Crestwood Drive

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster1857-DR-NY
ApplicantVillage of Gowanda
Appeal TypeSecond
PA ID#009-26930-00
PW ID#1014
Date Signed2013-11-12T00:00:00

Citation:  FEMA-1857-DR-NY, Village of Gowanda, Crestwood Drive, Project Worksheet (PW) 1014

Cross-Reference:  Improved Project; Hazard Mitigation

Summary:   In August 2009, flooding caused by severe storms damaged Crestwood Drive in the Village of Gowanda.  The Village of Gowanda (Applicant) requested FEMA funding for the repair of disaster damage and a hazard mitigation proposal (HMP).  FEMA prepared PW 1014 for $105,416 for the repair of the road, and the Applicant submitted an HMP for $175,666 for drainage improvements to the road.  Based on a benefit-cost analysis, FEMA determined the HMP was not cost-effective and, therefore, not eligible for funding under the Public Assistance program. However, the Applicant completed the scope of work approved in PW 1014 and the work associated with the denied HMP.  The Applicant submitted a request for project closeout that included a request for additional funding based on its total, actual costs incurred for repair of disaster damage and the hazard mitigation ($258,269).  Because the Applicant completed the hazard mitigation work along with the approved scope of work, FEMA determined that the Applicant performed an improved project and capped the eligible funding at the estimate for the scope of work approved in the PW ($94,315).  Therefore, FEMA deobligated $11,101 from PW 1014.  The Applicant submitted a first appeal, asserting that although the signed PW did not include the costs of the HMP, FEMA had approved the HMP when all interested parties signed the PW.  The FEMA Regional Administrator denied the first appeal explaining that at the time of the Applicant’s signature, the HMP was merely a proposal and its costs were not included in the project total.  The Applicant submitted a second appeal, reiterating its belief that by including the HMP with the original PW, FEMA approved the work. 

Issues:  1. Did FEMA approve the HMP?                                      

              2. Was funding properly capped as an improved project?

Findings:  1. No. 

                  2. Yes.

Rationale:   44 CFR §206.201(2)(j), Definitions used in this subpart, Project approval; 44 CFR §206.203(d)(1), Federal grant assistance Improved projects; 44 CFR § 206.226(e), Restoration of damaged facilities, Hazard mitigation; FEMA Recovery Policy RP9526.1, Hazard Mitigation Under Section 406 (Stafford Act)


 

Appeal Letter

November 12, 2013

Dr. Peter Marghella
Director
New York State Office of Emergency Management
1220 Washington Avenue, Building 22, Suite 101
Albany, New York 12226-2251

Re: Second Appeal – Village of Gowanda, PA ID 009-26930-00, Crestwood Drive, FEMA-1857-DR-NY, Project Worksheet (PW) 1014

Dear Dr. Marghella:

This is in response to a letter from your office dated September 5, 2012, which transmitted the referenced second appeal on behalf of the Village of Gowanda (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of funding of a hazard mitigation proposal and FEMA’s determination that it completed an improved project.

As explained in the enclosed analysis, I have determined that the Applicant completed improvements outside of the scope of work approved in PW 1014 and as an improved project, eligible funding is limited to the cost estimate for the approved scope of work approved in PW 1014, which is $94,315. Therefore, I am denying the appeal.

Please inform the Applicant of my decision.  This determination constitutes the final decision on this matter pursuant to 44 CFR §206.206, Appeals.

Sincerely,

/s/

Deborah Ingram
Assistant Administrator
Recovery Directorate

Enclosure

cc:  Mary Ann Tierney
      Acting Regional Administrator
      FEMA Region II


 

 

Appeal Analysis

Background

In August 2009, flooding caused by severe storms damaged Crestwood Drive in the Village of Gowanda.  The Village of Gowanda (Applicant) requested FEMA funding for the repair of disaster damage and a hazard mitigation proposal (HMP).  FEMA prepared PW 1014 for $105,416 for the repair of the road, and the Applicant submitted an HMP for $175,666 for drainage improvements to the road.  Based on a benefit-cost analysis, FEMA determined the HMP was not cost-effective and, not eligible for funding under the Public Assistance program.

However, the Applicant completed the scope of work approved in PW 1014 and the work associated with the denied HMP.  The Applicant submitted a request for project closeout that included a request for additional funding based on its total, actual costs incurred for repair of disaster damage and the hazard mitigation ($258,269).  Because the Applicant completed the hazard mitigation work along with the approved scope of work, FEMA determined that the Applicant performed an improved project and capped the eligible funding at the estimate for the scope of work approved in the PW ($94,315).  Therefore, FEMA deobligated $11,101 from PW 1014. 

First Appeal

The Applicant submitted a first appeal on November 23, 2011, asserting that although the signed PW did not include the costs of the HMP, FEMA had approved the HMP when all interested parties signed the PW.  In the alternative, the Applicant claimed that the State approved both the HMP and the amount of funding.  The Applicant also disputed the finding that the entire project became an improved project when it completed more than the original scope of work.  Finally, the Applicant stated that Crestwood Drive is the only access route to its water treatment facilities and that the mitigation work is essential to ensure access to those facilities.   

On June 11, 2012, the FEMA Regional Administrator denied the first appeal explaining that at the time of the Applicant’s signature, the HMP was merely a proposal and its costs were not included in the project total.  In the scope of work, the PW stated that “because [the engineering cost] includes a full survey and extensive mitigation, which when and if approved and included…” (Emphasis added).  This wording demonstrates unequivocally that the mitigation was not approved at that time.  The Regional Administrator further explained that the benefit cost ratio of the proposal was only .19 and not the 1.0 required by the program to demonstrate cost effectiveness.  The Regional Administrator also explained that only FEMA may approve projects and HMPs, not the State, and that because the Applicant improved the site by completing the mitigation measures, it completed an improved project and the associated funding is subject to a cap. 

Second Appeal

The Applicant submitted a second appeal on August 21, 2012, reiterating its belief that by including the HMP with the original PW, FEMA approved the work.  Further, the Applicant states that it cannot afford the mitigation proposal work on its own.  The Applicant included no additional information or supporting documentation.

Discussion

According to Title 44 of the Code of Federal Regulations (44 CFR) §206.201(2)(j), Definitions used in this subpart, Project approval, only the Regional Administrator or designee has the authority to approve a PW and this approval coincides with obligation of the PW.  In this case, FEMA staff included the HMP with the PW and during the review process FEMA determined that the HMP was not cost-effective.  Therefore, FEMA denied funding for the HMP and obligated no funds for hazard mitigation.  The language in the PW reinforces the fact that the FEMA had not approved the HMP at the time the Applicant signed the PW, referring to “extensive mitigation, which when and if approved,” indicating that the mitigation was not approved at that time.  (Emphasis added). 

Although the Applicant believed that FEMA approved the HMP at the time, FEMA can only provide funding for HMPs that are eligible based on FEMA regulations and policy.  FEMA evaluates proposed HMPs for cost effectiveness and technical feasibility in accordance with 44 CFR § 206.226(e), Restoration of damaged facilities, Hazard mitigation, and FEMA Recovery Policy RP9526.1, Hazard Mitigation Under Section 406 (Stafford Act).  Based on a benefit-cost analysis, FEMA determined that the Applicant’s HMP was not cost effective and, therefore, not eligible for funding. 

The Applicant does not dispute that it completed the hazard mitigation work.  According to 44 CFR §206.203(d)(1), Federal grant assistance, Improved projects, an improved project is one that restores the pre-disaster function of a damaged facility with improvements.  Further, “Federal funding for such improved projects shall be limited to the Federal share of the approved estimate of eligible costs.”  In the case of PW 1014, the estimate of eligible costs is $94,315.

Conclusion

The Applicant is requesting FEMA reimbursement of its actual costs for the work it completed, which include the costs associated with the performance of an HMP that FEMA denied.  By completing the hazard mitigation measures in addition to repairing the disaster damage, the Applicant performed an improved project.  Eligible funding is capped at the Federal share of the cost estimate for the eligible work ($94,315).

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