Force Account Labor and Equipment Costs

April 15, 2010

Francis McCarton

Governor’s Authorized Representative

California Emergency Management Agency

3650 Schriever Avenue

Mather, California 95655

Re:       Second Appeal–California Department of Water Resources,

PA ID 000-UF0FD2-00, Force Account Labor and Equipment Costs,

FEMA-1628-DR-CA, Project Worksheets (PW) 1018, 1203, 3752, and 3753

Dear Mr. McCarton:

This letter is in response to your letter dated July 16, 2009, which transmitted the referenced second appeal on behalf of the California Department of Water Resources (Applicant).  The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $151,525 for force account labor straight-time costs.

As a result of a severe storm occurring from December 2005 to January 2006, heavy rain and rising flood waters caused scour holes, mini-landslides and slippage of the levee banks and deposited debris along the Sacramento River and bypasses.  FEMA prepared PWs 1018, 1203, 3752, and 3753 for emergency protective measures and debris removal activities.  FEMA obligated all four PWs for $0 because the Applicant had not provided sufficient supporting documentation for their costs at that time.

In a letter dated October 26, 2006, the Applicant submitted its first appeal.  The Applicant provided supporting cost information for each PW.  In a letter dated March 23, 2007, the Deputy Regional Director requested additional information from the Applicant.  In a letter dated April 16, 2009, the Acting Regional Administrator partially approved the appeal and determined that the Applicant’s force account overtime costs of $835,216 were eligible.  The Acting Regional Administrator determined that the Applicant’s force account employees were full-time State employees, and as such, the straight-time salaries were not eligible emergency work costs.  In addition, the Acting Regional Administrator requested a cost comparison for the use of automobiles and pick-up trucks based on mileage and using an hourly rate.

In a letter dated May 19, 2009, Applicant submitted its second appeal.  The Applicant asserts that funding for the employees identified in the appeal is not included in the State’s budget (General Fund) and therefore should be eligible for reimbursement.

In its second appeal, the Applicant submitted the cost comparison that the Acting Regional Administrator requested, which sufficiently supports the Applicant’s claimed vehicle costs.  In accordance with FEMA’s regulations at 44 CFR §206.228(a)(2), Force Account Labor Costs, the straight- or regular-time salaries of an Applicant’s permanently employed personnel are not eligible in calculating the cost of eligible emergency work.  The Response and Recovery Directorate Policy 9525.7, Labor Costs – Emergency Work, dated July 20, 2000, which is the effective version of the policy for this disaster, clarifies that the straight-time permanent employees who are funded from an external source (e.g., by a grant from a Federal agency, statutorily dedicated funds, rate-payers, etc.) to work on specific non-disaster tasks may be an eligible cost for emergency work.  In this case, the Applicant has asserted that the employees identified for straight time reimbursement are funded by an external source.  The Applicant referenced Section 12878 of the California Water Code, which relates to the process and procedures for how the Applicant maintains other flood control facilities through maintenance areas.  It does not address funding its permanent employees.  Therefore, the Applicant did not provide specific information or supporting documentation to establish that an external source funded these employees. 

I have reviewed the information submitted with the appeal and have determined that the Deputy Regional Administrator’s decision in the first appeal is consistent with Public Assistance regulations and policy.  Accordingly, I am denying the second 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/

Elizabeth A. Zimmerman

Assistant Administrator

Recovery Directorate

cc:   Nancy Ward

       Regional Administrator

       FEMA Region IX