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Second Appeal Analysis
PA ID# 001-90100; Kalapana Gardens Community Association
DSR ID# 12501,11376,12502,11375,12503,11374; Project Completion Deadline
The Kalapana Gardens Community Association (subgrantee) submitted an appeal of the completion deadline established by the Federal Emergency Management Agency (FEMA) for the completion of its projects. The project completion period established was for up to four years following the close of the incident period or January 31, 2001. The subgrantee is requesting a time extension to May 1, 2002, and the State has recommended an indefinite time extension.
On May 18, 1990, the President declared a major disaster due to damages from lava flow from the Kilauea Volcano in the County of Hawaii (FEMA-0864-DR-HI). The disaster declaration was for damages incurred since January 24, 1983. The subgrantee requested disaster assistance for the restoration of various facilities. Damage Survey Reports 11376, 11375, and 11374 were prepared to fund the restoration of damaged waterlines, roads and a destroyed office/storage building, respectively. In March 1994, FEMA agreed that the project completion period for this disaster would begin upon the close of the incident period. The incident period was closed on January 31, 1997.
On January 15, 1999, representatives of FEMA met with representatives of the County of Hawaii (County) and the subgrantee to discuss and identify an alternate project in an effort to ensure that the funding approved by DSRs 11376, 11375, and 11374 would not be jeopardized. As a result of the meeting, a proposal was developed that would involve the "transfer" of the subgrantee's DSRs to the County which would then undertake an alternate project. At this same time, FEMA prepared DSRs 12501, 12502, and 12503 to adjust the cost estimates used for DSRs 11376, 11375, and 11374, respectively. This funding adjustment was done to reflect current cost codes for present site conditions.
By letter dated May 27, 1999, FEMA advised the State that the proposed transfer of funding was determined to be contrary to FEMA regulations and the proposal developed at the January 15, 1999, meeting was withdrawn. This letter also advised the State that FEMA would consider a time extension for the completion of the subgrantee's projects for up to four years following the close of the incident period or January 31, 2001.
The subgrantee has submitted an appeal of FEMA's decision that it would consider time extensions for the subgrantee's projects for up to four years after the close of the incident period or January 31, 2001. Although submitted as a first appeal, we have processed it as a second appeal because this same issue has been specifically responded to by Region IX twice - once in 1998 and again in 1999. By letter dated April 20, 1998, the State of Hawaii (State) requested that FEMA unconditionally suspend all of the subgrantee's DSRs "until such time as lava activity has ceased for a continuous period of six months." In other words, the State requested, on behalf of the subgrantee, an indefinite project completion period. FEMA denied this request in a letter sent to the State on September 25, 1998, and suggested that the subgrantee consider an alternate project. FEMA subsequently revisited issues affecting the subgrantee's projects, including the project completion deadlines. FEMA's letter dated May 27, 1999, confirmed the project completion deadline of January 31, 2001. We have concluded that FEMA's letter dated May 27, 1999, was the substantive equivalent of a first appeal determination.
In the State's appeal transmittal letter, it states that an extended project performance is not unreasonable in view of the unabated lava flow activity within five miles of the subgrantee's subdivision.
The deadlines established in Section 206.204(c) of Title 44 of the Code of Federal Regulations (44 CFR) are set from the date that a major disaster is declared. Due to the uniqueness of this disaster, FEMA agreed that the project completion period would begin on the date of the close of the incident period. FEMA typically closes the incident period when there is no longer a significant threat of new and/or additional damage to homes and infrastructure from the event that gave rise to the declaration. There has not been any damage to homes or infrastructure outside Volcanoes National Park since 1992 and the lava flow had since that time remained in the park. FEMA closed the incident period for 864-DR on January 31, 1997 - almost five years beyond the time period an incident period is typically kept open.
The current project completion deadline of January 31, 2001, falls four years from the date on which FEMA closed the incident period. The four-year project completion period was established on the basis of the total amount of time within the Grantee's authority to grant under 44 CFR 206.204(c).
As set forth in 44 CFR 206.204(d), requests for time extensions beyond four years must include a detailed justification for the delay and a projected completion date. The subgrantee states in its appeal that "assuming a project start date of September 1, 1999, the project will be completed by May 1, 2002." At the same time, however, the subgrantee acknowledges that the anticipated start date, as well as the project schedule, is a "gross assumption."
As noted in the State's transmittal letter, neither the State nor the County is willing to reopen access roads to the former site of the Kalapana Gardens Community Association (KGCA) subdivision until the area is "stable." Because of the ongoing lava-flow hazard along Kilauea Crater's east rift zone, there is considerable uncertainty concerning the subgrantee's ability to ever regain access to and use of the desired project site. Thus, there is little likelihood that the subgrantee will be able to start work in the near future, adhere to its project schedule, or meet its projected completion date of May 1, 2002.
The subgrantee's request for a time extension is based upon a speculative set of circumstances and is not, therefore, sufficiently supported. The subgrantee's appeal is denied.
As a result of this determination, FEMA notes that the subgrantee may choose to pursue an alternate project. In this regard, it is important that the subgrantee understand that an alternate project facility must provide an eligible private nonprofit service as set forth in 44 CFR 206.221(e). Additionally, we note that homeowners associations are formed for the specific purpose of managing, maintaining and governing the use of property within a specific defined area for and on behalf of the homeowners of that area. Thus, to be eligible, any alternate project proposed by the subgrantee must provide a collective benefit to the KGCA subdivision homeowners and/or to the KGCA subdivision property, as a whole. Such alternate project must also be completed within the approved deadline of January 31, 2001.