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Second Appeal Letter
PA ID# 113-12000-00; City of Cedar Rapids
PW ID# Multiple Project Worksheets ; Steam Heat Conversion
February 17, 2012
Iowa Homeland Security and Emergency Management Division
7105 NW 70th Avenue
Camp Dodge, Bldg W-4
Johnston, Iowa 50131-1824
Re: Second Appeal - City of Cedar Rapids, PA ID 113-12000-00, Steam Heat Conversion, FEMA-1763-DR-IA, Multiple Project Worksheets (PWs)
Dear Mr. Schouten:
This is in response to a letter from your office dated November 9, 2010, which transmitted the referenced second appeal on behalf of the City of Cedar Rapids (Applicant). The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $69,118,138 to convert steam heating systems to stand-alone boilers in the Applicant’s facilities.
In 2008, flooding resulted in extensive damage to ten Applicant owned facilities. Prior to the disaster, the Applicant procured steam heat for the facilities from a private vendor, Alliant Energy Corporation (AEC). FEMA prepared multiple PWs for the cost of disaster related damages to the Applicant’s facilities. Elements of the heating system within the Applicant’s facilities were undamaged by the flooding. FEMA denied funding to convert the Applicant’s heating system to stand-alone boilers to replace the commercial steam heat. After the disaster, the commercial steam vendor ceased providing the steam heat service based upon its own business decision.
The Applicant submitted a first appeal in a letter dated January 27, 2010. The Applicant requested funding to provide its facilities another source of heat, such as steam heat provided by an onsite natural gas steam boiler, or conversion of the existing infrastructure to accommodate alternative forms of heat, such as gas furnaces and hot water. The Applicant argued that building codes and standards required heat and hot water in all its damaged facilities, and that the Applicant’s recovery required establishing a new source of heat for each of its facilities. On July 22, 2010, the Regional Administrator denied the first appeal. The Regional Administrator determined that the Applicant’s loss of steam heat was not caused by the declared disaster, but was the result of AEC’s business decision to no longer provide steam service. Therefore, funding for undamaged steam heat systems was not eligible.
The Applicant submitted a second appeal in a letter dated September 22, 2010. In the letter, the Applicant repeated its arguments from the first appeal and provided references to specific PWs: 465, 521, 940, 8148, 10285, 10299, 10326, 10342, and 10377. The Applicant also claimed that the work was eligible as a codes and standards upgrade. The Applicant specifically referenced the 2006 International Building Code regarding maintenance of a minimum indoor temperature of 68 degrees. The Applicant contends that this requirement is necessary to restore the facilities to pre-disaster function and capacity, and is necessary for the restoration of essential government services. In addition, the Applicant stated that FEMA should consider reasonable solutions and alternatives to projects affected by the commercial steam vendor’s business decision. On December 22, 2011, at the request of the State and the Applicant, FEMA and representatives of the Applicant discussed the subject appeal on a teleconference. During the call, the Applicant reiterated that since the pre-disaster condition of its buildings were in compliance with the Building Codes to maintain heat in its buildings, the restoration of the facilities should include the reasonable work necessary to return the facilities into compliance with this code.
Pursuant to Title 44 of the Code of Federal Regulations (CFR) §206.223(a)(1), eligible work must “be required as the result of the emergency or major disaster event.” Furthermore, 44 CFR §206.226(d), requires that the costs of code and standard upgrades must “apply to the type of repair or restoration required.” The Public Assistance Policy Digest (FEMA-321; January 2008) clarifies that for facilities requiring repair, upgrade work required by codes and standards is limited to the disaster-damaged elements of the facility.
In this case, the Applicant did not demonstrate that the steam heat components of the Applicant’s facilities were damaged by the flooding incident. Rather, the Applicant states that damage to AEC’s steam generation facilities resulted in termination of the steam heat services provided by the commercial vendor. As this loss of function is attributable to AEC’s decision to suspend service and not due to disaster-damage to the steam heat components of the facilities, upgrades to replace the undamaged heating systems in the Applicant’s facilities with stand-alone boilers are not eligible for reimbursement through FEMA’s Public Assistance Program.
I have reviewed the information submitted with the appeal and have determined that the Regional Administrator’s decision is consistent with Public Assistance Program regulations and policies. Therefore, I am denying the Applicant’s 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: Beth Freeman
FEMA Region VII