Earl Schmidt Filtration Plant

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster	FEMA-1008-DR
Applicant	Castaic Lake Water Agency
Appeal Type	Second
PA ID#	037-91156
PW ID#	77524
Date Signed	1999-10-29T04:00:00

Citation: FEMA-1008-DR-CA; Castaic Lake Water Agency, Earl Schmidt Filtration Plant, DSR 77524

Cross Reference:Hazard Mitigation Proposals, Codes and Standards

Summary: As a result of the January 1994 Northridge Earthquake, damages occurred to the Earl Schmidt Filtration Plant and Distribution Pipeline System. A total of 18 DSRs were prepared for funding of earthquake repairs, totaling $1,236,342. Of these DSRs, DSR 77254 was prepared on July 17, 1996, to consider six HMPs. The proposed HMPs consisted of two phases of work. Phase 1 (HMPs 1,2,3), totaling $1,312,474, completed by April 1995, and Phase 2 (HMPs 4,5,6), totaling $1,664,920, for work that had not yet been performed. FEMA found that the scopes of work for HMPs 1, 2, 3, 4 and 6 did not directly relate to the disaster damaged elements as required by a May 15, 1995 hazard mitigation policy letter. The scope of work for HMP 5 was found to be related to damaged elements, but a benefit-cost analysis found that the work was not cost-effective. DSR 77254 was obligated for $0 on January 21, 1998. The subgrantee's first appeal agreed that the scope of work did not relate specifically to damaged elements, but argued that because HMPs 1, 2, and 3 were completed prior to the May 15, 1995, policy letter, they should be evaluated relative to an earlier memo which did allow mitigation of non-damaged elements. In the first appeal response, the Federal Coordinating Officer concluded that the May 15, 1995, policy letter was applicable to HMPs 1, 2, and 3 and that the subgrantee's completion of the work prior to the May 1995 date had no bearing on its eligibility. The subgrantee's second appeal asserts that that the completed work was required by certain codes and standards, and that several similar hazard mitigation projects have been funded previously by FEMA.

Issues:

1. Is the requested work required by a code or standard?
2. Is the requested work eligible for Section 406 hazard mitigation?
3. Does the funding of other similar projects support funding of these HMPs?

Findings:

1. No. The referenced code requiring mitigation of facilities does not apply to the eligible repair efforts.
2. No. The scopes of work within the requested hazard mitigation proposals do not specifically relate to disaster-damaged elements.
3. No. The projects referenced by the subgrantee were funded under Section 404 mitigation, and support our determination that such work is not eligible under the Section 406 authority.

Rationale: Stafford Act Section 406 Hazard Mitigation; 44 CFR 206.226(c)

Appeal Letter

Appeal Analysis

BACKGROUND

As a result of the January 1994 Northridge Earthquake (FEMA-1008), damages occurred to the Earl Schmidt Filtration Plant (Plant) and Distribution Pipeline System (Pipelines). Damages at the Plant generally consisted of cracked joints in the sedimentation basin, concrete structures and chemical storage area. The Pipelines sustained cracked pipe joints and damaged air vacuum and air relief valves (AVAR). The Castaic Lake Water Agency (subgrantee) requested disaster assistance from the Federal Emergency Management Agency (FEMA) for repair of the Plant and Pipelines. A total of 18 DSRs were prepared for funding of earthquake repairs to the Plant and Pipelines, for a total estimated cost of $1,236,342.

This appeal is associated with FEMA's denial of six hazard mitigation proposals (HMPs) submitted by the subgrantee associated with this work. Therefore, a brief review of the FEMA Hazard Mitigation policy, as it relates to the Northridge disaster and this appeal, is provided below.

Northridge Disaster Hazard Mitigation Policy
During the Northridge disaster, a policy memorandum was prepared describing the intent of the Section 406 Hazard Mitigation program and the eligible scope of work for hazard mitigation proposals. The memorandum entitled, "Joint FEMA/OES Section 406 Hazard Mitigation Policy Statement," dated September 16, 1994, (September 1994 policy memo) states, If an applicant requests that a specific mitigation project(s) be included on the DSR, said measure(s) does not have to apply to a damaged element of the infrastructure system or the building. However, the system or building to which the measure is implemented must have been damaged. In other words, if a DSR is being written for permanent restoration work, hazard mitigation may be considered.The Federal Coordinating Officer issued a second letter, dated May 15, 1995, (May 1995 policy memo) more accurately describing the eligible scope of work for a mitigation proposal. This letter states, The intent of this discretion under Section 406 is to limit mitigation funding to eligible measures under the Public Assistance program that are directly related to the damaged elements for which restoration work on a facility is performed.

Subgrantee Hazard Mitigation Proposals
On March 28, 1994, the Pipeline was inspected by members of FEMA, the California Governor's Office of Emergency Services (OES), and the subgrantee. The FEMA inspector prepared Category F Damage Survey Report (DSR) 05733 in the amount of $62,652 for the repair or replacement of 2 inch (in.) and 4 in. AVAR assemblies. The DSR included an HMP in the amount of $234,600 to install automatic AVAR valves to replace manual valves at undamaged areas along the pipeline. However, the HMP was not evaluated as part of this DSR.

DSR 77254 was prepared on July 17, 1996, to consider six HMPs submitted by the subgrantee. The proposed HMPs consisted of two phases of work. Phase 1, totaling $1,312,474, consisted of three HMPs (1,2,3), including the HMP submitted under DSR 05733, the installation of isolation valves and pump-outs, and construction of improvements to the clearwell piping and remote valve operator. The Phase 1 work had been completed by April 1995. The Phase 2 work, totaling $1,664,920, consisted of three additional HMPs (4,5,6) addressing the installation of flexible joints at fault lines and river crossings, the stabilization of fill under the sedimentation basin, and the replacement of wash-water recovery basins at a new site.

FEMA reviewed the proposals and found that the scope of work for HMPs 1, 2, 3, 4 and 6 did not directly relate to the disaster-damaged elements. Therefore, according to the May 1995 policy memo, the scope of work for these HMPs was found to be ineligible. The scope of work for HMP 5 was found to be related to damaged elements, and therefore, FEMA performed a benefit-cost analysis for this proposal. However, the benefit-cost analysis found that the work of HMP 5 was not cost effective. The HMPs were, therefore, found not eligible, and DSR 77254 was obligated for $0 on January 21, 1998.

First Appeal
The subgrantee submitted a first appeal of FEMA's denial of the HMPs, transmitted by OES in a letter dated May 26, 1998. Additional conversations between the subgrantee and the state and FEMA further clarified their position. The subgrantee agreed that the scope of work in HMPs 1, 2, and 3 did not directly relate to disaster-damaged elements, but because the work was completed prior to the May 1995 policy memo, they asserted that the scope of work should be evaluated against the criteria of the earlier September 1994 policy memo. The subgrantee concludes that the completed work is consistent with the eligible work described in the September 1994 policy memo, and should therefore be eligible. The subgrantee withdrew their appeal regarding HMPs 4, 5, and 6, stating that because the work was not completed before the issuance of the May 1995 policy memo, and because it did not meet the criteria of that memo, that it would not be eligible.

The Federal Coordinating Officer upheld the earlier determination that the guidance of the May 1995 policy memo must be used to evaluate the eligibility of the HMPs, and that based on this guidance, the work in HMPs 1, 2, and 3 was not eligible. The subgrantees completion of the work prior to the May 1995 date has no bearing on this determination.

Second Appeal
The subgrantee submitted a second appeal, transmitted and supported by OES in a letter dated April 29, 1999. The subgrantee's appeal asserts that that the completed work was required by certain codes and standards, and that several similar hazard mitigation projects have been funded by FEMA. OES further challenges the benefit-cost analysis performed by FEMA, and asserts that some of the mitigation efforts do directly relate to the damaged system.

DISCUSSION

The subgrantee and OES have presented several arguments to support their position that the HMPs should be eligible. Each of these is presented below.

Required by Codes and Standards
The subgrantee argues that the completed hazard mitigation measures were required by the California Seismic Hazards Mapping Act, Public Resources Code Section 2690 et. seq. This law addresses shaking, landsliding, and liquefaction hazards. This Act requires the California State Geologist to prepare seismic hazard maps that cities and counties must then use in preparing their general plan of safety elements, and in regulating new development to avoid or mitigate these seismic hazards. The subgrantee provided maps to illustrate that the damaged pipeline is currently located in a designated area where there is a historic occurrence of liquefaction such that mitigation as defined in the Public Resources Code Section 2693 (c) would be required.

The cost of code-driven upgrades necessary to restore building components or systems damaged as a direct result of a disaster event are considered eligible for Federal reimbursement. However, costs associated with code upgrades or mitigation measures for new components or systems not damaged by a disaster are generally not eligible, unless an applicable code or standard specifically requires such work. In this instance, the documents referenced by the subgrantee pertain to new development and proposed plans for redevelopment, and generally refer to mitigation efforts rather than specific design requirements. There is no criteria within the Public Resources Code that mandates that certain design upgrades to damaged, or in this case undamaged elements, must be applied during repair of a damaged facility. Accordingly, it is concluded that the referenced code does not ap oer HMPs 1, 2 and 3.

Funding of Other Similar Projects
The subgrantee argues that several similar and identical hazard mitigation projects have been funded by FEMA. Their appeal provides copies of articles written about federally funded mitigation projects for the County of Los Angeles and the Los Angeles Department of Water and Power. However, review of these projects indicates that they were funded under the Stafford Act Section 404 Hazard Mitigation Grant Program, and not the Section 406 mitigation for which the subgrantee has applied. The Section 404 program is administered by the state, and allows measures intended to benefit undamaged facilities, and measures not directly related to damaged elements for which restoration work is required. Such work is consistent with that described in the referenced Los Angeles projects, and similar to that being requested by the subgrantee in this appeal.

Reference to these Los Angeles projects demonstrates that the subgrantees HMPs would be more appropriately funded under the Section 404 mitigation program, and supports our determination that the work is not eligible for Section 406 mitigation.

Relationship to Damaged Elements
OES asserts that the mitigation efforts to valves and pipeline joints are directly related to the damaged pipeline system, and, therefore, should be considered directly related to the disaster damages. However, as stated in the May 1995 policy memo, eligible mitigation measures are those that are directly related to the damaged elements for which restoration work on a facility is performed. This means that the measures must be taken within the specific repair of those damaged elements. Mitigative efforts on other undamaged components of the system, although they may strengthen the integrity of the overall system as well as the repaired components, are not eligible under the Section 406 mitigation program.

Benefit-Cost Analysis OES asserts that there appears to be errors in the model FEMA used to perform their benefit-cost analysis, referring to data input for HMP 6 and the application of the model to projects that do not require complete seismic rehabilitation of a structure. First, it is noted that the subgrantee agrees that HMP 6 is not eligible for funding. For the proposals under appeal, it has been determined that the scope of work is not consistent with the intent of hazard mitigation under the Section 406 program in that it is not directly related to disaster-damaged elements. Therefore, further review of the benefit-cost of these proposals is not necessary.

CONCLUSION

Based on a review of the documentation provided by the subgrantee, it is concluded that the scopes of work within the requested hazard mitigation proposals do not specifically relate to disaster-damaged elements, and, therefore, do not meet eligibility criteria for Section 406 hazard mitigation as defined in the May 1995 policy memo. The referenced code requiring mitigation of facilities does not apply to the eligible repair efforts. Finally, other projects funded for similar scopes of work as referenced by the subgrantee pertain to Section 404 mitigation, and support our determination that such work is not eligible under the Section 406 authority. The subgrantee's appeal is denied.