Tapo Canyon WTC Replacement

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

DisasterFEMA-1008-DR
ApplicantCity of Simi Valley
Appeal TypeSecond
PA ID#111-72016
PW ID#15379
Date Signed2003-06-19T04:00:00
Citation: FEMA-1008-DR-CA; City of Simi Valley; DSR 15379, Tapo Canyon Water Treatment Plant

Cross-reference: Eligible Facility; Pre-disaster Function; Eligible Work; Reasonable Costs; Improved Project; Category F

Summary: The Tapo Canyon Water Treatment Plant was damaged during the 1994 Northridge Earthquake. DSR 13685 was obligated for $901,241 to repair the facility to provide treated, filtered potable water. Subsequent to this approval, the Applicant accepted a Grant Acceleration Program offer for $2,678,265 and applied for an Improved Project, which was approved by the Grantee. In June 2000, the Office of Inspector General questioned the pre-disaster use of the facility. FEMA then determined that the plant provided only non-potable water during its normal operation and emergency backup potable water, chlorinated only, during limited emergency situations. FEMA deobligated the previously approved funding and approved DSR 15379 for $346,705. The Applicant submitted a first appeal to reinstate the originally approved scope of work that included filtration in addition to chlorination for potable water at a cost of $872,577. The appeal was partially denied because the Applicant did not establish that the filtration was necessary for emergency potable water provided for limited periods of time and because the cost estimate was not sufficiently documented for certain costs. Certain costs were approved under the first appeal: $24,257 for eligible site work and $16,000 for an engineering study. The Applicant’s second appeal again requests inclusion of potable water filtration, approval of an updated cost estimate of $882,049 as well as actual construction costs and an 18-month time extension.

Issues: 1. Is filtration an eligible cost? 2. Are the Applicant’s costs associated with the additional work reasonable?3. Is the Applicant eligible for actual costs for replacement?4. Is the requested time extension (18 months) approved for the Applicant?

Findings: 1. No. The plant was capable of providing only non-potable water and disinfected (chlorinated) water at the time of the disaster.2. 3. No. The Applicant’s cost estimate includes ineligible components. The eligible cost has been determined to be $509,087.4. 5. No. There is an Improved Project approved for this facility.6. 7. Not at this time. There is a current time extension to January 1, 2004, for this project. The time extension will be addressed under a separate transmittal.

Rationale: 44 CFR §206.226, Restoration is only eligible to restore a facility to its pre-disaster use. 44 CFR §206.203, Work beyond restoration to pre-disaster condition may be eligible as an Improved Project

Appeal Letter

June 19, 2003

Mr. Dallas Jones
Governor’s Authorized Representative
Office of the Director
Governor’s Office of Emergency Services
P.O. Box 419047
Rancho Cordova, California, 91741-9047

RE: Second Appeal – City of Simi Valley, PAID 111-72016, Tapo Canyon Water Treatment Plant Replacement, FEMA-1008-DR-CA, DSR 15379

Dear Mr. Jones:

This letter is in response to the referenced second appeal transmitted by your letter dated
September 18, 2002. In their appeal, the City of Simi Valley (Applicant) requested that the Tapo Canyon Water Treatment Plant (TCWTP) be replaced as a potable water treatment facility at a cost of $882,049. The Applicant also requested actual cost reimbursement and an 18-month time extension.

As explained in the enclosed analysis, I have determined that the Applicant has not presented adequate evidence that supports their claim that the TCWTP had operated as a potable water treatment plant immediately prior to the disaster. The present DSR Scope of Work will remain as approved; however, the cost estimate was re-evaluated using the FEMA Cost Estimating Format (CEF) and the eligible cost was determined to be $509,087. I have also determined that there is an Improved Project approved for this facility; therefore, the Applicant is entitled to only the Federal share of the DSR estimated cost. Finally, since there is an existing time extension to January 1, 2004; the requested time extension will be addressed later under a separate transmittal. Therefore, the appeal is partially approved. By copy of this letter, I am requesting that the Regional Director prepare a DSR to implement this decision.

Please inform the Applicant o f my determination. My determination constitutes the final decision on this matter as set forth in 44 CFR 206.206.

Sincerely,
/S/
Laurence W. Zensinger
Acting Director, Recovery Division
Emergency Preparedness and Response Directorate
Department of Homeland Security

Enclosure

cc: Jeff Griffin,
Regional Director, Region IX

Appeal Analysis

SR 15379

BACKGROUND

As a result of the Northridge Earthquake on January 17, 1994 (FEMA-DR-1008-CA), the City of Simi Valley (Applicant) sustained damage at the Tapo Canyon Water Treatment Plant (TCWTP). During the earthquake, a quarry tailings dam located upstream from the TCWTP failed and inundated the site with mud and water, damaging a one-story control building including coagulant holding tank equipment and chemicals. Ground motion also destroyed equipment and units at the TCWTP including a mixing/flocculation/clarification unit, two chemical silos, two gravity filters and sludge ponds. An aerator on the site and the two wells that supplied the TCWTP were not damaged. The Applicant requested assistance from the Federal Emergency Management Agency (FEMA) for the repair of disaster-related damages.

A FEMA/California Office of Emergency Services (OES) team first visited the site on April 7, 1994. At this visit, photographs were taken and a narrative describing the damages was prepared. No damaged components were quantified. In July 1994, FEMA approved Damage Survey Report (DSR) 50353 for $21,000 to cover engineering and geological studies and contract administration. In April 1997, DSR 45835 was approved to de-obligate $5,000 for the geological study because the Applicant deemed the study unnecessary. This action left $16,000 for the engineering study and contract administration.

The Applicant demolished the damaged facility before the physical damage was quantified by FEMA and OES. The Applicant stated that the demolition was necessary because the facilities were not salvageable and were a public safety hazard. DSR 13685, based on the Applicant’s engineering report and a FEMA/OES site visit, was approved in May 1997 for $901,241 to replace the TCWTP as originally constructed in the early 1970’s. The TCWTP was built at that time to use a lime-soda ash softening process and filtering to treat well water for the Applicant’s domestic water supply. The eligible replacement facilities under DSR 13685 included the control building, a mixer/precipitator tank, chemical storage bins, rapid sand filters, sludge drying ponds and a chlorine injection station. The aerator and supply wells were not eligible because they were not damaged by the disaster.

In October 1998, the Applicant accepted a Grant Acceleration Program (GAP) offer in the amount of $2,678,265 based on the scope of work in DSR 13685. DSR 36564 was then approved in November 1998 for $1,777,024 (GAP offer $2,678,265 less previously approved DSR 13685 amount $901,241). In June 2000, the Applicant requested an Improved Project to replace the TCWTP’s lime-soda ash softening process with a nano-filtration softening process. A new 1.0 million gallon water storage tank and relocation of a reject water holding tank were also proposed at the site. OES approved this request in a letter dated July 10, 2000.

In June 2000, the FEMA Office of the Inspector General questioned the pre-disaster use of the facility because of an August 27, 1990, Applicant memorandum prepared by the Department of Public Works. This memorandum stated that the TCWTP, originally constructed to treat well water for potable uses, was taken off-line in 1984 because operation and maintenance costs made the plant uneconomical to operate. The memorandum also stated that the TCWTP was now being maintained to provide non-potable water during normal operation and potable water, with chlorine injection treatment only, during limited emergency situations. Subsequently, in July 2001, DSR 36564 (GAP Project) was de-obligated by DSR 15380 and replaced by DSR 15379 for $346,705. The DSR Scope of Work and cost estimate now provided for the construction of a water treatment plant consistent with the pre-disaster use of the facility.

First Appeal

On July 31, 2001, the Applicant submitted its first appeal of DSR 15379, transmitted and supported by OES to FEMA in a letter dated September 25, 2001. The Applicant maintained that the TCWTP was fully capable of being brought online to supply potable water had it not been destroyed by the earthquake. The Applicant also asserted that:

1. The DSR Scope of Work should include filtration because the wells that supply the TCWTP are required by the California Code of Regulations to provide multi-barrier treatment (rapid sand filters) in addition to disinfection (chlorination);
2. The DSR cost estimate ($346,705) should be revised to reflect the Applicant’s estimate of $872,577; and,
3. The DSR Scope of Work should include the removal of mud, replacement of fill and the remedial grading of the affected areas.
4.
In the first appeal response, the FEMA Regional Director determined that the rapid sand filters were not eligible and that the DSR cost estimate was reasonable and appropriate. The mud removal and fill placement as well as remedial grading was determined to be eligible. Subsequently, a supplemental DSR was prepared to provide funding for the mud removal, fill replacement and grading work ($24,257) as well as for a $16,000 engineering study that was inadvertently deobligated by DSR 15380 but was not part of the first appeal. DSR 11505 for $40,257 was approved in May 2002.

Second Appeal

On July 19, 2002, the Applicant submitted a second appeal of FEMA’s determination, transmitted and supported by OES in a letter dated September 18, 2002. The Applicant reiterated the same assertions made in the first appeal, the difference being additional documentation was provided to support the assertions and the requested project cost estimate was amended from $872,577 to $882,049 with the understanding that final project costs, if greater than the estimated amount, would be eligible for supplemental funding. The Applicant also requested an 18-month time extension from the date of FEMA’s second appeal response to complete the work. OES supported the Applicant on the assertions; however, OES, in its transmittal to FEMA, stated that the Applicant’s request for a time extension for this project would be addressed under a separate transmittal.

In their second appeal submittal to FEMA Headquarters dated October 21, 2002, the FEMA Regional Director noted that the Applicant had not requested improved project status for the scope of work under DSR 15379 and actual project costs are being requested by the Applicant under this DSR. It was acknowledged that an Improved Project had been approved for the facility under the GAP project DSR.

DISCUSSION

In the second appeal, the Applicant’s primary issue is the eligibility of a filtering system for the TCWTP. Secondary issues include increasing the DSR cost estimate from $346,705 to $882,049 and the expectation that actual costs should be reimbursed by FEMA upon the completion of TCWTP construction. The Applicant also requested a time extension in the second appeal.

Filtering System Eligibility

The Applicant has asserted in the appeal process that the eligible DSR Scope of Work should provide for the replacement of a potable water treatment plant incorporating a lime-soda ash softening process. The TCWTP was originally constructed and permitted to function as such and the Applicant maintains that the TCWTP was in a standby mode at the time of the disaster and fully capable of being brought online to supply potable water had it not been destroyed by the earthquake.

The Applicant has also stated that several federal and state laws and regulations require the replacement plant to have a filtering system, in addition to chlorination, in order for the replacement plant to provide potable water under any circumstance, emergency or otherwise. The Federal Surface Water Treatment Rule, the Federal Interim E Cerenced by the Applicant to have regulatory authority over this issue. The filtration system requirement was triggered when the California Department of Health Services (DOHS) determined that one of the water supply wells was “under the influence of surface water” as defined by the Federal Surface Water Treatment Rule issued by EPA in 1989. This fact was documented in an Engineering Report dated January 2002, by DOHS. Because of this determination, the California Code of Regulations requires multi-barrier treatment methods (filtering) to protect against microbiological contaminants.

Under the provision of 44 CFR§206.226(i)(1), [now §206.226(k)(1)], when determining eligible work and costs, FEMA must consider the immediate pre-disaster use of the facility. The regulation states that if a facility is being used for purposes other than those for which it was originally designed, the eligible restoration is limited to the extent necessary to restore the immediate pre-disaster use of the facility. For this appeal, FEMA must first establish the immediate pre-disaster function of the TCWTP. Once this determination has been made, then the eligibility of any requirements placed by federal or state laws and regulations can be evaluated.

FEMA concurs that the plant was designed and had operated, at one time, as a potable water treatment facility with a lime-soda ash softening process. However, there is documentation that indicates, at the time of the disaster, the plant was no longer functioning at the level at which it was originally designed. The following information describes the pre-disaster function of the TCWTP:

1. An Applicant memorandum from the Department of Public Works to the Board of Directors for the Ventura County Waterworks District and dated August 27, 1990, provided the following information:
▪ The TCWTP had operated daily as a potable water treatment facility until 1984.

▪ The TCWTP was taken out of service in 1984 because the plant’s operation and maintenance costs had increased and made the plant uneconomical to operate.

▪ The TCWTP facilities were still on site but considerable rehabilitation work (estimated to cost between $250,000 and $300,000) would be needed in order to reactivate the plant for potable water uses. Anticipated rehabilitation efforts to place the TCWTP back in service included replacing the filter sand, replacing or rebuilding the existing pumps and electrical system as well as replacing or cleaning all internal plant piping.
▪ A chlorine injection station existed at the site and could be activated on a temporary basis for emergency use.
▪ The California Water Quality Board indicated that chlorine injection would be the only treatment required during an emergency utilization of the water. However, each emergency would be considered on a case-by-case basis and the allowable duration of use would be determined by the specific water emergency condition.

2. An Applicant memorandum from the Department of Public Works to the Board of Directors for the Ventura County Waterworks District and dated May 3, 1999, stated that the plant had been maintained in an emergency standby condition at the time of the disaster and that the wells were currently being used to meet the non-potable demands in the immediate area.
3.
4. The 1978 operating permit identified several activities that were required for the continued permitted operation of the plant. These activities included analyses associated with the operation of the TCWTP such as determining chemical dosages, pH control, turbidity, chlorine residuals and bacteriological quality.
5.
In the appeal process, the Applicant did not provide FEMA any documentation (maintenance records, permit compliance and reporting records, etc) to indicate that the plant was rehabilitated, maintained or operational for potable water purposes at the time of the disaster.

Based on this information, FEMA has determined that the Applicant has not provided sufficient evidence to establish that the plant was capable of or used, since being taken out of service, for providing potable water at the time of the disaster. FEMA has determined that the TCWTP, based on the Applicant memorandums of 1990 and 1999, the facility was capable of providing disinfected (chlorinated) water at the time of the disaster. Accordingly, the eligible immediate pre-disaster use of the plant is determined to be a facility that provided non-potable water during normal operation with the capability of providing disinfected water using chlorine injection treatment for limited periods of time. This was clearly the level of treatment that the plant was capable of providing that was described in the 1990 memorandum.

The Applicant has asserted that because federal and state laws and regulations mandated the incorporation of a multi-barrier (filtration) system into the design of the replacement potable water treatment plant, the filtration system should be eligible. Although an eligible project must comply with all applicable federal, state and local regulations and obtain all necessary permits, these costs are not necessarily eligible for reimbursement from FEMA. In order for a law or regulation requirement to be eligible for reimbursement, it must be related to an eligible damaged element. In the case of the TCWTP, the repair of the damaged filters was not eligible for funding because they were not functional at the time of the disaster. Based on available documentation, the only eligible treatment component that was determined to be operational at the time of the disaster was the chlorination station.

Eligible Costs

The Applicant’s cost estimate ($882,049) represents the cost to replace a potable water treatment plant with a lime-soda ash softening process. However, this cost estimate incorporates ineligible project components such as a filtering system and the piping, electrical, instrumentation and site work to support a complete lime-soda ash softening treatment plant.

Throughout the appeal process, the Applicant had expressed concerns about the inconsistencies of the FEMA cost estimates. FEMA has addressed these concerns by using available information and developing a cost estimate using the FEMA Cost Estimating Format (CEF). Unit costs and labor rates have been updated and documented using the 2003 RS Means Building Construction Cost Data Manual, applying escalation rates to items noted as quotes, and applying adjustments for the Los Angeles area. Accordingly, the estimated cost for the established eligible work has been determined to be $509,087. The total funding currently obligated for this project is $370,962 for construction and $16,000 for an engineering study.

Actual Costs

In the second appeal request, the Applicant requested that their cost estimate be incorporated in the DSR with the understanding that final project costs, if greater than the estimated amount, will be eligible for supplemental funding. FEMA Region IX noted that the Applicant had not requested improved project status for the scope of work under DSR 15379.

In June 2000, under the scope of work approved in DSR 36564 (GAP DSR), the Applicant requested an Improved Project to replace the TCWTP with a modern “state of the art” water treatment plant. OES approved this request in July 2000. FEMA issued a Finding of No Significant Impact for the Improved Project pursuant to the requirements of the National Environmental Policy Act in May 2002. DSR 36564 was subsequently de-obligated with a new scope of work defined by DSR 15379.

Although DSR 36564 was de-obligated, the Improved Project approval still applies to the project described by DSR 15379 because the same facility is involved. Pursuant to 44 CFR§206.203(d)(1), federal funding for le ped at the federal funding contribution associated with the project cost identified above. If the Applicant wishes to revise the Improved Project as currently approved or to withdraw the Improved Project and build only the facility approved by this determination, this request must be made through the Grantee and forwarded to FEMA.

Time Extension
At this time, construction has not begun on the project and the Applicant has a time extension to complete the work by January 1, 2004. In the second appeal request, the Applicant requested a time extension of 18 months from the date of FEMA’s second appeal response. However, OES in their transmittal to FEMA, requested that the time extension request be considered under a separate transmittal. Since the current time extension has not expired, a separate request should be submitted when a firm construction schedule is determined.

CONCLUSION
The Applicant has asserted that the eligible scope of work should provide for the replacement of a potable water treatment plant incorporating a lime-soda ash softening treatment process including a filtering system as required by federal and state law and regulations. However, FEMA has concluded that there is sufficient documentation that establishes that the eligible pre-disaster use of the plant was a facility that provided non-potable water during normal operation and disinfected water, using chlorine injection treatment, during limited periods of time. Because the potable water treatment facilities were inactive at the time of the disaster, federal and state regulatory requirements are not eligible FEMA costs, although they may be required if a potable water plant is to be built. The eligible cost associated with the eligible work has been determined to be $509,087. Because an Improved Project has been approved, the Applicant is entitled to only the federal share of the DSR estimated cost. Since the current time extension has not expired, FEMA concurs with OES that the requested time extension should be considered under a separate transmittal. The appeal is partially approved.
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