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Second Appeal Analysis
PA ID# 037-90312; White Memorial Medical Center
DSR ID# 91338 & 91339; Medical Office Buildings # 1700 & 1710 Ceasar Chaves Ave
The subgrantee, a Private Non-Profit (PNP) institution, along with damages to its main hospital complex, suffered some damage to its Medical Office Buildings (MOB's) in the Northridge earthquake. FEMA had initially determined that the buildings were leased to "for-profit" physicians and other providers. No Damage Survey Reports had been prepared for the buildings due to FEMA's initial determination that they were ineligible. Subsequently, in the first appeal decision described below, FEMA approved the eligibility of that portion of the buildings which White Memorial Medical Center used for its own non-profit hospital services.
Both buildings are of reinforced concrete construction. The building at 1700 Ceasar Chavez Avenue (Building #1700) was constructed in 1955 and Building #1710 in 1965. The repairs to both buildings which have been verified and approved as eligible by FEMA are patching and painting of cracks on the exterior and interior walls. Apparently this level of repair work was carried out soon after the earthquake.
In this second appeal, the subgrantee has filed a claim with FEMA to cover the cost of extensive structural damage repairs as documented by A&E reports as described below. In the first appeal response, as quoted below, FEMA reported that "the inspection team was not able to verify the damage documented in the A&E report." Although no evidence that it was caused by that particular event was submitted, the damage purported to have been caused by the Northridge earthquake consists of through cracks in the structural reinforced columns and diagonal cracks in shearwalls, spandrels and floors.
On July 10, 1997, White Memorial Medical Center filed a first appeal of FEMA's determination that the MOB's were ineligible because of for-profit uses. In the first appeal decision dated October 5, 1998, FEMA approved the eligibility of that portion of the buildings which White Memorial Medical Center had documented was used for its own non-profit hospital uses. For building #1700 that percentage of eligibility was determined to be 66%, and for #1710, it was 76%. According to the first appeal decision, in the case of partial eligibility, the eligible PNP must use at least 50% of the building for eligible services.
With the first appeal, the subgrantee submitted documents showing actual costs for earthquake repairs already completed. These costs became the basis for the DSRs prepared in response to the first appeal. These actual costs were for patch and paint work on the interior and exterior of both buildings only. The total bill for repairs to # 1700 was $20,638, and for # 1710 was $16,886. The final DSRs were for 66% and 76% of these amounts respectively.
Also in the first appeal, the subgrantee requested additional funding to cover the cost of an A&E report prepared on each building in the amount of $25,247. This funding, along with any funding to cover the structural damages identified in the A&E reports, in the first appeal decision, was denied. The FEMA first appeal response states: "The buildings were inspected in response to the Subgrantee's appeal and, based upon the re-inspection, FEMA determined that the level of earthquake damage did not warrant an A&E evaluation for either building. A&E DSRs were never requested [by the applicant] or approved by FEMA for the two buildings. The documented damage does not warrant the preparation of an A&E report. Furthermore, the inspection team was not able to verify the damage documented in the A&E report. Therefore, the cost of the A&E services is not eligible."
SECOND APPEAL REQUEST
In this second appeal, the subgrantee requests that FEMA cover a total of $824,568 for building # 1700 and $1,946,038 for building # 1710 to cover the cost of more extensive structural damage repairs which are purported to have been caused by the Northridge earthquake. In addition, the subgrantee requests reimbursement for the "actual costs" of $25,247 for the preparation of the two A&E reports which report on this structural damage.
In their first appeal chronology, the subgrantee states: "In March, 1996, FEMA issued a Structural Evaluation (A&E) DSR." However, a thorough check of the FEMA DFO files could not turn up any evidence or reference to the existence of any such DSR. In the second appeal, the subgrantee claims that the preparation of the A&E reports had been "authorized" by Inspector Sharam Aram of FEMA. While Sharam Aram acknowledges that the preparation of an A&E report had been discussed, no DSR was ever prepared to cover its cost. FEMA has no other mechanism for the advance approval of the cost of an A&E report for reimbursement without the approval of a DSR. Such a DSR was never prepared, much less approved.
Although no A&E DSR had been approved by FEMA, the two A&E reports mentioned above were prepared by the subgrantee's consultants with reference to FEMA's 11 point A&E checklist and then submitted to FEMA. The reports are dated August 30, 1996. They were formally delivered to FEMA for consideration prior to the second appeal on November 18, 1998, although there is evidence that the FEMA reviewers were familiar with them when the first appeal response was prepared.
In this second appeal, the subgrantee also takes the position that FEMA had failed to re-inspect the site to verify the A&E report damages by canceling a scheduled meeting in February, 1999. However, the first appeal response does indicate that the issue was dealt with. The first appeal response provides evidence that a site inspection was conducted, and Sharam Aram of FEMA has testified that an inspection did take place during the period after the cracks were exposed by sandblasting and before they were recovered. During that inspection Peter Mutty, Kai Pajouhi, and Dushan Sharich of FEMA, and Hassan Sassi of OES, accompanied him.
Since the building was patched and painted soon after the earthquake, it is clear that any inspection would be handicapped in making a determination as to the origins of the cracks, even when, as was done, the cracks were later re-exposed. Apparently right after the earthquake, the damage was not considered severe enough to lead the subgrantee to seek the services of an engineer to analyze the structures prior to its repair, nor was it severe enough for the city's inspectors to "tag" the buildings and thus restrict their use.
This second appeal was submitted outside of the 60 day time period. In so doing, the subgrantee asks that FEMA consider it in light of their claim that there were extenuating circumstances for the delay. Without reviewing the merits of that particular issue, FEMA will herein consider the claim on its merits by reviewing the case made for coverage of the A&E report costs and structural repair costs claimed in the reports.
The structural damage reported on in the A&E reports consists of diagonal cracks in the structural concrete shearwalls, columns, and floors of both buildings. Both reports describe the damage as "severe" and recommend replacement or upgrading of the buildings. In the case of the newer building, number 1710, the report in bold type goes on to claim that: "it is a strong recommendation that this building be demolished and replaced with an equivalent properly engineered and constructed structure." This same report states that "cracks from .01" to .25" occur at the top and bottom sills of all windows" whereas the table of documented cracks includes no crack larger than .01", with most identified as .005"-.007". In the report for the other building, #1700, the text reports that the cracks "range in width from .015 to .1" whereas the table includes cracks all of which range froror - 1/8" on a "roof level spandrel." Since there is no such thing as a "roof level spandrel" it is unclear what this refers to. It must be a parapet, and thus of no structural significance to the building below.
Both reports also state that both buildings: "had been fully patched and painted prior to this structural damage survey." Some of these repairs were reported in the subgrantee's first appeal to have been sandblasted off at a date subsequent to July 22, 1996. Although photographs showing the sandblasted areas are included in the A&E reports, there is no reference to this re-exposure of the cracks in the text of the reports. On the contrary, the discrepancy between the statement that the buildings had been "fully patched" and the repeated statements that the "damage that was still apparent" was "severe" is never explained. The reports contain no crack maps to provide an objective documentation of the pattern of cracks, nor do they include any evidence to support the attribution of all of the identified (and later revealed by sand blasting) cracks as being a product of the Northridge earthquake. Since, as is reported in the A&E reports, all had been patched and painted subsequent to the quake, this issue is certainly a significant one.
In this second appeal, the subgrantee asks that FEMA include as eligible (1) the cost of the preparation of the two A&E reports, which is purported to have been "authorized" by a FEMA representative. However, no DSR for the A&E costs could be located in FEMA files, and, as mentioned above, FEMA has no mechanism other than the approval of a DSR for obligating the Agency to cover A&E or construction costs.
To retrospectively consider these reports for approval, and also to consider their conclusions with regard to the claim for such substantial repair costs, one must examine the reports themselves. (In the case of building #1710, the A&E estimated repair costs exceed the estimated cost for replacing the building). A review of these two reports by FEMA finds them to fall well short of standards for acceptance as FEMA funded projects. Neither comes close to providing FEMA with any substantiated grounds for determining the eligibility of any of the approximately $2.8 million in damage repairs claimed in the reports.
For example, the deficiencies in the reports include:
1) A total lack of technical data to provide a basis for verifying the claims made that the buildings must be upgraded or demolished, as is claimed.
2) A complete absence of a codes and standards review to defend the upgrade/replacement conclusions on administrative grounds because of code requirements.
3) A complete absence of crack maps from which a pattern of cracks could be examined to support the claim that the cracks were caused by an earthquake.
4) The complete absence of verifying data to support the position that the damage is all caused by the Northridge Earthquake.
5) A complete lack of engineering calculations to support (1) loss of capacity conclusions presented in the text, or (2) the representation that the buildings must be upgraded or demolished. In fact, there is no evidence that engineering calculations of any kind were conducted as part of the A&E study.
6) Generalized statements, which are in conflict with what little technical data there is, such as the discrepancy in the size of the cracks as reported in the text, from those listed in a table listing the cracks.
7) The inclusion of plans which do not show the windows, and which do not identify the shearwalls within each building. Only the partitions are shown, without door or window openings, and without structural walls distinguished from non-structural walls. In fact, in the case of building #1710, the report condemns the building as not "properly engineered or constructed" without any reference to the presence, or absence of interior shearwalls or structural cores.
8) The photographs in both reports are presented often without reference to their location, or incorrect reference to the locations (a photo showing a window is referenced to an interior wall). Many photographs are presented upside down. There are even several presented as showing building # 1700, which were taken in building # 1710!
9) Some of the cracks marked on the photographs with a pen are otherwise invisible. All visible cracks are marked without distinguishing between earthquake cracks on the one hand and cold joints, construction joints, or general shrinkage cracks not related to the earthquake on the other. The visual evidence is that many of the marked cracks fall into the non-earthquake-related classification.
In light of the above findings, the A&E reports cannot be accepted by FEMA as eligible for reimbursement. In addition, the written conclusions in the A&E reports are completely at odds with (1) the FEMA inspectors' impressions of the level of damage, (2) the record that the building was never tagged by the city as damaged or unsafe, (3) the lack of any record that, prior to the undertaking of cosmetic repairs, that White Memorial Medical Center had seen the need to have the building examined by an engineer, (4) the fact that there were insufficient deflections in either building to cause the breakage of any of the windows which about the columns are claimed to have been heavily damaged by the earthquake, and (5) the raw data as shown by the crack list and photographs in the A&E reports themselves which support the conclusion that the cracks were very small, and many may have been from causes other than the earthquake. As a result, FEMA cannot credibly rely on the text in these two reports for a funding determination.
In addition to the shortcomings in the information provided in the reports, the consultants have focused on the inadequacies of the design of the buildings, the newer one, #1710, in particular. It is important, therefore, to add that FEMA funding is based on disaster damage, not on inherent design flaws per se. The Stafford Act is very specific in its mandate to repair a damaged facility "on the basis of the design of such facility as it existed immediately prior to the major disaster."
Based on the information listed above, FEMA finds that there is insufficient evidence that the damages shown in the report (1) can be verified as caused by the Northridge earthquake, and (2) would require the extensive repairs and upgrade specified in the report, even if they were.
The appeal is denied.