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Second Appeal Letter
PA ID# 071-U8M7N-00; Hosuing Authroity of New Orleans
PW ID# Multiple PWs; Duplication of Benefits
April 14, 2009
Colonel Thomas Kirkpatrick (Ret.)
State Coordinating Officer
Governors Office of Homeland Security and Emergency Preparedness
7667 Independence Boulevard
Baton Rouge, Louisiana 70806
Re: Second Appeal Housing Authority of New Orleans, PA ID 071-U8M7N-00, Duplication of Benefits
, FEMA-1603-DR-LA, Multiple Project Worksheets (PWs)
Dear Colonel Kirkpatrick:
This letter is in response to your letter dated June 4, 2008, which transmitted the referenced second appeal on behalf of the Housing Authority of New Orleans (Applicant). The Applicant is appealing the Department of Homeland Securitys Federal Emergency Management Agencys (FEMA) deduction of insurance proceeds from the cost of eligible emergency protective measures.
FEMA prepared 241 PWs for emergency work costs, including costs associated with the demolition and removal of interior materials containing mold at multiple facilities operated by the Applicant. FEMA reduced Public Assistance funding for eligible work by the amount of anticipated insurance proceeds per requirements of Section 312(a) of the Stafford Act and FEMA Response and Recovery Policy 9525.3, Duplication of Benefits Non-Government Funds
, dated October 30, 2000. The Applicant submitted its first appeal to the Governors Office of Homeland Security and Emergency Preparedness (GOHSEP) on July 5, 2007. The Applicant argued that the Stafford Act does not explicitly authorize insurance reductions for emergency work under Section 403, as it does under Section 406. The Applicant also stated that insurance monies received would be insufficient to cover all losses and that it would apply any insurance proceeds received towards permanent work activities, resulting in no duplication of benefits for the emergency work. The Regional Administrator denied the appeal on December 31, 2007, stating that Section 312(a) of the Stafford Act is clear that requirements to reduce insurance proceeds from eligible assistance apply to both emergency and permanent work. The Regional Administrator stated that FEMA will adjust insurance reductions as necessary at project closeout.
The Applicant submitted its second appeal to GOHSEP on March 7, 2008. The Applicant restated the same arguments presented in the first appeal. The Applicant also claims that FEMA has not demonstrated how it determined reduction amounts or how the insurance policy covers the type of emergency work included in the PWs. GOHSEP supported the Applicants appeal and asserted that the Applicant will repay any duplicative assistance.
The Applicant has a general insurance policy on each eligible facility covered under the PW. 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 241 PWs being appealed cover work that includes interior demolition and debris removal activities. Additionally, the Applicants Insurance Statement of Loss confirms that the Applicant is eligible for insurance monies for emergency work, including debris removal. 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, stating that FEMA shall assure that no such person, business concern, or other entity will receive such assistance with respect to any part of such loss as to which he has received financial assistance under any other program or from insurance or any other source. Accordingly, FEMA is required to reduce eligible assistance by the amount of insurance proceeds received for the emergency protective measures, including the interior demolition and debris removal work. FEMA will make adjustments to insurance reductions as necessary at project closeout.
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. This determination is the final decision on this matter pursuant to 44 CFR §206.206, Appeals
James A. Walke
Acting Assistant Administrator
Disaster Assistance Directorate
cc: Gary Jones
Acting Regional Administrator
FEMA Region VI
James W. Stark
Gulf Coast Recovery Office