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Second Appeal Letter
PA ID# 000-006AE-00; Kiamichi Electric Cooperative
PW ID# PWs 916, 920, 921, 922, 924 & 1035; Collateral Damage
January 6, 2012
Oklahoma Department of Emergency Management
2401 N. Lincoln
Oklahoma City, OK 73105
Re: Second Appeal–Kiamichi Electric Cooperative, PA ID 000-006AE-00, Collateral Damage, FEMA-1678-DR-OK, Project Worksheets (PW) 916, 920, 921, 922, 924, and 1035
Dear Mr. Ashwood:
This is in response to a letter from your office dated October 4, 2010, which transmitted the referenced second appeal on behalf of the Kiamichi Electric Cooperative (Applicant). The Applicant is appealing the Department of Homeland Security’s (DHS) Federal Emergency Management Agency’s (FEMA) denial of funding in the amount of $302,930 for the cost to repair rut damage caused during the performance of emergency work.
In January 2007, a severe winter storm caused significant damage throughout the State of Oklahoma. FEMA provided funding to the Applicant, including for the cost of emergency protective measures it performed as a result of the storm. The DHS Office of Inspector General (OIG) audited the Public Assistance funding provided to the Applicant. On June 23, 2009, the OIG issued an audit report (Number DD-09-12) that questioned the cost to repair rut damage on private property on the basis that the work did not constitute an eligible emergency protective measure. Subsequently, FEMA de-obligated $303,253 in previously funded for the repair of rut damage.
On January 11, 2010, the Applicant filed an appeal of the de-obligation of funding for rut repairs, which the State forwarded to FEMA in a letter dated February 5, 2010. The Applicant contended that the repair costs should be eligible because FEMA personnel were involved in the preparation of the scope of work and reviewed the Applicant’s contract prior to their award. The Applicant also noted that Disaster Assistance Fact Sheet DAP9580.6, Electric Utility Repair, dated September 22, 2009, states that the repair of collateral damage, such as ruts on private property, is eligible. The FEMA Regional Administrator denied the Applicant’s appeal on June 8, 2009, noting that DAP9580.6 was issued after the declared event and therefore not applicable to this case.
On August 3, 2010, the Applicant submitted its second appeal, which the State forwarded to FEMA in a letter dated October 4, 2010. The Applicant maintained that the rut repairs should be eligible and again made reference to DAP9580.6. The Applicant noted that the costs which are in dispute are to repair collateral damage caused to private property easements while repairs were made to eligible disaster-damaged facilities, namely electric utility poles. The Applicant included a copy of case law (616 P.2d 450 OK CIV) and a blank Release of All Claim form signed by landowners in order to support its claim that it had the legal responsibility and authority to repair the rut damage.
As indicated in the Public Assistance Policy Digest (FEMA-321), which the OIG cited in its audit report, “Private property is not eligible for permanent restoration under the Public Assistance Program.” The Fact Sheet that FEMA issued in 2009 (DAP9580.6) clarified, albeit after this major disaster was declared, that restoration of collateral damage caused during the conduct of otherwise work may also be eligible for assistance, specifically where an eligible applicant has secured private property easements. The provision in the Public Assistance Policy Digest, in place at the time of the disaster, does not preclude the eligibility of such costs. FEMA has reviewed the information submitted with the appeal and determined that the Applicant has demonstrated the legal responsibility for the repair in the form of a written or statutory easement with an express legal responsibility to repair the damage. Since the damage was caused during the performance of eligible repair work, it is eligible for reimbursement under the Public Assistance Program.
I have reviewed the information submitted with the appeal and have determined that the Applicant’s appeal should be granted in full. By this letter, I am requesting that the Regional Administrator take appropriate action to implement my decision.
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