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Second Appeal Letter
PA ID# 055-99055-00; Lafayette Parish
PW ID# Project Worksheet 92; Cajundome Shelter
October 14, 2008
Colonel Thomas Kirkpatrick (Retired)
State Coordinating Officer
Governor’s Office of Homeland Security and Emergency Preparedness
7667 Independence Boulevard
Baton Rouge, Louisiana 70806
Re: Second Appeal–Lafayette Parish, PA ID 055-99055-00,
Cajundome Shelter, FEMA-1603-DR-LA, Project Worksheet (PW) 92
Dear Colonel Kirkpatrick:
This is in response to your letter dated October 17, 2007, which transmitted the referenced second appeal on behalf of Lafayette Parish, now Lafayette Consolidated Government (LCG), (Applicant). The Applicant appealed the denial by the Department of Homeland Security’s Federal Emergency Management Agency (FEMA) to provide $2,301,000 for daily usage fees related to an agreement with the Cajundome Commission to operate a shelter.
On August 30, 2005, at the request of the State of Louisiana, the Applicant opened a shelter at the Cajundome Commission Arena and Convention Center (Cajundome) for disaster evacuees from Hurricane Katrina. The shelter was closed on October 28, 2005, and the Cajundome remained closed to the public until January 16, 2006, while damages to the facility due to shelter occupancy were repaired. PW 92 was prepared as expedited funding for $8 million, with $6 million allocated to fund shelter operations.
The Applicant submitted its first appeal of PW 92 on September 28, 2006. In its first appeal, the Applicant requested additional funding for utilities ($80,934) and usage fees ($1,239,000) incurred during the recovery period. In a letter dated May 17, 2007, the Regional Administrator approved reimbursement for utilities, but denied $2,301,000 for usage fees, during both the shelter operations and the recovery period. The denial letter stated that because the Cajundome is a government-owned and operated facility, usage fees represent loss of revenue and are not eligible under the Public Assistance Program.
The Applicant submitted its second appeal on August 24, 2007. The Applicant asserted that usage fees while the shelter was open were not a subject of the first appeal and should not have been under review with the appeal response. The Applicant disagreed with FEMA that the daily usage fee represents recovery of lost revenue. The Applicant contended that the appeal was denied based on the belief that LCG owns and controls the Cajundome. The Applicant claimed that because it does not own or control the Cajundome, usage fees should be eligible as rental
costs for the facility. The Applicant noted that FEMA participated in early discussions regarding the contracting arrangement with the Cajundome Commission and reviewed early invoices that addressed usage fees without stating that these usage fees were ineligible. The Public Assistance Division Director discussed this appeal with representatives of your office and the Applicant in a videoconference call on May 30, 2008.
The Cajundome is owned by the State of Louisiana through the University of Louisiana at Lafayette (ULL). The Cajundome Commission was established to operate the Cajundome through an Intergovernmental Contract dated September 23, 1987, between LCG and ULL. The Cajundome Commission is a five-member authority comprised of representatives from LCG and ULL. LCG and the Cajundome Commission are political subdivisions of the State of Louisiana, and the Cajundome Commission is a component unit of LCG. The Intergovernmental Contract that LCG signed with ULL to operate the Cajundome allows ULL to use the facility up to 22 days per year free of charge. The agreement does not allow for LCG to use the facility free of charge. Absent any specific language in the agreement, one assumes that LCG must pay the Cajundome Commission to use the facility as other users are required to do.
Disaster Specific Guidance 2, Eligible Costs for Emergency Sheltering Declarations, states that when shelters are operated in government-owned facilities, only the actual expenses incurred, such as supplies or cleanup labor, are eligible. The guidance states that rental costs may be eligible “when the government contracts with another organization.” In the extant situation, the LCG does not own the Cajundome. The Cajundome is not part of LCG. Rather, LCG operates the Cajundome under contract with ULL. Therefore, the rental fees LCG paid to the Cajundome Commission for use of the Cajundome as a shelter may be eligible under the Public Assistance Program.
The Applicant stated that it entered a verbal contract with the Cajundome Commission to use the facility as a shelter soon after the disaster struck. The Applicant used the Cajundome as a shelter from August 30, 2005, to October 28, 2005. In addition to rent, the Applicant paid the cost to restore the facility to its pre-shelter condition when it terminated the sheltering operation. The Cajundome Commission restored the facility from October 29, 2005 to January 26, 2006. The parties signed a Cooperative Endeavor Agreement to memorialize the verbal agreement on January 26, 2006. The agreement states, in pertinent part, that LCG will pay “Rental and facilities fees associated with the use of the Cajundome, including the period of restoration or remediation of the Cajundome after use as a shelter and until completion of restoration or the first event, whichever occurs first.” The Cajundome Commission charged a daily fee $17,700 to rent the facility.
We have reviewed all the information submitted with the appeal and determined that the cost to rent the Cajundome for use as a shelter is reasonable and eligible for reimbursement. The eligible amount is $1,062,000 (60 days @ $17,700 per day). However, the rental fees that the Cajundome Commission charged the Applicant during the restoration period are not eligible
Col. Thomas Kirkpatrick
because the facility was not being used as a shelter. These costs are appropriately considered lost revenue. Therefore, I am partially approving the appeal for $1,062,000. By copy of this letter, I request that the Regional Administrator take appropriate action to implement this determination.
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, Regional Administrator
FEMA Region VI
James Stark, Director
Louisiana Transitional Recovery Office