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Water Pipeline Break

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

DisasterFEMA-1585-DR
ApplicantSouth Coast Water District
Appeal TypeSecond
PA ID#059-22A8A-00
PW ID#865
Date Signed2010-03-11T05:00:00

Citation:       FEMA-1585-DR-CA; South Coast Water District (Applicant)

Cross-
Reference:
      Hazard mitigation; Permanent relocation; Improved Project

Summary:        Heavy rainfall during the February 2005 winter storms triggered a landslide that damaged a section of the Joint Transmission Main (JTM) buried within an easement located at the bottom of the slide.  The Applicant engaged the services of engineering consultants to assess the slope and provide recommendations for repair of the water main.  The Applicant’s consultants identified several alternatives to repair the water main, including restoration of the landslide and reconstruction of the water main within the easement.  Project Worksheet (PW) 865-2 was prepared in March 2008, at an estimated cost of $1,738,800 for work to stabilize the landslide and reconstruct the water main within the Applicant’s easement.  The Applicant contends that this alternative, as well as two others proposed by its consultants, are technically infeasible as they do not remove the water main from the threat of damage by future landslides.  Rather than stabilize the landslide and repair the water main along its current alignment, the Applicant’s plan is to relocate the water main along a different alignment, within the right-of-way of two city streets, which the Applicant contends is an appropriate and cost effective hazard mitigation project that removes the facility from the threat of future landslides.  The Applicant states that the JTM is a main water supply for the City of San Clemente, South Coast Water District, state parks, Camp Pendleton Marine Corps Base, and the San Onofre Nuclear Generating Station.

Issue:          Should FEMA grant the Applicant’s request to relocate the water main along an alignment within the right-of-way of city streets and fund the project at an estimated total cost of $3,530,000?

Finding:        No.  The cost effectiveness of the Applicant’s proposal relies on the assumption that the San Onofre Nuclear Generating Station will be shut down by a failure of the JTM.  However, the Applicant did not provide any documentation from Southern California Edison to confirm that the power station had shut down when the JTM failed as a result of the declared event, or would in a future event.

Rationale:      44 CFR 206.226(e); 44 CFR 206.226(g); RR Policy 9526.1; RP9580.102; 44 CFR §206.203(d)(1)

Appeal Letter

March 11, 2010

 

 

 

Frank McCarton

Governor’s Authorized Representative

California Emergency Management Agency

3650 Schriever Avenue

Mather, CA  95655

 

Re:    Second Appeal– South Coast Water District, PA ID 059-22A8A-00, Water Pipeline Break, FEMA-1585-DR-CA, Project Worksheet (PW) 865-2

 

Dear Mr. McCarton:

 

This is in response to a letter from your office dated October 14, 2008, which transmitted the referenced second appeal for the South Coast Water District (Applicant).  The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) decision to deny its request for a hazard mitigation project related to the damaged waterline.

As explained in the enclosed analysis, the benefit cost analyses that the Applicant submitted do not demonstrate that the project is cost effective.  Acceptable cost benefit ratios are obtained only if the San Onofre Nuclear Generating Station is shut down by a failure of the Joint Transmission Main (JTM).  While the Applicant made this assumption for the analyses, it did not provide any documentation from Southern California Edison to confirm that the power station had shut down when the JTM failed as a result of the declared event, or would in a future event.  The Applicant also did not document that the approved scope of work was not technically feasible.  Accordingly, I am denying this appeal.

Please inform the Applicant of my decision.  My determination constitutes the final decision on this matter as set forth in 44 CFR §206.206, Appeals.

Sincerely,

/s/

Elizabeth A. Zimmerman

Assistant Administrator

Disaster Assistance Directorate

cc:     Nancy Ward

Regional Administrator

FEMA Region IX

Appeal Analysis

SECOND APPEAL ANALYSIS
FEMA-1585-DR-CA
South Coast Water District; PA ID 059-22A8A-00
Water Pipeline Break, Project Worksheet (PW) 865-2

Background:

Heavy rainfall during the February 2005 winter storms triggered a landslide that damaged a section of 36-inch diameter water transmission main buried within an easement located at the bottom of the slide.  The Joint Transmission Main (JTM) is part of the Joint Regional Water Supply System (JRWSS), and is operated by South Coast Water District (SCWD), which is the Applicant.  As a result of the landslide, approximately 600 feet of the water main (concrete cylinder pipe (CCP)) was damaged along about a 3,500-foot-long section of the JTM between Camino Del Avion on the west, and Street of the Golden Lantern on the east. 

The Applicant engaged the services of Lawson & Associates Geotechnical Consulting, Inc. (LGC) to make an assessment of the slope and provide recommendations for repair of the water main.  LGC completed a draft report dated July 29, 2005, with a recommendation that the water main be relocated outside the limits of the landslide to a hillside just east of the JRWSS easement at an estimated cost of $1,000,000.  FEMA prepared Project Worksheet (PW) 865 in December 2005 for zero dollars because the option that LGC recommended lacked a scope of work with sufficient detail on which to base a cost estimate.

LGC performed additional work for the Applicant and presented a follow-up report dated March 23, 2006.  LGC’s subsequent work determined that the area initially considered for relocation of the water main was potentially unstable; therefore, that alternative was eliminated from further consideration in lieu of an option to reconstruct the water main atop 36-inch diameter cast-in-drilled-hole (CIDH) reinforced concrete piles (also known as caissons) that would extend down into a competent siltstone formation that lies beneath the landslide.  The Applicant subsequently engaged the services of Daniel Boyle Engineering (DBE) Psomas to review the LGC recommendations and examine additional options.  FEMA prepared Version 1 of PW 865 (PW 865-1) in September 2007, based on a site visit performed on September 4, 2007 by representatives of FEMA, the Governor’s Office of Emergency Services (OES), and the Applicant, using one of the options presented in the DBE report dated April 6, 2007. 

PW 865-1 allowed for funding the restoration of the damaged water main at a cost of $766,900, after the slope had been stabilized at the Applicant’s expense.  Rather than stabilize the landslide, the Applicant’s plan was to relocate the water main along a different alignment, within the right-of-way of Camino Del Avion and Street of the Golden Lantern, which would require approximately 5,500 feet of new pipe.  Consequently, FEMA considered the proposed work to be an Improved Project capped PW 865-1 at the estimated project cost of $766,900.

First Appeal
 
The Applicant submitted its first appeal to the Governor’s Office of Emergency Services ((OES) now California Emergency Management Agency) on November 20, 2007.  The Applicant argued that relocation of the water main within the right-of-way of the nearby streets was the most technically feasible of the options considered by the Applicant’s engineers, due to instability of the landslide, environmental issues with other options, and current litigation with homeowners above the landslide.  The Applicant further argued that this option was not an Improved Project, but rather constituted appropriate hazard mitigation under the provisions of the Stafford Act and 44 CFR Part 206.  The Applicant requested that FEMA fund the project at an estimated cost of $3,530,000.  OES forwarded the appeal to FEMA on January 22, 2008, along with its analysis of the Applicant’s appeal.  OES did not support the Applicant’s proposal and took the position that the most cost effective solution would be to reconstruct the water main atop CIDH caissons at an estimated project cost of $1,304,812.  In its transmittal, OES disagreed with FEMA’s position in PW 865-1 that the cost of stabilizing the landslide should be at the Applicant’s expense, noting that FEMA’s decision is inconsistent with Response and Recovery Policy 9524.2, Landslide Policy Relating to Public Facilities.

The Regional Administrator responded to the Applicant’s appeal in a letter to OES, dated June 17, 2008.  The Regional Administrator noted that one of the alternatives the Applicant’s engineers identified as a viable option was the stabilization of the landslide and reconstruction of the water main within the existing easement.  Upon further review, the Regional Administrator concurred with OES’s position that the cost to stabilize the landslide was eligible for FEMA funding, since there was no evidence of any historic movement of the landslide prior to the declared event.  FEMA also stated that the Applicant had not presented any documentation or benefit cost analysis to support its position for relocating the water main.  Consequently, while FEMA denied the appeal as it related to the Applicant’s proposed relocation of the water main, FEMA did increase the project funding from $766,900 to $1,738,800 to include the cost of stabilizing the landslide.  FEMA prepared Version 2 of the PW (PW 865-2) to reflect the change in the scope of work and estimated total project cost.

Second Appeal

The Applicant submitted its second appeal to OES on August 25, 2008.  The Applicant argued that several other alternatives presented by its engineering consultants for reconstructing the JTM within the existing easement are technically infeasible due to instability of the soils at the site.  Furthermore, the Applicant contended that current litigation involving the property owners where the landslide occurred will not allow timely restoration of the pipeline within the existing easement.  Therefore, the Applicant’s position was that the only feasible option is the relocation of the water main within the right-of-way of two nearby streets.  The Applicant further argued that this option is not an Improved Project, but rather constitutes appropriate hazard mitigation or permanent relocation under the provisions of the Stafford Act and 44 CFR Part 206.  The Applicant included with the second appeal benefit cost analyses, performed by Risk Management Professionals, in response to FEMA’s comment in the first appeal decision letter that the Applicant failed to demonstrate cost effectiveness for the preferred alternative.  The Applicant is requesting that FEMA fund the project at an estimated cost of $3,531,736.  OES forwarded the appeal to FEMA with a letter dated October 14, 2008, in support of the Applicant’s appeal.

Discussion:

The Applicant submitted two benefit cost analyses (BCAs).  One analysis used the Limited Data Module to analyze the mitigation of landslide damage to the water main.  This analysis yielded a benefit cost ratio of approximately 57, and will be referred to herein as BCA1.  The other analysis apparently used the Seismic Full Data Module to evaluate the mitigation of pipeline damage against an earthquake hazard.  This analysis yielded a cost benefit ratio of approximately 16, and will be referred to herein as BCA2.  A benefit cost ratio greater than one indicates that the mitigation would be a financial benefit, with higher ratios reflecting greater financial benefits.  A review of the analyses, however, raised several concerns over the reported results.

The Applicant states that Reach 7 of the Joint Transmission Main (JTM) is a main water supply for the City of San Clemente, South Coast Water District, state parks, Camp Pendleton Marine Corps Base, and the San Onofre Nuclear Generating Station.  Both sets of analyses considered loss of function for the electrical utility as well as the water utility.

In considering the loss of function of the water utility, both sets of analyses used the total operating budget for the utility; however, different values were used in both analyses.  A value of $23,328,712 was used in BCA1, while a value of $44,000,000 was used in BCA2.  One of the supporting documents indicates that the 2007-2008 Proposed Operating Budget for the SCWD was $23,326,712; however, the budget was broken down into water sales, sewer service charges, recycled water sales, and recreational facilities.  The total water sales amount was $12,384,572.  No explanation was provided as to why different values were used in the two analyses, nor was any explanation given as to why values other than water sales were used.  Futhermore, the section of Reach 7 of the JTM that failed lies in the southernmost reach of the pipeline network which consists of seven reaches or segments.  The use of the total value suggests that all customers served by the water utility would be affected, throughout the entire system, by the failure of this single section of the JTM.  No explanation was given as to why the entire operating budget was applied to the analyses when it would seem more appropriate to use a prorated value reflecting the actual number of individuals that were affected when the failure occurred.

Both analyses assume that the San Onofre Nuclear Generating Station will be shut down for a period of six hours by a failure of the JTM.  The two sets of analyses, however, compute two significantly different values for loss of function for the electric utility.  A value of $705,000,000 was computed in BCA1, while a value of $141,000,000 was used in BCA2.  No explanation was provided as to the difference in the computed values.  Documentation from Southern California Edison states that domestic water from the SCWD is critical to maintaining operation of the power station, and various functions are identified for which the water is used.  However, potable water from the SCWD is not the primary source of cooling water for the nuclear generating station.  Therefore, it was unclear as to why the temporary loss of potable water would shut down the power station.  Southern California Edison did not state that a loss of domestic water for any period of time would shut the power station down, nor did it state that the power station had shut down when the JTM failed as a result of the declared event. 

FEMA performed a check of the two sets of analyses using the Limited Data Module with the same values for critical variables identified in the Applicant’s analyses, and FEMA’s check essentially confirmed the results.  FEMA’s analyses yielded a benefit cost ratio of approximately 55 for the Applicant’s BCA1 and a benefit cost ratio of approximately 11 for the Applicant’s BCA2.  However, if the loss of function of the electric utility is removed from both sets of analyses, the benefit cost ratio drops to a value of 0.1 for both sets of data from the Applicant’s analyses.  From FEMA’s analysis it can be seen that the loss of function of the electric utility is a critical assumption in both sets of analyses submitted by the Applicant; however, the second appeal does not establish that the San Onofre Nuclear Generating Station will actually be shut down for a period of six hours by a failure of the JTM.

Finally, the Applicant asserts in the appeal that the other alternatives presented by its engineering consultants for reconstruction of the JTM within the existing easement are technically infeasible due to instability of the soils at the site.  However, the Applicant did not provide any documentation from either of its engineering consultants stating that the only technically feasible alternative for this project is the relocation of the JTM.

Conclusion: 

The benefit cost analyses that the Applicant submitted do not demonstrate that the project is cost effective on the basis of loss of water function alone.  Acceptable cost benefit ratios are obtained only if the San Onofre Nuclear Generating Station is shut down by a failure of the JTM.  While the Applicant made this assumption for the analyses, it did not provide any documentation from Southern California Edison to confirm that the power station had shut down when the JTM failed as a result of the declared event, or would in a future event.  The Applicant also did not document that the approved scope of work was not technically feasible.  Therefore, the Applicant’s appeal is denied.  If the Applicant wants to relocate the JTM, approval must be obtained from the Grantee (OES) for an Improved Project in accordance with federal regulations and the federal share of the project cost will be capped at the amount defined in the PW.