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Second Appeal Letter
PA ID# 000-UV3S5-00; University of Texas Medical Branch at Galveston
PW ID# 12275, 12277, 12278, 12279, & 12485; Mutual Aid Agreement
April 29, 2010
Texas Department of Public Safety
5805 N. Lamar Blvd.
P.O. Box 4087
Austin, TX 78773-0001
Re: Second Appeal–University of Texas Medical Branch at Galveston, PA ID 000-UV3S5-00,
Mutual Aid Agreement, FEMA-1791-DR-TX, Project Worksheets (PW) 12275, 12277, 12278, 12279, and 12485
Dear Mr. Patterson:
This letter is in response to your letter dated October 20, 2010, which transmitted the referenced second appeal on behalf of the University of Texas Medical Branch at Galveston (UTMB) (Applicant). The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of funding for labor costs incurred under a Mutual Aid Agreement following Hurricane Ike.
The Applicant is a component institution of the University of Texas (UT) System. In response to Hurricane Ike, the Applicant utilized additional personnel who were provided by several UT institutions, in accordance with the UT System Disaster Response Mutual Aid Guidebook (Mutual Aid Guidebook). The Applicant claimed contract labor costs for additional police personnel for security, chemical and biological experts to remove contaminated biological materials, and additional personnel who provided various emergency protective measures after Hurricane Ike. FEMA considered all related costs to be ineligible on the basis that all additional labor claimed by the Applicant as contract labor came from the same entity (the UT System), or the same State government. FEMA prepared five PWs documenting the full claimed amount for the services performed, and obligated the PWs for zero dollars on September 30, 2009.
The Applicant submitted its first appeal on November 13, 2009, arguing that, “UTMB, like all of the UT universities, is an autonomous institution.” The Applicant further stated that the employees performing work under the Mutual Aid Agreement are not UTMB employees and are not included in UTMB’s budget. FEMA determined that the component institutions of the UT System, such as the Applicant, were part of the same state government, and that the labor force of each component institution was therefore considered to be employed by the same state government. FEMA stated that in accordance with FEMA Disaster Assistance Policy DAP 9523.6, Mutual Aid Agreements for Public Assistance and Fire Management Assistance, the mutual aid labor costs that the Applicant claimed are not eligible to be claimed as contract labor costs. FEMA stated that the Applicant could still submit a request for FEMA to consider the mutual aid costs as force account costs, so that eligible overtime force account costs and related eligible expenses would be considered for FEMA reimbursement.
The Applicant submitted its second appeal in a letter dated September 27, 2010. The Applicant argued that it should not be considered “employed by the same State government” because although it is a component of the UT System, the Applicant has a separate budget, human resources department, and is responsible for its own operation. The Applicant submitted a matrix of its incurred expenses, which listed four additional PWs that were not submitted to FEMA and not included in the first appeal. The Applicant reiterated its request for reimbursement, now totaling $179,484 with the additional PWs.
Disaster Assistance Policy DAP 9523.6, Mutual Aid Agreements for Public Assistance and Fire Management Assistance, Section VII(E)(2) states, “The labor force expenses of the Providing Entity will not be treated as contract labor if the labor force is employed by the same local or State government as the Requesting Entity.” FEMA reviewed the Mutual Aid Guidebook and the post-disaster invoice contracts signed between UTMB and various UT institutions. FEMA has determined that the Requesting Entity (UTMB) and the Providing Entity (various UT institutions) are component parts of the UT System and are “State” institutions of higher learning under Texas’s Education Code. The UT component schools share the same Board of Regents, appointed by the Governor of Texas. The Board of Regents commits funding for the institutions’ various programs, as well as for the associated personnel, equipment, and supplies.
FEMA reviewed The University of Texas System Operating Budget Summaries and Reserve Allocations for Library, Equipment, Repair and Rehabilitation, Fiscal Year 2009. The UT System operating budget includes costs for all of the component institutions. The FY 2009 Operating Budget lists the total costs for Instruction and Academic Support as 27.2% of its total budget, or $3.116 billion. The UT System defines this category to include “Expenditures for salaries, wages, and all other costs related to those engaged in the teaching function including the operating costs of instructional departments.” Support services to faculty and staff are also included in the UT System’s operating budget. Additionally, appropriations from the State General Revenue Fund supplement the UT institutional revenue in meeting operating expenses, including faculty salaries, utilities, and institutional support. Each component institution has its own budget and presumably some autonomy, as the Applicant stated, but they are each funded through the UT System’s overall budget. They share the same funding sources, retirement system, and insurance and benefit plans. The state-and-federally-supported UT System is the employer of the personnel in question, and therefore the Requesting Entity and Providing Entity are employed by the same State government. Therefore, the requested cost is ineligible for Public Assistance reimbursement pursuant to DAP9523.6. However, as FEMA has previously stated, the Applicant may still submit a request with proper support documentation for FEMA to consider the mutual aid cost as a force account cost, so that any eligible overtime force account labor costs and related eligible expenses may be considered by FEMA for reimbursement.
I have reviewed the information submitted with the appeal and have determined that the Regional Administrator’s decision in the first appeal is consistent with Public Assistance regulations and policy. Accordingly, 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.
cc: Tony Russell
FEMA Region VI