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Flood Control Works

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

DesastreMultiple DRs
ApplicantSouth Florida Water Management District
Appeal TypeSecond
PA ID#000-U03C1-00
PW ID#Various Project Worksheet (PWs)
Date Signed2014-02-18T00:00:00

Conclusion: FEMA correctly de-obligated $22,726,838 of funding for disaster-related repairs to the SFWMD’s (Applicant) canals and related flood control facilities because the work fell under the authority of other federal agencies.  Further, the protections afforded to an applicant under Stafford Act §§705(a) and 705(c) are not applicable to this matter.  Finally, the Applicant is entitled to recoup $792,000 in costs associated with the repair of an access road because the work on this road did not fall under the authority of another federal agency. 

Summary Paragraph

Hurricanes struck Florida in 2004 and 2005, resulting in 4 major disaster declarations.  FEMA obligated funding for 52 PWs to fund disaster-related repairs to the Applicant’s canals and related flood control facilities.  In 2012, FEMA de-obligated the funding, $23,518, 838, because the PWs funded work that fell under the authority of other federal agencies.  The Applicant is appealing FEMA’s de-obligations and cites the following reasons:  (1) The de-obligations are barred by the 3-year statute of limitations established by the Stafford Act § 705(a); (2) The de-obligations are contrary to the protections that the Stafford Act § 705(c) provides to the Applicant; and (3) FEMA is not barred from funding the projects at issue because of doctrine regarding the funding of projects that fall under the authority of other federal agencies.  The Applicant also notes that its second appeal serves “to prevent FEMA from seeking a dismissal of related litigation for failure to exhaust all administrative remedies.” Additionally, the Grantee contends that $792,000 in costs associated with the repair of an access road was not part of any flood control work and was de-obligated in error. 

 

 

 Authorities Discussed

  • Robert T. Stafford Disaster Relief and Emergency Assistance Act § 705(a) and (c), 42 U.S.C. § 5205 (a)(c) (2007);
  • 44 Code of Federal Regulations (CFR) Part 13;
  • 33 CFR Part 203 (Subpart D);
  • 7 CFR § 624.6(b);
  • 44 CFR § 206.226(a); and
  • Disaster Assistance Policy (DAP) 9524.3 (September 11, 1996).

Headnotes

  • Stafford Act § 705(a) provides a statute of limitations barring FEMA from de-obligating funds more than 3-years  from the date of the “final expenditure report for the disaster or emergency.”  44 CFR Part 13 defines “expenditure report” but does not directly link to the “final expenditure report” referred to in Stafford Act § 705(a).
  • Stafford Act § 705(c)(1) prohibits FEMA from de-obligating grant funds provided to a state or local government under the Stafford Act where “the payment was authorized by an approved agreement specifying the costs.”
  • 44 CFR § 206.226(a) provides: “generally, disaster assistance will not be made available under the Stafford Act when another Federal agency has specific authority to restore facilities damaged or destroyed by an  event which is declared a major disaster.”

 

 

 

Appeal Letter

February 18, 2014

Bryan W. Koon
Director
State of Florida Division of Emergency Management
2555 Shumard Oaks Boulevard
Tallahassee, FL  32399-2100

Re: Second Appeal – South Florida Water Management District, PA ID #000-U03C1-00, Flood Control Works, FEMA-1539, 1545, 1561, 1609-DR-FL, Various Project Worksheet (PWs)

Dear Mr. Koon:

This letter is in response to your letter dated July 1, 2013, which transmitted the referenced second appeal on behalf of the South Florida Water Management District (Applicant).  The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) de-obligation of costs associated with the repair of flood control works funded in 52 Project Worksheets (PWs).  The total amount in dispute for this appeal is $23,518,838. 

As explained in the enclosed analysis, I have determined that FEMA de-obligated $792,000 for the repair of an access road in error.  I have determined that the remaining facilities at issue fall under the authority of other federal agencies, and the Applicant is not entitled to recoup these de-obligated funds.  Accordingly, I am partially approving this appeal.

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

Sincerely,

/s/

Deborah Ingram
Assistant Administrator
Recovery Directorate

Enclosure

cc:  Major P. May
      Regional Administrator
      FEMA Region IV

Appeal Analysis

Background

Hurricanes Charley, Frances, Jeanne, and Wilma struck Florida in 2004 and 2005, resulting in four major disaster declarations.  The hurricanes damaged various canals and related flood control works (FCW) owned and operated by South Florida Water Management District (Applicant).  FEMA approved $23,518,838 in 52 Project Worksheets (PWs)[1] to fund repairs of disaster-related damage.  The scope of work for most of the PWs included restoring eroded canal embankments through replacing soil and installing sod, planting grass, or placing riprap.  This type of work constituted approximately 95% of the work at issue in this appeal.  The remaining work in question involved other types of projects, including repairs to levee roads, pump stations, spillway facilities, and stormwater treatment areas. The majority of the PWs were “closed out” in 2008 and 2009 but some were still open at the time the Applicant submitted its first appeal.   

In addition to FEMA funding, the Applicant also applied for federal disaster assistance from the U.S. Army Corps of Engineers (USACE) and the Natural Resources Conservation Service (NRCS).  USACE denied those applications, finding that the damage was not eligible under their regulations.  NRCS, however, funded the Applicant through several different NRCS Project Agreements but limited repairs to areas adjacent to certain structures.  The Applicant asserts it adjusted its invoices to FEMA to account for NRCS assistance and has avoided any duplication of benefits. 

On October 17, 2011, the Regional Administrator (RA) notified the Grantee of FEMA’s intent to de-obligate the $23,518,838 in funding.[2]  Between September 18, 2012 and October 24, 2012, FEMA de-obligated the funding.  FEMA took this action because the PWs at issue funded permanent work under the authority of other federal agencies, specifically, USACE and NRCS. 

First Appeal

In a first appeal letter, dated November 15, 2012, the Applicant requested FEMA reconsider its de-obligation decision based on three objections: 

  1. The de-obligations are barred by the 3-year statute of limitations established by section 705(a) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act);[3]
  2. FEMA’s doctrine regarding the funding of projects that fall under the authority of other federal agencies should not bar FEMA from funding the projects at issue since one of the other agencies denied the Applicant’s request for funding—USACE— and the other—NRCS—only partially granted the Applicant’s request for funding; and
  3. The de-obligations are contrary to the limitation on recouping funds used for completed grant projects under Stafford Act section 705(c).[4]

On April 10, 2013, the FEMA Region IV Regional Administrator (RA) denied the Applicant’s first appeal.  In it, the Applicant asserted that Stafford Act section 705(a)’s three-year statute of limitations ran on a project-by-project basis.  However, the RA found that section 705(a) did not bar the de-obligations of the PWs at issue because, based on the explicit language of the provision, the statute of limitations runs from the final expenditure report for the “disaster or emergency.”

The RA also found that the work at issue fell under the specific authorities of USACE and NRCS, and, therefore, in accordance with FEMA regulation and policy guidance regarding the authority of other federal agencies, FEMA was not authorized to fund them.  As such, the RA concluded that the payments in question did not fall within the scope of Stafford Act section 705(c) because they were made contrary to FEMA regulations and policies in effect at the time of the disaster and, thus, were not authorized under the Stafford Act. 

Second Appeal

The Florida Division of Emergency Management (Grantee) transmitted the Applicant’s second appeal on July 1, 2013.  The Applicant’s second appeal letter, dated May 30, 2013, reasserts the claims of its first appeal.  Additionally, reflecting the fact that on May 23, 2013 the Applicant filed suit against FEMA in the Southern District Court of Florida challenging FEMA’s decision to de-obligate, the Applicant states that the second appeal acts as a protective measure and is intended to prevent FEMA from seeking, and the court from granting, dismissal under theories of administrative exhaustion at a time when the 60-day deadline to commence a second administrative appeal may have lapsed and, as a result, dismissal may be with prejudice.[5]

Finally, the Grantee highlights $792,000 in costs associated with the repair of an access road damaged during Hurricane Jeanne.  The Grantee contends that this road, which runs along the L-8 canal, does not fall under the authority of another agency and was de-obligated in error. 

FEMA originally wrote PW 4109 for the repair of this access road and levee breeches.  The Applicant applied for funding from NRCS for these repairs.  On July 11, 2006, NRCS wrote a letter to the Applicant denying funding for the road repair but agreeing to pay for the levee breeches.  The cost to repair the levee breeches was documented on another PW.[6]

Discussion

Section 705(a) of the Stafford Act

Stafford Act section 705(a) provides that:

no administrative action to recover any payment made to a State or local government for disaster or emergency assistance under this Act shall be initiated in any forum after the date that is 3 years after the date of transmission of the final expenditure report for the disaster or emergency.[7]

The Stafford Act does not define “the final expenditure report.”  While Title 44 of the Code of Federal Regulations (CFR) Part 13–Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments does not expressly define “final expenditure report,” 44 CFR §13.3 does define “expenditure report” for non-constructional grants as the SF-269 “Financial Status Report and for construction grants as the SF-271 “Outlay Report and Request for Reimbursement.”[8]  However, this regulation pre-dates the passage of section 705 and, therefore, is of limited relevance.

In its second appeal, the Applicant asserts that section 705(a) of the Stafford Act “bars FEMA from taking back funds more than three years from the ‘final expenditure report’ of a project.”[9]    This argument is misplaced as tying the prohibition to an individual project is inconsistent with section 705(a), which explicitly bars  FEMA administrative action to recover payment more than three years from the “final expenditure report for the disaster or emergency,” not a project.[10]

The Applicant also notes that 44 CFR Part 13 defines “expenditure report” as referring to the “last (necessarily also the ‘final’) request for reimbursement made by an applicant” for each individual project and contends that FEMA should apply this definition to 705(a).[11]  While 44 CFR Part 13 does define the term “expenditure report,” the application of this term to each individual project does not carry over to Stafford Act section 705(a).[12]  For purposes of section 705(a), the relevant expenditure report is the “final” expenditure report that the grantee submits  to FEMA on behalf of the subgrantee for all project worksheets for the disaster or emergency.

The RA’s first appeal decision provides that “section 705(a) refers to the final expenditure report for the ‘disaster or emergency,’ not to expenditure reports for individual projects.”[13]   Although a reasonable one, the RA’s position is more limited than the Agency’s interpretation of the provision.  Noting such, the results for this Subgrantee do not change.  As none of the four major disasters at issue in this appeal had been closed out for the Subgrantee at the time of the first appeal, nor had the grantee submitted a final expenditure report on SFWMD’s behalf, the conclusion that the section 705(a) statute of limitations had not begun was correct. 

Authorities of Other Federal Agencies

Title 44 CFR § 206.226(a) provides that  “Generally, disaster assistance will not be made available under the Stafford Act when another Federal agency has specific authority to restore facilities damaged or destroyed by an event which is declared a major disaster.”[14]  The FEMA Disaster Assistance Policy (DAP) 9524.3, Rehabilitation Assistance for Levees and Other Flood Control Works,[15] restates this requirement as it applies to flood control facilities:

The Stafford Act includes flood control facilities (including levees) as public facilities that are eligible for assistance under the Act.  When other Federal agencies have the authority to repair facilities that are also eligible under the Stafford Act, FEMA generally defers to the other Federal agencies unless there is an immediate threat to life and property.  This is codified in 44 CFR § 206.226(a).[16]

Further, DAP 9524.3 provides that “[t]he two Federal agencies that have primary responsibility for the repair of flood control works are USACE and NRCS.”  Title 33 of the United States Code (USC) Section 701n(a) specifically authorizes USACE to repair or restore “any flood control work threatened or destroyed by flood.”[17]  USACE implements this authority through Title 33 CFR Part 203, Emergency Employment of Army and Other Resources, Natural Disaster Procedures and its Rehabilitation and Inspection Program (RIP) in Subpart D.[18]

DAP 9524.3 also sets forth the following constraints on FEMA funding permanent work of FCWs:

  1. Permanent repairs of flood control works that are eligible to join the USACE PL 84-99 Rehabilitation and Inspection Program, whether or not they are active participants in the program, are ineligible.
  2. Damages to eligible flood control works that do not meet the USACE PL 84-99 Rehabilitation and Inspection Program minimum threshold amount for permanent repair [$15,000] are ineligible for FEMA funding.                                                        
  3. Damages that do not meet the criteria for funding for permanent repair under the NRCS EWP Program are ineligible for FEMA funding.[19]

Finally, in accordance with the following Federal Register announcement, if an agency had the authority to perform an item of work or grant assistance but did not have funds available at the time to grant assistance, FEMA would not grant assistance, regardless of the reason(s) the funds were unavailable:

[W]hen an agency has the specific authority to restore facilities or grant assistance, FEMA will not grant assistance regardless of the availability of funds.  FEMA believes it should not override the decisions made by Congress or the Administration not to fund another agency’s program from money appropriated to the President’s Disaster Fund.[20]

In its second appeal, the Applicant asserts that “FEMA has struggled in its effort to adopt and implement a coherent” FCW policy and requests that “the original interpretation of the policy be restored.”  The Applicant also suggests that FEMA is now re-interpreting the policy and applying it retroactively.  This suggestion is inaccurate and not supported by the facts of this case.  In making eligibility determinations and appeal decisions, FEMA considers the policy that was in effect at the time of the emergency or disaster.  In this case, the Region correctly applied DAP 9524.3, which was issued on September 11, 1996, and reissued via memorandum on August 17, 1999.  Although FEMA PA Program staff misapplied the policy in originally granting funding to the Applicant, FEMA’s current interpretation of this policy is the same as it was when the disasters in question occurred.[21]   

The Applicant stipulated to applying for federal disaster assistance from both USACE and NRCS for some of the projects at issue in this appeal.  USACE denied the Applicant’s grant applications after concluding the work did not meet the criteria for RIP funding.  In applying 44 CFR § 206.226(a), the issue is not whether the work met the other agency’s eligibility criteria for receiving funding but rather whether the work fell under the specific authority of that other agency.  In accordance with 33 USC § 701n(a), it is clear that the work at issue here clearly fell under the specific authority of USACE.  The Applicant does not dispute that the FCWs related to this appeal were enrolled in the RIP, a fact that intrinsically makes the work ineligible under DAP 9524.3.[22]  Rather, the Applicant “urges FEMA to interpret the term ‘flood control works’ narrowly as not including the embankments, and to conclude that the work at issue therefore does not fall within the scope of the USACE’s authority to fund.”[23]  FEMA does not adopt this narrow interpretation nor choose to retroactively apply it to the case at hand, as it considers the embankments to be an integral part of the Applicant’s FCWs.  Consequently, the work at issue falls within the scope of USACE’s authority and is barred by 44 CFR § 206.226(a).  

NRCS partially denied the Applicant’s grant applications for projects at issue in this appeal.  Initially, NRCS denied funding because it lacked sufficient appropriations from Congress to fund the projects.  When funding became available, NRCS provided assistance to the Applicant in the amount of $2.9 million, determining that it would only pay for repairs needed adjacent to certain structures.  The Applicant then requested funding for damages not covered by NRCS and claimed to have adjusted its invoices to FEMA to account for the NRCS assistance. 

The NRCS’s funding of some of the Applicant’s repair work clearly demonstrates that agency’s specific authority over the facilities in question.   Regardless of whether NRCS was appropriated enough money to fund all, some, or none of the Applicant’s projects, FEMA’s policies on these issues, as published in the Federal Register and DAP 9524.3, still preclude FEMA funding of a project under another federal agency’s authority.

Section 705(c) of the Stafford Act

Stafford Act section 705(c) prohibits FEMA from de-obligating grant funds provided to a state or local government under the Stafford Act when three statutory preconditions are met.  Specifically, the law provides:

A State or local government shall not be liable for reimbursement or any other penalty for any payment made under this Act if – (1) the payment was authorized by an approved agreement specifying the costs; (2) the costs were reasonable; and (3) the purpose of the grant was accomplished.[24]

The Applicant asserts that it meets the three preconditions outlined above.  However, as the provision is written, it only applies to payments made “under this Act,” meaning payments authorized under the Stafford Act and its implementing regulations and policies.  Further, in order for the Applicant to meet the first precondition, the payment must be “authorized by an approved agreement.”  Accordingly, in order to be the authorized act of an agency official, the approval must have been for an authorized use of the federally appropriated funds, consistent with applicable legal authorities and implementing policy guidance.  Conversely, if the approval is not consistent with applicable legal authorities, it follows that the approval was outside the scope of the authority of the official and does not constitute a binding agreement. 

Here, FEMA made payments that were not authorized under the Stafford Act and its implementing regulations and policies.  As discussed in the preceding section, Authorities of Other Federal Agencies, though the Stafford Act and Code of Federal Regulations do not expressly prohibit FEMA from funding projects where other agencies have authority over the facilities, DAP 9524.3, Rehabilitation Assistance for Levees and Other Flood Control Works, prohibits FEMA from funding these projects.  Thus, FEMA made payments contrary to the implementing policy in effect at the time of the disaster.  Consequently, FEMA’s decision to de-obligate the funding in question was lawful, and the payments at issue do not fall within the scope of Section 705(c) of the Stafford Act.     

Access Road, L-8 Canal, FEMA-1561-DR-FL, PW 4109

NRCS funded repairs of disaster damage to the L-8 canal levee.  However, it denied funding for the access road repairs, because the repairs were not authorized under its EWP.[25]  In this case, the facility was also active in the USACE RIP, but the RIP does not cover repair of disaster damage to access roads.[26]  As such, repair of the access road was not under the authority of another federal agency.  Consequently, FEMA was not precluded from funding those repairs and the de-obligation of $792,000 in funding for them was in error.          

Conclusion

FEMA de-obligated $792,000 for the repair of the access road damaged during Hurricane Jeanne in error because its repair was not under the authority of another federal agency.  Thus, this amount is eligible for FEMA funding.  In addition, FEMA correctly de-obligated the remaining $22,726,838 in funding at issue because the work to restore the FCWs damaged by Hurricanes Charley, Frances, Jeanne, and Wilma fell under the specific authority of USACE and NRCS.  Further, neither section 705(a) nor 705(c) of the Stafford Act prohibits FEMA from de-obligating the funds at issue in this appeal.



[1] Upon review of the PWs, 4 PWs (PWs 8262, 5041, 5513, 5731) have elements that may be eligible for FEMA funding.  However, the documentation provided by the Applicant is insufficient to distinguish between these potentially eligible costs and ineligible costs.

[2] See Letter from Major P. May, Regional Administrator, FEMA Region IV to Bryan Koon, Director, Florida Division of Emergency Management (October 17, 2011) (filed with FEMA).

[3] Stafford Act § 705(a), 42 U.S.C. § 5205(a) (2000).

[4] Stafford Act § 705(c), 42 U.S.C. § 5205(c) (2000).

[5] Applicant’s Second Appeal Letter, South Florida Water Management District, FEMA-1539, 1545, 1561, 1609-DR-FL, PA ID 181-10765-00 (May 30, 2012). 

[6] The cost to repair the levee breeches was documented on PW 4161.

[7] Stafford Act § 705(a), 42 U.S. C. § 5205(a) (2000) (emphasis added).

[8] 44 CFR §13.3 Definitions (1988). 

[9] Applicant’s Second Appeal Letter, at 5 (May 30, 2012) (emphasis added). 

[10] Stafford Act § 705(a), 42 U.S. C. § 5205(a) (2000); see also Public Assistance Guide, FEMA 322 at 87 (1999) (updated 2001) (stating that “Final reconciliation of the grant, or grant closure, occurs later, when FEMA and the State reach agreement that all applicable administrative actions related to the PA Program are complete and all program funds related to the disaster have been reconciled.  At that point, all PA Program projects have been completed, the State has awarded all grant funds and submitted its final expenditure report to FEMA, and FEMA has adjusted the funding level for the program.) (emphasis added)

[11] Applicant’s Second Appeal Letter, at 6 (May 30, 2012). 

[12] As previously noted, 44 CFR Part 13 pre-dates Stafford Act § 705. 

[13] FEMA’s First Appeal Decision, South Florida Water Management District, FEMA-1539, 1545, 1561, 1609-DR-FL, PA ID 181-10765-00, at 2 (April 10, 2013). 

[14] 44 CFR §13.3 Restoration of damaged facilities.  Assistance under other Federal agency (OFA) programs (1988).

[15] FEMA DAP 9524.3, Rehabilitation Assistance for Levees and Other Flood Control Works (dated September 11, 1996 and reissued via memorandum dated August 17, 1999). 

[16] Id.

[17] 33 USC § 701n(a) Emergency response to natural disasters (as amended in 1996).

[18] 33 CFR Part 203 Emergency Employment of Army and Other Resources, Natural Disaster Procedures (See Subpart D, outlining USACE’s RIP Program).

[19] FEMA DAP 9524.3 (dated September 11, 1996 and reissued via memorandum dated August 17, 1999). 

[20] 54 Fed. Reg. 11610 (March 21, 1989) (emphasis added). 

[21] FEMA DAP 9524.3 (dated September 11, 1996 and reissued via memorandum dated August 17, 1999). 

[22] DAP 9524.3 under “Ineligible,” bullet 1 (dated September 11, 1996 and reissued via memorandum dated August 17, 1999). 

[23] FEMA’s First Appeal Decision, at 3 (April 10, 2013). 

 [24]Stafford Act § 705(c), 42 U.S. C. § 5205(c) (2000).

[25] 7 CFR § 624.6 (b), Eligibility

[26] 33 CFR Part 203.