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Second Appeal Analysis
PA ID# 071-99071-00; San Bernardino County
PW ID# 1859, 2059 & 2217; Improved Projects
SECOND APPEAL ANALYSIS
San Bernardino County, PA ID 071-99071-00
Improved Projects, Project Worksheets (PWs) 1859, 2059, and 2217
From December 27, 2004, to January 11, 2005, severe storms caused damage to the Applicant’s roads. As part of its recovery, the Applicant requested a Net Small Project Overrun (NSPO) in the amount of $612,459 for adjustments to 48 small projects. In a letter dated July 9, 2008, FEMA denied the NSPO, and determined that five projects were improved projects. FEMA prepared versions of these five PWs reflecting the actual work performed and re-classifying them as improved projects. At issue in this appeal are three of those five PWs: 1859, 2059, and 2217. The Applicant is appealing FEMA’s determination that these PWs are Improved Projects.
FEMA prepared PW 1859 for an estimated amount of $5,017 to repair the asphalt edges and to add one concrete apron as a hazard mitigation measure along Calico Road. In the Applicant’s original NSPO request, the Applicant stated that both it and FEMA had underestimated the extent of repairs. FEMA requested the revised repair dimensions and information to validate it was storm-related damage. The Applicant responded that it added concrete aprons at two locations, and that it charged repairs to other roads in the vicinity to the work order for PW 1859. The Applicant made repairs to Calico Road, and also to a new site on Ironwood Drive, and claimed that the actual cost incurred for PW 1859 was $16,787.
PW 2059 addressed storm damages at Bluebird Drive and Wild Rose Drive. It was written for an estimated amount of $38,457 to replace three damaged culverts, two concrete headwalls, 150 square yards (SY) of asphalt road, and 416 cubic yards (CY) of backfill. It also identified installation of a concrete headwall as a hazard mitigation measure. The actual work that the Applicant performed included: replacing four culverts instead of three; placing 167 tons, or approximately 1,000 SY, of asphalt concrete pavement; and installing French drains, crushed rock bedding, and filter fabric at both sites in order to alleviate static pressure from ground water. The Applicant requested actual costs of $361,637.
FEMA prepared PW 2217 for an estimated amount of $3,864 to repair a 30-foot long, 24-inch corrugated metal pipe culvert and to replace 18 CY of the surrounding embankment on Chateau Drive. Additionally, a hazard mitigation proposal was included to replace the culvert with a 40-foot long, 48-inch high-density polyethylene (HDPE) culvert pipe. The Applicant also obtained a geotechnical report, not in conjunction with FEMA, and decided to install a concrete block retaining wall system with a total claimed cost of $464,049.
On September 7, 2007, the Applicant submitted its request for reimbursement for its NSPO costs. There were 40 PWs that the Applicant either decided not to pursue or that FEMA found ineligible. For 25 other PWs, the Applicant claimed an overrun of $544,944, and then amended this amount to $612,459 on October 29, 2007. On February 13, 2008, the California Emergency Management Agency (CalEMA) forwarded to FEMA the Applicant’s supporting documentation, including a Final Inspection Report (FIR), FIR Summary, and Project Completion and Certification Report (P.4). CalEMA stated that based on this documentation, $862,995 in small project cost overruns was eligible for funding.
In a letter dated July 9, 2008, the Deputy Regional Administrator stated that she had determined that the Applicant actually had a net underrun of $59,189. FEMA denied the NSPO, and stated that it would not adjust any of the Applicant’s projects that have differences between estimated and actual costs, since the net effect would be a deobligation. Because two of the projects were not completed, versions of those PWs were prepared to deobligate funding. Additionally, FEMA determined that five of the projects were Improved Projects, and prepared PW versions reflecting the actual work performed and re-classifying them as Improved Projects. PWs 1859, 2059, and 2217 were included in the five projects to be re-classified.
The Applicant submitted its second appeal February 13, 2009. For PW 1859 and the scope of work at Calico Road, the Applicant argued that the additional site at Ironwood Drive is allowable because at the time of preparing PW 1859, FEMA had maps indicating that the water crossing that damaged Calico Road also affected Ironwood Drive. For PW 2059, the Applicant argued that the full scope of the damages was not known until after a “more careful engineering assessment,” and that FEMA did not deny these actions at the time. The Applicant also argued that costs for PW 2217 were calculated in error because they were included with PW 1182, which was a PW for a large project embankment repair. The Applicant stated that once the costs were separated, the actual amended cost for PW 2217 totaled $14,995. The Applicant submitted documentation for the scope of work performed under PW 2217 totaling $15,104.
Pursuant to 44 CFR §206.203(d)(1), Improved projects, if an Applicant chooses to make improvements, but still restore the pre-disaster function of a damaged facility, it must obtain approval from the Grantee prior to construction. Federal funding for such improved projects shall be limited to the Federal share of the approved estimate of eligible costs. Furthermore, any improved project that results in a significant change from the pre-disaster configuration (i.e., different location, footprint, size) of the facility must also be approved by FEMA prior to construction.
For PWs 1859 and 2059, the work performed is significantly different than the scope of work in the PWs and does not correlate with the damages described in the PWs. For PW 1859, the Applicant is requesting to add an additional site to the scope of work. For PW 2059, the Applicant is requesting an additional $323,180 for repair work outside the approved scope of work. Specifically, this included adding an additional culvert, increasing asphalt tonnage, and adding French drains, crushed rock bedding, and filter fabric at both sites. Pursuant to 44 CFR §206.204(e), Cost Overruns, it is the Subgrantee’s responsibility to notify the Regional Director through the Grantee for the approval of changes in the scope of work at the time it discovers the additional damages. The Applicant failed to do this for either of these PWs. These projects fall under the guidelines of an Improved Project pursuant to 44 CFR §206.203(d)(1). Federal funding on improved projects is limited to the federal share of the estimated cost. For PW 1859 and PW 2059, the total approved amounts are $5,017, and $38,457 respectively.
FEMA originally prepared PW 2217 for $3,864 to repair a culvert and replace 18 cubic yards of an embankment. This also included a hazard mitigation proposal. FEMA later determined that the Applicant installed a retaining wall for $464,049. The Applicant has demonstrated that this figure is in error because the work was combined with PW 1182, and has submitted documentation demonstrating that the eligible scope of work was completed for a total amount of $15,104.
The repairs performed by the Applicant under PWs 1859 and 2059 are significant changes to the pre-disaster configuration of the site. The Applicant did not obtain approval for this change from either the Grantee or FEMA prior to construction, and additional work on these PWs is ineligible for funding. The Applicant has demonstrated that an additional $11,240 is eligible for PW 2217. However, because this amount is less than the NSPO underrun amount of $59,189, the appeal is denied.