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Equipment Rental Rates

Appeal Brief Appeal Letter

Appeal Brief

DesastreFEMA-1046-DR
ApplicantAlpine County
Appeal TypeSecond
PA ID#003-00000
PW ID#Multiple
Date Signed1998-02-06T05:00:00

Citation: Appeal Brief; Second Appeal; Alpine County; FEMA-1046-DR-CA; PA #003-00000

Cross-Reference: DSRs 71132, 28705, 28584, 28593, 28702, 71133, 20199 and 20200; Equipment Rental Rates

Summary: Following the 1995 winter storms in Alpine County (County), California, FEMA prepared DSRs 71132, 28705, 28584, 28593, 28702, 71133, 20199 and 20200 for $51,554 to remove debris and repair roadway damage. Upon review, FEMA eliminated the labor and benefits costs for category A work, and reduced the equipment rental rates to comply with FEMA cost codes. The revised cost for all the DSRs totaled $34,321. The State forwarded individual first appeals for each of the DSRs between May 31, 1996, and June 8, 1996. The basis of these appeals was that the overhead and indirect costs were deducted from the equipment rates, therefore the rates complied with FEMA's Cost Code Schedule. The County also indicated that the equipment rates had been audited by the California State Controller's Office (SCO). On January 17, 1997, the former Regional Director denied the first appeal. The basis of the denial was that the subgrantee provided no documentation to demonstrate how the current equipment rates were calculated or that the rates had been certified and verified by the SCO, as required under 44 CFR 206.228(a)(i). On August 15, 1997, the State forwarded the second appeal. The basis of the appeal is that the County's equipment rates were approved by the SCO and were established in accordance with the State guidelines of the Accounting Standards and Procedures for Counties Manual. In support of the appeal, an April 29, 1997, letter from the SCO was submitted which indicates that the County followed procedures of State guidelines and that the State audited the rates for accuracy for the year ending June 30, 1993. The Regional Director indicated that the subgrantee has provided adequate documentation to support their equipment rates up to $75 per hour, but does not support the rates above $75 per hour.

Issues:
  1. Are the District's equipment rates, up to $75 per hour, eligible for FEMA reimbursement?
  2. Are the District's equipment rates, beyond $75 per hour, eligible for FEMA reimbursement?
Findings:
  1. Yes. The letter from the SCO and usage records demonstrates that the rates were established under State guidelines. Additional eligible equipment costs total $9,709 (see attached summary).
  2. No. No documentation was provided to support the basis of the rates above $75 per hour.
Rationale: Pursuant to 44 CFR 206.228 (a)(1)(i), eligible direct costs include reimbursement of applicant-owned equipment with reasonable rates of $75 per hour or less, which have been established under State guidelines. Equipment rates in excess of $75 per hour shall be determined on a case by case basis.

Appeal Letter

February 6, 1998

Mr. D. A. Christian
Governor's Authorized Representative
Governor's Office of Emergency Services
Post Office Box 239013
Sacramento, California 95823

Dear Mr. Christian:

This is in response to your letter dated August 15, 1997, to the Federal Emergency Management Agency (FEMA). With that letter, you forwarded a second appeal of damage survey reports (DRSs) 71132, 28705, 28584, 28593, 28702, 71133, 20199 and 20200 under FEMA-1046-DR-CA on behalf of Alpine County (County). The subgrantee is requesting approval of County equipment rental rates, which exceed FEMA's rates.

Following the 1995 winter storms in Alpine County, California, FEMA prepared the eight DSRs listed above for a total of $51,554 to cover the costs of removing debris and repairing roadway damage. Upon review, FEMA eliminated the labor and benefits costs for category A work, and reduced the equipment rental rates to comply with FEMA cost codes. The revised total for all the DSRs was $34,321. The State forwarded the first appeals, individually, between May 31, 1996, and June 8, 1996. The basis of these appeals was that the overhead and indirect costs, which were estimated to be 22%, were deducted from the revised equipment rates. In addition, the County indicated that the equipment rates had been audited by the California State Controller Office (SCO). On January 17, 1997, the former Regional Director denied the first appeal. The basis of the denial was that the County failed to document that the equipment rates had been certified or approved by the State, as required under Title 44 of the Code of Federal Regulations (CFR), section 206.228(a)(i).

On August 15, 1997, the State forwarded the second appeal. The basis of the appeal is that the equipment rates were established under State guidelines. The appeal is supported by a letter from the SCO dated April 29, 1997. The letter indicates that the County's equipment rates, which were approved by the SCO, were established in accordance with the State guidelines of the Accounting Standards and Procedures for Counties Manual. The letter also indicates that for the year ending June 30, 1993, the State audited the rates for accuracy. Pursuant to 44 CFR 206.228 (a), eligible direct costs include reimbursement of applicant-owned equipment with an hourly rate of $75 or less, which are reasonable and have been established under State guidelines. The documentation provided indicates that the County has reduced the equipment rates 22%, eliminating overhead and indirect costs. Therefore, the equipment rates are reasonable and less than $75 per hour (exclusive of the water truck) and are eligible for funding, pursuant to 44 CFR 206.228 (a)(1)(i). The attached summary provides an itemized breakdown of equipment rates, equipment costs, and allowable additional funding per DSR. As indicated in the summary, the additional eligible equipment costs total $9,709.

I have asked the Regional Director to take appropriate action to implement this decision. Please inform the applicant of my determination.

Sincerely,
/S/
Lacy E. Suiter
Executive Associate Director
Response and Recovery Directorate

Enclosure

cc: Dianne K. Bona
Acting Regional Director
FEMA Region IX