Royce Hall (UC Seismic Safety Policy)
Appeal Brief
Appeal Letter
Appeal Analysis
N/A
For the reasons set forth below, the appeal is denied.
BACKGROUND
On January 17, 1994, a catastrophic earthquake struck southern California, inflicting billions of dollars of property damage and economic losses in a densely populated area. Almost immediately, the Governor of California requested, and the President declared, Los Angeles, Ventura and Orange Counties to be a major disaster area under the Robert T. Stafford Disaster Relief and Emergency Assistance Act ("Stafford Act"). This declaration triggered the availability of certain types of Federal disaster assistance funding programs to supplement State and local disaster efforts. Among those programs is the Section 406 Public Assistance program. Under Section 406 of the Stafford Act and FEMA's implementing regulations at 44 CFR Part 206, public facilities that have been damaged or destroyed by a major disaster are eligible for federal funding of a portion - 90% in the case of the Northridge Earthquake - of the cost to repair, restore, reconstruct, and in some cases replace, those facilities.
UCLA's historic Royce Hall is a multi-functional building dedicated primarily to the performing arts with auditorium, classroom and office space. Its twin towers (the south towers) are a recognized symbol of the University. Royce Hall suffered structural and non-structural damage from the Northridge Earthquake, and as a result became eligible for Section 406 funding.
The Northridge Office has issued five DSRs obligating funds for the Royce Hall project:
Statutory and Regulatory Framework. Section 406 of the Stafford Act authorizes the President to make contributions of not less than "75 percent of the net eligible cost of repair, restoration, reconstruction, or replacement" carried out under its terms. Section 406(c)(1) defines "net eligible cost" as, at a minimum, "the cost of repairing, restoring, reconstructing, or replacing a public facility . . . on the basis of the design of such facility as it existed immediately prior to the major disaster and in conformity with current applicable codes, specifications, and standards." Where the code or standard changes the predisaster construction of a facility; i.e., it requires that the facility be upgraded, the code will only be used for determining eligibility for funding if it complies with the five criteria set forth in 44 CFR 206.226(b) ("The Regulation").1.
University of California Seismic Safety Policy. The University of California is, under the California Constitution, independent of other State and local government regulatory authority. As a result, the University serves as its own code setting authority. In 1975, the University promulgated a Seismic Safety Policy governing all buildings on University campuses.
The intent of this Policy, as expressed in the preamble ("Basic Policy"), is to provide for, subject to the availability of funds, the seismic upgrade of buildings in general:"It is University Policy to the maximum extent feasible by present earthquake engineering practice to acquire, build, maintain, and rehabilitate buildings and other facilities which provide an acceptable level of earthquake safety, as defined in this Policy, for students, employees, and the public who occupy those buildings and other facilities at all locations where University operations and activities occur. Feasibility is to be determined by weighing the practicability and cost of protective measures against the gravity and probability of injury resulting from a seismic occurrence." [The last sentence of the Basic Policy is referred to herein as the Feasibility Provision] The Policy - when adopted in 1975 and now -- requires that new buildings be constructed in accordance with extensive seismic requirements of the California Building Standards Code.2. However, recognizing the difficulty and expense of retrofitting existing buildings to meet current Code requirements, the University has struggled to define how much existing buildings need to be upgraded - and when.
The original 1975 Policy merely required the responsible campus official to develop a program for abatement of seismic hazards and to establish priorities for seismic safety projects in accordance with the Policy. In accord with the Policy, seismic rehabilitation projects are to provide the following:"as a minimum, an acceptable level of earthquake safety based on the sole consideration of the protection of life and prevention of personal injury, insofar as predictable, at a level of safety equivalent to that which would be established by compliance with the current seismic provisions of Title 24, California Building Standards Code, or local seismic requirements, whichever requirements are more stringent, disregarding insofar as possible potential building damage not jeopardizing life, which would be expected from one earthquake of the intensity of at least IX on the Modified Mercali Intensity Scale. . . . The intent of seismic rehabilitation shall be to reconstruct buildings and other structures so that they would have a Good seismic performance rating. . .." What constitutes an acceptable level of earthquake safety is determined by the evaluation of a structural engineer of the anticipated seismic performance of the facility with respect to degree of risk and injury to persons. Seismic performance ratings are expressed in terms of "Very Poor," "Poor," "Fair" and "Good," as defined in Appendix A of the Policy. Life safety considerations are the principal determinant of whether or not a facility provides an acceptable level of safety.
The Policy was amended in 1988 to provide for the phased rehabilitation of selected buildings when funds were limited. The first phase of the program would have te hases, to be performed when funds were available, would complete the seismic rehabilitation program of the structure:"When funds for seismic rehabilitation are limited, the program developed by the responsible official may include a phased rehabilitation program for selected buildings." [Phased Rehabilitation Program] After the Loma Prieta earthquake in 1989, FEMA examined the applicability of the Policy to damaged buildings on the University of California - Santa Cruz campus. FEMA agreed that all repairs of damaged elements (and structural connections to those elements) should be constructed in accordance with current applicable codes. However, the University argued that, in addition, undamaged building elements should be upgraded to achieve a seismic rating of "Good."3. In essence, the University argued that, since its building officials were required to develop a phased program to upgrade the seismic performance of its buildings, FEMA was required to finance the seismic upgrade of undamaged building elements when repairing earthquake damaged buildings to "pre-disaster condition" "in accordance with current applicable codes." FEMA denied the request, finding specifically that the Policy was not a current "applicable code" as set forth in the Regulation for the purpose of determining funding eligibility under the Stafford Act. FEMA determined that the Policy did not set forth standards that governed the repair of earthquake damage. More importantly, FEMA also determined that the Policy did not require that University buildings be upgraded/retrofitted to meet the subjectively defined standards/ratings of the Policy. In short, they were discretionary standards.
Applicability of Seismic Codes After Northridge. After Northridge, FEMA recognized from its prior experience - with the University and other Subgrantees - that there frequently were not "applicable codes or standards" that unambiguously addressed the repair and upgrade of earthquake damaged buildings. As a result, on March 3, 1994, FEMA and the State entered into a Memorandum of Understanding, "Expediting Infrastructure of Grants" (MOU). The MOU provided that, in the absence of an applicable code or standard with explicit triggers for code-mandated structural upgrading, FEMA would use triggers contained in the MOU. The MOU provided structural damage thresholds or triggers based upon structural repair costs which, when met, would trigger funding for specific upgrade work associated with damage resulting from the earthquake. The MOU was an exercise of FEMA's discretionary authority to fund the upgrade of damaged buildings with the intent of mitigating future earthquake damage.
Subsequent to the Northridge Earthquake, the University of California modified its Policy in an effort to ensure (1) that its application to repair of earthquake damaged buildings was expressly stated and (2) that the basic intent - that all buildings which had suffered damage should be brought up to "Good" status - would be met (Submittal [materials submitted by the Subgrantee on August 3, 1995], Attachment A-1). The amendments were added "for clarification purposes only." The intent was to "improve the likelihood of reimbursement from [FEMA]"(Submittal, 11/10/94 Letter from the Office of the President).
The University's modifications became effective in January 1995. No provision of the 1988 Policy was deleted or amended. Rather, the University inserted a new section that provided for earthquake damage upgrade triggers ("Repair Upgrade Provisions"). In addition, the following new sentence was inserted into the middle of the Basic Policy section quoted above: "It is also University policy to repair University buildings and other facilities damaged in an earthquake as set forth below in the section entitled Repair of Buildings and Other Facilities Damaged by Earthquakes."
As applicable here, the Repair Upgrade Provisions provided that when the estimated cost of repairs"required to bring damaged elements into substantial compliance with the seismic performance objectives of current codes exceeds 10% of the replacement cost of the entire building, then the entire building will be made to comply with the seismic performance objectives currently applicable to University construction." The University did not otherwise modify the 1995 Policy; it retained both the Feasibility Provision (which had made all retrofit requirements subject to the availability of funds) and the Phased Rehabilitation Program.
FEMA Review of the 1995 Policy. After adoption of the 1995 Policy, on May 10, 1995, the Subgrantee wrote to the Governor's Office of Emergency Services (OES) requesting that FEMA and OES make a determination on whether the 1995 Policy qualified as an "applicable code or standard" under the Stafford Act, its implementing regulations and FEMA policy for the purpose of determining the scope of work eligible for FEMA funding. Because the Subgrantee's letter raised legal issues that could involve a number of the Subgrantee's potential repair projects; James L. Witt, Director of FEMA, asked John Carey, then General Counsel for FEMA, to examine the issues.
In a letter dated October 27, 1995 (the "Decision Letter"), FEMA's General Counsel provided OES with a detailed written analysis of the 1995 Policy concluding that the 1995 Policy still did not satisfy the FEMA Regulation as an applicable code.4. The General Counsel specifically determined that:
In correspondence dated December 18, 1995, and January 25, 1996, the Subgrantee stated its intention to appeal the Decision Letter. FEMA advised the Subgrantee, in a letter dated February 2, 1996, that the Decision Letter had been provided to the State in order to give guidance on how FEMA would apply its analysis of the policy to specific projects. Because the guidance was not a determination with regard to a specific project, it was not appealable. However, once a determination was made through the standard DSR process regarding application of the Policy to a specific project, the DSR could be appealed.
THE APPEAL
UCLA's first opportunity to appeal the refusal to recognize the 1995 Policy as an applicable code or standard came in DSR # 02623, obligating funds for Royce Hall. DSR #02623 stated that the Subgrantee had not provided documentation to show that the 1995 Policy had been formally adopted, as required by 206.226(b)(3), and therefore it was not an applicable code. In the absence of an applicable code, FEMA applied the triggers contained in the MOU to the Royce Hall project to determine the eligible scope of work. In an attachment to the DSR, dated July 24, 1996, UCLA stated that it generally concurred with the DSR in that the MOU effectively triggered the sameiggeP>5. However, it reserved the right to appeal the determination that the Policy was not an applicable code.
On January 28, 1997, OES transmitted to FEMA the Subgrantee's "Statement of Non-Concurrence With, and Appeal of, FEMA Determination [in DSR #02623 (Royce Hall)] that the University Seismic Policy is not the Applicable Standard under 44 CFR 206.226(b)," dated December 2, 1996 (Appeal). On October 10, 1997, UCLA requested that its appeal be treated as a "second" appeal (decided by the Associate Director) rather than as a first appeal, which would have been decided in this case by the Disaster Recovery Manager for the Northridge Earthquake. FEMA agreed to do so after confirmation of this request through OES. Subsequently, on January 16, 1998, UCLA provided a letter to the General Counsel supplementing its appellate arguments.
The only issues that have been raised by Subgrantee in this Appeal relate to whether the Policy is an applicable code or standard. The Appeal addresses the issues raised by FEMA in the Decision Letter, as well as the issue raised in the DSR.6. As noted above, no technical issues have been raised. No determinations made relative to application of the Policy to the Royce Hall project have been appealed; that is, Subgrantee has not identified any work that was not part of the initial eligible scope of work in DSR #02623, but that would have been eligible if the 1995 Policy had been applied. As to DSR #02623, this appeal is arguably moot. Nonetheless, we have determined to resolve the appeal on its merits because it is clearly in the best interest of FEMA, OES, and UCLA that the applicability of the 1995 Policy to FEMA eligibility determinations be decided.
ANALYSIS
The Decision Letter provided a detailed rationale for FEMA's determination that the 1995 Policy was not an applicable code. The analysis that follows only addresses those issues raised by the Subgrantee in its Appeal.
A. ISSUES RAISED IN SUBGRANTEE'S APPEAL
The Decision Letter's conclusion that the 1995 Policy was not an applicable code or standard was based primarily on the wide scope of discretion given to the University official to implement the Policy. UCLA argues on appeal that any discretion granted pursuant to the Policy does not diminish or compromise the absolute requirement that repairs consistent with and in strict compliance with the Policy must be undertaken. Specifically, UCLA alleges that the discretion provided for in the Policy is reasonable in that it goes to the timing and nature of repairs only. To the extent discretion is authorized (1) it is a limited form of discretion; (2) it is consistent with the discretion granted to building officials under other building codes and (3) it does not convert what is a mandatory policy into a discretionary policy. Further, UCLA argues that the Feasibility Provision and the Phased Rehabilitation Program are not applicable to earthquake damaged buildings.
Discretionary Application of the 1995 Policy. UCLA contends that any discretion as to the timing and nature of a repair "is not unlimited" and is not inconsistent with the approach authorized under other building codes. It cites to section 17980 of the California Health and Safety Code (CHSC) as support for authorizing discretion as to timing, in that the CHSC provides that a building adjudged to be a nuisance must be brought into compliance "according to a reasonable and feasible schedule." Section 104 of the 1991 Uniform Building Code (UBC) is also cited as support for authorizing discretion - but as to the nature of repairs - in that it provides that, "when there are practical difficulties involved in carrying out the provisions of this code, the building official may grant modifications for individual cases".
While both of the statutes cited authorize a certain amount of discretion, the discretion is quite restricted. Under the CHSC the building must be brought into compliance "according to a reasonable and feasible schedule for expeditious repairs." However, an owner does not have an unlimited amount of time. If the work is not done as scheduled, or a timely choice of repair or demolition is not made, or if an option is selected which cannot be completed within a reasonable period of time; the enforcement agency may take appropriate action. The CHSC requires that the work actually be performed, and in a timely manner. Similarly, the UBC requires that any modification only be granted on a case by case basis - "The building official shall first find that a special individual reason makes the strict letter of this code impractical" - rather than on an across the board basis. In addition, the UBC requires that all modifications conform to the intent and purpose of the Code.
Both statutes set clear parameters for the exercise of discretion. By contrast, the Seismic Safety Policy since 1975 has simply granted discretion to the University NOT to upgrade seismic performance until it is feasible to do so. No parameters have been set for exercise of the discretion. There is no timetable for repairs, nor is there any requirement that repairs to a facility actually be performed. And, should the Subgrantee actually initiate repairs to a facility, there is no requirement that the entire facility be made to conform to the intent and purpose of the Policy; i.e., to bring it to a "Good" rating.
An illustrative example of the approach the University has taken with regard to the seismic upgrade of University buildings and application of the Feasibility Provision and Phased Rehabilitation program is the approach taken with regard to the seismic retrofit of Royce Hall prior to the Northridge Earthquake. After the 1971 San Fernando Earthquake the University conducted a system-wide survey of its buildings. Royce Hall was rated Very Poor. Confirming studies were performed in 1987 and 1992 (subsequent to adoption of the 1975 and 1988 Policies). Funding for design work only was approved by the State of California and was scheduled to begin in 1994. The design work only related to a proposed limited scope project intended to address elements of the two South Towers. The remainder of any seismic correction was deferred, subject to later funding availability.7.
As defined in the Policies, a Very Poor seismic performance rating applies to buildings "whose performance during a major seismic disturbance is anticipated to result in extensive structural and nonstructural damage, potential structural collapse... that would represent high life hazards. Such buildings...would be given the highest priority for expenditures...so that the building could be reclassified GOOD." Seismic deficiencies were identified in Royce Hall more than 23 years ago. The facility received the poorest rating and required the highest priority, and only partial design work had commenced when Northridge struck. To argue that the Policy "mandates" seismic upgrades does not appear credible.
Applicability of the Feasibility Clause and the Phased Rehabilitation Program.
UCLA also argues that, after the 1995 amendment, neither the Feasibility Provision nor the Phased Rehabilitation Program apply to the Repair Upgrade Provisions for earthquake damaged buildings: "It is University Policy `to the maximum extent feasible' to maintain and rehabilitate non-earthquake-damaged but deficient buildings..." (Appeal, p.14, fn. 5); "The Decision Letter confuses the sequencing of seismic rehabilitation projects involving buildings not damaged by earthquakes with mandatory repairs to ones that are" (Appeal, p.8). This position, however, is clearly not supported by either the provisions of the 1995 Policy nor the prepared statements submitted by the Subgrantee to FEMA prior to issuance of the Decision Letter.
(new is University policy to the maximum extent feasible... [to] provide an acceptable level of earthquake safety,...It is also University policy to repair University buildings and other facilities damaged in an earthquake as set forth below in the section entitled Repair of Buildings and Other Facilities Damaged by Earthquakes. Feasibility is to be determined by weighing the practicability and cost of protective measures against the gravity and probability of injury resulting from a seismic occurrence.The amendment to the Basic Policy was inserted directly prior to the pre-existing Feasibility Provision - indicating an intent that the Feasibility Provision apply to the two sentences preceding it, including the new Repair Upgrade Provisions. The introduction to the Repair Upgrade Provision similarly contains qualifying language:
Repair of Buildings and Other Facilities Damaged by Earthquakes
In addition to the requirements established elsewhere in this Policy pertaining to the construction, maintenance and rehabilitation of University buildings and facilities, the following standards shall apply to the repair of University buildings and facilities which are damaged by earthquakes. Thus, the new Repair Upgrade Provisions themselves are "in addition to the requirements established elsewhere;" that is, they are subject to the requirements of the Feasibility Provision and the Phased Rehabilitation Program. The standards do not supersede them.
Furthermore, Subgrantee, in its Submittal, clearly stated that the Feasibility provision applied to the "clarified" 1995 Policy; that is, to the Repair Upgrade provisions that were the focus of the clarification:"As issued in 1975, revised and clarified in 1988, and still today following the 1995 clarification, the Seismic Policy has as its central tenet the provision of `an acceptable level of earthquake safety'...The timing of undertaking work has been addressed in the seismic policy by the statement that `[f]easibility [to modify an existing structure] is to be determined by weighing the practicality and cost of protective measures against the gravity and probability of injury...' These requirements established in the original 1974 Seismic Policy are still part of the clarified 1995 policy." (Submittal, Attachment A-1) UCLA has also clearly stated that the clarified 1995 Policy was subject to the Phased Rehabilitation Program; i.e., life safety and availability of funds:
"The precise timing of the repairs will be consistent with the requirement. that the Chancellors. tak[e] all reasonable steps to assure protection of persons. against the effects of earthquakes which could result in the loss of life or injury to persons". "The buildings which are required to be repaired or upgraded.will be phased in as soon as required resources are available."..."Th[e] program of repair and retrofit can only occur where the resources exist to so proceed, and the timing of repairs must be determined in that context." .. "In not specifying a timing requirement, the Seismic Policy recognizes that repairs to buildings cannot be made without funding, and that funding is limited." (Submittal, Attachment A-1)
UCLA now argues, in essence, that the 1995 modifications were so substantial as to have eliminated the discretion clearly evident and exercised over the 20 years from 1975 through 1995. However, UCLA's current view is inconsistent with the University's own declaration - made to the Board of Regents of the University - that the 1995 modifications were for "clarification purposes only" (Appeal, Exhibit, Letter dated January 23, 1996). It is inconceivable that the University would have effected a change of such significance - forcing immediate seismic upgrade of undamaged portions of buildings where immediate upgrades had quite clearly not previously been required -- while describing the change to the University's governing body as a mere "clarification."
B. THE 1995 POLICY FOSTERS A TWO-TIERED SYSTEM
Were FEMA to accept the Subgrantee's position that the Feasibility Provision does not apply to the Repair Upgrade Provisions and that compliance with those provisions is mandatory rather than discretionary; it would still be FEMA's determination that the Policy is not an "applicable code or standard." Were FEMA to accept the Policy as a basis for determining eligible costs; it would be FEMA's determination that the Policy is contrary to the intent of the Stafford Act and the five criteria specified in the Regulation in that it fosters a two-tiered system with respect to the upgrade of University buildings.
One of the major purposes of the Stafford Act and the Regulation is to encourage state and local government to enact hazard mitigation measures that will lessen the risk of loss in the future on the part of all facilities within the jurisdiction of the owner. Additionally, one of the important Federal policy considerations embodied in the five criteria of the Regulation (206.226(b)(3)-(5)), is to ensure that the Federal government does not contribute to or foster the creation of a two-tiered system of standards with respect to life-safety concerns: one standard applicable to buildings eligible for federal disaster assistance and another (lower) standard applicable to facilities for which Federal funds are not available under the Stafford Act.
However, were FEMA to use the 1995 Policy as a determinant of eligible costs, we would foster just such a two-tiered system. We would be encouraging mitigation measures with respect to facilities that are eligible for federal reimbursement for the repair of losses already incurred; but not preventing future losses from occurring with respect to facilities not damaged by a disaster and thus not eligible for federal funding.
Conflict of Interest. This appeal presents an unusual situation in which the same public entity adopted the Policy, enforces the Policy, and also owns or controls all the buildings within the purview of the Policy. This conflict of interest is unavoidable and of course does not, by itself, render the Policy inapplicable. However, the conflict does require FEMA to scrutinize very carefully the University's adoption of a policy that would trigger major federal expenditures. This scrutiny must, of necessity, examine the overall impact of the Policy to determine whether it complies with the five criteria in the Regulation and encourages mitigation on an across the board basis.
The Policy Fosters a Two Tiered System. Under the interpretation of the 1995 Policy currently advanced by UCLA, if the estimated cost of repairs to an earthquake damaged building:"required to bring damaged elements into substantial compliance with the seismic performance objectives of current codes exceeds 10% of the replacement cost of the entire building, then the entire building will be made to comply with the seismic performance objectives currently applicable to University construction." This seismic objective stands in stark contrast to the lesser objectives set forth for other existing buildings in the University of California system - even those non-earthquake damaged buildings that are rated "Very Poor" and are subject to major remodeling efforts due to obsolescence:Seismic rehabilitation projects will provide, at a minimum, an acceptable level of earthquake safety based solely on considerations of seismic safety based on the sole consideration of the protection of life and prevention of personal injury, insofar as practicable, at a level equivalent to what would be established by compliance with the seismic provisions of the California Code of Regulations, Title 24, California Building Standards Code, or local building requirements, whichever is more stringent, disregarding insofar as possible potlife.In short, where buildings do not incur damage which costs more than 10% of replacement cost to repair to current seismic code levels, the Policy only calls for reconstruction on a phased basis, and even then, reconstruction is required only to levels consistent with protection of life safety and personal injury. Yet under the interpretation of the 1995 Policy now proffered on appeal, a damaged building costing slightly more to repair must now be "made to comply with the seismic performance objectives currently applicable to University construction." The University is no longer permitted to disregard "insofar as possible potential building damage not jeopardizing life."
We cannot ignore the practical reality that, in virtually every situation in which a University building will incur damage meeting the 10% threshold, the earthquake causing the damage will be of sufficient intensity to constitute a major disaster triggering federal funding under the Stafford Act. It is also significant to note that when FEMA requested information regarding the criteria for determining when a damaged building had to be replaced (as opposed to repaired), Subgrantee stated that there were no such criteria, as replacement was addressed by FEMA's 50% rule. That rule states that when damages exceed 50% of the cost to replace, the cost of a replacement facility may be eligible for funding (44 CFR 206.226(d)).
Because undamaged buildings are not eligible for funding under section 406 of the Stafford Act, upgrade of these buildings has not been mandated by the Policy. On the other hand, repair work to University buildings - which is always eligible for Federal assistance - along with seismic upgrade work, is made mandatory by the Policy. Similarly, [replacement] work that is already addressed in 44 CFR is not addressed within the context of the Policy since it is not contemplated that these buildings will be replaced outside of the Federal disaster assistance program. Such a Policy clearly encourages a two-tiered system.
Subgrantee's statements regarding the "Source of Funding for the 1988 and 1995 Policies" further evidence the fact that a two-tiered system based upon eligibility for funding has been created. (Submittal, Attachment A-1, pp.6-7). There, Subgrantee stated that, "For.University buildings which have not been damaged by earthquake.the primary source of available funds for upgrading in accordance with the Seismic Policy is by way of State appropriation." In contrast, the primary source of funding for earthquake damaged buildings is Federal disaster assistance: "In order to accomplish the repair of the UCLA buildings which suffered damage in the Northridge Earthquake to the standard established by the Seismic Policy, the primary sources of funding must be the federal and state government."
Furthermore, when the Office of the President submitted the 1995 clarification for review and approval, the cover letter (Submittal, 11/10/94 Letter) stated as follows:I believe that the attached Amendments would clarify the scope and purpose of the Policy, and, in doing so, would improve the likelihood of reimbursement from the Federal Emergency Management Agency (FEMA) for damage to University buildings caused by earthquake.I want to stress the point that these amendments will not change the scope and purpose of the policy. They are proposed for clarification purposes only. It is clear that the intent of the clarification was to increase the likelihood of reimbursement and to attempt to mandate mitigation measures for facilities that were eligible for Federal reimbursement. In view of the fact that the University may not impose mandatory seismic upgrade requirements in the absence of a State appropriation for capital improvements; the assurances that the amendments were only a clarification and would not change the scope and purpose of the policy must be interpreted to mean that the Policy would not mandate funding on the part of the University. Presumably, had it been contemplated that the amendments would change the scope and purpose of the Policy in that the upgrades would impose a financial burden upon the University, the Policy would have had to have been approved, at the outset and at a minimum, by the Board of Regents of the University of California. Clearly, it was contemplated that there would be no financial burden upon the University and that any changes effectuated by the Policy would, as stated by the letter, be funded by the Federal government.
Only FEMA is authorized to interpret and implement the Stafford Act and regulations issued pursuant to the Stafford Act. Accordingly, only FEMA has the authority to determine which repairs (code-mandated or otherwise) it will fund pursuant to the Stafford Act. The Stafford Act and applicable regulations cannot be read or interpreted as authorizing State or other officials or agencies to determine the amount of federal disaster assistance funds FEMA must contribute to a project. Retention of Federal authority is particularly important where the "code" language at issue is a "trigger" which determines when federal funds should be used to upgrade the undamaged structural elements of a building.8. It is similarly important when the "code" proffered by a code setting agency triggers upgrade activity only where federal funding of that upgrade is available.
The University Policy fosters a double standard with respect to the entity(ies) that must fund the upgrade of the University's buildings and the extent to which those buildings must be upgraded. Here, all of the damaged structures of the University would be upgraded at Federal expense; neither the State or local government, nor any private entity, would have to bear that expense. As a result, there are no countervailing economic constraints that would cause the University to adopt a lesser standard, such as one that would have higher triggers/thresholds which, when met, would require less of an upgrade. Such constraints are quite evidently present in the case of the upgrade of undamaged buildings. There, where the primary source of funding is by State appropriation, the Feasibility Provision and the Phased Rehabilitation Provision apply. If and when buildings are upgraded, they may be upgraded to a lesser standard that emphasizes the protection of life.
In short, Policy encourages a two-tiered system, one that addresses deficiencies in buildings eligible for Federal disaster assistance funding (or self-supporting) versus those that require a State appropriation. Such a two-tiered system is contrary to the Stafford Act and the five criteria contained in the Regulation, in particular 206.226(b)(4), which requires that a code "apply uniformly."
Recent Legislative Matters. In its January 16, 1998 letter, UCLA directed our attention to language in the House Appropriations Committee Report, on H.R.2158, which set FEMA's appropriations for the fiscal year 1998. The House Appropriations Committee noted that:"in the case of public institutions which are subject to building codes and standard[s] that require changes in the pre-disaster construction of a damaged facility, FEMA should recognize such codes and standards for purposes of determining reimbursement under section 406 when such institution has provided sufficient credible evidence that all requirements for recognition of such codes, under the applicable regulations, have been satisfied." As noted above, FEMA has determined that the Seismic Safety Policy, both before and after its 1995 clarification, does not meet the requirements of the Stafford Act and the Regulations. UCLA argues that the House Report's reference to "credible evidence" changes the applicable legal standard imposed by the Staffes that FE only a bare minimum of credible evidence supporting it, no matter how substantial the conflicting evidence may be. However, language in a Committee Report, even when adopted by the Conference Committee, cannot change the substantive legal standard FEMA is required to follow in the Stafford Act (see, Texas Municipal Power v. EPA, 89 F.3d 858 (1996) and U.S. v. Meyer, 808 F. 2d 912(1987)). In any event, the standard to which Subgrantee refers, and the cases to which it cites, address a minimal standard that only requires "some" or "any" credible evidence. The standard used in the House Report, "sufficient" creditable evidence, is a much higher standard that has not been met. As noted above, the Seismic Policy simply cannot be viewed as an "applicable code or standard" for the purpose of determining eligibility for funding under section 406 and 44 CFR 206.226(b).
CONCLUSION
The 1995 Policy is not an applicable code or standard for the purpose of determining eligibility for FEMA funding in that it does not meet the third, fourth and fifth criteria of the Regulation.
ENDNOTES:
1. 44 CFR 206.226(b) provides: "For the costs of Federal, state and local repair or replacement standards which change the predisaster construction of facility to be eligible, the standards must:
3. See, for example, Appeal dated December 14, 1992 from California's Office of Emergency Services in connection with the funding of University of California - Santa Cruz (Natural Sciences 2 Building).
4.The General Counsel examined the following in reaching his conclusion: (1) the May 10, 1995 correspondence and Submittal, (2) information provided at a meeting with UCLA on August 8, 1995 to discuss the applicability of the 1995 Policy and (3) UCLA's "Memorandum in Support of Adoption of the University of California Seismic Policy as the Governing Code for Purposes of Determining Reimbursable Costs under Section 406 of the Robert T. Stafford Relief and Emergency Assistance Act," dated October, 1995 (Memorandum, October 1995).
5.A summary comparison of the provisions of the 1995 Policy and the MOU is attached.
6.The Decision Letter determined that the 1995 Policy was not an applicable code for the reasons stated above. In addition, it was noted that there was another consideration that upon further review could have lead to the same determination; that is, because the 1995 Policy was adopted by the President of the University, rather than the Board of Regents of the University of California, it did not appear to have been formally adopted, as required by 206.226(b)(3). In error, the sole issue cited in the DSR narrative for FEMA's determination was this consideration regarding formal adoption. Subsequent to the Decision Letter the Board of Regents formally adopted the 1995 Policy. Consequently, formal adoption is not being addressed as an issue in FEMA's legal analysis.
7. See, letter dated June 25, 1996, from Peter W. Blackman, Administrative Vice-Chancellor, UCLA to Gilbert Najera, OES.
8.Cost effective discretionary mitigation measures may be available under sections 406 and 404 of the Stafford Act. This appeal does not review technical matters nor conclude whether mitigation may be appropriate or cost effective.
Appeal Brief
| Disaster | FEMA-1008-DR |
| Applicant | University of California, Los Angeles |
| Appeal Type | Second |
| PA ID# | 000-92040 |
| PW ID# | 02623 |
| Date Signed | 1998-03-10T05:00:00 |
Appeal Letter
March 10, 1998
Mr. Gilbert Najera
Governor's Authorized Representative
Governor's Office of Emergency Services
Disaster Field Office
74 North Pasadena Avenue, West Annex, Second Floor
Pasadena, California 91103
Dear Mr. Najera:
This is in response to your January 16, 1997, transmittal of the University of California, Los Angeles' first appeal of damage survey report 02623 for the restoration of Royce Hall. Your letter of November 11, 1997, requested that the first appeal be reviewed as a second appeal. The appeal concerns the application of the University's 1995 Seismic Safety Policy (Seismic Policy) to the restoration of the facility and issues raised in an October 27, 1995, letter from FEMA's Office of General Counsel (OGC) regarding the Seismic Policy. The University claims that the Seismic Policy is an applicable code and standard and would require a full seismic retrofit of Royce Hall.
Based on the submitted documentation, I have determined that the Seismic Policy is not an eligible code and standard and the appeal is denied. My response is detailed in the enclosed second appeal analysis. Essentially, the Seismic Policy does not meet the third, fourth, and fifth criteria of Title 44 of the Code of Federal Regulations, section 206.226(b).
Please inform the applicant of my determination. The applicant may submit a third appeal to the Director of FEMA. The appeal must be submitted through your office and the Regional Director within 60 days of receipt of this determination.
Sincerely,
/S/
Lacy E. Suiter
Executive Associate Director
Response and Recovery Directorate
Enclosure
cc: Leland Wilson
Federal Coordinating Officer
Northridge Long-Term Recovery Area Office
Mr. Gilbert Najera
Governor's Authorized Representative
Governor's Office of Emergency Services
Disaster Field Office
74 North Pasadena Avenue, West Annex, Second Floor
Pasadena, California 91103
Dear Mr. Najera:
This is in response to your January 16, 1997, transmittal of the University of California, Los Angeles' first appeal of damage survey report 02623 for the restoration of Royce Hall. Your letter of November 11, 1997, requested that the first appeal be reviewed as a second appeal. The appeal concerns the application of the University's 1995 Seismic Safety Policy (Seismic Policy) to the restoration of the facility and issues raised in an October 27, 1995, letter from FEMA's Office of General Counsel (OGC) regarding the Seismic Policy. The University claims that the Seismic Policy is an applicable code and standard and would require a full seismic retrofit of Royce Hall.
Based on the submitted documentation, I have determined that the Seismic Policy is not an eligible code and standard and the appeal is denied. My response is detailed in the enclosed second appeal analysis. Essentially, the Seismic Policy does not meet the third, fourth, and fifth criteria of Title 44 of the Code of Federal Regulations, section 206.226(b).
Please inform the applicant of my determination. The applicant may submit a third appeal to the Director of FEMA. The appeal must be submitted through your office and the Regional Director within 60 days of receipt of this determination.
Sincerely,
/S/
Lacy E. Suiter
Executive Associate Director
Response and Recovery Directorate
Enclosure
cc: Leland Wilson
Federal Coordinating Officer
Northridge Long-Term Recovery Area Office
Appeal Analysis
The University of California at Los Angeles ("UCLA") is the Subgrantee of public assistance funds granted to the State of California by the Federal Emergency Management Agency ("FEMA") for the repair of UCLA facilities damaged in the Northridge Earthquake. UCLA appeals from a Damage Survey Report (DSR) issued by FEMA's Northridge Long Term Recovery Area Office (Northridge Office) obligating funds for the repair of Royce Hall.For the reasons set forth below, the appeal is denied.
BACKGROUND
On January 17, 1994, a catastrophic earthquake struck southern California, inflicting billions of dollars of property damage and economic losses in a densely populated area. Almost immediately, the Governor of California requested, and the President declared, Los Angeles, Ventura and Orange Counties to be a major disaster area under the Robert T. Stafford Disaster Relief and Emergency Assistance Act ("Stafford Act"). This declaration triggered the availability of certain types of Federal disaster assistance funding programs to supplement State and local disaster efforts. Among those programs is the Section 406 Public Assistance program. Under Section 406 of the Stafford Act and FEMA's implementing regulations at 44 CFR Part 206, public facilities that have been damaged or destroyed by a major disaster are eligible for federal funding of a portion - 90% in the case of the Northridge Earthquake - of the cost to repair, restore, reconstruct, and in some cases replace, those facilities.
UCLA's historic Royce Hall is a multi-functional building dedicated primarily to the performing arts with auditorium, classroom and office space. Its twin towers (the south towers) are a recognized symbol of the University. Royce Hall suffered structural and non-structural damage from the Northridge Earthquake, and as a result became eligible for Section 406 funding.
The Northridge Office has issued five DSRs obligating funds for the Royce Hall project:
- DSR # 22695 was obligated on August 22, 1994, for $153,238 to fund an Architectural & Engineering structural evaluation to develop conceptual repair schemes.
- DSR # 09601 was obligated on March 1, 1995, for $9,830,145 for Emergency Protective Measures (Category B) to protect the building from the collapse of the two south towers (the most severely damaged elements of the building).
- Interim DSR # 85162 was obligated on February 4, 1996, for $9,000,000 to help the UCLA repay a portion of a construction loan it received from the Board of Regents of the University of California.
- DSR # 02623 was obligated on October 3, 1996, for $11,383,420. This was a comprehensive construction DSR for repair and upgrade of both structural and non-structural elements of Royce Hall.
- DSR # 47372 was obligated on February 4, 1997, for $5,802,642 in relocation costs.
Statutory and Regulatory Framework. Section 406 of the Stafford Act authorizes the President to make contributions of not less than "75 percent of the net eligible cost of repair, restoration, reconstruction, or replacement" carried out under its terms. Section 406(c)(1) defines "net eligible cost" as, at a minimum, "the cost of repairing, restoring, reconstructing, or replacing a public facility . . . on the basis of the design of such facility as it existed immediately prior to the major disaster and in conformity with current applicable codes, specifications, and standards." Where the code or standard changes the predisaster construction of a facility; i.e., it requires that the facility be upgraded, the code will only be used for determining eligibility for funding if it complies with the five criteria set forth in 44 CFR 206.226(b) ("The Regulation").1.
University of California Seismic Safety Policy. The University of California is, under the California Constitution, independent of other State and local government regulatory authority. As a result, the University serves as its own code setting authority. In 1975, the University promulgated a Seismic Safety Policy governing all buildings on University campuses.
The intent of this Policy, as expressed in the preamble ("Basic Policy"), is to provide for, subject to the availability of funds, the seismic upgrade of buildings in general:
The original 1975 Policy merely required the responsible campus official to develop a program for abatement of seismic hazards and to establish priorities for seismic safety projects in accordance with the Policy. In accord with the Policy, seismic rehabilitation projects are to provide the following:
The Policy was amended in 1988 to provide for the phased rehabilitation of selected buildings when funds were limited. The first phase of the program would have te hases, to be performed when funds were available, would complete the seismic rehabilitation program of the structure:
Applicability of Seismic Codes After Northridge. After Northridge, FEMA recognized from its prior experience - with the University and other Subgrantees - that there frequently were not "applicable codes or standards" that unambiguously addressed the repair and upgrade of earthquake damaged buildings. As a result, on March 3, 1994, FEMA and the State entered into a Memorandum of Understanding, "Expediting Infrastructure of Grants" (MOU). The MOU provided that, in the absence of an applicable code or standard with explicit triggers for code-mandated structural upgrading, FEMA would use triggers contained in the MOU. The MOU provided structural damage thresholds or triggers based upon structural repair costs which, when met, would trigger funding for specific upgrade work associated with damage resulting from the earthquake. The MOU was an exercise of FEMA's discretionary authority to fund the upgrade of damaged buildings with the intent of mitigating future earthquake damage.
Subsequent to the Northridge Earthquake, the University of California modified its Policy in an effort to ensure (1) that its application to repair of earthquake damaged buildings was expressly stated and (2) that the basic intent - that all buildings which had suffered damage should be brought up to "Good" status - would be met (Submittal [materials submitted by the Subgrantee on August 3, 1995], Attachment A-1). The amendments were added "for clarification purposes only." The intent was to "improve the likelihood of reimbursement from [FEMA]"(Submittal, 11/10/94 Letter from the Office of the President).
The University's modifications became effective in January 1995. No provision of the 1988 Policy was deleted or amended. Rather, the University inserted a new section that provided for earthquake damage upgrade triggers ("Repair Upgrade Provisions"). In addition, the following new sentence was inserted into the middle of the Basic Policy section quoted above: "It is also University policy to repair University buildings and other facilities damaged in an earthquake as set forth below in the section entitled Repair of Buildings and Other Facilities Damaged by Earthquakes."
As applicable here, the Repair Upgrade Provisions provided that when the estimated cost of repairs
FEMA Review of the 1995 Policy. After adoption of the 1995 Policy, on May 10, 1995, the Subgrantee wrote to the Governor's Office of Emergency Services (OES) requesting that FEMA and OES make a determination on whether the 1995 Policy qualified as an "applicable code or standard" under the Stafford Act, its implementing regulations and FEMA policy for the purpose of determining the scope of work eligible for FEMA funding. Because the Subgrantee's letter raised legal issues that could involve a number of the Subgrantee's potential repair projects; James L. Witt, Director of FEMA, asked John Carey, then General Counsel for FEMA, to examine the issues.
In a letter dated October 27, 1995 (the "Decision Letter"), FEMA's General Counsel provided OES with a detailed written analysis of the 1995 Policy concluding that the 1995 Policy still did not satisfy the FEMA Regulation as an applicable code.4. The General Counsel specifically determined that:
- the 1995 Policy did not apply uniformly to all similar type facilities (206.226(b)(4));
- it could not be enforced nor had Subgrantee demonstrated that it had been enforced (206.226(b)(5)); and
- it did not constitute a legal state requirement, as required by 206.226(b)(3).
In correspondence dated December 18, 1995, and January 25, 1996, the Subgrantee stated its intention to appeal the Decision Letter. FEMA advised the Subgrantee, in a letter dated February 2, 1996, that the Decision Letter had been provided to the State in order to give guidance on how FEMA would apply its analysis of the policy to specific projects. Because the guidance was not a determination with regard to a specific project, it was not appealable. However, once a determination was made through the standard DSR process regarding application of the Policy to a specific project, the DSR could be appealed.
THE APPEAL
UCLA's first opportunity to appeal the refusal to recognize the 1995 Policy as an applicable code or standard came in DSR # 02623, obligating funds for Royce Hall. DSR #02623 stated that the Subgrantee had not provided documentation to show that the 1995 Policy had been formally adopted, as required by 206.226(b)(3), and therefore it was not an applicable code. In the absence of an applicable code, FEMA applied the triggers contained in the MOU to the Royce Hall project to determine the eligible scope of work. In an attachment to the DSR, dated July 24, 1996, UCLA stated that it generally concurred with the DSR in that the MOU effectively triggered the sameiggeP>5. However, it reserved the right to appeal the determination that the Policy was not an applicable code.
On January 28, 1997, OES transmitted to FEMA the Subgrantee's "Statement of Non-Concurrence With, and Appeal of, FEMA Determination [in DSR #02623 (Royce Hall)] that the University Seismic Policy is not the Applicable Standard under 44 CFR 206.226(b)," dated December 2, 1996 (Appeal). On October 10, 1997, UCLA requested that its appeal be treated as a "second" appeal (decided by the Associate Director) rather than as a first appeal, which would have been decided in this case by the Disaster Recovery Manager for the Northridge Earthquake. FEMA agreed to do so after confirmation of this request through OES. Subsequently, on January 16, 1998, UCLA provided a letter to the General Counsel supplementing its appellate arguments.
The only issues that have been raised by Subgrantee in this Appeal relate to whether the Policy is an applicable code or standard. The Appeal addresses the issues raised by FEMA in the Decision Letter, as well as the issue raised in the DSR.6. As noted above, no technical issues have been raised. No determinations made relative to application of the Policy to the Royce Hall project have been appealed; that is, Subgrantee has not identified any work that was not part of the initial eligible scope of work in DSR #02623, but that would have been eligible if the 1995 Policy had been applied. As to DSR #02623, this appeal is arguably moot. Nonetheless, we have determined to resolve the appeal on its merits because it is clearly in the best interest of FEMA, OES, and UCLA that the applicability of the 1995 Policy to FEMA eligibility determinations be decided.
ANALYSIS
The Decision Letter provided a detailed rationale for FEMA's determination that the 1995 Policy was not an applicable code. The analysis that follows only addresses those issues raised by the Subgrantee in its Appeal.
A. ISSUES RAISED IN SUBGRANTEE'S APPEAL
The Decision Letter's conclusion that the 1995 Policy was not an applicable code or standard was based primarily on the wide scope of discretion given to the University official to implement the Policy. UCLA argues on appeal that any discretion granted pursuant to the Policy does not diminish or compromise the absolute requirement that repairs consistent with and in strict compliance with the Policy must be undertaken. Specifically, UCLA alleges that the discretion provided for in the Policy is reasonable in that it goes to the timing and nature of repairs only. To the extent discretion is authorized (1) it is a limited form of discretion; (2) it is consistent with the discretion granted to building officials under other building codes and (3) it does not convert what is a mandatory policy into a discretionary policy. Further, UCLA argues that the Feasibility Provision and the Phased Rehabilitation Program are not applicable to earthquake damaged buildings.
Discretionary Application of the 1995 Policy. UCLA contends that any discretion as to the timing and nature of a repair "is not unlimited" and is not inconsistent with the approach authorized under other building codes. It cites to section 17980 of the California Health and Safety Code (CHSC) as support for authorizing discretion as to timing, in that the CHSC provides that a building adjudged to be a nuisance must be brought into compliance "according to a reasonable and feasible schedule." Section 104 of the 1991 Uniform Building Code (UBC) is also cited as support for authorizing discretion - but as to the nature of repairs - in that it provides that, "when there are practical difficulties involved in carrying out the provisions of this code, the building official may grant modifications for individual cases".
While both of the statutes cited authorize a certain amount of discretion, the discretion is quite restricted. Under the CHSC the building must be brought into compliance "according to a reasonable and feasible schedule for expeditious repairs." However, an owner does not have an unlimited amount of time. If the work is not done as scheduled, or a timely choice of repair or demolition is not made, or if an option is selected which cannot be completed within a reasonable period of time; the enforcement agency may take appropriate action. The CHSC requires that the work actually be performed, and in a timely manner. Similarly, the UBC requires that any modification only be granted on a case by case basis - "The building official shall first find that a special individual reason makes the strict letter of this code impractical" - rather than on an across the board basis. In addition, the UBC requires that all modifications conform to the intent and purpose of the Code.
Both statutes set clear parameters for the exercise of discretion. By contrast, the Seismic Safety Policy since 1975 has simply granted discretion to the University NOT to upgrade seismic performance until it is feasible to do so. No parameters have been set for exercise of the discretion. There is no timetable for repairs, nor is there any requirement that repairs to a facility actually be performed. And, should the Subgrantee actually initiate repairs to a facility, there is no requirement that the entire facility be made to conform to the intent and purpose of the Policy; i.e., to bring it to a "Good" rating.
An illustrative example of the approach the University has taken with regard to the seismic upgrade of University buildings and application of the Feasibility Provision and Phased Rehabilitation program is the approach taken with regard to the seismic retrofit of Royce Hall prior to the Northridge Earthquake. After the 1971 San Fernando Earthquake the University conducted a system-wide survey of its buildings. Royce Hall was rated Very Poor. Confirming studies were performed in 1987 and 1992 (subsequent to adoption of the 1975 and 1988 Policies). Funding for design work only was approved by the State of California and was scheduled to begin in 1994. The design work only related to a proposed limited scope project intended to address elements of the two South Towers. The remainder of any seismic correction was deferred, subject to later funding availability.7.
As defined in the Policies, a Very Poor seismic performance rating applies to buildings "whose performance during a major seismic disturbance is anticipated to result in extensive structural and nonstructural damage, potential structural collapse... that would represent high life hazards. Such buildings...would be given the highest priority for expenditures...so that the building could be reclassified GOOD." Seismic deficiencies were identified in Royce Hall more than 23 years ago. The facility received the poorest rating and required the highest priority, and only partial design work had commenced when Northridge struck. To argue that the Policy "mandates" seismic upgrades does not appear credible.
Applicability of the Feasibility Clause and the Phased Rehabilitation Program.
UCLA also argues that, after the 1995 amendment, neither the Feasibility Provision nor the Phased Rehabilitation Program apply to the Repair Upgrade Provisions for earthquake damaged buildings: "It is University Policy `to the maximum extent feasible' to maintain and rehabilitate non-earthquake-damaged but deficient buildings..." (Appeal, p.14, fn. 5); "The Decision Letter confuses the sequencing of seismic rehabilitation projects involving buildings not damaged by earthquakes with mandatory repairs to ones that are" (Appeal, p.8). This position, however, is clearly not supported by either the provisions of the 1995 Policy nor the prepared statements submitted by the Subgrantee to FEMA prior to issuance of the Decision Letter.
(new is University policy to the maximum extent feasible... [to] provide an acceptable level of earthquake safety,...It is also University policy to repair University buildings and other facilities damaged in an earthquake as set forth below in the section entitled Repair of Buildings and Other Facilities Damaged by Earthquakes. Feasibility is to be determined by weighing the practicability and cost of protective measures against the gravity and probability of injury resulting from a seismic occurrence.The amendment to the Basic Policy was inserted directly prior to the pre-existing Feasibility Provision - indicating an intent that the Feasibility Provision apply to the two sentences preceding it, including the new Repair Upgrade Provisions. The introduction to the Repair Upgrade Provision similarly contains qualifying language:
In addition to the requirements established elsewhere in this Policy pertaining to the construction, maintenance and rehabilitation of University buildings and facilities, the following standards shall apply to the repair of University buildings and facilities which are damaged by earthquakes.
Furthermore, Subgrantee, in its Submittal, clearly stated that the Feasibility provision applied to the "clarified" 1995 Policy; that is, to the Repair Upgrade provisions that were the focus of the clarification:
"The precise timing of the repairs will be consistent with the requirement. that the Chancellors. tak[e] all reasonable steps to assure protection of persons. against the effects of earthquakes which could result in the loss of life or injury to persons". "The buildings which are required to be repaired or upgraded.will be phased in as soon as required resources are available."..."Th[e] program of repair and retrofit can only occur where the resources exist to so proceed, and the timing of repairs must be determined in that context." .. "In not specifying a timing requirement, the Seismic Policy recognizes that repairs to buildings cannot be made without funding, and that funding is limited." (Submittal, Attachment A-1)
UCLA now argues, in essence, that the 1995 modifications were so substantial as to have eliminated the discretion clearly evident and exercised over the 20 years from 1975 through 1995. However, UCLA's current view is inconsistent with the University's own declaration - made to the Board of Regents of the University - that the 1995 modifications were for "clarification purposes only" (Appeal, Exhibit, Letter dated January 23, 1996). It is inconceivable that the University would have effected a change of such significance - forcing immediate seismic upgrade of undamaged portions of buildings where immediate upgrades had quite clearly not previously been required -- while describing the change to the University's governing body as a mere "clarification."
B. THE 1995 POLICY FOSTERS A TWO-TIERED SYSTEM
Were FEMA to accept the Subgrantee's position that the Feasibility Provision does not apply to the Repair Upgrade Provisions and that compliance with those provisions is mandatory rather than discretionary; it would still be FEMA's determination that the Policy is not an "applicable code or standard." Were FEMA to accept the Policy as a basis for determining eligible costs; it would be FEMA's determination that the Policy is contrary to the intent of the Stafford Act and the five criteria specified in the Regulation in that it fosters a two-tiered system with respect to the upgrade of University buildings.
One of the major purposes of the Stafford Act and the Regulation is to encourage state and local government to enact hazard mitigation measures that will lessen the risk of loss in the future on the part of all facilities within the jurisdiction of the owner. Additionally, one of the important Federal policy considerations embodied in the five criteria of the Regulation (206.226(b)(3)-(5)), is to ensure that the Federal government does not contribute to or foster the creation of a two-tiered system of standards with respect to life-safety concerns: one standard applicable to buildings eligible for federal disaster assistance and another (lower) standard applicable to facilities for which Federal funds are not available under the Stafford Act.
However, were FEMA to use the 1995 Policy as a determinant of eligible costs, we would foster just such a two-tiered system. We would be encouraging mitigation measures with respect to facilities that are eligible for federal reimbursement for the repair of losses already incurred; but not preventing future losses from occurring with respect to facilities not damaged by a disaster and thus not eligible for federal funding.
Conflict of Interest. This appeal presents an unusual situation in which the same public entity adopted the Policy, enforces the Policy, and also owns or controls all the buildings within the purview of the Policy. This conflict of interest is unavoidable and of course does not, by itself, render the Policy inapplicable. However, the conflict does require FEMA to scrutinize very carefully the University's adoption of a policy that would trigger major federal expenditures. This scrutiny must, of necessity, examine the overall impact of the Policy to determine whether it complies with the five criteria in the Regulation and encourages mitigation on an across the board basis.
The Policy Fosters a Two Tiered System. Under the interpretation of the 1995 Policy currently advanced by UCLA, if the estimated cost of repairs to an earthquake damaged building:
We cannot ignore the practical reality that, in virtually every situation in which a University building will incur damage meeting the 10% threshold, the earthquake causing the damage will be of sufficient intensity to constitute a major disaster triggering federal funding under the Stafford Act. It is also significant to note that when FEMA requested information regarding the criteria for determining when a damaged building had to be replaced (as opposed to repaired), Subgrantee stated that there were no such criteria, as replacement was addressed by FEMA's 50% rule. That rule states that when damages exceed 50% of the cost to replace, the cost of a replacement facility may be eligible for funding (44 CFR 206.226(d)).
Because undamaged buildings are not eligible for funding under section 406 of the Stafford Act, upgrade of these buildings has not been mandated by the Policy. On the other hand, repair work to University buildings - which is always eligible for Federal assistance - along with seismic upgrade work, is made mandatory by the Policy. Similarly, [replacement] work that is already addressed in 44 CFR is not addressed within the context of the Policy since it is not contemplated that these buildings will be replaced outside of the Federal disaster assistance program. Such a Policy clearly encourages a two-tiered system.
Subgrantee's statements regarding the "Source of Funding for the 1988 and 1995 Policies" further evidence the fact that a two-tiered system based upon eligibility for funding has been created. (Submittal, Attachment A-1, pp.6-7). There, Subgrantee stated that, "For.University buildings which have not been damaged by earthquake.the primary source of available funds for upgrading in accordance with the Seismic Policy is by way of State appropriation." In contrast, the primary source of funding for earthquake damaged buildings is Federal disaster assistance: "In order to accomplish the repair of the UCLA buildings which suffered damage in the Northridge Earthquake to the standard established by the Seismic Policy, the primary sources of funding must be the federal and state government."
Furthermore, when the Office of the President submitted the 1995 clarification for review and approval, the cover letter (Submittal, 11/10/94 Letter) stated as follows:
Only FEMA is authorized to interpret and implement the Stafford Act and regulations issued pursuant to the Stafford Act. Accordingly, only FEMA has the authority to determine which repairs (code-mandated or otherwise) it will fund pursuant to the Stafford Act. The Stafford Act and applicable regulations cannot be read or interpreted as authorizing State or other officials or agencies to determine the amount of federal disaster assistance funds FEMA must contribute to a project. Retention of Federal authority is particularly important where the "code" language at issue is a "trigger" which determines when federal funds should be used to upgrade the undamaged structural elements of a building.8. It is similarly important when the "code" proffered by a code setting agency triggers upgrade activity only where federal funding of that upgrade is available.
The University Policy fosters a double standard with respect to the entity(ies) that must fund the upgrade of the University's buildings and the extent to which those buildings must be upgraded. Here, all of the damaged structures of the University would be upgraded at Federal expense; neither the State or local government, nor any private entity, would have to bear that expense. As a result, there are no countervailing economic constraints that would cause the University to adopt a lesser standard, such as one that would have higher triggers/thresholds which, when met, would require less of an upgrade. Such constraints are quite evidently present in the case of the upgrade of undamaged buildings. There, where the primary source of funding is by State appropriation, the Feasibility Provision and the Phased Rehabilitation Provision apply. If and when buildings are upgraded, they may be upgraded to a lesser standard that emphasizes the protection of life.
In short, Policy encourages a two-tiered system, one that addresses deficiencies in buildings eligible for Federal disaster assistance funding (or self-supporting) versus those that require a State appropriation. Such a two-tiered system is contrary to the Stafford Act and the five criteria contained in the Regulation, in particular 206.226(b)(4), which requires that a code "apply uniformly."
Recent Legislative Matters. In its January 16, 1998 letter, UCLA directed our attention to language in the House Appropriations Committee Report, on H.R.2158, which set FEMA's appropriations for the fiscal year 1998. The House Appropriations Committee noted that:
CONCLUSION
The 1995 Policy is not an applicable code or standard for the purpose of determining eligibility for FEMA funding in that it does not meet the third, fourth and fifth criteria of the Regulation.
ENDNOTES:
1. 44 CFR 206.226(b) provides: "For the costs of Federal, state and local repair or replacement standards which change the predisaster construction of facility to be eligible, the standards must:
- Apply to the type of repair or restoration required;
- Be appropriate to the pre-disaster use of the facility;
- Be in writing and formally adopted by the applicant prior to project approval or be a legal Federal or State requirement applicable to the type of restoration;
- Apply uniformly to all similar types of facilities within the jurisdiction of the owner of the facility; and
- For any standard in effect at the time of a disaster, it must have been enforced during the time it was in effect."
3. See, for example, Appeal dated December 14, 1992 from California's Office of Emergency Services in connection with the funding of University of California - Santa Cruz (Natural Sciences 2 Building).
4.The General Counsel examined the following in reaching his conclusion: (1) the May 10, 1995 correspondence and Submittal, (2) information provided at a meeting with UCLA on August 8, 1995 to discuss the applicability of the 1995 Policy and (3) UCLA's "Memorandum in Support of Adoption of the University of California Seismic Policy as the Governing Code for Purposes of Determining Reimbursable Costs under Section 406 of the Robert T. Stafford Relief and Emergency Assistance Act," dated October, 1995 (Memorandum, October 1995).
5.A summary comparison of the provisions of the 1995 Policy and the MOU is attached.
6.The Decision Letter determined that the 1995 Policy was not an applicable code for the reasons stated above. In addition, it was noted that there was another consideration that upon further review could have lead to the same determination; that is, because the 1995 Policy was adopted by the President of the University, rather than the Board of Regents of the University of California, it did not appear to have been formally adopted, as required by 206.226(b)(3). In error, the sole issue cited in the DSR narrative for FEMA's determination was this consideration regarding formal adoption. Subsequent to the Decision Letter the Board of Regents formally adopted the 1995 Policy. Consequently, formal adoption is not being addressed as an issue in FEMA's legal analysis.
7. See, letter dated June 25, 1996, from Peter W. Blackman, Administrative Vice-Chancellor, UCLA to Gilbert Najera, OES.
8.Cost effective discretionary mitigation measures may be available under sections 406 and 404 of the Stafford Act. This appeal does not review technical matters nor conclude whether mitigation may be appropriate or cost effective.
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