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Final Inspection De-obligation
Appeal Brief
Appeal Letter
Citation: FEMA-1292-DR-NC; Town of Pine Knoll Shores, Final Inspection De-obligation; PW 644-1
Cross-reference: Debris Removal, Actual Documented Costs
Summary: As a result of Hurricane Floyd, the Town of Pine Knoll Shores (Town) suffered damage and debris throughout the Town. The Town had two contractors under standing time and material contracts for debris removal. Both contractors proceeded with the clean up shortly after the event and completed their work in October 1999. On December 3, 1999, the Federal Emergency Management Agency (FEMA) approved Project Worksheet (PW) 644-0 in the amount of $221,571 for debris removal. FEMA performed a final inspection on June 28, 2000, and identified a $1,001 overrun. However, before the Disaster Recovery Manager approved the report, the regional staff determined that the unit cost of $21.87 per cubic yard was not reasonable. FEMA subsequently prepared a revised Final Inspection Report and de-obligated $51,382 because the Town did not document the actual volume of debris removed. The Town appealed this determination on January 3, 2001, stating that the contractor completed the work adequately and responsibly, and the FEMA cost codes for equipment rates were not reasonable for determining eligible costs charged by private corporations. Also, it stated that there were mathematical errors in the report. The Acting Regional Director denied the appeal based on the Towns failure to submit documentation supporting its appeal. The Town submitted its second appeal on July 31, 2001. The State supports the appeal. The amount requested is $56,459.
Issues: Are the Towns claimed costs reasonable?
Findings: No. There is no documentation to support the Towns claimed costs. Therefore, eligible costs are based on the FEMA estimate. However, an additional $6,763 is eligible to correct mathematical errors in the Final Inspection Report.
Rationale: 44 CFR §206.204(e)(2); 44 CFR §13.20
Appeal Brief
| Desastre | FEMA-1292-DR |
| Applicant | Town of Pine Knoll Shores |
| Appeal Type | Second |
| PA ID# | 031-52000 |
| PW ID# | 644-1 |
| Date Signed | 2002-09-13T04:00:00 |
Appeal Letter
September 13, 2002
Dr. Kenneth B. Taylor
Director
North Carolina Division of Emergency Management
1830-B Tillery Place
Raleigh, North Carolina 27604
Reference: Second Appeal: Town of Pine Knoll Shores, PAID 031-52000, Debris Removal, FEMA-1292-DR-NC, Project Worksheet (PW) 644-1
Dear Dr. Taylor:
This is in response to your September 12, 2001, letter forwarding the referenced second appeal dated July 31, 2001. The Town of Pine Knoll Shores (Town) is appealing the Federal Emergency Management Agencys (FEMA's) de-obligation of funds associated with the final inspection of PW 644-0. The amount in dispute is $56,459.
Following Hurricane Floyd, the Town used two contractors that it had under standing time and material contracts to remove the debris from the storm. Both contractors proceeded with the clean up shortly after the event and completed their work in October 1999. FEMA approved PW 644-0 for $221,571 for debris removal on December 3, 1999. FEMA performed a final inspection of the debris removal project on June 28, 2000, and determined that the Town was owed an additional $1,001. However, before the Disaster Recovery Manager approved the Final Inspection Report, the regional staff determined that the costs that the Town requested for one contractor was equivalent to a unit cost of $21.87 per cubic yard. This was considered unreasonable. The Town did not provide any information to support the questioned costs. FEMA issued a Final Inspection Report on November 28, 2000, wherein it determined that $51,382 was ineligible. FEMA subsequently deobligated this amount.
The North Carolina Division of Emergency Management (State) forwarded the Towns first appeal dated January 3, 2001, to FEMA Region IV Regional Director, with a
March 26, 2001, letter. In the appeal letter, the Town states that the contractor completed the work adequately and responsibly, and the FEMA cost codes for equipment rates were not reasonable for determining eligible costs charged by private corporations. Also, it stated that there were mathematical errors in the Final Inspection Report. The Acting Regional Director denied the appeal in a letter dated May 30, 2001, because the Town did not submit documentation to support its claim for additional funds.
In a letter dated September 12, 2001, the State transmitted to FEMA the Towns second appeal letter dated July 31, 2001. The State supported the appeal. The Town stated that during the debris removal operations, it determined that hauling the debris to the county landfill was not cost effective due to the long wait to enter the landfill. Consequently, it decided to transport some construction and demolition debris to a private landfill. The Town estimated that the contractor hauled approximately 600 cubic yards of construction and demolition debris from the beach to the private landfill. When this debris is considered, the Town asserted that the unit cost for debris removal is reasonable. The Town submitted a video made on September 20, 1999, which shows structures along the beach that were damaged by Hurricane Floyd. While the video shows the extent of damage to private structures along the beach, there is no way to quantify the amount of eligible debris that the contractor may have hauled from this section of town.
The Town stated that the Regional Director did not address several items raised in the first appeal. Specifically, FEMA used its cost codes for equipment rates to compute reasonable costs in the Final Inspection Report, which were not appropriate for contractors equipment. Also, there were calculation errors in the report. Because the Town used contractors to remove the storm-related debris, contractors equipment rates should be used to estimate reasonable costs. The contractors rate for a 12-cubic yard truck is $35 per hour versus $26 per hour for the FEMA rate. This results in a cost adjustment of $5,063. The Town asserted that there was an error in the computation of additional labor on page 20 of the Final Inspection Report. The correct number of labor hours should be 647.5 instead of 562.5. At $20 per hour, this equates to $1,700. We agree with this change. The Towns suggested cost adjustments for removing an additional 600 cubic yards of debris are not appropriate because the Town did not provide documentation to support that the contractor removed this additional quantity of debris.
Title 44 Code of Federal Regulations Part 13 requires that eligible costs are reasonable. Because the Town did not submit adequate documentation to support its claimed costs, I deny that portion of the appeal. However, I approve the Towns request to correct mathematical errors in the Final Inspection Report. The amount approved is $6,763. By copy of this letter, I ask the Regional Director to prepare a project worksheet to implement my decision.
Please inform the Town of my determination. My decision constitutes the final decision on this matter as set forth in 44 CFR §206.206.
Sincerely,
/S/
John R. DAraujo, Jr.
Assistant Director
Response and Recovery Directorate
cc: Kenneth O. Burris, Jr.
Regional Director
FEMA Region IV
Dr. Kenneth B. Taylor
Director
North Carolina Division of Emergency Management
1830-B Tillery Place
Raleigh, North Carolina 27604
Reference: Second Appeal: Town of Pine Knoll Shores, PAID 031-52000, Debris Removal, FEMA-1292-DR-NC, Project Worksheet (PW) 644-1
Dear Dr. Taylor:
This is in response to your September 12, 2001, letter forwarding the referenced second appeal dated July 31, 2001. The Town of Pine Knoll Shores (Town) is appealing the Federal Emergency Management Agencys (FEMA's) de-obligation of funds associated with the final inspection of PW 644-0. The amount in dispute is $56,459.
Following Hurricane Floyd, the Town used two contractors that it had under standing time and material contracts to remove the debris from the storm. Both contractors proceeded with the clean up shortly after the event and completed their work in October 1999. FEMA approved PW 644-0 for $221,571 for debris removal on December 3, 1999. FEMA performed a final inspection of the debris removal project on June 28, 2000, and determined that the Town was owed an additional $1,001. However, before the Disaster Recovery Manager approved the Final Inspection Report, the regional staff determined that the costs that the Town requested for one contractor was equivalent to a unit cost of $21.87 per cubic yard. This was considered unreasonable. The Town did not provide any information to support the questioned costs. FEMA issued a Final Inspection Report on November 28, 2000, wherein it determined that $51,382 was ineligible. FEMA subsequently deobligated this amount.
The North Carolina Division of Emergency Management (State) forwarded the Towns first appeal dated January 3, 2001, to FEMA Region IV Regional Director, with a
March 26, 2001, letter. In the appeal letter, the Town states that the contractor completed the work adequately and responsibly, and the FEMA cost codes for equipment rates were not reasonable for determining eligible costs charged by private corporations. Also, it stated that there were mathematical errors in the Final Inspection Report. The Acting Regional Director denied the appeal in a letter dated May 30, 2001, because the Town did not submit documentation to support its claim for additional funds.
In a letter dated September 12, 2001, the State transmitted to FEMA the Towns second appeal letter dated July 31, 2001. The State supported the appeal. The Town stated that during the debris removal operations, it determined that hauling the debris to the county landfill was not cost effective due to the long wait to enter the landfill. Consequently, it decided to transport some construction and demolition debris to a private landfill. The Town estimated that the contractor hauled approximately 600 cubic yards of construction and demolition debris from the beach to the private landfill. When this debris is considered, the Town asserted that the unit cost for debris removal is reasonable. The Town submitted a video made on September 20, 1999, which shows structures along the beach that were damaged by Hurricane Floyd. While the video shows the extent of damage to private structures along the beach, there is no way to quantify the amount of eligible debris that the contractor may have hauled from this section of town.
The Town stated that the Regional Director did not address several items raised in the first appeal. Specifically, FEMA used its cost codes for equipment rates to compute reasonable costs in the Final Inspection Report, which were not appropriate for contractors equipment. Also, there were calculation errors in the report. Because the Town used contractors to remove the storm-related debris, contractors equipment rates should be used to estimate reasonable costs. The contractors rate for a 12-cubic yard truck is $35 per hour versus $26 per hour for the FEMA rate. This results in a cost adjustment of $5,063. The Town asserted that there was an error in the computation of additional labor on page 20 of the Final Inspection Report. The correct number of labor hours should be 647.5 instead of 562.5. At $20 per hour, this equates to $1,700. We agree with this change. The Towns suggested cost adjustments for removing an additional 600 cubic yards of debris are not appropriate because the Town did not provide documentation to support that the contractor removed this additional quantity of debris.
Title 44 Code of Federal Regulations Part 13 requires that eligible costs are reasonable. Because the Town did not submit adequate documentation to support its claimed costs, I deny that portion of the appeal. However, I approve the Towns request to correct mathematical errors in the Final Inspection Report. The amount approved is $6,763. By copy of this letter, I ask the Regional Director to prepare a project worksheet to implement my decision.
Please inform the Town of my determination. My decision constitutes the final decision on this matter as set forth in 44 CFR §206.206.
Sincerely,
/S/
John R. DAraujo, Jr.
Assistant Director
Response and Recovery Directorate
cc: Kenneth O. Burris, Jr.
Regional Director
FEMA Region IV