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Second Appeal Letter
PA ID# 071-U8M7N-00; Housing Authority of New Orleans
PW ID# Multiple Project Worksheets; Duplication of Benefits
February 19, 2008
Colonel Thomas Kirkpatrick (Ret.)
State Coordinating Officer
Governors Office of Homeland Security and
Emergency Preparedness (GOHSEP)
7667 Independence Boulevard
Baton Rouge, LA 70806
Re: Second AppealHousing Authority of New Orleans, PA ID 071-U8M7N-00,Duplication of Benefits
, FEMA-1603-DR-LA, Multiple Project Worksheets (PWs)
Dear Colonel Kirkpatrick:
This is in response to your letter dated August 9, 2007, which transmitted the referenced second appeal on behalf of the Housing Authority of New Orleans (Applicant). The Applicant is appealing the Federal Emergency Management Agencys (FEMA) deduction of insurance proceeds from the cost of eligible emergency protective measures rather than from permanent repairs.
The Applicant requested FEMA assistance for emergency work performed at its eligible facilities. FEMA prepared 39 PWs to address the emergency protective measures at each facility. The FEMA Public Assistance funding for eligible work was reduced by the amount of anticipated insurance proceeds.
The Applicant appealed the reduction in the first appeal dated February 23, 2007, regarding restoration of the amount deducted. The Applicant contends that FEMA misinterpreted section 312 of the Stafford Act and was arbitrary in applying the anticipated insurance proceeds.
The Regional Administrator denied the first appeal stating:
The types of work performed in the PWs in appeal are items covered in the Applicants insurance policy. Accordingly, the PW costs must be reduced by the amount that the Applicant would receive from insurance. Failure to take the reductions would be contrary to the intent that insurance is the primary source of funding for Applicants and funding from Federal agencies is supplemental. Applicable insurance reductions are required by FEMA regulations.
The Regional Administrator further stated, Interpretation of this section  makes it clear that the insurance requirements included in the Stafford Act apply to both emergency work and permanent work.
On August 14, 2007, the Applicant submitted a second appeal, again contending that section 312 of the Stafford Act applies to permanent work, not emergency work. The Applicant also stated, Nonetheless, HANO is not disputing the amount of the deductions but rather the fact that the Category A and B Project Worksheets were reduced at all as there has been no duplication of benefits received by HANO. The Applicant submitted no additional documentation with the second appeal.
The Applicant has a general insurance policy on each location. The policy provides coverage for debris removal subject to insurance limits as specified in the policy. In addition, each location has Debris Removal Additional Coverage in the amount of $5,000. The 39 PWs being appealed cover work that includes tear-out and interior demolition activities. By insurance company definition, debris removal covers the cost of tear-out and removal. Therefore, the Applicant can receive the costs from its insurance carrier. Section 312 of the Stafford Act requires that FEMA reduce the amount of assistance provided to an Applicant by the amount of financial assistance it will receive under any other program or from insurance or any other source. FEMAs Response and Recovery Directorate Policy 9525.3, Duplication of Benefits Non-Government Funds
, states that the reduction of anticipated insurance proceeds is required.
Based on the review of all information submitted with the appeal, I have determined that the Regional Administrators decision on this matter is consistent with program statute and regulations. Therefore, I am denying the second appeal.
Please inform the Applicant of my decision. My determination constitutes the final decision on this matter as set forth in 44 CFR §206.206.
Carlos J. Castillo
Disaster Assistance Directorate
cc: William Peterson
FEMA Region VI