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Second Appeal Letter
PA ID# 000-UOIMD-00; South Carolina Public Service Authority
PW ID# Project Worksheet 96; Wampee Park Seawall
January 5, 2009
Ronald C. Osborne
Governors Authorized Representative
South Carolina Emergency Management Division
2779 Fish Hatchery Road
West Columbia, South Carolina 29172
Re: Second AppealSouth Carolina Public Service Authority, PA ID 000-UOIMD-00, Wampee Park Seawall
, FEMA-1547-DR-SC, Project Worksheet (PW) 96
Dear Mr. Osborne:
This letter is in response to your letter dated February 7, 2008, which transmitted the referenced second appeal on behalf of the South Carolina Public Service Authority (Applicant). The Applicant is appealing the Department of Homeland Securitys Federal Emergency Management Agencys (FEMA) denial of $481,565 in additional costs for restoration of the Wampee Park Seawall.
On October 31, 2004, FEMA prepared PW 96 for $295,927, the estimated cost to replace riprap and restore the bulkhead of the Wampee Park Seawall, which was damaged by flooding from August 28, 2004, through August 30, 2004. The approved estimate, which included $28,726 for a hazard mitigation project, was based on the results of an analysis conducted by FEMA and Ashridge Construction. Upon project closeout, the Applicant submitted an invoice for $777,492, a cost increase of 162 percent. On May 10, 2007, FEMA approved the cost of the bulkhead repair and replacement. However, additional costs for the replacement of riprap were denied and FEMA de-obligated the $28,726 mitigation project because the actual project costs were determined to be excessive.
In its first appeal, submitted June 5, 2007, the Applicant claimed that the project cost increased due to delays imposed by the State Historical Preservation Office (SHPO) and increased market rates. Due to the delay in SHPO approval, the Applicant did not enter into a contract with Ashridge Construction in 2004. The Applicant received SHPO approval on March 11, 2005. However, the project was further delayed by high water levels in the adjacent lake. Additionally, market rates were impacted by Hurricanes Katrina and Rita in the fall of 2005. The Applicant stated that it re-bid the contract and $777,492 represented the lowest bid received. The Regional Administrator reviewed the Applicants first appeal and determined that the change in costs exceeded reasonable cost increases for the time period in question and denied the appeal on November 14, 2007.
The Applicant submitted its second appeal on January 18, 2008 and provided documentation that accounts for the $481,565 difference between the $295,927 approved for PW 96 and the final
project cost of $777,492. In addition to attributing the increased cost to SHPO delays and increased market rates, the Applicant stated that the initial estimate and scope of work did not reflect the actual slope of the lake. FEMA originally prepared PW 96 in order to replace 3,585 cubic yards (CY) of material to extend the revetment of the seawall 22 feet to the lake floor. In September 2005, the Applicant conducted a topography study using soundings that demonstrated that the lake floor was deeper than estimated. The study established that the seawall needed to extend 37 feet in order to reach the lake floor. This required 6,100 CY of material rather than 3,585 CY. The Applicant also stated that the new revetment required the installation of a drain. Finally, the Applicant stated that the estimated project cost for PW 96 was based on the assumption that the project could be completed in 15 days. However, the project took 45 days to complete.
I have reviewed the information submitted with the appeal and have determined that the Applicant submitted sufficient information to support its recount for a change in scope and cost of the project. In addition, the cost of the hazard mitigation project is eligible. Therefore I am approving the appeal. By this letter, I am requesting the Regional Administrator to take appropriate action to implement my decision.
Please inform the Applicant of my decision. This determination constitutes the final decision on this matter as set forth in 44 CFR §206.206.
Carlos J. Castillo
Disaster Assistance Directorate
cc: Major P. May
FEMA Region IV