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Second Appeal Analysis
PA ID# 111-65042-00; City of San Buenaventura
PW ID# 897 and 906; Time Extension Request
Severe rainstorms in January 2005 produced very high storm water flows through the normally dry Ventura River bed. The storm water flow and associated debris scoured the river bed and embankments and damaged the City of San Buenaventura’s (Applicant) water pipelines and wells located at the Foster Park Well Field. The wells provide the community’s drinking water supply. On February 4, 2005, a major disaster was declared as a result of the severe storms and flooding. FEMA approved PW 897 (August 2005) and PW 906 (June 2005) for damage incurred during the storm and for proposed hazard mitigation measures to stabilize the eroded riverbank and prevent future damage.
FEMA prepared PW 897 to repair 1,000 linear feet of 12-inch raw water pump line between Nye Wells 7 and 8, and 900 linear feet of 16-inch pipeline crossing the river. The estimated cost of repair was $420,804. FEMA also approved a hazard mitigation proposal for slope protection. The proposed bank stabilization and slope protection measure included two rock groins and riprap extending 1,200 feet along the west bank of the river. The estimated cost of the proposal was $829,206. FEMA prepared PW 906 to replace and relocate Nye Well 1A and associated pipelines in the amount of $303,609. In addition, slope protection and bank stabilization was proposed for the east bank of the river to mitigate future damages to the relocated well. The estimated cost of the proposal was $952,686. The California Emergency Management Agency (Grantee) approved time extensions for the PWs through January 15, 2009, pursuant to Title 44 Code of Federal Regulations (44 CFR) §206.204(c) Project performance, Time limitations for completion of work.
On October 21, 2008, FEMA granted an extension to complete both projects per their original scopes of work through December 31, 2009. The Applicant requested an additional time extension until December 30, 2011, citing delays caused by environmental reviews, permitting requirements and seasonal construction constraints. The Grantee forwarded the Applicant’s request on April 8, 2009, recommending approval and noting the Applicant’s intent to revise the scopes of work. Updated cost estimates for the projects were provided on June 17, 2009. On August 7, 2009, FEMA responded with a request for additional information to include: a detailed construction timeline, scope of work for bank protection design, differences between original PW and actual scopes of work, status of coordination with an adjacent pre-disaster mitigation project for the Ojai Valley Sanitation District, status of environmental reviews and other permits, status of compliance with National Marine Fisheries Service (NMFS) requirements. While the Applicant submitted some of the requested information, more detailed information on the revised scope of work was necessary for FEMA to make a decision on the time extension. Over the next seven months, FEMA worked with the Grantee and the Applicant to obtain details regarding the revised scope of the hazard mitigation proposals.
On March 3, 2010, the Applicant submitted a revised mitigation proposal. The mitigation measures for PW 897 included the design and construction of three spur dikes along the west bank with an estimated cost of $2.5 million. The proposal for PW 906 included the design and construction of six spur dikes with 800 linear feet of riprap along the east bank for a total estimate of $4.8 million. On May 19, 2010, FEMA conducted an interagency meeting with all of the environmental agencies, the Grantee and the Applicant to discuss the project’s environmental clearance. Based upon the information obtained at that meeting, FEMA concluded that the necessary environmental reviews would not only be lengthy, but the associated clearances would be potentially unattainable due to a related upstream project.
In addition, because the original PWs did not include a benefit-cost analysis (BCA) for the proposed hazard mitigation proposals and the scope of work had changed, FEMA performed a BCA in August 2010 based on the current cost data obtained from the Applicant. Based on the results, the projects were not cost effective. The benefit-cost ratios were 0.14 and 0.87 for the west and east bank projects respectively. On October 4, 2010, FEMA determined that the hazard mitigation projects were ineligible and denied the request for a time extension.
On December 8, 2010, the Applicant appealed the denial of the time extension request for PWs 897 and 906. The Applicant, with the support of the Grantee, requested reimbursement of $412,301 in related environmental and design costs incurred through September 2, 2010, plus the additional costs to complete the design and construction of the bank protection project. The Applicant’s proposed completion date was December 30, 2012. The Applicant cited the following as a basis for its appeal:
• Risk to human health and endangered species habitat without the project
• City’s timely request for time extensions and continued city funding
• Delays in city’s efforts to obtain environmental compliance caused by FEMA
• Potential inadequacy, errors, and inappropriate application of regulations in the BCA
• Failure of FEMA to provide a copy of the BCA.
FEMA denied the appeal on October 17, 2011. FEMA stated that the time extension was requested only for the hazard mitigation portion of the project, and noted that the permanent repairs to restore the facility to its pre-disaster condition were complete. In addition, FEMA maintained that the proposed project was not cost-effective and, therefore, not eligible for funding under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) Section 406 Repair, Restoration, and Replacement of Damaged Facilities. The issues brought forward by the Applicant were all addressed in the Regional Administrator’s appeal analysis.
On February 29, 2012, the Applicant submitted a second appeal for the time extension denial and the denial of additional costs incurred on the hazard mitigation proposals. The Applicant’s second appeal is based on the contention that FEMA failed to provide it with a complete copy of the BCA used to deny the projects, FEMA relied on the wrong policy directive and incomplete data when conducting the BCA, and FEMA has denied the Applicant due process rights.
In support of the appeal, the Applicant reiterated the status of the design (90 percent complete) and preparation of the environmental documents (80 percent complete). The Applicant again requested reimbursement of $412,301 in related environmental and design costs, plus the additional costs to complete the design and construction of the bank protection project.
The primary issue of the second appeal is whether the Applicant’s hazard mitigation proposals are eligible for Public Assistance funding as allowed under Section 406 of the Stafford Act, as amended; and, secondarily, whether the requested time extension is justified under 44 CFR §206.204(d) Project performance, Requests for time extensions.
The disaster damage reflected in PWs 897 and 906 was due to the flooding that occurred in January 2005. At that time, the applicable policy related to hazard mitigation funding for Public Assistance projects was Response and Recovery Policy 9526.1, Hazard Mitigation Funding under Section 406 (Stafford Act) dated August 13, 1998. This policy was revised as Disaster Assistance Policy 9526.1 on July 30, 2007, and again on March 30, 2010. Specifically, the 2010 policy was revised to adopt the BCA tools and methodologies utilized for the Hazard Mitigation Grant Programs. This added elements, such as loss of function, to be considered when determining projected benefits. However, the 2010 policy is not retroactive and only applies to disasters declared after the policy issuance date of March 30, 2010.
The Applicant’s appeal claims that FEMA relied on the wrong policy and incomplete data when conducting the BCA. In particular, the Applicant states that the 1998 policy allowed wide discretion in determining what factors to include in a BCA. The 1998 policy, however, does not specify the factors to use when determining cost-effectiveness. Furthermore, prior to the 2010 policy, the only benefits considered under Section 406 were future avoided costs related to direct damages to the facility, necessary emergency protective measures and temporary relocation assistance. Additional elements, such as benefits associated with loss of function of the damaged facility, were not included. Accordingly, the BCA performed by FEMA for PWs 897 and 906 did not include loss of function as a benefit. Upon review, the BCA followed an acceptable methodology and utilized data provided by the Applicant’s design engineer, Hawks & Associates. Data provided by the Applicant included project cost estimates, historical erosion rates, project useful life, and project maintenance costs.
With regard to other impacts requested by the Applicant to be considered in the BCA, many are associated with facilities outside the Applicant’s legal responsibility, including the Casitas Municipal Water District pipeline, the Ojai Valley Sanitation District sewer trunk line, and Highway 33. In accordance with past and current policy, mitigation measures must be related to eligible disaster-related damage and must directly reduce the potential of future, similar disaster damages to the eligible facility (i.e., the Applicant’s damaged wells and pipelines). Upon review, the BCA correctly excluded benefits associated with other facilities.
In conclusion, FEMA applied the correct policy at the time of the disaster and the data used was complete and sufficient in determining cost-effectiveness. Because the BCA resulted in benefit-cost ratios of less than 1.0 for both the west and east bank projects, the hazard mitigation proposals are not cost effective, and therefore, not eligible for Public Assistance funding. A complete copy of the BCA is attached to this appeal analysis.
Relative to the Applicant’s request for a time extension, there is no justification to extend the deadline for these PWs. Based on the appeal documentation, FEMA was not formally notified of the changes in design and cost estimates for the hazard mitigation projects until the Grantee forwarded the Applicant’s time extension request on April 8, 2009. Subsequently, due to the significant changes to the original scope and the substantial increase in costs (three and five times the original estimates), FEMA justifiably re-evaluated the feasibility and cost-effectiveness of the proposed measures. As determined above, the hazard mitigation proposals are not eligible, and for this reason, no further time extension is required.
The Applicant’s proposed bank stabilization projects are not a cost-effective hazard mitigation measure in accordance with Response and Recovery Policy 9526.1, Hazard Mitigation Funding under Section 406 (Stafford Act) dated August 13, 1998. Because the project is not eligible, there is no justification for a time extension beyond the completion date of December 31, 2009, previously approved by the Regional Administrator.