De-obligation of Funds

Appeal Brief Appeal Letter

Appeal Brief

DisasterFEMA-1292-DR
ApplicantGreenville Housing Authority
Appeal TypeSecond
PA ID#147-U2CR4-00
PW ID#PWs 450, 451, 494-499, 1296, 1446-1449, 2079, 2080, 2633, and 4312
Date Signed2007-07-23T04:00:00

Citation:

FEMA-1292-DR-NC, Greenville Housing Authority (GHA)

Cross-reference:

Public Housing Authorities

Summary:

In 1999, Hurricane Floyd produced rainfall which caused flooding of an average of 12 inches in 111 public housing units owned and operated by the Greenville Housing Authority (GHA). The damage occurred prior to the 2001 MOU between FEMA and the Department of Housing and Urban Development (HUD), which requires Section 9K public housing authorities to apply for disaster assistance from HUD. At final inspection, the Region de-obligated FEMA funds in the amount of $705,130.

On November 23, 1999, GHA submitted a Disaster Application Request to HUD in the amount of $9,348,401. The requested amount was reduced by $833,600 for insurance proceeds and $809,000 for anticipated FEMA payments resulting in a net amount of $7,705,801, which was granted by HUD February 14, 2000.
In its first appeal, May 9, 2006, the GHA asserted that all costs were provided to HUD, and that HUD did not provide funding for any repairs listed on the de-obligated PWs.

The applicant’s first appeal was denied by the Region on July 27, 2006. GHA was deemed ineligible for permanent repairs based on the assumption that alternate funding (from HUD) was available.

On September 27, 2006, GHA submitted a second appeal. The letter stated that FEMA Disaster Assistance Policy, DAP 9523.7, was only effective for disasters after January 8, 2001, prior to that FEMA had been providing disaster assistance to HUD Public Housing Authorities.

Issues:

(1) Were public housing authorities eligible for public assistance from FEMA, including Section 406 permanent repairs, prior to Disaster Assistance Policy DAP9523.7?

Findings:

(1) Yes. Disaster Assistance Policy DAP 9523.7 states, “Although HUD has specific authority under Section 9(k) of the U.S. Housing Act of 1937, as amended, to provide funds for the repair of disaster damaged PHA facilities, FEMA has generally funded these costs in the past.”

Rationale:

Section 406, Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. §5172, as amended.

Appeal Letter

Mr. Doug Hoell
Director North Carolina Division of Emergency Management
4716 Mail Service Center
Raleigh, North Carolina 27699

Reference: Second Appeal - Greenville Housing Authority, PA ID 147-U2CR4-00, De-obligation of Funds, FEMA-1292-DR-NC, Project Worksheets (PW) 450, 451, 494-499, 1296, 1446-1449, 2079, 2080, 2633, & 4312

Dear Mr. Hoell:

This is in response to your letter dated October 3, 2006, transmitting the referenced second appeal on behalf of the Greenville Housing Authority (GHA). GHA is requesting that the Department of Homeland Security’s Federal Emergency Management Agency (FEMA) re-obligate funds for the Hurricane Floyd-related PWs listed above, in the amount of $705,130.

In November 1999, FEMA decided that it would not be prudent to deny funding to Public Housing Authorities (PHAs) indefinitely (until FEMA and the Department of Housing and Urban Development (HUD) could reach agreement) given the acute housing situation in some of the Hurricane Floyd States, particularly North Carolina. Accordingly, FEMA directed its staff to prepare and process all PWs for eligible damages to PHA facilities with the following comment added to the PW:

FEMA is providing this amount in the interest of timeliness, in anticipation that a substantial portion of the eligible costs should be available to the applicant from HUD at 100% Federal funding under 42 U.S.C. 1437 as amended or similar authority. The applicant must repay to FEMA portions of this grant which duplicate amounts available from any other source, 42 U.S.C. 5155.

FEMA expected to de-obligate the PWs later to the extent that HUD provided funding for the repairs.

On November 23, 1999, GHA submitted a Disaster Application Request (DAR) to HUD, in the amount of $9,348,401. The disaster repairs, covered by multiple FEMA PWs, were referenced in the HUD application, but the cost of the repairs was excluded from the total DAR showing as “Anticipated FEMA payments” in the amount of $809,000. Additionally, insurance proceeds in the amount of $833,600 were subtracted from the total requested amount, resulting in a net grant to GHA of $7,705,801. On February 14, 2000, GHA submitted a supplemental DAR to HUD for damages that were not initially evident, in the amount of $1,787,835 which was also granted by
HUD.

Doug Hoell

Page 2

At final inspection in 2006, the Region de-obligated $705,130 citing that GHA had failed to seek funding from all available sources. In its first appeal, dated May 9, 2006, GHA stated that all repair costs had been submitted to HUD for processing. The amount of funding received from HUD was reduced by the anticipated FEMA funding and insurance proceeds. GHA refers to HUD’s Comprehensive Grant Program Directive 7485.3G Section 3-8(C)(2)(a) dated October 1996, which states, “The housing authority (HA) is eligible to receive funds from the reserve regardless of the availability of other modernization funds or reserves, but only to the extent that its needs are in excess of its expected reimbursement from insurance and other sources, such as the Federal Emergency Management Administration [sic] (FEMA).” GHA also references the Background section of FEMA Disaster Assistance Policy DAP9523.7 which states, “Although HUD has had specific authority to repair disaster damage to PHAs, FEMA has generally funded these costs in the past.” GHA further maintained that they received no duplication of funding on any FEMA PWs.

FEMA Region IV denied GHA’s first appeal on July 27, 2006, based upon the following statement, “When the PWs were written a caveat was added to the General Comments section of each PW alerting GHA that it was incumbent on the applicant to seek funding from all available sources. If alternate funding is available, FEMA will not provide funding.” GHA submitted a second appeal on September 27, 2006, reiterating its original position.

FEMA Disaster Assistance Policy DAP9523.7 was not in effect at the time of this disaster. Prior to the publication of the policy, FEMA had been providing funding for disaster-related damage to PHA facilities. It appears that GHA interpreted the payment of the PWs by FEMA as approval of repair damages, and, therefore, did not request that amount of funding from HUD. GHA should not be penalized for that misinterpretation of fact.

Based on these facts, I am granting this appeal. By copy of this decision, I am asking the Regional Administrator to re-obligate the GHA’s eligible costs for disaster-related damages on the PWs listed above.

Please inform GHA of my decision. My determination constitutes the final decision in this matter as set forth in 44 CFR §206.206.

Sincerely,
/s/
Carlos J. CastilloAssistant Administrator
Disaster Assistance Directorate

cc: Major Phil May
Regional Administrator
FEMA Region IV

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