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Facility Eligibility

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster1603-DR-LA
ApplicantCommunity Care and Restoration Center, Inc.
Appeal TypeSecond
PA ID#071-UDVCP-00
PW ID# 20404
Date Signed2014-03-13T00:00:00

Conclusion: The Community Care and Restoration Center, Inc. (Applicant) failed to demonstrate its legal responsibility for the facility addressed in PW 20404 and that the facility is primarily used for eligible activities.  

Summary Paragraph                                                    Authorities Discussed

  • 44 CFR §206.223(a)(3) General Work Eligibility.
  • 44 CFR 206.221 (e)(7) Definitions
  • Recovery Division Policy RDP9521.3, Private Non-Profit Facility Eligibility (May 2003).
  • Response and Recovery Directorate Policy RRDP9521.1, Community Center Eligibility (August 1998).

Headnotes

  • 44 CFR §206.223(a)(3) states that the Applicant must be legally responsible for an item of work in order to be eligible for Public Assistance.
    • The Applicant did not provide a deed, lease, or any other documentation that demonstrates it is legally responsible for repairs and maintenance of the facility.
  • RDP 9521.3 requires a facility be primarily used for eligible services.  Where a facility is used for both eligible and ineligible activities, the facility must dedicate over 50 percent of its space to the eligible use.
    • Here, the facility’s use for eligible services does not meet the “over 50 percent” threshold for space or time. 

 

 

Community Care and Restoration Center Inc. (Applicant) is a private non-profit (PNP) organization that conducts business in a facility located at 2143 Simon Bolivar, New Orleans, Louisiana.  Hurricane Katrina caused damage to about 45 percent of the facility’s roof as well as its interior.   In Project Worksheet (PW) 20404, FEMA determined that the facility was ineligible for Public Assistance funding because the Applicant did not demonstrate that it was legally responsible for the maintenance and repairs of the facility.  In addition, the Applicant failed to show that the mixed-use facility was used primarily for eligible PNP activities.  In the first appeal, the Applicant asserted that it was legally responsible for the facility because the Applicant’s representative is solely responsible for all of the facility’s repairs and maintenance.  In addition, the Applicant asserted that the facility was used primarily (over 50 percent of space) for eligible activities.  The Region VI Regional Administrator denied the appeal, finding that another entity owned the facility, and the Applicant did not provide a lease demonstrating that it was responsible for repairs and maintenance.  In addition, the Regional Administrator determined that only nine percent of the space was used for possible eligible activities.  In the second appeal, the Applicant, again, asserts that it is legally responsible for the facility through its agent.  In addition, the Applicant disagrees with FEMA’s evaluation of the eligible square footage of the facility in determining the facility’s primary use.

 

 

Appeal Letter

March 13, 2014

Kevin Davis
Director
Governor’s Office of Homeland Security and Emergency Preparedness
7667 Independence Boulevard
Baton Rouge, LA 70806

Re:  Second Appeal–Community Care and Restoration Center, Inc., PA ID 071-UDVCP-00, Facility Eligibility, FEMA-1603-DR-LA, Project Worksheet (PW) 20404

Dear Mr. Davis:

This is in response to the letter from your office dated November 6, 2013, which transmitted the referenced second appeal on behalf of Community Care and Restoration Center, Inc. (Applicant).  The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of eligibility of the facility addressed in PW 20404.

As explained in the enclosed analysis, I have determined that the Applicant failed to demonstrate legal responsibility for the facility and that the facility is primarily used for eligible activities.  Therefore, I am denying the 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/

Brad Kieserman
Assistant Administrator
Recovery Directorate

Enclosure

cc:  George A. Robinson
       Regional Administrator
       FEMA Region VI

Appeal Analysis

Background

In 2005, Hurricane Katrina damaged the roof and the interior of the facility used by Community Care and Restoration Center, Inc. (Applicant).  In October 2010, the Louisiana Governor’s Office of Homeland Security and Emergency Preparedness (Grantee) requested that FEMA accept additional Requests for Public Assistance (RPA) from private non-profit organizations (PNP) for Hurricanes Katrina, Rita, Gustav, and Ike.  For each new PNP RPA, final approval was dependent upon a thorough review of the Applicant’s facilities, as required by Recovery Division Policy (RDP) 9521.3, Private Non-Profit Facility Eligibility, dated May 23, 2003.  The Applicant submitted a RPA for the facility it used to conduct business, located at 2143 Simon Bolivar, New Orleans, Louisiana.  Another entity, Community Church of God in Christ (church), also utilized the facility.  The Applicant’s representative is also the representative for the church.  In Project Worksheet (PW) 20404, FEMA determined the facility ineligible for Public Assistance because the Applicant was not legally responsible for the required repairs and the facility was not primarily used for eligible PNP activities.

First Appeal

The Applicant submitted its first appeal to the Grantee on December 15, 2012.  With the appeal, the Applicant asserted that, although the facility’s insurance policy was issued to the church, the Applicant’s representative is responsible for all repairs of the facility.  The Grantee clarified that the church owned the facility; however, the Applicant’s representative, who is also the church’s representative, was responsible for the repair and maintenance of the facility.  The Applicant also asserted that social service activities consumed at least 50 percent of the time and space of the facility.

In a letter, dated June 18, 2013, the FEMA Region VI Regional Administrator denied the appeal because the Applicant failed to demonstrate that it had legal responsibility for the facility.  The Regional Administrator stated that the church, not the Applicant’s representative, owned the facility, and absent a lease, legal responsibility resides with the owner of the facility.  In addition, the Regional Administrator stated that, after a thorough evaluation of the documentation provided by the Applicant, FEMA determined that only nine percent of the facility’s total area was used for potentially eligible activities.  Accordingly, the facility was ineligible for Public Assistance funding because it was not used primarily for eligible PNP activities. 

Second Appeal

The Grantee received the Applicant’s second appeal on September 6, 2013, and transmitted the appeal to FEMA on November 12, 2013.  With regard to the issue of legal responsibility, the Applicant asserts that its representative is the owner of the facility because the church’s board members delegated to him the authority to act on behalf of the church.  Further, according to the Applicant, its representative used money obligated for his salary to pay the mortgage until it was paid in full.  In addition, the Applicant asserts that its representative is responsible for all major and minor repairs to both the facility’s church and community service areas.  As for the matter of eligible use of the facility, the Applicant contends that, at the time of the disaster, the facility served as a mixed-use facility with predominately social services occurring on the first floor.  The Applicant asserts that it used the kitchen area, located on the first floor, exclusively for social services.  Moreover, the Applicant disagrees with FEMA’s evaluation of the eligible square footage of the facility arguing that an attic and a garage, both of which the Applicant characterizes as common space, should not have been factored into the evaluation.

Discussion

Applicant Eligibility

Pursuant to Title 44 of the Code of Federal Regulations (44 CFR) §206.223(a)(3), to be eligible, an item of work must be the legal responsibility of an eligible applicant.  The legal responsibility to repair a facility usually resides with the owner of the facility, unless the owner has transferred that responsibility to another party by lease or other legal instrument.[1]

The Applicant submitted a notarized document, dated March 28, 1991, that transferred the responsibility for mortgage payments from the church to the Applicant’s representative.[2]  The Applicant’s representative asserts that this notarized document demonstrates that he is responsible for all repairs to the facility; therefore, the Applicant is legally responsible.  However, the document does not transfer ownership of the facility to the Applicant or the Applicant’s representative.  As the Regional Administrator noted, the facility is owned by the church, not the Applicant’s representative.  In addition, the church’s Board of Director’s signed the notarized document in 1991 and the Applicant was not recognized as a legally-formed PNP until 2004.  Accordingly, the document does not establish the Applicant’s legal responsibility for the facility.    

The Grantee provides additional arguments to support a finding that the Applicant is legally responsible for the facility.  First, the Grantee asserts that the responsibility for the facility’s repairs lie with the Applicant, by and through the Applicant’s representative.  However, the Applicant failed to submit a deed, lease, or other documentation demonstrating that Community Care and Restoration Center (Applicant) is legally responsible for the facility addressed in PW 20404.  The Grantee also asserts that the Applicant had a verbal lease with the owner of the facility.  Although Louisiana recognizes verbal lease agreements,[3] the Louisiana Attorney General discourages their use because they “may be impossible to prove in court should a dispute arise.”[4]  Reflective of such, the Applicant did not produce documentation demonstrating that it is responsible for repair of major damage of the facility, as required by FEMA policy.[5]  Finally, the Grantee states that FEMA assessed the wrong facility for eligibility.  The Grantee states that a building located at 2139 Simon Bolivar, New Orleans, Louisiana is the actual facility where the Applicant provides its services.  However, the Applicant does not raise this issue or provide documentation to substantiate the Grantee’s assertion in its first or second appeals. 

Facility Eligibility

Pursuant to RDP 9521.3(7)(B)(2), to be eligible, a PNP facility must be primarily used for eligible services.  Where a facility is used for both eligible and ineligible activities, an applicant must show that it dedicates over 50 percent of the space to the eligible service.[6]  When a facility is a mixed-use facility, FEMA may assess its eligibility based on the amount of time the facility is used for eligible activities, and that amount of time must also reach the “over fifty percent” threshold mandated by RDP 9521.3(7)(C)(1). [7]   

In the second appeal, the Applicant argues that FEMA should not have included two large areas—a garage and an attic—in its evaluation of the facility’s space, because it considers this “dead” or common space.  Pursuant to RDP 9521.3(7)(C)(1), FEMA must assess the entire facility, not just individual parts, such as a basement or building wing, when determining the percentage of space available for eligible uses.  Therefore, FEMA must include the garage and attic square footage in the total square footage of the building, which is approximately 14,763 square feet (SF).[8]  The Applicant asserts that the first floor of the facility, including the lobby, is dedicated primarily to eligible activities.  In the first appeal, the Regional Administrator determined that the lobby is common space—both the church and the community center use this space equally—and excluded it from the eligibility evaluation.[9]  Even if, arguendo, FEMA were to include the lobby in the eligibility evaluation, the community center and the lobby comprise 760 SF and 450 SF respectively.  Therefore, in comparison to the total space of the facility, the area used for eligible activities does not comprise over 50 percent of the total space of the facility.    

Additionally, the facility was used as both a church and a community center.  Response and Recovery Directorate Policy (RRDP) 9521.1, Community Center Eligibility, dated August 11, 1998, states, “Facilities established or primarily used for religious… activities… are not eligible community centers.  A facility used for a variety of community activities but primarily established or used as a religious institution… would be ineligible.” [10]  The policy further requires “well-documented longstanding, routine (day-to-day) use of such facility as a community center” for the facility to be eligible for Public Assistance funding.[11]  The Applicant provided some documentation—such as attendance sheets and flyers—that demonstrate periodic community activities, but has not demonstrated consistent use of the facility as a community center.  The documents show that these activities are conducted annually or semi-annually.  In comparison, ineligible activities occur on a weekly, and at certain times bi-weekly, basis.  As such, based on the information provided, possible eligible activities do not meet the “over fifty percent” threshold required by FEMA policy.

Conclusion

The Applicant has failed to show that it is legally responsible for the facility.  In addition, the Applicant has not demonstrated that the facility is primarily used for eligible PNP activities.  Accordingly, the facility addressed in PW 20404 is not eligible for Public Assistance funding. 


[1] See FEMA 322, Public Assistance Guide at 16, dated October 1999.

[2] This document appears to be incomplete.  On January 13, 2014, FEMA requested the complete document or additional documentation demonstrating legal responsibility of the facility.  The request stated that if FEMA did not receive additional documentation within 30 days, it would proceed with the appeal with the information it currently possessed.  As of February 18, 2014, FEMA had not received a response from the Applicant and proceeded with processing the appeal. 

[3] See La. Civ. Code Ann. art. 2681 (2004) stating, “a lease may be made orally or in writing.”

[4] See A Guide to Louisiana Landlord & Tenant Laws, Louisiana Department of Justice, Office of the Attorney General, available at //www.ag.state.la.us/Shared/ViewDoc.aspx?Type=3&Doc=220.

[5] Recovery Division Policy (RDP) 9521.3(7)(G), Private Nonprofit Facility (PNP) Eligibility, dated May 23, 2003, stating, “the lease, pre-dating the disaster, must clearly specify that the eligible applicant is responsible for repair of major damage and not just maintenance or minor repairs.”

[6] Id. at RDP9521.3(7)(C)(1).

[7] Id. at RDP9521.3(7)(C)(2).

[8] See Community Care and Restoration Center, Inc., Project Worksheet (PW) 20404, Version 0 at 3 (September 2, 2012)

[9] See RDP9521.3(7)(C)(1) stating, “common space is not included in calculating the proportion of eligible use.”

[10] See RRDP9521.1(7)(C)(7).

[11] Id. at RRDP9521.1(7)(C)(3).