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Second Appeal Letter
PA ID# 123-UA83D-00; Mahaska County Emergency Management Agency
PW ID# 565; Disposition of Equipment
August 28, 2012
Iowa Homeland Security and Emergency Management Division
7105 NW 70th Avenue
Camp Dodge, Bldg W-4
Johnston, Iowa 50131-1824
Re: Second Appeal–Mahaska County Emergency Management Agency, PA ID 123-UA83D-00, Disposition of Equipment, FEMA-1930-DR-IA, Project Worksheet (PW) 565
Dear Mr. Schouten:
This letter is in response to a letter from your office dated March 20, 2012, which transmitted the referenced second appeal on behalf of the Mahaska County Emergency Management Agency (Applicant). The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) deduction of $6,980 for the purchase of a boat and motor.
The Applicant purchased equipment and supplies in response to widespread flooding that threatened homes and the County water supply and sanitary systems as a result of severe storms occurring June 1, through August 31, 2010. Purchases included office supplies, safety vests and flares, generators, mobile telecommunication equipment, an outboard boat, and a gas powered outboard motor. FEMA prepared PW 565 in the amount of $39,166 for force account labor ($4,212) and equipment and supplies ($34,954). FEMA determined, pursuant to Title 44 Code of Federal Regulations (44 CFR) §13.32(e)(2), Equipment, Disposition, and 44 CFR §13.33(b), Supplies, Disposition, that the Applicant was required to compensate FEMA for its portion of the fair market residual value of used and unused equipment and supplies with an aggregate value exceeding $5,000, when the materials are no longer needed for disaster work. A total of $24,695 was deducted from the eligible costs for equipment and supplies, and on January 26, 2011, PW 565 was obligated for $14,471.
The Applicant submitted a first appeal on February 24, 2011, disputing FEMA’s decision to reduce the eligible costs for emergency equipment and supplies. Support documentation included invoices, detailed descriptions of the purchased items and explanations of how the items were used in the emergency response operation, and a copy of FEMA Policy 9525.12 Disposition of Equipment, Supplies, and Salvageable Materials (July 14, 2008). The State supported the first appeal asserting that the Applicant demonstrated that all purchased materials were used in response to the declared disaster.
In a letter dated December 7, 2011, the Regional Administrator responded to the first appeal and determined that only a portion of the equipment purchases required compensation to FEMA.
The Regional Administrator explained that the boat ($3,695) and motor ($4,390) were purchased together and used together in function in the same way as an automobile. According to the Regional Administrator, the total purchase price of the boat and motor was greater than $5,000 and required a reduction to account for FEMA’s share of that equipment. A reduction of $6,980 was calculated on the $8,085 purchase price of the boat and motor. All other equipment and supply costs were reimbursed to allow the Applicant to receive an additional $17,715 in funding.
The Applicant submitted a second appeal, which the State forwarded to FEMA on March 20, 2012. The Applicant disagrees with FEMA’s comparison of the boat and motor to a motorized vehicle and requests reinstatement of the $6,980 reduction. The Applicant also disagrees with FEMA’s interpretation of 44 CFR §13.32 of combining two items of equipment that were built by different companies and assembled by the vendor after the Applicant’s purchase.
The Applicant purchased a Lowe R1760 Outboard boat ($3,695), a Mercury 25HP gasoline powered outboard motor ($4,390), a propeller ($174), a Karavan boat trailer ($899), and a battery ($103) from Malone Motorsports for its emergency response operations. The Applicant contends that the boat and motor were sold and purchased as separate units, not as a single piece of equipment. The Malone Motorsports invoice does not indicate that the boat comes equipped with an outboard motor as each piece of equipment is listed on the invoice with a separate serial number and corresponding purchase price. Likewise, the outboard motor does not indicate that it is equipped with a propeller, which FEMA previously reimbursed as an independent item. Each of the items purchased from Malone Motorsports has a fair market value of less than $5,000. Pursuant to 44 CFR §13.32(e)(1), Equipment, Disposition, items of equipment with a current per-unit fair market value of less than $5,000 may be retained, sold or otherwise disposed of with no further obligation to the awarding agency.
Based on the review of all information submitted with the appeal, I have determined that the boat and motor were separate purchases with a current fair market value of less than $5,000 each, and therefore, may be disposed of with no further obligation to FEMA. Therefore, I am approving this appeal to re-obligate $6,980 to PW 565. By this letter, I am requesting the Regional Administrator take appropriate actions 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: Beth Freeman
FEMA Region VII