Request for Public Assistance

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster1981-DR-ND
ApplicantNorth Dakota Secretary of State
Appeal TypeSecond
PA ID#N/A
PW ID#N/A
Date Signed2013-01-10T00:00:00

Citation:  FEMA-1981-DR-ND, North Dakota Secretary of State, RPA

Cross-
Reference:
  Request for Public Assistance

Summary:   As a result of flooding throughout North Dakota, the President declared major disaster FEMA-1981-DR-ND, on May 10, 2011.  The North Dakota Secretary of State (Applicant) incurred $20,425.22 in costs from staffing a one-stop contractor-licensing center in Minot, ND from July 11 to September 8, 2011.  The Applicant submitted a Request Public Assistance (RPA) on November 2, 2011.  FEMA denied the RPA because the Applicant failed to cite extenuating circumstances that were beyond its control that prevent timely submittal of the RPA.  The Applicant’s first appeal requested that FEMA accept the late RPA because the Applicant’s engagement with the disaster recovery efforts started after both the Applicants’ Briefing and the RPA deadline.  The FEMA Regional Administrator denied the appeal because the Applicant submitted the RPA nearly six months after the date of declaration and also noted that the costs claimed by the Applicant for providing staff for the licensing center constituted increased operating costs and were, therefore, not eligible for reimbursement.  The Applicant’s May 14, 2012, second appeal reiterates the claim from the first appeal and requests that FEMA reconsider approving its request for reimbursement of due to the impact of the operating costs on the Applicant’s budget.  The Applicant submitted the RPA well after the regulatory timeframe established in Title 44 Code of Federal Regulation §206.202(c) Application Procedures and did not provide sufficient justification for the delay in filing the RPA as required by §206.202(f)(2) Exceptions.  Furthermore, the operating costs referenced in the request were administrative in nature and not eligible for reimbursement.

Issues:  1. Did the Applicant demonstrate that extenuating circumstances that were beyond its control prevented it from submitting an RPA within a timely manner?
               2. Are the requested costs of staffing the licensing center eligible for reimbursement?

Finding:  1. No.
                2. No.

Rationale:  44 CFR §206.202(c) Application procedures, Request for Public Assistance, and FEMA Public Assistance Guide/ FEMA 322, page 54

Appeal Letter

January 10, 2013

Greg M. Wilz
Director
Department of Emergency Services
P.O. Box 5511
Bismarck, North Dakota 58506-5511

Re: Second Appeal – North Dakota Secretary of State, Request for Public Assistance (RPA), FEMA-1981-DR-ND

Dear Mr. Wilz:

This letter is in response to a letter from your office dated May 21, 2012, which transmitted the referenced second appeal on behalf of the North Dakota Secretary of State (Applicant).  The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) decision to deny the Applicant’s RPA and is requesting reimbursement of $20,425.22 for supporting a contractor-licensing center.

While the establishment and operation of a one-stop contractor-licensing center in a geographically convenient location represents a practice of significant utility to a disaster recovery effort, not all disaster-related costs are eligible for reimbursement under FEMA’s Public Assistance Program.

As explained in the enclosed analysis, 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.  My determination constitutes the final decision on this matter as set forth in 44 CFR §206.206, Appeals.

Sincerely,
/s/

Deborah Ingram
Assistant Administrator
Recovery Directorate

Enclosure

cc: Robin Finegan
Regional Administrator
FEMA Region VIII

Appeal Analysis

Background

On May 10, 2011, the President declared major disaster FEMA-1981-DR-ND for the State of North Dakota due to flooding.  In coordination with the Mayor of Minot, the State Office of the Attorney General and other State agencies, the North Dakota Secretary of State (Applicant) established and operated a one-stop contractor-licensing center in Minot, ND from July 11 to September 8, 2011.  After the center closed, the Applicant submitted a Request for Public Assistance (RPA) on November 2, 2011, and requested reimbursement for the cost of staffing the licensing center.  With the RPA, the Applicant submitted a letter in which the applicant acknowledged that the RPA was late, but explained that the process of assembling the documentation to support the requested costs took longer than the Applicant had expected.

FEMA determined that the Applicant’s RPA was ineligible because it was submitted nearly five months after the regulatory timeframe established in Title 44 Code of Federal Regulation (44 CFR) §206.202(c), Application Procedures, Request for Public Assistance (Request).  On January 9, 2012, the North Dakota Department of Emergency Services (Grantee) notified the Applicant of FEMA’s determination and stated the reason for the denial was that, “The Application is past the deadline and FEMA does not cover additional operating costs as a result of disaster activities.”

First Appeal

The Applicant submitted a first appeal on February 24, 2012, which explained that extenuating circumstances prevented the Applicant from submitting the RPA within 30 days after designation of the disaster and stressed the importance of the Minot licensing center to the community’s recovery.  As the Applicant’s engagement in the disaster recovery effort began after the deadline for RPA submission, the Applicant did not attend the Applicants’ Briefings conducted by the Grantee and was unaware of the RPA deadline.  Furthermore, the Applicant noted that it had received Public Assistance funding for similar work to support a one-stop contractor-licensing center in Grand Forks in 1997 following flooding declared under FEMA-1174-DR-ND, and emphasized that due to this experience, it diligently documented all staff overtime, travel, and other operating costs associated with the licensing center in advance of submitting the RPA.  The Applicant noted that the services it provided by staffing the Minot licensing center significantly expedited the process of licensing contractors, registering businesses, verifying insurance, conducting background checks, and issuing badges.  Due to the crucial role that the licensing center played in the disaster recovery, the Applicant reiterated its request for reimbursement of the costs of supporting the center.

The Grantee supported the Applicant’s first appeal and forwarded it to FEMA with a letter dated February 28, 2012.  The Regional Administrator (RA) denied the first appeal with a letter dated March 23, 2012.  In the response, the RA noted that the regulatory timeframe for submittal of RPAs as codified in 44 CFR §206.202(c) is within 30 days of designation of the affected area, making June 9, 2011, the applicable deadline for declaration FEMA-1981-DR-ND.  However, the Applicant did not submit an RPA until five months after the deadline.  In addressing the Applicant’s claim that it was gathering documentation to support the requested costs, the RA pointed out that page 92 of FEMA’s Public Assistance Guide (FEMA 322, June 2007) states, “An applicant need not wait until all damage is identified before requesting assistance...”  The letter also recognized the Applicant’s requested costs as operating costs that were administrative in nature and are, therefore, ineligible for reimbursement under FEMA’s Public Assistance Program.

Second Appeal

In a second appeal dated May 14, 2012, the Applicant claimed that it was integral to the operation of the licensing center, as its “primary function [was] to expedite the issuing of contractor licenses in accordance with state law.”  The Applicant stated that it was unaware of the RPA deadline because it was unfamiliar with FEMA rules and regulations, but provided an assurance that it would have complied with applicable provisions had it been informed.  It also explained that the Applicant’s limited budget could not absorb the staff overtime and travel costs.  While the second appeal reiterated the effectiveness of the one-stop contractor-licensing center, it did not provide any new details or legal provisions regarding the eligibility of the operating expenses.

With letters dated May 16 and May 21, 2012, the Grantee transmitted the second appeal to FEMA.  In the letters, the Grantee supported the Applicant’s position that it was unable to submit an RPA by June 9, 2011, due to its delayed engagement in the disaster recovery process. The Grantee also recognized the one-stop licensing center as a “best practice…which created cost savings for survivors, as well as our local, state, and federal agencies.”  While the Grantee did not directly address the eligibility of the Applicant’s administrative operating expenses, the May 16, 2012, letter stated that “it is recognized only allowable program expenses are applicable.”

Discussion

44 CFR §206.202(f)(2), Application Procedures, Exceptions, Time Limitations,  provides an exception to the 30-day timeframe for submittal of RPAs established in 44 CFR §206.202(c) when “extenuating circumstances beyond the grantee’s or subgrantee’s control” prevents compliance.  The Applicant claimed that it was unable to meet the June 9, 2011, deadline because it did not begin supporting the licensing center until July 11, 2011.  As the Applicant did not incur any disaster-related costs until after the RPA deadline and did not anticipate incurring any costs until the June 23, 2011 email from the Assistant Attorney General regarding the request for establishment of a one-stop licensing center in Minot, it would seem reasonable that the Applicant would not have submitted an RPA within the regulatory timeframe.  However, given that the Applicant had received a Public Assistance grant previously for similar costs and had taken steps to document the disaster-related costs in order to support a request for federal disaster assistance, the argument does not justify why the Applicant did not submit an RPA until four months after it began incurring disaster-related costs.

The Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), as amended, authorizes FEMA to reimburse eligible applicants the eligible costs to remove debris, perform emergency protective measures, and restore eligible disaster-damaged facilities.  Since the staffing of a contractor-licensing center does not qualify as debris removal or permanent repair, it is assumed that the Applicant considers the requested work to be emergency protective measures.  Pursuant to 44 CFR §206.225 Emergency Work, “in order to be eligible, emergency protective measures must (1) Eliminate or lessen immediate threats to live, public health, or safety; or (2) Eliminate or lessen immediate threats of significant additional damage to improved public or private property…”   The Applicant’s appeal does not demonstrate how its support of the licensing center directly satisfied the regulatory requirements for emergency work.  Instead, the requested costs represent increased operating costs associated with administering programs to register businesses and license contractors.  Such costs are ineligible for reimbursement.

Conclusion

A first and critical step in the process of applying for a subgrant through FEMA’s Public Assistance Program is the timely submittal of an RPA.  The RPA deadline is important for it allows FEMA to meet its various statutory and regulatory commitments that are sequence dependent or are time sensitive.  The RA may extend the RPA deadline when requested by the grantee and warranted by virtue of an extenuating circumstance beyond the applicant’s control that prevents timely submittal of an RPA.  In this case, the Applicant has not demonstrated a circumstance that prevented it from promptly submitting an RPA once it began incurring disaster-related costs, or from requesting an extension to the RPA deadline from the grantee.

While appeal determinations on the eligibility of work are generally reserved for projects documented on subgrant applications known as Project Worksheets, the Applicant claims that the staffing of the contractor-licensing center represents eligible work and that its associated costs should be reimbursed by FEMA.   However, the requested administrative costs do not meet the criteria for eligible work and FEMA can only provide disaster assistance funding for work authorized by the Stafford Act.
 

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