, which discussed the availability of insurance coverage for Hurricane Katrina and set guidance for applicants on how they should obtain coverage even where they could not satisfy the full FEMA requirement.  These letters are not specific to the Applicant, who obtained coverage in excess of FEMA’s requirement. 
  2. Applicant-specific letters did not change the outcome for PW 2892. The Applicant received two letters from the Commissioner, in 2008 and 2009, which do not address the coverage the Applicant obtained for PW 2892 following Hurricane Katrina.  The 2008 certification from the Commissioner addresses nine of the Applicant’s PWs from Hurricane Katrina—3342, 3489, 2052, 3442, 4046, 3528, 3431, 231, and 1716—that required certification because the Applicant could not find “coverage in excess of that which it has obtained.”  PW 2892 was not on this list, because the Applicant obtained coverage in excess of that which FEMA required.  The Commissioner’s 2009 letter simply verified that the Applicant had met the requirement to insure its facilities.
  3. Portions of the certifications exceed the scope of section 311(a)(2). Section 311(a)(2) exists to prevent FEMA from denying assistance because it required an applicant to obtain coverage no one offers.  Given that states primarily regulate the business of insurance, section 311(a)(2) presumes that state insurance commissioners can best determine whether the type and extent of coverage required exists, and whether it can be reasonably obtained.[20]  Here, for PW 2892 for Hurricane Katrina, the Applicant obtained more coverage than FEMA required and the coverage was in effect at the time of Hurricane Gustav.  The Commissioner had no additional role to play.  In addition, Section 311(a)(2) does not authorize the Commissioner to waive the reduction required by 44 CFR 206.253(b)(2), or assert waivers of FEMA policy regarding the eligibility of deductibles in a second disaster.

In light of the facts stated above, there was no need for a Commissioner certification under section 311(a)(2).  Even if a certification had been necessary, the Commissioner does not have the authority to waive FEMA regulations or policy.    

Conclusion

The reduction to the eligible amount of project costs will remain because the Applicant’s insurance coverage is a blanket policy that requires a reduction based on funding provided in a previous disaster. 


[1] The Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, Pub. L. No. 93-288, § 406, 42 U.S.C. § 5172 (2000).

[2] Id. § 5154(a)(1).

[3] 44 C.F.R. § 206.253(b)(1)(1991). See also Disaster Assistance Policy DAP9580.3, Insurance Considerations for Applicants at 2 (June 29, 2008) (requiring coverage “at a minimum” in “amount of the eligible project costs” for “the type of hazard that caused the damage”).

[4] Stafford Act, supra note 1, § 5154(a)(2).

[5] See generally Letter from James J. Donelon, Commissioner, Louisiana Dep’t of Ins., to George W. Bush, President, United States of America (Aug. 10, 2007) [hereinafter Bush Letter]; Letter from James J. Donelon, Commissioner, Louisiana Dep’t of Ins., to Barak Obama, President, United States of America (July 20, 2010) [hereinafter Obama Letter].

[6] See generally Bush Letter; Obama Letter.

[7] See generally Bush Letter; Obama Letter.

[8] See Letter from Margaret L. Tooke, Attorney, Taylor Porter Attorneys at Law, to Tony Russell, Acting Director, Louisiana Transitional Recovery Office (Aug. 21, 2009) (asserting interpretation will apply “[u]nless we hear differently from you”) [hereinafter Tooke Letter]; Obama Letter (stating “inclusion of the deductible as eligible in subsequent disaster assistance as a result of my certification has been confirmed in the attached August 21, 2009 correspondence to FEMA and FEMA has not refuted it.”).

[9] Letter from James L. Donelon, Commissioner, Louisiana Dep’t of Ins., to Col. Thomas K. Kirkpatrick, Governor’s Office of Homeland Sec. and Emergency Preparedness (Apr. 25, 2008).

[10] Stafford Act, supra note 1, § 5154(b).  See also 44 C.F.R. § 206.253(f).

[11] Louisiana Governor’s Office of Homeland Sec. and Emergency Preparedness, GOHSEP Appeal Analysis – Terrebonne Parish PW 6241 (May 11, 2011).

[12] Stafford Act, supra note 1, § 5154(a)(2).

[13] Stafford Act, supra note 1, at § 5154(b).

[14] Id.

[15] See generally 44 C.F.R. §§ 206.252, 206.253.

[16] 44 C.F.R. § 206.253(b)(2).

[17] Id.

[18] Stafford Act, supra note 1, § 5154(a)(1).

[19] Id. § 5154(a)(2).

[20] See also 15 U.S.C. §§ 1011-1015 (providing text of McCarran-Ferguson Act).

 

29 Sep 2014
Appeal Type: 
2nd
Report Type: 
PW
Appeal Categories: 
Applicant Name: 
City of Kenner
Disaster Number: 
1603-DR-LA
DSR: 
1221 and 16642
Date Signed: 
Friday, September 26, 2014
PA ID: 
051-39475-00
Summary/Brief: 

Conclusion:  On second appeal, the City of Kenner (Applicant) provided adequate documentation to demonstrate that $824,500.84 of the $889,616.62 de-obligated due to insufficient documentation should be reinstated. 

Summary Paragraph

Hurricane Katrina produced a significant amount of debris throughout the City of Kenner.  FEMA prepared a series of PWs, including 1221 and 16642, to capture the eligible disaster debris removal cost.  In April 2009, the OIG issued Audit Report DD-09-04, in which the OIG concluded that the Applicant failed to comply with FEMA policies for monitoring debris operations.  The OIG used an Excel spreadsheet that transcribed the necessary data from the 33,500 haul tickets from the Applicant’s debris removal operation.  The OIG recommended de-obligating $5,464,037.00 for unsupported debris removal costs.  In an April 16, 2012 memorandum, FEMA determined $889,616.62 in debris removal cost was ineligible because: a) the Applicant claimed $738,971.64 for debris hauled by uncertified and unverified trucks, and b) the Applicant claimed $150,644.98 for 11,822 cubic yards (CY) of debris billed at more than 100 percent of certified truck capacities.  On May 31, 2012, FEMA de-obligated the ineligible costs from PWs 1221 and 16642.  In its first appeal, the Applicant contended that the debris trucks used by its contractor were properly certified by FEMA.  The Regional Administrator (RA) denied the appeal because “the Applicant did not adequately document the questioned debris removal costs or provide sufficient evidence with its appeal to reinstate the de-obligated amounts,” as required by OMB Circular A-87.  In its second appeal, the Applicant asserts that it has provided sufficient documentation to reinstate most of the de-obligated amount.  Pursuant to 44 C.F.R. § 13.22 and OMB Circular A-87, the Applicant provided sufficient documentation to reinstate $824,500.84 of the de-obligated amount.   

Authorities and Second Appeals

  • 44 C.F.R. § 13.22.

  • OMB Circular A-87, 2 C.F.R. § 225.

Headnotes

  • Pursuant to Title 44 of the Code of Federal Regulations (44 C.F.R.) §13.22, only allowable costs are eligible for Public Assistance funding.

  • According to OMB Circular A-87, all allowable procurement cost must be adequately documented.

    • The Applicant submitted extensive documentation, including haul tickets and certification forms, to rectify the discrepancies that resulted in de-obligation.

    • In addition, the Applicant provided evidence that the Excel spreadsheet used during the de-obligation process had numerous errors and provided documentation to explain discrepancies.

    • Finally, the Applicant’s contractor and sub-contractor explained their findings—i.e. why certain truck numbers were documented incorrectly on haul tickets— in a meeting with FEMA. 

Letter: 

September 26, 2014

Kevin Davis
Director
Governor’s Office of Homeland Security and Emergency Preparedness
7667 Independence Boulevard
Baton Rouge, LA 70806

Re: Second Appeal – City of Kenner, PA ID 051-39475-00, FEMA-1603-DR-LA, Project Worksheets (PWs) 1221 and 16642 – OIG Audit – Support Documentation

Dear Mr. Davis:

This is in response to your letter, dated October 9, 2013, which transmitted the referenced second appeal on behalf of the City of Kenner (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $889,616.62 in Public Assistance funding for debris removal.

As explained in the enclosed analysis, I have determined that the Applicant has provided adequate documentation to reinstate the de-obligated amount, except with respect to overages for the following Truck Numbers: 7, 9, 11, 15, 61, 86, 704, and FB1.  Therefore, I am partially approving the appeal in the amount of $824,500.84.  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 is the final decision on this matter pursuant to 44 C.F.R. § 206.206, Appeals.

Sincerely,

/s/

Brad J. Kieserman
Assistant Administrator
Recovery Directorate

Enclosure

cc:  George A. Robinson
       Regional Administrator
       FEMA Region VI


 

 



 

Analysis: 

Background

Hurricane Katrina impacted the City of Kenner (Applicant) in 2005.  The disaster produced significant debris, which presented an immediate threat to lives, public health, and safety of the Applicant’s citizens.  The Applicant used two separate contractors for debris removal and monitoring.  In total, the Applicant accumulated 33,500 haul tickets for debris removal.  FEMA developed a series of PWs, including 1221 and 16642, to capture the eligible disaster debris removal cost. 

In January 2009, the Department of Homeland Security’s Office of Inspector General (OIG) issued Audit Report DD-09-04, in which the OIG concluded that the Applicant failed to comply with FEMA guidance and overestimated the amount of debris hauled.   The OIG used an Excel spreadsheet that transcribed the necessary data from the 33,500 haul tickets.[1]  The OIG recommended de-obligating $5,464,037.00 for unsupported debris removal costs.

In an April 16, 2012, memo, FEMA determined $889,616.62 in debris removal cost was ineligible because: 1) the Applicant claimed $738,971.64 for debris hauled by uncertified and unverified trucks, and 2) the Applicant claimed $150,644.98 for 11,822 cubic yards (CY) of debris that was billed at more than 100 percent of certified and verified truck capacities.  On May 31, 2012, FEMA de-obligated the ineligible costs from PWs 1221 and 16642.

First Appeal

In a first appeal letter submitted June 15, 2012, the Applicant asserted that there were two issues for review.  The first issue was whether certain debris trucks were properly certified.  The second issue concerned whether certain debris hauling loads were in excess of the certified capacity of the debris trucks.  The Applicant contended that both FEMA and the Applicant properly certified or verified the debris trucks used by its contractor.  The Applicant also asserted that any statistical analysis of haul tickets which reflected that the debris loads were in excess of truck capacity was the result of re-certification of the debris trucks.  

On June 6, 2013, the Regional Administrator (RA) denied the appeal because “the Applicant did not adequately document the questioned debris removal costs or provide sufficient evidence with its appeal to reinstate the de-obligated amounts,” as required by OMB Circular A-87. 

Second Appeal

In a second appeal letter, dated August 22, 2013, the Applicant argues that the additional documentation, presented with its second appeal, provides sufficient evidence to reinstate most of the de-obligated amount still at issue.  The Applicant presents the same two first appeal issues for review.  Regarding the certification issue, the Applicant provides additional documentation to address each haul ticket in question.  In addition, the Applicant asserts that the trucks were improperly identified on the haul ticket or improperly transcribed from the haul ticket to the FEMA spreadsheet.  Regarding the issue of excess capacity load, the Applicant asserts that a spreadsheet that FEMA created to calculate the de-obligated amount has mathematical errors.  With its second appeal, the Applicant submitted a revised spreadsheet to correct these errors.    

On April 30, 2014, the Applicant presented its second appeal to FEMA in a meeting held at FEMA Headquarters in Washington, D.C.  During the meeting, the Applicant’s contractor and sub-contractor fielded questions from FEMA staff and explained discrepancies in the FEMA spreadsheet.  The Applicant also provided binders of each haul ticket at issue in this appeal and demonstrated where and why errors were committed.  Finally, the Applicant’s sub-contractor conceded that Trucks 6, 7, 9, 11, 12, 15, 61, 86, 430, 450, 505, 704, 711 and FB1were initially certified; however, after the trucks were refitted to equip larger capacity loads, neither the Applicant nor its contractors could locate the necessary re-certification documentation.

Discussion

Pursuant to Title 44 of the Code of Federal Regulations (44 C.F.R.) §13.22, only allowable costs are eligible for Public Assistance funding.  In addition, all allowable procurement cost must be adequately documented.[2]

FEMA originally de-obligated $889,616.62 between PWs 1221 and 16642.  Due to the extensive nature of the debris removal project—33,500 total haul tickets—and the Applicant’s admission that it did not fully understand FEMA’s reason for de-obligation until after the first appeal, the Applicant did not produce the necessary documentation demonstrating allowable costs until its second appeal.  Accordingly, the RA’s determination was correct based on the data submitted.   

The de-obligated amount of $889,616.62 addresses two different issues: 1) debris hauled in uncertified and unverified trucks and 2) debris exceeding 100 percent of truck capacity.  This figure was derived using an Excel spreadsheet that FEMA produced in consultation with DHS OIG.  The Excel spreadsheet includes dates prior to September 12, 2005 in its analysis.  However, all debris removal done before September 12, 2005 was done on a time and materials (T & M) contract and documented in another PW.[3]  Therefore, FEMA did not include these haul tickets in its analysis of the second appeal.

  1. Debris Hauled in Uncertified or Unverified Trucks

Regarding the first issue, the Applicant provided documentation to address each truck FEMA determined to be “uncertified” or “unverified.”  A “certified” truck is one that is measured by a debris monitor to determine the truck’s height, width, and depth to determine its hauling capacity.[4]  The Applicant provided copies of truck certifications for the trucks at issue in this appeal in Exhibits 7 and 8 and copies for additional trucks during its meeting with FEMA.[5]  A “verified” truck is one that a FEMA debris monitor certified at the Temporary Disposal and Reduction Site (TDRS).[6]

The Applicant provided FEMA with extensive documentation, including certification forms, haul tickets, and written explanations for discrepancies in the data, to support its assertion that each truck in question was certified.  In addition, during the meeting, the Applicant demonstrated that many of the discrepancies regarding certified trucks that led to de-obligation were due to poor penmanship on the haul tickets or input errors regarding the Excel spreadsheet used to document the debris project.  For example, because the Applicant used a contractor and sub-contractor for debris removal, many of the trucks displayed more than one identification placard.  This resulted in an identification number on the haul ticket that was different than the identification number on the “certified” truck even though it was the same truck.[7]  In addition, some truck numbers were not properly input into the spreadsheet.  This error led to FEMA mistakenly classifying these trucks as “uncertified.”[8]   Using the documentation and other evidence provided by the Applicant, FEMA reconciled the certification of the trucks at issue in this appeal.  Accordingly, the FEMA funding that was de-obligated because trucks were deemed “uncertified” or “unverified” is eligible and should be re-instated.

  1. Debris Exceeding 100 Percent of Truck Capacity

The second issue of this appeal involves excess load capacity.  FEMA de-obligated $150,644.98 to address the total amount billed for excess cubic yard capacity.  The Applicant asserts that this overage primarily is due to misplaced certification forms that reflect the re-certification of trucks once they were re-fitted for expanded capacity.  In its second appeal, the Applicant produced documentation to address many of the trucks associated with this issue.  However, by the Applicant’s admission, there are instances where it did not provide documentation to reflect that the truck was re-certified once it was re-fitted.[9]

For Trucks 6, 12, 430, 450, 505, and 711, the Applicant asserts that these trucks were “duplicate truck identification numbers” and the Applicant cannot locate the certification forms for the larger capacity trucks.[10]  While the February 14, 2014 letter states that the Applicant was unable to retrieve re-certification forms for these trucks, the May 14, 2014 letter provides haul tickets for these trucks that demonstrate that both a small and large capacity were noted throughout the hauling process.[11]  In addition, the haul ticket numbers associated with overages in the Excel spreadsheet document the larger capacities.[12]  Finally, the Excel spreadsheet shows a consistent increase representative of the larger capacity for the haul tickets that are identified as overages.  Considering the catastrophic magnitude of Hurricane Katrina, the Applicant had to produce records seven years after the disaster, and other extenuating circumstances, FEMA uses a level of reasonableness to review the Applicant’s documentation.  Although the Applicant did not provide certification forms for the larger capacity trucks, the documentation provided is sufficient to justify the Applicant’s assertion that Trucks 6, 12, 430, 450, 505, and 711 were duplicate truck identification numbers.

Regarding Trucks 7, 9, 11, 15, 61, 86, 704, and FB1, the Applicant asserts that the recertification forms for these trucks cannot be located, but the Excel spreadsheet demonstrates a consistent increased capacity equivalent to the addition of boards or other measurable capacity addition.[13]  However, the Applicant failed to specify on which date the trucks were refitted or how much the capacity increased once refitted.  In addition, the Applicant did not provide haul tickets or other documentation to support this assertion.  Upon review of the Excel spreadsheet, FEMA could not conclude that the overages were consistent after a certain date for any of the trucks listed in the February 17, 2014 letter.  Accordingly, FEMA cannot re-obligate the amount associated with the increased capacity of these trucks. 

FEMA used the Excel spreadsheet to calculate overages attributable to Truck Numbers 7, 9, 11, 15, 61, 86, 704, and FB1.  First, FEMA sorted the spreadsheet by removing all entries prior to September 12, 2005.  FEMA then removed all trucks except the ones at issue.  This produced a total of 2,084 haul tickets.  From the 2,084 haul tickets, 66,737 cubic yards were billed.  FEMA then filtered the spreadsheet to only reflect entries with an overage amount greater than zero.  From the total cubic yards billed, 5,055 cubic yards, encompassed in 1,000 haul tickets, were over the allowed capacity.[14]  The total amount for the excess cubic yards billed is $65,115.78.  This amount will be deducted from the eligible amount of PA funding.   

Conclusion

The Applicant provided adequate documentation for the majority of debris costs de-obligated as the result of an OIG audit.  Originally, FEMA de-obligated $889,616.62 in PA funding between PWs 1221 and 16642.  Upon review of the documentation submitted on second appeal, $65,115.78 remains ineligible due to lack of documentation.  Accordingly, $824,500.84 is eligible and should be re-obligated.    


[1] The Applicant provided FEMA the Excel spreadsheet as supporting documentation with its second appeal.  The Excel spreadsheet is on file with FEMA.   

[2] See OFFICE OF MGMT. & BUDGET, EXEC. OFFICE OF THE PRESIDENT, OMB CIRCULAR A-87, COST PRINCIPLES FOR STATE, LOCAL, AND INDIAN TRIBAL GOVERNMENTS (2004) (codified at 2 C.F.R. § 225).

[3] See Project Worksheet 1215, City of Kenner, Version 2 (Jul. 12, 2012).

[4] See Response to Request for Information (RFI), City of Kenner, FEMA-1603-DR-LA, at 2 (Jan. 3, 2014).

[5] See Second Appeal Letter, City of Kenner, FEMA-1603-DR-LA, at Exhibit 7, 8 (Aug. 22, 2013).

[6] See Response to RFI, at 2.

[7] See Additional documentation provided at April 30, 2014 meeting (demonstrating that Truck 30 (uncertified) and Truck 100 (certified) used the same crew with the same crew leader on the same days and had the same load capacity).

[8] See City of Kenner, FEMA-1603-DR-LA, at Exhibit 10, Part 1 (demonstrating that Truck 29 does not exist, but Truck 629 did exist and was certified.  While the spreadsheet associates Truck 29 with Ticket Number 21566, the actual haul ticket associated with Ticket Number 21566 lists Truck 629.  Logically, FEMA concluded that an input error occurred at the time the spreadsheet was created.)

[9] See Letter from Jens Nielsen, Partner, All South Consulting Engineers, LLC, to Mark DeBosier, State Applicant Liaison, GOHSEP, at 2 (Feb. 14, 2014)(on file with FEMA)(stating “Unfortunately, we have not been able to locate all of the truck certifications for the large capacity trucks… The trucks in question are as follows: Truck No. 6, Truck No. 12, Truck No. 430, Truck No. 450, Truck No. 505, Truck No. 711.”); see also Letter from Jens Nielsen, Partner, All South Consulting Engineers, LLC, to Mark DeBosier, State Applicant Liaison, GOHSEP, (Feb. 17, 2014)(on file with FEMA)(asserting that evidence shows that Trucks 7, 9, 11, 15, 61, 86, 704, and FB1 were recertified, but the recertification form was misplaced.) and Letter from Michael Gaffney, Counsel, Hurndon & Gaffney, to Tod Wells, Deputy Director, FEMA Public Assistance Division, at 4 (May 14, 2014)(on file with FEMA).

[10] Letter from Jens Nielsen to Mark DeBosier at 2 (Feb. 14, 2014).

[11] See Letter from Michael Gaffney, Counsel, Hurndon & Gaffney, to Tod Wells, Deputy Director, FEMA Public Assistance Division, at Attachment (May 14, 2014).

[12] Id.

[13] See Letter from Jens Nielsen to Mark DeBosier, at 2-3 (Feb. 17, 2014).

[14] In the second appeal, the Applicant argues that certain errors in the spreadsheet are attributable to the spreadsheet’s creator manually inputting figures—as opposed to using formulas—for certain entries.  To address the Applicant’s concern, FEMA reviewed 200 entries (20 percent) to verify no input errors occurred.

 

8 Sep 2014
Appeal Type: 
2nd
Report Type: 
PW
Appeal Categories: 
Applicant Name: 
City of Athens
Disaster Number: 
4077-DR-OH
DSR: 
1033
Date Signed: 
Thursday, September 4, 2014
PA ID: 
009-02736-00
Summary/Brief: 

Conclusion:  The City of Athens’ permanently mounted generator costs are eligible; however, the eligible cost associated with that usage is limited to the cost of the fuel consumed during the performance of eligible work.

Summary Paragraph

During the incident period of June 29 through July 2, 2012, strong winds and severe storms produced extensive damage, causing downed utility lines and widespread power outages for multiple days.  The City of Athens (Applicant) utilized two temporary and five permanently mounted generators during the event to support emergency protective measures at the Law Administration Building and four pump stations.  FEMA prepared Project Worksheet (PW) 1033 for $33,212.88 to fund usage of the temporary generators, force account labor costs, and fuel for the permanently mounted generators.  FEMA did not reimburse the usage of the five permanently mounted generators based on FEMA’s schedule of equipment rates.  The Applicant submitted a first appeal for $6,542.01 requesting that FEMA use equipment rates for the permanently mounted generators to determine eligible funding, because its insurer does not provide coverage for maintenance or depreciation of permanently mounted generators.  The Regional Administrator denied the first appeal, explaining that the ownership costs of permanently mounted generators are viewed as components of the cost of operating the facility.  The Applicant reiterates its position in its second appeal.

Authorities and Previous Appeals Discussed

  • Stafford Act §403,  42 U.S.C. § 5170b(3)
  • 44 C.F.R. § 206.226
  • Public Assistance Guide, FEMA 322 (June 2007), pages 54-55, 85
  • Public Assistance Digest, FEMA 321 (Jan. 2008), page 135
  • FEMA-DR-4077-OH, Trimble Township Wastewater Treatment District (Jan. 17, 2014)

Headnotes

  • 42 U.S.C. § 5170b(3) and 44 CFR § 206.225(a)(3) provide that generally, those prudent actions taken by an Applicant to ensure the continuation of essential public services and protect lives and public health are eligible for assistance.
  • FEMA 322, Public Assistance Guide (June 2007), at 54-55 provides that the cost of obtaining power from alternate sources is considered an increased operating expense and is not eligible.  The guidance does provide an exception for increased operating costs constituting “reasonable short-term additional costs to an applicant that are directly related to accomplishing specific emergency health and safety tasks as part of eligible emergency protective measures.”
    • Application of this guidance necessitates a distinction between temporary and permanently mounted generators.
    • FEMA reimburses the use of temporary generators based on FEMA equipment rates or similar set rates. 
    • FEMA does not reimburse the use of permanently mounted generators based on equipment rates.  However, if permanently mounted generators are used in the performance of eligible emergency work, FEMA will reimburse the fuel consumed during the performance of that work.


 

Letter: 

September 4, 2014

Nancy J. Dragani
Executive Director
Ohio Emergency Management Agency
2855 West Dublin-Granville Road
Columbus, Ohio 43235-2206

Re: Second Appeal – City of Athens, PA ID 009-02736-00, Operation of Permanently Mounted Generators, FEMA-4077-DR-OH, Project Worksheet (PW) 1033

Dear Ms. Dragani:

This is in response to your letter dated July 3, 2013, which transmitted the referenced second appeal on behalf of the City of Athens (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $6,542.01 for reimbursement of the operation of permanently mounted generators based on FEMA’s schedule of equipment rates.

As explained in the enclosed analysis, I have determined that the Applicant’s use of permanently mounted generators is eligible.  However, the eligible cost associated with that usage is limited to the cost of the fuel consumed during the performance of eligible emergency work.  Therefore, I am denying the appeal.

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

Sincerely,

/s/

Brad J. Kieserman
Assistant Administrator
Recovery Directorate

Enclosure

cc: Janet Odeshoo
      Acting Regional Administrator
      FEMA Region V

Analysis: 

Background

During the incident period of June 29 through July 2, 2012, strong winds and severe storms produced extensive damage throughout Athens County, causing downed utility lines and widespread power outages for multiple days.  The City of Athens (Applicant) utilized two temporary and five permanently mounted generators during the event to support emergency protective measures at the Law Administration Building and four pump stations.  FEMA prepared Project Worksheet (PW) 1033 for $33,212.88 to fund the force account labor costs associated with emergency protective measures, fuel for the permanently mounted generators, and usage of the temporary generators based on FEMA’s schedule of equipment rates.  Because five of the generators were permanently mounted, FEMA did not reimburse the use of the those generators based on FEMA’s schedule of equipment rates, but rather for fuel costs only ($1,650.00). 

First Appeal

The Applicant submitted a first appeal for $6,542.01 in a letter dated March 25, 2013, asserting that reimbursement for the permanently mounted generator usage should be based on FEMA’s schedule of equipment rates because its insurer does not provide coverage for maintenance or depreciation of permanently mounted generators.  The FEMA Region V Regional Administrator denied the first appeal in a letter dated May 7, 2013, explaining that the depreciation and ownership costs of permanently mounted generators are viewed as components of the cost of operating the facility.

Second Appeal

The Applicant submitted a second appeal for $6,542.01 in a letter dated June 6, 2013, reiterating its request for FEMA to apply equipment rates in reimbursing the permanently mounted generator usage.  The Applicant’s second appeal letter states that the Applicant’s insurance covers the generators but contains a clause that excludes maintenance and depreciation.  The Grantee supports the Applicant’s second appeal, and its transmittal letter also cites a second appeal under FEMA-3288-EM-FL, dated January 17, 2012, involving a Miami-Dade County, Florida, project for which FEMA funded permanently mounted generator costs using FEMA’s schedule of equipment rates.

Discussion

FEMA policy specifically provides that the cost of obtaining power from alternate sources, with a few exceptions, is considered an increased operating expense and is generally not eligible for Public Assistance.[1]  FEMA’s policy provides exceptions, however, for “reasonable short-term additional costs to an applicant that are directly related to accomplishing specific emergency health and safety tasks as part of eligible emergency protective measures.”[2]  A specific example of such an exception is the “increased utility costs of a permanently mounted generator at a hospital or police station.”[3]   The FEMA Public Assistance Guide also lists the use of “temporary generators for facilities that provide health and safety activities” as an example of an emergency protective measure that can be undertaken by a community before, during, and following a disaster.[4]

Recent appeals and appeal decisions have highlighted confusion with regard to distinguishing between the eligible costs associated with the use of permanently mounted generators compared to temporary generators and the underlying rationale for such distinctions.[5]  Use of the terms “portable” and “fixed” as interchangeable with “temporary” and “permanently mounted” has created additional ambiguity by primarily focusing on the physical placement of the generator rather than the duration, intent and purpose of the placement.  

As such, it is important to reinforce the distinction between temporary and permanently mounted generators.  FEMA reimburses the use of temporary generators based on FEMA equipment rates or similar set rates in large part because the purpose of the placement of those items at the facility is related to the disaster in question and temporary in nature.  FEMA equipment rates include such costs as operation of equipment, depreciation, overhead, maintenance, field repairs, fuel, lubricants, tires, Occupational Safety and Health Administration equipment, and other costs incidental to operation.  In contrast to temporary generators, permanently mounted generators, whether a fixture as described within OMB Circular A-87, mounted on a pad within a shed servicing a building, or affixed or otherwise bolted down to a slab adjacent to a building, typically have been placed in their locations for reasons that preceded the disaster and with an intent that they remain there afterward.  Hence, the fundamental purpose, nature, and duration of the placement of a permanent generator differ from a temporary generator that is brought in to provide temporary emergency power during the time of the disaster in question.  The purpose of permanently mounted generators is to provide backup power whenever necessary, and not only as a consequence of a disaster.  Recognizing such a purpose, it is reasonable to assume the associated overhead costs for permanently mounted generators is covered by the applicant’s operating budget and that the only out-of-pocket expense for operating them is the increased operating expense of fuel used.  Accordingly, FEMA will reimburse fuel costs for permanently mounted generators if they are used to perform eligible emergency work because those are the only increased costs incurred by the applicant as a direct result of the event.  This policy distinction applies to permanently mounted generators as a matter of principle, regardless of circumstances associated with an individual applicant’s insurance coverage, the placement of a permanently mounted generator in a leased facility, or whether maintenance costs for a permanently mounted generator are included in an applicant’s operating budget.

With regard to the fundamental issue of this appeal, the basic facts are analogous to those in the January 2014 Trimble Township Wastewater Treatment District second appeal decision.  The Trimble second appeal decision reinforced existing policy in finding that when permanently mounted generators are used in the performance of eligible emergency work, FEMA will reimburse the fuel consumed during the performance of that work, but will not reimburse the usage based on equipment rates. 

Conclusion

FEMA does not reimburse the use of permanently mounted generators based on equipment rates.  However, if permanently mounted generators are used in the performance of eligible emergency work, FEMA will reimburse the fuel consumed during the performance of that work.  In this case, FEMA has provided all of the eligible funding available for the permanently mounted generator usage in PW 1033.


[1] See FEMA 322, Public Assistance Guide (June 2007), at 54-55.

[2] Id.at 55.

[3] Id.

[4] Id. at 72.

[5] See FEMA-DR-4077-OH, Trimble Township Wastewater Treatment District (January 17, 2014) (noting unclear direction provided by prior second appeal decisions as to eligible costs associated with permanently mounted generator usage).  The Trimble decision also found that the Miami-Dade second appeal decision, referenced by the Grantee, accurately reflected FEMA policy regarding reimbursement of permanently mounted generator usage but provided ambiguous direction to the Regional Administrator and consequently was misapplied.  

 

8 Sep 2014
Appeal Type: 
2nd
Report Type: 
PW
Appeal Categories: 
Applicant Name: 
Paulding County Emergency Management Agency
Disaster Number: 
4077-DR-OH
DSR: 
510
Date Signed: 
Thursday, September 4, 2014
PA ID: 
125-08399-00
Summary/Brief: 

Conclusion:  The Paulding County’s permanently mounted generator costs are eligible; however, the eligible cost associated with that usage is limited to the cost of the fuel consumed during the performance of eligible work.

Summary Paragraph

During the incident period of June 29 through July 2, 2012, strong winds and severe storms produced extensive damage, causing downed utility lines and widespread power outages for multiple days.  The Paulding County Emergency Management Agency (Applicant) utilized two permanently mounted generators during the event to support emergency protective measures at its Emergency Operations Center and communications tower.  FEMA prepared Project Worksheet (PW) 510 for $3,803.32 to fund the fuel for the permanently mounted generators.  Because both of the generators were permanently mounted, FEMA did not reimburse the cost of operating those generators based on FEMA’s schedule of equipment rates.  The Applicant submitted a first appeal for $2,125.00 requesting that FEMA use equipment rates for the permanently mounted generators to determine eligible funding, because its permanently mounted generator was housed in a rented facility.  The Regional Administrator denied the first appeal, explaining that the ownership costs of permanently mounted generators viewed as components of the cost of operating the facility.  The Applicant reiterates its position in its second appeal.

Authorities and Previous Appeals Discussed

  • Stafford Act §403,  42 U.S.C. § 5170b(3)
  • 44 CFR § 206.226
  • Public Assistance Guide, FEMA 322 (June 2007), pages 54-55, 85
  • Public Assistance Digest, FEMA 321 (Jan. 2008), page 135
  • FEMA-DR-4077-OH, Trimble Township Wastewater Treatment District (Jan. 17, 2014)

Headnotes

  • 42 U.S.C. § 5170b(3) and 44 CFR § 206.225(a)(3) provide that generally, those prudent actions taken by an Applicant to ensure the continuation of essential public services and protect lives and public health are eligible for assistance.
  • FEMA 322, Public Assistance Guide (June 2007), at 54-55 provides that the cost of obtaining power from alternate sources is considered an increased operating expense and is not eligible.  The guidance does provide an exception for increased operating costs constituting “reasonable short-term additional costs to an applicant that are directly related to accomplishing specific emergency health and safety tasks as part of eligible emergency protective measures.”
    • Application of this guidance necessitates a distinction between temporary and permanently mounted generators.
    • FEMA reimburses the use of temporary generators based on FEMA equipment rates or similar set rates. 
    • FEMA does not reimburse the use of permanently mounted generators based on equipment rates.  However, if permanently mounted generators are used in the performance of eligible emergency work, FEMA will reimburse the fuel consumed during the performance of that work.


 

 


 

Letter: 

September 4, 2014

Nancy J. Dragani
Executive Director
Ohio Emergency Management Agency
2855 West Dublin-Granville Road
Columbus, Ohio 43235-2206

Re: Second Appeal – Paulding County Emergency Management Agency, PA ID 125-08399-00, Operation of Permanently Mounted Generators, FEMA-4077-DR-OH, Project Worksheet (PW) 510

Dear Ms. Dragani:

This is in response to your letter dated July 3, 2013, which transmitted the referenced second appeal on behalf of the Paulding County Emergency Management Agency (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $2,125.00 for reimbursement of the operation of permanently mounted generators based on FEMA’s schedule of equipment rates.

As explained in the enclosed analysis, I have determined that the Applicant’s use of permanently mounted generators is eligible. However, the eligible cost associated with that usage is limited to the cost of the fuel consumed during the performance of eligible emergency work.  Therefore, I am denying the appeal.

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

Sincerely,

/s/

Brad J. Kieserman
Assistant Administrator
Recovery Directorate

Enclosure

cc: Janet Odeshoo
     Acting Regional Administrator
     FEMA Region V

Analysis: 

Background

During the incident period of June 29 through July 2, 2012, strong winds and severe storms produced extensive damage throughout Paulding County, causing downed utility lines and widespread power outages for multiple days.  The Paulding County Emergency Management Agency (Applicant) utilized two permanently mounted generators during the event to support emergency protective measures at its Emergency Operations Center and communications tower.  FEMA prepared Project Worksheet (PW) 510 for $3,803.32 to fund the fuel for the permanently mounted generators.  Because both of the generators were permanently mounted, FEMA did not reimburse the use of those generators based on FEMA’s equipment rates, but rather for fuel costs only. 

First Appeal

The Applicant submitted a first appeal for $2,125.00 in a letter dated March 11, 2013, asserting that reimbursement for the permanently mounted generator usage should be based on FEMA’s schedule of equipment rates because its permanently mounted generator was housed in a rented facility.  The FEMA Region V Regional Administrator denied the first appeal in a letter dated May 7, 2013, explaining that the depreciation and ownership costs of permanently mounted generators are viewed as components of the cost of operating the facility.

Second Appeal

The Applicant submitted a second appeal for $2,125.00 in a letter dated June 27, 2013, reiterating its request for FEMA to apply equipment rates in reimbursing the permanently mounted generator usage.  The Applicant’s second appeal letter states that the Applicant rents the facility that houses the generators and it has the responsibility of operating and maintaining the generators, not the facility owner. The Grantee supports the Applicant’s appeal and its transmittal letter also cites a second appeal under FEMA-3288-EM-FL, dated January 17, 2012, involving a Miami-Dade County, Florida, project for which FEMA funded permanently mounted generator costs using FEMA’s schedule of equipment rates.

Discussion

FEMA policy specifically provides that the cost of obtaining power from alternate sources, with a few exceptions, is considered an increased operating expense and is generally not eligible for Public Assistance.[1]  FEMA’s policy provides exceptions, however, for “reasonable short-term additional costs to an applicant that are directly related to accomplishing specific emergency health and safety tasks as part of eligible emergency protective measures.”[2]  A specific example of such an exception is the “increased utility costs of a permanently mounted generator at a hospital or police station.”[3]   The FEMA Public Assistance Guide also lists the use of “temporary generators for facilities that provide health and safety activities” as an example of an emergency protective measure that can be undertaken by a community before, during, and following a disaster.[4]

Recent appeals and appeal decisions have highlighted confusion with regard to distinguishing between the eligible costs associated with the use of permanently mounted generators compared to temporary generators and the underlying rationale for such distinctions.[5]  Use of the terms “portable” and “fixed” as interchangeable with “temporary” and “permanently mounted” has created additional ambiguity by primarily focusing on the physical placement of the generator rather than the duration, intent and purpose of the placement.  

As such, it is important to reinforce the distinction between temporary and permanently mounted generators.  FEMA reimburses the use of temporary generators based on FEMA equipment rates or similar set rates in large part because the purpose of the placement of those items at the facility is related to the disaster in question and temporary in nature.  FEMA equipment rates include such costs as operation of equipment, depreciation, overhead, maintenance, field repairs, fuel, lubricants, tires, Occupational Safety and Health Administration equipment, and other costs incidental to operation.  In contrast to temporary generators, permanently mounted generators, whether a fixture as described within OMB Circular A-87, mounted on a pad within a shed servicing a building, or affixed or otherwise bolted down to a slab adjacent to a building, typically have been placed in their locations for reasons that preceded the disaster and with an intent that they remain there afterward.  Hence, the fundamental purpose, nature, and duration of the placement of a permanent generator differ from a temporary generator that is brought in to provide temporary emergency power during the time of the disaster in question.  The purpose of permanently mounted generators is to provide backup power whenever necessary, and not only as a consequence of a disaster.  Recognizing such a purpose, it is reasonable to assume the associated overhead costs for permanently mounted generators is covered by the applicant’s operating budget and that the only out-of-pocket expense for operating them is the increased operating expense of fuel used.  Accordingly, FEMA will reimburse fuel costs for permanently mounted generators if they are used to perform eligible emergency work because those are the only increased costs incurred by the applicant as a direct result of the event.  This policy distinction applies to permanently mounted generators as a matter of principle, regardless of circumstances associated with an individual applicant’s insurance coverage, the placement of a permanently mounted generator in a leased facility, or whether maintenance costs for a permanently mounted generator are included in an applicant’s operating budget.

With regard to the fundamental issue of this appeal, the basic facts are analogous to those in the January 2014 Trimble Township Wastewater Treatment District second appeal decision.  The Trimble second appeal decision reinforced existing policy in finding that when permanently mounted generators are used in the performance of eligible emergency work, FEMA will reimburse the fuel consumed during the performance of that work, but will not reimburse the usage based on equipment rates. 

Conclusion

FEMA does not reimburse the use of permanently mounted generators based on equipment rates.  However, if permanently mounted generators are used in the performance of eligible emergency work, FEMA will reimburse the fuel consumed during the performance of that work.  In this case, FEMA has provided all of the eligible funding available for the permanently mounted generator usage in PW 510.


[1] See FEMA 322, Public Assistance Guide (June 2007), at 54-55.

[2] Id.at 55.

[3] Id.

[4] Id. at 72.

[5] See FEMA-DR-4077-OH, Trimble Township Wastewater Treatment District (January 17, 2014) (noting unclear direction provided by prior second appeal decisions as to eligible costs associated with permanently mounted generator usage).  The Trimble decision also found that the Miami-Dade second appeal decision, referenced by the Grantee, accurately reflected FEMA policy regarding reimbursement of permanently mounted generator usage but provided ambiguous direction to the Regional Administrator and consequently was misapplied.  

 

8 Sep 2014
Appeal Type: 
2nd
Report Type: 
PW
Appeal Categories: 
Applicant Name: 
Putnam County Emergency Management Agency
Disaster Number: 
4077-DR-OH
DSR: 
872
Date Signed: 
Thursday, September 4, 2014
PA ID: 
137-U7CM9-00
Summary/Brief: 

Conclusion:  The Putnam County Emergency Management Agency’s permanently mounted generator costs are eligible; however, the eligible cost associated with that usage is limited to the cost of the fuel consumed during the performance of eligible work.

Summary Paragraph

During the incident period of June 29 through July 2, 2012, strong winds and severe storms produced extensive damage, causing downed utility lines and widespread power outages for multiple days.  The Putnam County Emergency Management Agency (Applicant) utilized two temporary generators and one permanently mounted generator during the event to support emergency protective measures at a telephone company, St. Rita’s Medical Center, and the EMS/EMA station.  FEMA prepared Project Worksheet (PW) 872 for $7,631.00 to fund the temporary generators and fuel for the permanently mounted generator.  FEMA did not reimburse the usage of that generator based on FEMA’s schedule of equipment rates.  The Applicant submitted a first appeal for $2,152.05 requesting that FEMA use equipment rates for the permanently mounted generators to determine eligible funding, because its permanently mounted generator was housed in a leased facility.  The Regional Administrator denied the first appeal, explaining that the ownership costs of permanently mounted generators are built in to the cost of operating the facility.  The Applicant maintains that it leases the facility where the permanently mounted generator is located and it owns the generator.

Authorities and Previous Appeals Discussed

  • Stafford Act §403,  42 U.S.C. § 5170b(3)
  • 44 C.F.R. § 206.226
  • Public Assistance Guide, FEMA 322 (June 2007), pages 54-55, 85
  • Public Assistance Digest, FEMA 321 (Jan. 2008), page 135
  • FEMA-DR-4077-OH, Trimble Township Wastewater Treatment District (Jan. 17, 2014)

Headnotes

  • 42 U.S.C. § 5170b(3) and 44 CFR § 206.225(a)(3) provide that generally, those prudent actions taken by an Applicant to ensure the continuation of essential public services and protect lives and public health are eligible for assistance.
  • FEMA 322, Public Assistance Guide (June 2007), at 54-55 provides that the cost of obtaining power from alternate sources is considered an increased operating expense and is not eligible.  The guidance does provide an exception for increased operating costs constituting “reasonable short-term additional costs to an applicant that are directly related to accomplishing specific emergency health and safety tasks as part of eligible emergency protective measures.”
    • Application of this guidance necessitates a distinction between temporary and permanently mounted generators.
    • FEMA reimburses the use of temporary generators based on FEMA equipment rates or similar set rates. 
    • FEMA does not reimburse the use of permanently mounted generators based on equipment rates.  However, if permanently mounted generators are used in the performance of eligible emergency work, FEMA will reimburse the fuel consumed during the performance of that work.


 

Letter: 

September 4, 2014

Nancy J. Dragani
Executive Director
Ohio Emergency Management Agency
2855 West Dublin-Granville Road
Columbus, Ohio 43235-2206

Re: Second Appeal – Putnam County Emergency Management Agency, PA ID 137-U7CM9-00, Operation of Permanently Mounted Generator, FEMA-4077-DR-OH, Project Worksheet (PW) 872

Dear Ms. Dragani:

This is in response to your letter dated July 3, 2013, which transmitted the referenced second appeal on behalf of the Putnam County Emergency Management Agency (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $2,152.05 for reimbursement of the operation of a permanently mounted generator based on FEMA’s schedule of equipment rates.

As explained in the enclosed analysis, I have determined that the Applicant’s use of a permanently mounted generator is eligible.  However, the eligible cost associated with that usage is limited to the cost of the fuel consumed during the performance of eligible emergency work.  Therefore, I am denying the appeal.

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

Sincerely,

/s/

Brad J. Kieserman
Assistant Administrator
Recovery Directorate

Enclosure

cc: Janet Odeshoo
     Acting Regional Administrator
     FEMA Region V

Analysis: 

Background

During the incident period of June 29 through July 2, 2012, strong winds and severe storms produced extensive damage throughout Putnam County causing downed utility lines and widespread power outages for multiple days.  The Putnam County Emergency Management Agency (Applicant) utilized two temporary generators and one permanently mounted generator during the event to support emergency protective measures at a telephone company, St. Rita’s Medical Center, and the EMS/EMA station.  FEMA prepared Project Worksheet (PW) 872 for $7,631.00 to fund the force account labor costs associated with emergency protective measures, fuel for the permanently mounted generator, and usage of the temporary generators based on FEMA’s schedule of equipment rates.  Because one of the generators was permanently mounted, FEMA did not reimburse the use of that generator based on FEMA’s equipment rates, but rather for fuel costs only. 

First Appeal

The Applicant submitted a first appeal for $2,152.05 in a letter dated March 5, 2013, asserting that reimbursement for the permanently mounted generator usage should be based on FEMA’s schedule of equipment rates because its permanently mounted generator was housed in a leased facility.  The FEMA Region V Regional Administrator denied the first appeal in a letter dated May 7, 2013, explaining that the depreciation and ownership costs of permanently mounted generators are viewed as components of the cost of operating the facility.

Second Appeal

The Applicant submitted a second appeal for $2,152.00 in a letter dated May 22, 2013, reiterating its request for FEMA to apply equipment rates in reimbursing the permanently mounted generator usage.  The Applicant’s second appeal letter states that the Applicant owns the generator in question but leases the facility in which the generator is housed.  The Grantee supports the Applicant’s second appeal, and the Grantee’s transmittal letter also cites a second appeal under FEMA-3288-EM-FL, dated January 17, 2012, involving a Miami-Dade County, Florida, project for which FEMA funded permanently mounted generator costs using FEMA’s schedule of equipment rates.

Discussion

FEMA policy specifically provides that the cost of obtaining power from alternate sources, with a few exceptions, is considered an increased operating expense and is generally not eligible for Public Assistance.[1]  FEMA’s policy provides exceptions, however, for “reasonable short-term additional costs to an applicant that are directly related to accomplishing specific emergency health and safety tasks as part of eligible emergency protective measures.”[2]  A specific example of such an exception is the “increased utility costs of a permanently mounted generator at a hospital or police station.”[3]   The FEMA Public Assistance Guide also lists the use of “temporary generators for facilities that provide health and safety activities” as an example of an emergency protective measure that can be undertaken by a community before, during, and following a disaster.[4]

Recent appeals and appeal decisions have highlighted confusion with regard to distinguishing between the eligible costs associated with the use of permanently mounted generators compared to temporary generators and the underlying rationale for such distinctions.[5]  Use of the terms “portable” and “fixed” as interchangeable with “temporary” and “permanently mounted” has created additional ambiguity by primarily focusing on the physical placement of the generator rather than the duration, intent and purpose of the placement.  

As such, it is important to reinforce the distinction between temporary and permanently mounted generators.  FEMA reimburses the use of temporary generators based on FEMA equipment rates or similar set rates in large part because the purpose of the placement of those items at the facility is related to the disaster in question and temporary in nature.  FEMA equipment rates include such costs as operation of equipment, depreciation, overhead, maintenance, field repairs, fuel, lubricants, tires, Occupational Safety and Health Administration equipment, and other costs incidental to operation.  In contrast to temporary generators, permanently mounted generators, whether a fixture as described within OMB Circular A-87, mounted on a pad within a shed servicing a building, or affixed or otherwise bolted down to a slab adjacent to a building, typically have been placed in their locations for reasons that preceded the disaster and with an intent that they remain there afterward.  Hence, the fundamental purpose, nature, and duration of the placement of a permanent generator differ from a temporary generator that is brought in to provide temporary emergency power during the time of the disaster in question.  The purpose of permanently mounted generators is to provide backup power whenever necessary, and not only as a consequence of a disaster.  Recognizing such a purpose, it is reasonable to assume the associated overhead costs for permanently mounted generators is covered by the applicant’s operating budget and that the only out-of-pocket expense for operating them is the increased operating expense of fuel used.  Accordingly, FEMA will reimburse fuel costs for permanently mounted generators if they are used to perform eligible emergency work because those are the only increased costs incurred by the applicant as a direct result of the event.  This policy distinction applies to permanently mounted generators as a matter of principle, regardless of circumstances associated with an individual applicant’s insurance coverage, the placement of a permanently mounted generator in a leased facility, or whether maintenance costs for a permanently mounted generator are included in an applicant’s operating budget.

With regard to the fundamental issue of this appeal, the basic facts are analogous to those in the January 2014 Trimble Township Wastewater Treatment District second appeal decision.  The Trimble second appeal decision reinforced existing policy in finding that when permanently mounted generators are used in the performance of eligible emergency work, FEMA will reimburse the fuel consumed during the performance of that work, but will not reimburse the usage based on equipment rates. 

Conclusion

FEMA does not reimburse the use of permanently mounted generators based on equipment rates.  However, if permanently mounted generators are used in the performance of eligible emergency work, FEMA will reimburse the fuel consumed during the performance of that work.  In this case, FEMA has provided all of the eligible funding available for the permanently mounted generator usage in PW 872.


[1] See FEMA 322, Public Assistance Guide (June 2007), at 54-55.

[2] Id.at 55.

[3] Id.

[4] Id. at 72.

[5] See FEMA-DR-4077-OH, Trimble Township Wastewater Treatment District (January 17, 2014) (noting unclear direction provided by prior second appeal decisions as to eligible costs associated with permanently mounted generator usage).  The Trimble decision also found that the Miami-Dade second appeal decision, referenced by the Grantee, accurately reflected FEMA policy regarding reimbursement of permanently mounted generator usage but provided ambiguous direction to the Regional Administrator and consequently was misapplied.

 

 

8 Sep 2014
Appeal Type: 
2nd
Report Type: 
PW
Appeal Categories: 
Applicant Name: 
Van Wert County Emergency Management Agency
Disaster Number: 
4077-DR-OH
DSR: 
322
Date Signed: 
Thursday, September 4, 2014
PA ID: 
121-U1HKY-00
Summary/Brief: 

Conclusion:  Van Wert County’s permanently mounted generator costs are eligible; however, the eligible cost associated with that usage is limited to the cost of the fuel consumed during the performance of eligible work.

Summary Paragraph

During the incident period of June 29 through July 2, 2012, strong winds and severe storms produced extensive damage, causing downed utility lines and widespread power outages for multiple days.  The Van Wert County Emergency Management Agency (Applicant) utilized two temporary generators and one permanently mounted generator during the event to support emergency protective measures at its Emergency Operations Center and a shelter at its middle school. FEMA prepared Project Worksheet (PW) 322 for $11,883.60 to fund the temporary generators and fuel for the permanently mounted generator.  FEMA did not reimburse the usage of the permanently mounted generator based on FEMA’s schedule of equipment rates.  The Applicant submitted a first appeal for $1,404.43 requesting that FEMA use equipment rates for the permanently mounted generators to determine eligible funding, because its permanently mounted generator was housed in a leased facility.  The Regional Administrator denied the first appeal, explaining that the ownership costs of permanently mounted generators are viewed as components of the cost of operating the facility.  The Applicant reiterates its position in its second appeal.

Authorities and Previous Appeals Discussed

  • Stafford Act §403,  42 U.S.C. § 5170b(3)
  • 44 CFR § 206.226
  • Public Assistance Guide, FEMA 322 (June 2007), pages 54-55, 85
  • Public Assistance Digest, FEMA 321 (Jan. 2008), page 135
  • FEMA-DR-4077-OH, Trimble Township Wastewater Treatment District (Jan. 17, 2014)

Headnotes

  • 42 U.S.C. § 5170b(3) and 44 CFR § 206.225(a)(3) provide that generally, those prudent actions taken by an Applicant to ensure the continuation of essential public services and protect lives and public health are eligible for assistance.
  • FEMA 322, Public Assistance Guide (June 2007), at 54-55 provides that the cost of obtaining power from alternate sources is considered an increased operating expense and is not eligible.  The guidance does provide an exception for increased operating costs constituting “reasonable short-term additional costs to an applicant that are directly related to accomplishing specific emergency health and safety tasks as part of eligible emergency protective measures.”
    • Application of this guidance necessitates a distinction between temporary and permanently mounted generators.
    • FEMA reimburses the use of temporary generators based on FEMA equipment rates or similar set rates. 
    • FEMA does not reimburse the use of permanently mounted generators based on equipment rates.  However, if permanently mounted generators are used in the performance of eligible emergency work, FEMA will reimburse the fuel consumed during the performance of that work.


 

Letter: 

September 4, 2014

Nancy J. Dragani
Executive Director
Ohio Emergency Management Agency
2855 West Dublin-Granville Road
Columbus, Ohio 43235-2206

Re: Second Appeal – Van Wert County Emergency Management Agency, PA ID 121-U1HKY-00, Operation of Permanently Mounted Generator, FEMA-4077-DR-OH, Project Worksheet (PW) 322

Dear Ms. Dragani:

This is in response to your letter dated July 3, 2013, which transmitted the referenced second appeal on behalf of the Van Wert County Emergency Management Agency (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $1,404.43 for reimbursement of the operation of a permanently mounted generator based on FEMA’s schedule of equipment rates.

As explained in the enclosed analysis, I have determined that the Applicant’s use of a permanently mounted generator is eligible.  However, the eligible cost associated with that usage is limited to the cost of the fuel consumed during the performance of eligible emergency work.  Therefore, I am denying the appeal.

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

Sincerely,

/s/

Brad J. Kieserman
Assistant Administrator
Recovery Directorate

Enclosure

cc: Janet Odeshoo
     Acting Regional Administrator
     FEMA Region V

Analysis: 

Background

During the incident period of June 29 through July 2, 2012, strong winds and severe storms produced extensive damage throughout Van Wert County, causing downed utility lines and widespread power outages for multiple days.  The Van Wert County Emergency Management Agency (Applicant) utilized two temporary generators and one permanently mounted generator during the event to support emergency protective measures at its Emergency Operations Center and a shelter at its middle school shelter.  FEMA prepared Project Worksheet (PW) 322 for $11,883.60 to fund usage of the temporary generators based on FEMA’s schedule of equipment rates and fuel for the permanently mounted generator.  Because one of the generators was permanently mounted, FEMA did not reimburse the use of that generator based on FEMA’s equipment rates, but rather for fuel costs only. 

First Appeal

The Applicant submitted a first appeal for $1,404.43 in a letter dated March 26, 2013, asserting that reimbursement for the permanently mounted generator usage should be based on FEMA’s schedule of equipment rates because its permanently mounted generator was housed in a leased facility.  The FEMA Region V Regional Administrator denied the first appeal in a letter dated May 7, 2013, explaining that the depreciation and ownership costs of permanently mounted generators already are viewed as components of the cost of operating the facility.

Second Appeal

The Applicant submitted a second appeal for $1,404.43 in a letter dated June 13, 2013, reiterating its request for FEMA to apply equipment rates in reimbursing the permanently mounted generator usage.  The Applicant’s second appeal letter states that the Applicant leases the facility that houses the generator and in its first appeal letter, it maintains that it is responsible for the operation and maintenance of the generator.  The Applicant submitted its lease for the facility with its second appeal.  The Grantee supports the Applicant’s appeal, and its transmittal letter also cites a second appeal under FEMA-3288-EM-FL, dated January 17, 2012, involving a Miami-Dade County, Florida, project for which FEMA funded permanently mounted generator costs using FEMA’s schedule of equipment rates.

Discussion

FEMA policy specifically provides that the cost of obtaining power from alternate sources, with a few exceptions, is considered an increased operating expense and is generally not eligible for Public Assistance.[1]  FEMA’s policy provides exceptions, however, for “reasonable short-term additional costs to an applicant that are directly related to accomplishing specific emergency health and safety tasks as part of eligible emergency protective measures.”[2]  A specific example of such an exception is the “increased utility costs of a permanently mounted generator at a hospital or police station.”[3]   The FEMA Public Assistance Guide also lists the use of “temporary generators for facilities that provide health and safety activities” as an example of an emergency protective measure that can be undertaken by a community before, during, and following a disaster.[4]

Recent appeals and appeal decisions have highlighted confusion with regard to distinguishing between the eligible costs associated with the use of permanently mounted generators compared to temporary generators and the underlying rationale for such distinctions.[5]  Use of the terms “portable” and “fixed” as interchangeable with “temporary” and “permanently mounted” has created additional ambiguity by primarily focusing on the physical placement of the generator rather than the duration, intent and purpose of the placement. 

As such, it is important to reinforce the distinction between temporary and permanently mounted generators.  FEMA reimburses the use of temporary generators based on FEMA equipment rates or similar set rates in large part because the purpose of the placement of those items at the facility is related to the disaster in question and temporary in nature.  FEMA equipment rates include such costs as operation of equipment, depreciation, overhead, maintenance, field repairs, fuel, lubricants, tires, Occupational Safety and Health Administration equipment, and other costs incidental to operation.  In contrast to temporary generators, permanently mounted generators, whether a fixture as described within OMB Circular A-87, mounted on a pad within a shed servicing a building, or affixed or otherwise bolted down to a slab adjacent to a building, typically have been placed in their locations for reasons that preceded the disaster and with an intent that they remain there afterward.  Hence, the fundamental purpose, nature, and duration of the placement of a permanent generator differ from a temporary generator that is brought in to provide temporary emergency power during the time of the disaster in question.  The purpose of permanently mounted generators is to provide backup power whenever necessary, and not only as a consequence of a disaster.  Recognizing such a purpose, it is reasonable to assume the associated overhead costs for permanently mounted generators is covered by the applicant’s operating budget and that the only out-of-pocket expense for operating them is the increased operating expense of fuel used.  Accordingly, FEMA will reimburse fuel costs for permanently mounted generators if they are used to perform eligible emergency work because those are the only increased costs incurred by the applicant as a direct result of the event.  This policy distinction applies to permanently mounted generators as a matter of principle, regardless of circumstances associated with an individual applicant’s insurance coverage, the placement of a permanently mounted generator in a leased facility, or whether maintenance costs for a permanently mounted generator are included in an applicant’s operating budget.

With regard to the fundamental issue of this appeal, the basic facts are analogous to those in the January 2014 Trimble Township Wastewater Treatment District second appeal decision.  The Trimble second appeal decision reinforced existing policy in finding that when permanently mounted generators are used in the performance of eligible emergency work, FEMA will reimburse the fuel consumed during the performance of that work, but will not reimburse the usage based on equipment rates.

Conclusion

FEMA does not reimburse the use of permanently mounted generators based on equipment rates.  However, if permanently mounted generators are used in the performance of eligible emergency work, FEMA will reimburse the fuel consumed during the performance of that work.  In this case, FEMA has provided all of the eligible funding available for the permanently mounted generator usage in PW 322.


[1] See FEMA 322, Public Assistance Guide (June 2007), at 54-55.

[2] Id.at 55.

[3] Id.

[4] Id. at 72.

[5] See FEMA-DR-4077-OH, Trimble Township Wastewater Treatment District (January 17, 2014) (noting unclear direction provided by prior second appeal decisions as to eligible costs associated with permanently mounted generator usage).  The Trimble decision also found that the Miami-Dade second appeal decision, referenced by the Grantee, accurately reflected FEMA policy regarding reimbursement of permanently mounted generator usage but provided ambiguous direction to the Regional Administrator and consequently was misapplied.

 

8 Sep 2014
Appeal Type: 
2nd
Report Type: 
PW
Appeal Categories: 
Applicant Name: 
Nashville-Davidson County
Disaster Number: 
1909-DR-TN
DSR: 
5522
Date Signed: 
Thursday, September 4, 2014
PA ID: 
037-52004-00
Summary/Brief: 

Conclusion:  The Applicant provided sufficient documentation to support the need for replacement of pipe insulation due to mold contamination.

Summary Paragraph

During the incident period of April 30 to May 18, 2010, severe storms and flooding caused the Cumberland River to overflow, submerging the Applicant’s K. R. Water Treatment Plant.  The Plant’s Filter/Chemical Building was inundated and its below-grade rooms flooded.  FEMA prepared PW 5522 in the amount of $3,128,178.01 for repairs to the building.  FEMA initially determined that the costs of the replacement of the pipe insulation due to mold contamination were ineligible because either the repairs were needed due to deferred maintenance or the contamination could not be verified.  The Applicant submitted a first appeal in the amount of $3,047,519.38 for several items, including $141,577.00 for the replacement of the pipe insulation.  The Regional Administrator (RA) found that there was limited contamination and not enough to merit full pipe insulation replacement; that the Applicant’s technical memorandum did not specify the precise facility location or dimensions of the tested pipes; and their unit linear costs.  Finally, the RA stated that the Applicant did not refute the original determination of deferred maintenance.  On second appeal, the Applicant argued that the damage was disaster-related, that it was necessary to replace the pipe insulation, and claimed that maintenance was not deferred.  The Applicant provided a survey report supporting the claim of adequate maintenance. 

Authorities and Second Appeals

  • 44 C.F.R. § 206.223(a)(1)
  • Recovery Division Fact Sheet 9580.100, Mold Remediation at 4 (Nov. 7, 2006)
  • PA Guide, at 32
  • City of Port Arthur, FEMA-1606-DR-TX, at 3.

Headnotes

  • 44 C.F.R. § 206.223(a)(1) provides that to be eligible for reimbursement, an item of work must “[b]e required as the result of the emergency or major disaster event.”
    • The pipe insulation was in an area that was completely submerged with floodwaters resulting from the disaster.
  • Recovery Division Fact Sheet 9580.100, Mold Remediation provides that “It is the responsibility of the applicant to show evidence of mold contamination or damage during the inspection.”
    • The Applicant conducted testing; 45 percent of the samples contained mold at that time. 
  • The PA Guide at 32 states that for “mold remediation to be eligible, the mold must not be a result of poor facility maintenance or failure to take protective measures in a reasonable time after the event.”
  • The Applicant took prompt action to drain and dry the plant immediately following the flood waters receding.
    • The Applicant provided a 2009 survey report to demonstrate proper maintenance.
  • City of Port Arthur, FEMA-1606-DR-TX, at 3, states that under FEMA’s mold remediation policy, “soft surfaces such as ceiling tiles, cellulose and fiberglass insulation, and wallboards should be replaced after being contaminated with mold.”
    • The Applicant’s paper-backed pipe insulation should be considered a soft surface.


 

 

Letter: 

September 4, 2014

David Purkey
Interim 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) 5522 – Pipe Insulation Replacement – Mold Contamination

Dear Mr. Purkey:

This is in response to your letter dated February 20, 2014, which transmitted the referenced second appeal on behalf of Nashville-Davidson County (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $141,577.00 for the replacement of mold contaminated pipe insulation.

As explained in the enclosed analysis, I have determined that the Applicant has demonstrated that the damage to the pipe insulation was caused by the flooding, that there was adequate maintenance, and that the pipe insulation replacement was necessary.  Accordingly, I am granting the appeal.  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: Andrew Velasquez, III
     Regional Administrator
     FEMA Region IV

Analysis: 

Background

During the incident period of April 30, 2010, to May 18, 2010, severe storms and flooding caused the Cumberland River to overflow.  The Nashville-Davidson County’s (Applicant) K.R. Harrington Water Treatment Plant was submerged.  The Filter/Chemical Building System of the water treatment plant was inundated and the below-grade rooms flooded.  The Applicant’s equipment, which had pipes with paper-backed piping insulation, was submerged.  The Applicant contracted to pump out, clean, and dry the facility immediately after the floodwaters receded.  On October 29, 2010, the Applicant had a bacteria and mold assessment conducted, which confirmed the presence of mold.  FEMA obligated Project Worksheet (PW) 5522 to address restoration of the Filter Building System for $3,128,178.01 on March 13, 2011.  The cost of the pipe insulation replacement was not obligated because the Applicant did not verify the contamination at the time and the damage was thought to be the result of deferred maintenance.

First Appeal

In a letter submitted June 1, 2011, the Applicant appealed a total of $3,047,519.38 in denied funding for direct administrative costs, resident engineering, mold on pipe insulation, metal door replacement, repairs to damaged flumes, repairs to damaged electrical wiring and cable, replacement of lime feed and fluoride feed equipment, replacement of a distributive control unit, replacement of butterfly valves in filter building clearwells, rebuilding pumps, and replacement of air compressors.  On December 6, 2013, the FEMA Region IV Regional Administrator (RA) issued a partial approval for $1,853,767.32, subject to insurance review and anticipated insurance proceeds.  The rest of the costs, including the replacement of the pipe insulation, were denied because, while the work may have been eligible, the documentation provided was not sufficient to prove that the damages were disaster-related. 

In FEMA’s first appeal response, the RA stated that the technical memorandum and report provided by the Applicant showed only limited mold contamination, findings which did not merit complete replacement. The RA also stated that the reports did not identify the facility location or dimensions of the tested pipes, and did not provide a unit cost per linear foot for pipe insulation removal and replacement.  Finally, the Applicant did not refute FEMA’s finding that the insulation damage resulted from deferred maintenance.  Therefore, the RA found that the Applicant provided insufficient documentation to show that the degradation of pipe insulation resulted from the flooding.  However, the Applicant used the same technical memorandum in six other appeals with this issue, and relief was granted in all of them.[1]

Second Appeal

On February 12, 2014, the Applicant submitted a second appeal letter to the State of Tennessee (Grantee).  The Grantee transmitted the Applicant’s second appeal to FEMA Region IV in a letter dated February 20, 2014, supporting the appeal.  The Grantee argues that the documentation submitted with the second appeal should be sufficient to allow reimbursement for the pipe insulation.  The Applicant limited its second appeal to the removal of the pipe insulation for $9,577.00 and the replacement of the pipe insulation for $132,000.00, totaling $141,577.00.

Discussion

Need for Removal and Replacement of Pipe Insulation

According to 44 C.F.R. § 206.223(a)(1), in order to be eligible, work must be required as the result of the disaster. The floodwaters reached two feet above grade on the outside building walls and completely submerged the interior, below-grade rooms for two to three days.[2]  On October 29, 2010, the Applicant had a bacteria and mold assessment conducted, which confirmed the presence of mold.  In a letter dated May 18, 2011, the Applicant’s consultant explained that their observation and assessment of the impacted facility led them to the conclusion that the insulation was damaged by a major water intrusion event and that all of insulation in the flood zone was impacted.  FEMA’s Fact Sheet on mold remediation incorporates guidance from the Environmental Protection Agency stating that fiberglass and cellulose insulation should be replaced following mold contamination.[3]  It does not reference a threshold for contamination remediation eligibility; rather it only instructs that water damaged fiberglass and cellulose installation should be discarded and replaced.   

Dimensions, Locations, and Cost

FEMA’s Public Assistance (PA) Guide provides that in a PW scope of work, “work should be specified as an action with quantifiable (length, width, depth, capacity) and descriptive (brick, wood, asphalt, timber deck bridge) terms.”[4]  The RA found that the technical memorandum and report provided by the Applicant did not identify which pipes were tested, their location in the facility, or the pipe dimensions.  On second appeal, the Applicant provided the locations and dimensions of the pipes in question, which correlate to PW line items numbered 3, 4, 9-14, and 16-19 from the PW’s damage description and scope of work.[5]  While the Applicant did not provide a unit cost per linear foot for pipe insulation removal and replacement, FEMA calculated the cost per linear foot by adding the totals requested for removal and replacement and dividing by the total linear feet of pipe insulation.  The resulting cost per linear foot was reasonable and comparable to the cost allowed on first appeal for the same applicant on PWs 5533, 5585, 5596, 5591, 5595, and 5597. 

Maintenance

The PA Guide states that for mold remediation to be eligible, “the mold must not be the result of poor facility maintenance or failure to take protective measures in a reasonable time after the event.”[6]  That the Applicant acted appropriately by hiring a contractor to pump out, clean, and dry the facility as soon as the floodwaters receded is not in dispute.  However, on first appeal, the RA found that the Applicant did not refute FEMA’s initial finding that the insulation damage resulted from deferred maintenance. 

In its second appeal submission, the Applicant states that the State of Tennessee’s Department of Environment and Conservation conducts routine sanitary surveys under its Drinking Water Program to ensure that water treatment facilities are compliant with the Safe Drinking Water Act.  The State’s 2009 survey did not make note of or deduct from the survey for any indication of the presence of mold.  In response to a specific request from FEMA, the Applicant provided a copy of the survey conducted on February 11-13 and 17, 2009.  The survey provided some recommendations but stated that “all other operations of the water system were of a superior nature.”  None of the recommendations applied to maintenance of the pipe insulation.  Furthermore, the survey included specific categories of equipment and associated scoring regarding maintenance.  Specifically, line items “4L.  Maintenance of Equipment, Buildings and (1) Grounds 1200-5-1-.02, .17(3), (17); and (19)”; “6B.  Inspection and Maintenance of Reservoirs, Tanks and Clearwell 1200-5-1-.17(16), (17), (33) and (34)”; and “7B.  Maintenance of Pumping Equipment 1200-5- (1-3) 1-.17(13)” were marked as “OK”, indicative of good maintenance practices.  These survey results sufficiently demonstrate that the pipes were properly maintained prior to the incident and that the damage was caused by the disaster.

Conclusion

The Applicant has provided documentation which identifies where the pipes were located, pipe dimensions, and unit costs for the insulation replacement.  The Applicant has also provided sufficient documentation to demonstrate that the insulation damage was a result of the flood event.  Therefore, the replacement of the mold contaminated pipe insulation is eligible.  A version to PW 5522 will be written to reflect this eligibility, subject to insurance review and anticipated insurance proceeds. 


[1] See first appeal responses for Nashville-Davidson County, PWs 5533 (Sept. 27, 2013); 5585 (Sept. 27, 2013); 5591 (Nov. 25, 2013); 5595 (Dec. 6, 2013); 5596 (Sept. 27, 2013); and 5597 (Nov. 25, 2013).

[2] Project Worksheet 5522, Nashville-Davidson County, Version 0 (Sept. 15, 2010).

[3] See Recovery Division Fact Sheet 9580.100, Mold Remediation at 4 (Nov. 7, 2006); see also FEMA Second Appeal Analysis, City of Port Arthur, FEMA-1606-DR-TX, (October 14, 2008) at 3.

[4] Public Assistance Guide, FEMA 322 at 101 (June 2007) (hereinafter PA Guide].

[5] PW 5522, Nashville-Davidson County, Version 0.

[6] PA Guide, at 32.

 

8 Sep 2014
Appeal Type: 
2nd
Report Type: 
PW
Appeal Categories: 
Applicant Name: 
Nashville-Davidson County
Disaster Number: 
1909-DR-TN
DSR: 
5405
Date Signed: 
Thursday, September 4, 2014
PA ID: 
037-52004-00
Summary/Brief: 

.Conclusion:  On second appeal, Nashville-Davidson County (Applicant) provided sufficient documentation to demonstrate that the replacement of two water heaters in the mechanical rooms of its Market House (facility) is eligible for Public Assistance funding. 

Summary Paragraph

From April 30 through May 18, 2010, severe storms caused major flooding throughout Nashville-Davidson County.  The Applicant’s Market House, within its Farmer’s Market, was partially submerged when the Cumberland River overflowed.  FEMA prepared PW 5405 to address repairs necessary to restore the facility to pre-disaster condition.  In its first appeal, the Applicant presented four issues.  One of the issues raised by the Applicant involved water heaters in mechanical rooms located on the main level of the facility.  The water heaters were replaced per local codes.  In the first appeal, the Applicant argued that FEMA failed to include the water heaters in PW 5405, but the Applicant was not aware of this “until after the deadline…”  The Region IV Regional Administrator (RA) denied the water heaters because the Applicant failed to identify the number of water heaters it replaced and the cost for replacement.  However, the RA determined the water heaters may be eligible for PA funding.  In its second appeal, the Applicant provides the number of water heaters (2) and the total cost ($1,000).  The Applicant argues that this information was available in the original cost overrun documentation that it submitted.

Authorities and Second Appeals

  • Stafford Act § 406, 42 U.S.C. § 5172
  • 44 C.F.R. § 206.226(h)

Headnotes

  • Pursuant to the Stafford Act § 406, FEMA funding may be available to a state or local government for the repair, restoration, and replacement of damaged or destroyed facilities under a major disaster.
  • In addition, 44 C.F.R. § 206.226 states that “work to restore eligible facilities on the basis of the design of such facilities as they existed immediately prior to the disaster” may be eligible for assistance.  If equipment and furnishings are damaged beyond repair, comparable items are eligible as replacement items.
    • In the second appeal, the Applicant provided the number of water heaters replaced, the total cost for their replacement, and additional documentation to substantiate its claim.
    • Replacement of the water heaters is eligible for PA funding.

 

Letter: 

September 4, 2014

David Purkey
Interim 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) 5405 – Building Contents

Dear Mr. Purkey:

This is in response to your letter, dated May 20, 2014, which transmitted the referenced second appeal on behalf of Nashville-Davidson County (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $1,000 in Public Assistance funding for replacement of two water heaters in the mechanical rooms of its Market House.

As explained in the enclosed analysis, I have determined that the Applicant provided sufficient documentation to demonstrate that replacement of the water heaters is eligible for Public Assistance funding.  Therefore, I am approving the appeal.  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 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: Andrew Velasquez, III
     Regional Administrator
     FEMA Region IV

Analysis: 

Background

From April 30 through May 18, 2010, severe storms caused major flooding throughout the Metropolitan Government of Nashville and Davidson County (hereinafter Nashville-Davidson County).  The Nashville-Davidson County’s (Applicant) Market House (facility), within its Farmer’s Market, was partially submerged after the Cumberland River overflowed.  FEMA prepared PW 5405 to address repairs necessary to restore the facility to pre-disaster condition.  Repairs included cleaning and painting various rooms, replacing drywall in common areas and bathrooms, replacing the HVAC, plumbing and electrical units, and removing, disposing of, and replacing a freight elevator and all associated components.

First Appeal

In its first appeal, dated February 8, 2013, the Applicant presented four issues for appeal.  The first issue involved tenant spaces.  The Applicant asserted that it was legally responsible for repairing damage to the electrical unit, walls, floors, and other aspects of the tenant spaces on the main level of the facility.  The second issue involved FEMA’s denial of a Hazard Mitigation Proposal (HMP) for an emergency generator.  The third issue involved FEMA’s denial of $4,245 in repairs to the Employee Break Room on the main floor.  Finally, the fourth issue involved water heaters in mechanical rooms located on the main level of the facility.  The water heaters were replaced per local codes.  The Applicant argued that FEMA failed to include the water heaters in PW 5405, but the Applicant was not aware of this “until after the deadline…”

In a letter dated February 28, 2014, the Region IV Regional Administrator (RA) denied the first appeal with respect to the first, second, and fourth issues.  The RA denied the tenant spaces because the Applicant agreed the spaces were ineligible and requested that FEMA de-obligate them in an earlier Version of PW 5405.  The RA denied the HMP for the generator because it was not a reasonable mitigation measure or an appropriate use of hazard mitigation discretionary funding under section 406 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988 (Stafford Act).[1]  The RA denied the water heaters because the Applicant failed to identify the number of water heaters that it replaced and the cost of replacement, but noted the water heaters may be eligible for PA funding.  With respect to the third issue, the RA approved funding for repairs to the employee break room.

Second Appeal

In its second appeal, dated May 14, 2014, the Applicant is only appealing the fourth issue involving the water heaters.  The Applicant asserts it replaced two water heaters, for a total of $1,000, in the mechanical rooms of the facility.  In addition, the Applicant contends that this information was included in the original cost overrun documentation it submitted.

Discussion

Section 406(e) of the Stafford Act authorizes FEMA to provide Public Assistance (PA) funding to a state or local government for the repair, restoration, and replacement of damaged or destroyed facilities under a major disaster.[2]  Title 44 of the Code of Federal Regulations (C.F.R.) § 206.226 provides that “work to restore eligible facilities on the basis of the design of such facilities as they existed immediately prior to the disaster” may be eligible for assistance.[3]  In addition, if equipment and furnishings are damaged beyond repair, comparable items are eligible as replacement items.[4]

The only issue in this appeal is the eligibility of replacement of two water heaters in the Applicant’s facility.  In the first appeal, the RA stated that the water heaters in the mechanical rooms may be eligible, but denied funding for them because the Applicant did not provide an exact quantity or price.  Through its second appeal, the Applicant has provided this information and additional documentation to support its claim.[5]  Although the Applicant did not submit invoices, receipts, or other documentation that states the cost of the two water heaters, FEMA researched the average cost of water heaters[6] and determined that the cost requested by the Applicant is reasonable.[7]  Accordingly, the cost to replace the water heaters in the Applicant’s facility is eligible for PA funding.

Conclusion

The Applicant provided sufficient documentation to demonstrate that the replacement of two water heaters in the mechanical rooms of its facility are eligible for PA funding.  The cost associated with such is reasonable.    


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

[2] Stafford Act § 102, 42 U.S.C. § 5172.

[3] 44 C.F.R. § 206.226 (2010).

[4] See 44 C.F.R. § 206.226(h).

[5] See Second Appeal, Nashville-Davidson County, FEMA-1909-DR-TN, (May 14, 2014) (including additional information such as floor plans, a service contract, and a Continuation Sheet (application and certificate for payment)).

[6] See Cost to Replace a Water Heater, http://www.homewyse.com/services/cost_to_replace_hot_water_heater.html , (June 18, 2014, 4:22 PM).

[7] See Public Assistance Guide, FEMA 322 at 41 (June 2007) (explaining that FEMA will generally analyze cost reasonableness by use of historical documentation for similar work, average costs for similar work in the area, published unit costs from national estimating databases, and FEMA cost codes).