Citation: FEMA-1763-DR-IA, Palo Cooperative Telephone Association, Central Office Facility, Project Worksheet (PW) 5182
Reference: Repair vs. Replacement, 50 Percent Rule, Permanent Relocation
Summary: The declared disaster caused flood damage to the Palo Cooperative Telephone Association’s (Applicant) Central Office building. FEMA approved PW 4456 for $33,312 for non-structural building damage and PW 5182 for $409,199 to replace destroyed telecommunications equipment housed in the building. Subsequent to the repair of the building, FEMA field personnel recommended a PW version to combine the building repair cost and the equipment replacement cost into one total repair estimate, which could have made the building eligible for replacement under the “50 Percent Rule.” The version was never approved. The Applicant also requested permanent relocation on the basis that the building was more than 50 percent damaged, the location was subject to repetitive damage, and relocation was cost effective. FEMA denied that request because the building was not located in a special flood hazard area, had no demonstrated history of repetitive damage, and repair costs did not exceed 50 percent of the cost to replace the facility. FEMA denied the first appeal on the same basis. The second appeal argued that the telecommunications equipment should be considered an integral component of the building rather than contents, and as such, should be included in the 50 percent calculation and again requested approval for permanent relocation. The telecommunications equipment housed in the building is considered “contents” and should not be included in the repair versus replacement calculation, and the building is not eligible for replacement. In addition, the facility is not located in a special flood hazard area, has no demonstrated history of repetitive flood damage, and, because the building is not eligible for replacement, the issue of cost-effectiveness is not applicable. The building has been repaired, the equipment replaced and the facility is operational. As such, permanent relocation is not justified.
Issues: 1) Should the telecommunications equipment installed in the Central Office building be included in the repair costs for the “50 Percent Rule” calculation?
2) Is the Central Office building eligible for permanent relocation?
Finding: 1) No. The equipment is considered contents.
Rationale: Section 406 of the Stafford Act; 44 CFR §§206.226(f) and 206.226(g) Restoration of damaged facilities; Recovery Fact Sheet 9580.102 Permanent Relocation, dated November 2, 2006; Public Assistance Guide, FEMA 322 dated July 2007