Hurricane Fran Debris Removal Contract

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

DisasterFEMA-1134-DR
ApplicantOnslow County
Appeal TypeSecond
PA ID#133-00000
PW ID#76599
Date Signed1999-10-29T04:00:00
Citation: FEMA-1134-DR-NC; Onslow County, Debris Removal, DSR 76599

Cross Reference: Debris Removal

Summary: Hurricane Fran struck Onslow County on September 5, 1996. Wind and storm surge generated large amounts of sand, vegetative and construction and demolition debris. Onslow County and Grubbs Construction entered into a $4.75 million lump sum contract. Under the contract, Grubbs was responsible for the removal, burning or chipping, and disposal of vegetative debris; demolition of condemned structures, processing and burning or disposal of demolition debris; and the removal, screening, and replacement of sand displaced by disaster 1134-NC. Subsequently, the State of North Carolina Department of Environment, Health, and Natural Resources placed a ban on all burning activities. Because of this change in disposal method, Onslow County entered into a second contract with Grubbs for a total of $14,647,250. FEMA approved DSR 28834 on March 8, 1997 for $6,389,686 based on multiple supplemental requests. This increased the total approved eligible funding to $10,666,994. In June of 1997, FEMA tasked Price Waterhouse (PW) to perform a financial review of the debris removal activities performed by Grubbs Construction. PW concluded that Onslow County and Grubbs Construction could document only $7,802,913. Based on this finding, FEMA wrote DSR 76599 to de-obligate $3,429,102. Onslow County waived its first appeal and submitted a second appeal on December 22, 1998. In the appeal, the County requests that Grubbs estimates for the quantities of both vegetative and C&D debris be used for calculating the eligible funding. It is requesting an additional $7,508,764.

Issues:
  1. Is the requested volume of C&D debris eligible?
  2. Is the requested volume of vegetative debris eligible?
Findings:
  1. No. The requested volume cannot be supported. However, a revised estimate can be supported as detailed in the analysis.
  2. Yes. The requested volume of vegetative debris is accepted as detailed in the analysis.
Rationale: Stafford Act Section 407 Debris Removal; 44 CFR Part 13

Appeal Letter

October 29, 1999

Mr. Steven N. Glenn
Deputy Operations Chief
Division of Emergency Management
Disaster Recovery Operations Center
205 West Cabarrus Street
Raleigh, North Carolina, 27601

RE: Second Appeal - Onslow County, Hurricane Fran Debris Removal, FEMA-1134-DR-NC, DSR 76599

Dear Mr. Glenn:

This letter is in response to the referenced second appeal transmitted by your letter dated March 12, 1999. The subgrantee is requesting an additional $7,508,764 for debris removal costs associated with Hurricane Fran.

As explained in the enclosed analysis, the total eligible cost for debris removal activities is $11,218,028. This represents an increase of $3,415,115 over the currently approved amount. Therefore, the appeal has been partially approved. By copy of this letter, I am requesting the Regional Director to prepare a DSR for the amount of $3,415,115.

Please inform the applicant of my determination. In accordance with the appeal procedure governing appeal decisions made on or after May 8, 1998, my decision constitutes the final decision on this matter. The current appeal procedure was published as a final rule in the Federal Register on April 8, 1998. It amends 44 CFR 206.206.

Sincerely,

/S/

Lacy E. Suiter
Executive Associate Director
Response and Recovery Directorate

Enclosure

cc: John B. Copenhaver
Regional Director
FEMA Region IV

Appeal Analysis

BACKGROUND
Hurricane Fran struck Onslow County on September 5, 1996. Wind and storm surge battered the County generating large amounts of sand, vegetative and structural debris. As a result, Onslow County hired Grubbs Construction to perform emergency debris clearance and prepare staging sites for the public to deposit debris. On September 11, 1996, Onslow County issued a Request For Proposal (RFP) for the debris removal operations throughout the County. Because of the wide range of bids received, the County issued a second RFP on September 17, 1996. Onslow County and Grubbs Construction entered into a $4.75 million lump sum contract on September 23, 1996. Under the contract, Grubbs was responsible for the removal, burning or chipping, and disposal of vegetative debris; demolishing condemned structures, processing and burning or disposal of debris generated from the demolition; and the removal, screening, and replacement of sand displaced by the storm.

Work progressed through the end of October, at which time, the State of North Carolina Department of Environment, Health, and Natural Resources placed a ban on all burning activities. This presented problems for the disposal of structural (Construction & Demolition) (C&D) debris. The County would now have to dispose of the C&D debris in a permitted subtitle D Landfill. The closest subtitle D Landfill was located approximately 100 miles away in Sampson County. Because of this change in disposal method, Onslow County entered into a second contract with Grubbs for an aggregate total of $14,647,250. The contract was lump sum and included the original $4.75 million with several adjustments for tasks that no longer had to be completed.

On October 29, 1996, FEMA wrote DSRs 32118 and 95846 for the loading and hauling of C&D debris that had accumulated at the NC 24 and NC 210 staging sites. The NC 24 staging site was for private citizens to dispose of various C&D debris while the NC 210 staging site was mainly for C&D debris generated from the demolition efforts, although some private dumping occurred.

FEMA approved DSR 28834 for $6,389,686 on March 8, 1997. The $6,389,686 was derived by starting with $14,647,250. This was the Grubbs' contract amount and was supported by information packages submitted by Onslow County in support of several supplemental requests. From this amount, FEMA made deductions totaling $8,257,564 for three items: $4,277,306 for 26 previously approved DSRs; $318,445 for previously approved work in units of the Coastal Barrier Resource System (CBRS); and $3,661,813 as a twenty-five percent holdback of the contract amount. FEMA withheld the twenty five percent because the debris volume quantities had not yet been documented. The intent was to release a portion of the funds up front and reconcile the debris quantities during closeout procedures. This action brought the total approved funding to $10,666,994. FEMA had approved other DSRs in addition to those accounted for in DSR 28834 that brought the total approved funding to $11,232,015.

To determine the eligible contract cost, FEMA tasked Price Waterhouse (PW) in June of 1997 to perform a financial review of the debris removal activities performed by Grubbs Construction. The PW report concluded that Onslow County and Grubbs Construction could document only $7,802,913. To reduce the approved funding from the $11,232,015, FEMA approved DSR 76599 to de-obligate $3,429,102.

Onslow County waived its first appeal and submitted a second appeal on December 22, 1998. In the appeal, the County requested that Grubbs' estimates for the quantities of both vegetative and C&D debris be used for calculating the eligible funding. The Division of Emergency Management of the State of North Carolina's Department of Crime Control and Public Safety (State) forwarded Onslow County's appeal to FEMA on March 12, 1999.

On August 10, 1999, representatives of Onslow County, the State of North Carolina and FEMA met in Raleigh, North Carolina. The County did not present any new information at the meeting. However, the County and State clarified some of the existing data on file. One item that was clarified was the number of structures demolished after the hurricane.

DISCUSSION
Onslow County addresses multiple issues in its second appeal letter. The two most relevant issues are the quantities of C&D and vegetative debris to be used for funding calculations. For the purposes of this analysis, we will discuss C&D and vegetative debris separately and will summarize the remaining issues raised by Onslow County.

C&D Debris
Onslow County states, "Grubbs' estimates concerning the quantities of C&D debris disposed of should be used for reimbursement calculations." The County asserts that Grubbs' estimate of 485,831 cy of C&D debris should be used. The County is requesting that 485,831 cy be applied to the $18.35 which would yield a total cost of $8,914,998. To support this, the County explains that no documentation of quantities was required, as the contract with Grubbs was lump sum. The 485,831 cy figure was provided to Onslow County by Grubbs just prior to the second contract approval. Documentation to support this quantity has not been provided. Additionally, Onslow County describes apparent flaws in how PW calculated the quantity of debris in the draft November 1997 report that include:
  • PW ignored any reduction and recycling efforts by Grubbs and its subcontractors.
  • PW ignored the fact that because the Governor had lifted the weight restrictions, substantially more debris could be compacted into the trucks. Grubbs reported that it was able to take a four-to five-cubic yard pile and reduce it to a one and a half-cubic yard pile by compaction. The only way this would have been accounted for was to weigh the trucks as they entered the landfill.
  • PW relied upon DSR estimates of debris that did not sufficiently account for mobile homes and furnishings within all structures.
PW's report noted that the only items relevant to C&D debris that Onslow County could document were the unit costs of $18.35 and $19.60 per cubic yard (cy) for demolishing, processing, and disposing of C&D debris from the NC 210 and NC 24 staging sites, respectively, and that 161,617 cy of C&D debris had been disposed of in the Sampson County landfill. The $18.35 and $19.60 were established by Grubbs Construction during PW's review of the contract costs and the 161,617 cy was based on load tickets from the landfill. Although a cost for demolition is not included in the breakout, Grubbs has stated that demolition is incorporated into the various component costs of unit costs, excluding tipping fees. The breakout of the $18.35 unit cost follows:

Description

Cost per cubic yard

Trucking

$6.40

Load & Separate

$1.50

Site management & Logistics

$0.95

Tipping Fee

$6.50

Overhead

$1.50

Profit

$1.50

TotalR"/TABLE>
The breakout of the $19.60 unit cost for the NC 24 staging site has not been included in this discussion based on the request by Onslow County that the 485,831 cy be applied only to the $18.35 unit cost. PW recommended that Onslow County was eligible for a total of $3,006,076 for C&D debris. This amount was calculated by using a weighted average of C&D debris volumes based on the requested 485,831 cy to determine the percentage of the documented 161,617 cy that would be associated with the NC 210 and NC 24 staging sites. PW determined that 129,294 cy was associated with the NC 210 site and 32,323 cy was associated with the NC 24 site. Using the $18.35 per cy and the $19.60 per cy unit costs and the estimated volumes, PW calculated that $3,006,076 was eligible. ($18.35 x 129,294 cy and $19.60 x 32,323 cy)

As discussed above, Onslow County has been able to document the disposal of only 161,617 cy of C&D debris. During this review, FEMA used the following method to determine a reasonable quantity of C&D debris the contractor may have removed and processed. At the August 10th meeting, the County stated that the structures listed in DSRs 04125, 95847, and 02570, represented all the structures that were demolished after October 29, 1996. However, FEMA subsequently determined that DSRs 32716, 25739, and 78854 listed 11, 21 and 15 structures, respectively, that had been demolished and had not been included in the three previous DSRs. Together, all six of these DSRs listed an address and a measured standing volume for 433 structures. Of the 433 structures, 210 were mobile homes and 223 were houses. The estimated total standing volume for the 433 structures is 407,335 cy.

To determine the estimated reduced volume (volume after demolition), several factors were addressed. Because mobile homes are more compact and tend to have more partitions in less volume than houses, their demolished volume was calculated differently than for houses. Based on five case studies performed by Onslow County and the State in support of the supplemental requests mentioned above, the demolished volume of a mobile home is 67% of its standing volume and the demolished volume of a house is 40% of its standing volume. These factors were determined by comparing the measured standing volumes against the measured debris piles after the structures were razed.

Using the above reduction factors, and the standing volume of mobile homes and houses, the demolished volume calculates to be 30,592 cy (45,660 cy x 0.67) and 145,402 (363,505 cy x 0.40) respectively. The total volume of ancillary items such as decks is calculated to be 3,356 cy. The sum of these three volumes is 179,350 cy. This represents the total volume of debris from structures to be demolished after October 29, 1996, which had to be processed and disposed.

As discussed above, FEMA wrote DSRs 32118 and 95846 for the loading and hauling of C&D debris that had accumulated at the NC 24 and NC 210 staging sites prior to October 29, 1996. The NC 24 had accumulated 36,105 cy of C&D debris and the NC 210 staging site had accumulated 130,315 cy of C&D debris at that time. The volumes for both DSRs were obtained by measuring the windrows of debris. The County verified these volumes. In the information package supporting the supplemental request to these DSRs, Onslow County states, "The inspection teams of October 29, 1996, measured and quantified the debris at each of the staging sites. These quantities should be considered accurate, because the debris was piled into windrows which allowed the inspectors to measure with ease." The 179,350 cy total discussed above is then added to the volumes documented in DSRs 32118 and 95846 of 36,105 cy and 130,315 cy, respectively. This brings the total estimated volume of debris processed to 345,770 cy. For calculation purposes, 346,000 cy will be used. To calculate the eligible funding, 346,000 cy is multiplied by $18.35, which yields $6,349,100. This amount represents the total eligible funding for ALL demolition and C&D debris removal activities.

The amount currently approved for C&D debris is $3,113,277, $3,006,076 of which was approved at the time of the PW report and the remaining $107,201 that is in two DSRs (#78854 & #36926) for 15 of the structures discussed above but not accounted for in the de-obligation DSR. Therefore, the new total is an increase of $3,235,823 over the current amount ($6,349,100 minus $3,113,277.)
Vegetative Debris
FEMA prepared DSR 32119 on October 29, 1996, to cover the chipping and burning of 287,603 cy of vegetative debris which had accumulated at nine staging sites throughout the County. However, this estimate excludes any debris brought to the site after, and, any debris burned prior to October 29, 1996.

The County states that "Grubbs' estimate concerning the quantity of vegetative debris removed from Onslow County should be used for reimbursement calculations." The County continues by stating that PW admits in its report that it cannot accurately quantify the amount of vegetative debris. The County references a September 23, 1997, letter from Dave Clark, Onslow County Public Works Director, to the State that quantifies the amount of vegetative debris reduced and removed by Grubbs in support of its claim. This letter states that amount as being 508,480 cy.

The County's estimate of the total volume of unreduced vegetative debris is reasonable. However, we will reduce this amount by 75% to calculate the amount of processed vegetative debris that was hauled to the landfill. The reduction is based on a 75% reduction ratio for chipping vegetative debris. In other words, the volume of debris hauled to the processing site is reduced to 25% after it has been chipped. The reduced volume is 25% of 508,480 cy or 127,120 cy.

During the review in preparation for the November draft report, PW along with Onslow County established that Grubbs Construction had developed a cost of $4.75 per cy to process and dispose of vegetative debris. The $4.75 was comprised of $1.50 per cy to process and $3.25 per cy to haul the vegetative debris. When the 127,120 cy is applied to the haul cost of $3.25/cy, the cost calculates to $413,140. The total volume of 508,480 cy will still be applied to the chipping cost of $1.50/cy. This yields a total chipping cost of $762,720. Together these two figures give a new eligible total for the removal and handling of vegetative debris of $1,175,860.
The current amount approved for vegetative debris is $1,320,549, $1,122,813 of which was approved at the time of the PW report and the remaining $197,736 in DSR 77717, approved after the PW report for the removal and disposal of vegetative debris from the New River. Therefore, the new total is a reduction of $144,689 from the current total. ($1,320,549 minus $1,175,860)

CBRA sand placement
The County states that, "Onslow County is entitled to reimbursement for screened sand placed back into Coastal Barrier Resources System areas."

Under DSR 76599, FEMA denied $323,981 for work completed in Coastal Barrier Resource System (CBRS) units based on the PW report. PW cites 44 CFR 206.344(c) which essentially states that no new expenditures or financial assistance may be made available for carrying out any project to prevent the erosion of, or to otherwise stabilize, any inlet, shoreline, or inshore area.

The County contends that it is eligible for the $323,981 based on the following:

  • The County would have been in direct violation of North Carolina coastal management regulations by removing the sand from the barrier island,
  • The only publicly owned property large enough to handle the quantity of sand was the beach strand. Because of the alternating CBRS and non-CBRS areas, placing sand onf reby not placing rescued sand in CBRS areas would give future storms unrestrained access to improved areas resulting in greater losses, and
  • The sand removal, screening, and replacement activities did not constitute an emergency berm or dune project which would have been in violation of 44 CFR 206.344 and the general purpose of the CBRA.
Emergency measures performed pursuant to Section 403 of the Stafford Act are eligible within a CBRS unit if limited to actions necessary to alleviate the impacts of the event (44 CFR 206.345 (b)(1)). Removal of sand debris from public and private property and its replacement on beach areas of CBRS and non-CBRS units is such a qualifying emergency measure. In addition, emergency actions do not require prior consultation with the U.S. Fish and Wildlife Service before approval. Therefore, the $323,981 is eligible. The new eligible amount is a $323,981 increase over the current approved amount for this activity.

Lump Sum Contract
Onslow County raises multiple issues concerning the appropriateness of the lump sum contract. Onslow County believes that a lump sum contract was acceptable because it had used a lump sum contract in the final stages of Hurricane Bertha cleanup activities and that FEMA did not voice objections to the lump sum contract following Hurricane Fran. Therefore, they believed there was no requirement to keep detailed records related to the contract.

Lump Sum contracts are acceptable if the quantities of work are known in sufficient detail to allow a detailed scope of work to be established. In the case of Hurricane Bertha, when the lump sum contract was initiated, the debris removal operations were far along in the process and the quantities were either known or could be physically measured as debris piles. Therefore, a detailed scope of work could be established. In the case of Hurricane Fran, at the time the contract was let, the quantities were not established.

Total funding
The Regional Director had determined that eligible funding for debris activities was $7,802,913. This appeal has determined that an additional $3,235,823 for C&D debris and $323,981 for CBRS activities are eligible. In addition, a reduction of $144,689 is necessary for vegetative debris. Together, these three changes result in a net increase of $3,415,115 over the currently approved amount. The total eligible amount for debris work is now $11,218,028.

CONCLUSION
Based on our review of the information submitted with the second appeal, we have determined that Onslow County is eligible for additional funding. Based on documented field measurements detailed above, the eligible volume of C&D debris is 346,000 cy. Based on PW's report and the second appeal information, the eligible volume of vegetative debris is 508,480 cy. Additionally, the debris removal work within CBRS areas is found to be eligible. The appeal is partially approved. The additional eligible amount as a result of this appeal is $3,415,115. The Regional Director will approve a DSR in this amount.
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