Intake Canal Spillway Repairs

January 16, 2014

Ed Tinsley
Administrator
Montana Disaster and Emergency Services Division
1956 Mt. Majo Street
Fort Harrison, Montana 59636

Re: Second Appeal–Lockwood Irrigation District, PA ID 111-U4OU7-00, Intake Canal Spillway Repairs, FEMA-1996-DR-MT, Project Worksheet (PW) 547

Dear Mr. Tinsley:

This is in response to a letter from your office dated November 9, 2012, which transmitted the referenced second appeal on behalf of Lockwood Irrigation District (Applicant).  The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of the Net Small Project Overrun (NSPO) for PW 547.

Background

Severe storms and flooding waters damaged the Applicant’s facilities.  Based on initial site visits conducted on August 18, 2011, FEMA prepared PW 547 for three sites as shown below:           

When the floodwaters began to recede, WWC Engineering (Consultant) was able to conduct a more thorough damage assessment and identified additional damage to the intake canal.  The Applicant’s contractor completed the repair work at all three sites on January 13, 2012.

First Appeal

On January 31, 2012, the Applicant submitted a Small Project Completion Certification and requested a Net Small Project Overrun (NSPO) for $242,473.  The U.S. Army Corps of Engineers (USACE) issued a Cease and Desist order on June 20, 2012, stating that the Applicant was in violation of the Rivers and Harbor Act.  Additionally, the Region determined this was an Improved Project based on the Consultant’s May 30, 2012, letter which stated, “To reconstruct the Intake Canal and improve the facility by increasing the embankment height, approximately 8,500 cubic yards of material was placed”.  The Region denied the NSPO and de-obligated PW 547 on August 17, 2012, stating that the Applicant neglected to obtain the required USACE permits prior to beginning the work.

Second Appeal

On November 5, 2012, the Applicant submitted a second appeal stating:

•     Sites 1 and 2 were not located on the Yellowstone River and therefore, were not subject to USACE permit requirements,

•     The cease and desist order was in reference to a replacement construction project for the intake canal not for the repair work, and

•     The repair work on the intake canal (Site 3) followed the existing footprint; therefore, pursuant to USACE Fact Sheet Nationwide Permit 3, a permit was not required and this was not an Improved Project.

Discussion

The Region determined that this project was an Improved Project based on a statement in the May 30, 2012, letter from the Consultant.  However, in that same letter, it also states, “The intent of the project was always to reinstall sandstone riprap and fill to reconstruct the Intake Canal.  The work performed during construction accurately reflects this intent.  It is important to note that no deviation from the intent of the project occurred during construction.”  In addition, the Consultant states that the initial project cost was underestimated due to its inability to thoroughly assess damage while the floodwaters were still high.  The substantially higher actual project cost resulted from the discovery of additional damage to the intake canal found during a second assessment on September 13, 2011, not a change to the scope of work.  The Applicant also acknowledged receipt of a $100,000 Renewable Resource Grant from the Montana Department of Natural Resource Conservation for the Intake Canal repair project partially offsetting the increased cost.

When an applicant discovers hidden damage on a project already identified and approved by FEMA, the applicant is required to request a project change of scope.  In some instances the change in the scope of work may result in additional environmental/historic preservation compliance reviews and/or new permits.  Since the Applicant did not request the change of scope, FEMA did not have an opportunity to perform the necessary environmental review of the project. 

In an email dated April 23, 2013, USACE stated, “any work done on the Yellowstone River requires pre-construction notification to USACE for permit verification under Section 404 of the Clean Water Act and Section 10 of the Rivers and Harbors Act”.  Sites 1 and 2 of PW 547 were not located on the Yellowstone River so a permit was not required.  Site 3, however, was located on the Yellowstone River and the Applicant failed to provide the required notification and obtain the required USACE permit.  Pursuant to Title 44 Code of Federal Regulations (44 CFR) §10.4 Policy, FEMA is required to ensure that its responsibilities, including disaster planning, response and recovery, hazard mitigation and flood insurance, are performed in a manner consistent with national environmental policies.  As such, FEMA must perform environmental reviews in accordance with the National Environmental Policy Act and other environmental laws before funding a project.  The Applicant completed the expanded project scope of work prior to FEMA reviewing the scope of work for environmental compliance.  Further, FEMA 322, Public Assistance Guide, June 2007 states, “Where a USACE permit is required for a PA project, FEMA places a requirement in the PW stating that the applicant is responsible for obtaining the permit”.  The Applicant failed to get the USACE permit, thereby, making the work ineligible for Public Assistance funding.

Conclusion

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

Deborah Ingram
Assistant Administrator
Recovery Directorate

cc:  Doug A. Gore
      Acting Regional Administrator
      FEMA Region VIII