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Second Appeal–City of Northwood

FEMA-1626-DR-ND, City of Northwood, PA ID 035-58300-00

Project Worksheet (PW) 95

 

Citation:         FEMA-1726-DR-ND, City of Northwood, Demolition and Debris Removal,

Project Worksheet (PW) 95

 

Cross

Reference:      Insurance; Debris Removal

 

Summary:      On August 26, 2007, a tornado struck the City of Northwood causing extensive damage to the privately owned Johnson Building.  The Applicant found that the Johnson Building was substandard and violated Ordinance 326.  The Applicant also determined that the costs of demolition were to be charged against the land by special assessment or by municipal lien upon the land or as a special tax against the land.  FEMA prepared PW 95 for the demolition of the Johnson Building.  FEMA subsequently deducted $29,400 from PW 95 based upon funds available as the result of the property owner’s insurance settlement. 

 

In its first appeal dated August 27, 2008, the Applicant stated that FEMA should have only deducted $10,000 from insurance proceeds because the insurance policy only covered $10,000 for debris removal and demolition.  In a letter dated November 24, 2008, the Disaster Assistance Division Director denied the first appeal.  The Division Director concluded that the insurance settlement of $135,000, with an additional $10,000 payment pending, for the loss of the Johnson Building, provided sufficient funds to cover the cost of demolition and debris removal.  Therefore, a FEMA reimbursement would be a prohibited duplication of benefits.

 

In a letter dated February 9, 2009, the Applicant submitted its second appeal asserting that only $10,000 additional coverage for debris removal should be considered as recoverable duplicate funding.  The City’s Order stated that the property owners are legally responsible for demolition and debris removal costs.  Therefore, FEMA is prohibited from approving funds for work that is covered by any other source of funding.

 

Issue:               Is the cost of demolition eligible for reimbursement?

 

Finding:          No.

 

Rationale:       Sections 311, 312, 403 and 406 of the Stafford Act; Disaster Assistance Policy DAP 9525.4, Demolition of Private Structures, dated July 18, 2007