Bell Springs
Appeal Brief
Appeal Letter
Appeal Analysis
Citation: FEMA-979-DR-CA; North Coast Railroad Authority; DSR 44661
Cross Reference: Landslide Policy
Summary: Due to heavy rainfall and storm runoff during the FEMA-979 storm event, numerous sites along the railway owned and operated by the North Coast Railroad Authority (subgrantee) were damaged. Numerous DSRs were prepared to fund the repairs of various damage sites along the railway. DSR 44661 was prepared to fund the repairs along an approximately 1000-foot area of the track within the site known as Bell Springs, as well as five other sites. The subgrantee submitted a request for supplemental funding for the repair of approximately 4000 feet of track within the Bell Springs site area; however, it was determined that the site was unstable due to a number of pre-existing conditions and that the request included landslide stabilization work. The supplement request was initially denied on September 18, 1996. During the OIG audit and closeout of its disaster application, the subgrantee claimed costs for essentially the same type of repairs at Bell Springs as denied in the September lettter. That request was denied by letter dated December 24, 1998, and is considered the substantive equivalent of a first appeal. The subgrantee submitted an appeal of that determination which is considered a second appeal. In its appeal, the subgrantee states that the only work accomplished at the site was rebuilding the roadbed to restore the track to its original alignment. Further, the subgrantee states that the damage at Bell Springs was caused by river bank erosion, and the Bell Springs area only becomes unstable when "disasters caused by heavy rains and flooding inundate the soil and the river washes away the roadbed."
Issues:
Due to heavy rainfall and storm runoff during the FEMA-979-DR winter storm event, numerous sites along the railway owned and operated by the North Coast Railroad Authority (subgrantee) were damaged. The damage to the railway was generally caused by washouts, slipouts, roadbed depressions, and landslides. Damage included damage to the railroad track bed and immediate area adjacent to the track. In some locations, roadbed subgrade material, wood ties, and ballast were lost. Some culverts were clogged with debris. Inspection teams, consisting of representatives of FEMA, the Governor's Office of Emergency Services (OES) and the subgrantee, inspected the railway to document damages and review cost documentation for repair work that had already been performed by force account labor. On March 5, 1993, FEMA approved Damage Survey Report (DSR) 97427 in the amount of $133,000 to fund the estimated cost of restoration of the damaged railway. Also on March 5, 1993, FEMA approved DSR 97426 in the amount of $40,000 to fund the estimated cost of debris removal that was to be performed by contract.
In September 1993, the railway was re-inspected and it was determined that considerable work remained to restore the railway. It was estimated that only 30% of the necessary repair work had been completed at that time. The inspection team reviewed cost documentation for repair work that had been completed along the railway and prepared supplemental DSR 65922 in the amount of $254,133 to adjust eligible funding to account for actual costs incurred to date. In addition, DSR 48873 was prepared in the amount of $158,185 to fund the estimated cost of repair of four discrete damaged areas along the railway. At the time of the inspection, sufficient data did not exist to develop a scope of additional eligible work for the remaining damaged sites or a cost estimate for that work.
An additional site visit was conducted on April 30, 1994. As a result of this site visit, two additional DSRs were prepared to fund the estimated cost of repairs at additional sites along the railway. DSR 41205 was approved in the amount of $270,630 to fund the estimated cost of repair of thirteen sites and DSR 41206 was approved in the amount of $542,808 to fund the estimated cost of the repair of four sites. It was during the eligibility review of DSR 41206 when the issue of the eligible scope of work at the site known as Bell Springs (the issue of this appeal) was first addressed. When originally prepared, the scope of work of DSR 41206 included the repair of the damage at Bell Springs; however, during eligibility review it was determined that the condition of the Bell Springs site was a result of "recurring problems that are clearly pre-existing" though the reviewer noted that the conditions were exacerbated by the disaster. Accordingly, the scope of work approved in DSR 41206 did not include the repair of the damage at Bell Springs.
On March 10, 1995, DSR 44661 was approved at the request of the subgrantee in the amount of $1,982,935 to fund the estimated cost of the repair of six sites that were not included in DSRs 41205 and 41206. The eligibility of the repair at Bell Springs was re-evaluated and it was determined that repairs necessitated as a result of the disaster were eligible for funding. Therefore, the scope of work of DSR 44661 included the repair of disaster damage at Bell Springs that was estimated to cost $608,439. It is noted that the damage site covered approximately 1000 feet.
On January 9, 1996, the State transmitted a request for supplement to DSR 41206 for additional funding for the Bell Springs site that now encompassed approximately 4000 feet. This request was supported by a geotechnical report prepared by the subgrantee's consultant, SHN Consulting Engineers and Geologists, that noted that damage "was associated with horizontal and vertical displacement of the railway due to chronic landslide activity and by erosion along the west bank of the main fork of the Eel River." It is noted that in January and March 1995, two winter storm disasters were declared (1044-DR and 1046-DR) and the railroad suffered additional damage as a result. This also is noted in the geotechnical report.
For purposes of evaluating the eligibility of the subgrantee's supplement request, a site visit was conducted to inspect the damage at Bell Springs in August 1996. By letter dated September 18, 1996, FEMA advised OES and the subgrantee that the request was denied because the site was unstable as a result of number of conditions that were not disaster-related (e.g., pre-existing landslides, ongoing erosion). Further, FEMA noted that the work was considered to be stabilization of a natural slope. As a result, FEMA advised OES and the subgrantee that in accordance with the Landslide Policy Relating to Public Facilities (Landslide Policy), the work for which supplemental funding was requested was not eligible.
First Appeal
In the course of performing its audit of funding provided to the subgrantee under 979-DR, 1044-DR and 1046-DR, the Office of Inspector General (OIG) consulted with FEMA program officials concerning the eligibility of additional costs claimed by the subgrantee for work it performed in the Bell Springs area. The subgrantee claimed a total of $1,345,096 for the work performed at Bell Springs. The amount previously approved by DSR 44661 was $608,439. FEMA program officials advised the OIG that it did not consider the additional costs of $736,657 to be eligible. This finding is reflected in OIG Audit Report W-05-99, as well as in FEMA's closeout of the subgrantee's application for 979-DR. While FEMA did not approve additional funding for work to the Bell Springs sites, FEMA did not deobligate previously approved funding under DSR 44661.
By letter dated December 24, 1998, formal notification was provided to the State and the subgrantee regarding the determinations made as the result of the OIG audit, including upholding the September 1996 determination that no additional funding would be provided for work at the Bell Springs site. The letter is considered the substantive equivalent of a first appeal determination, because it was made after discussions and site visits with representatives of the subgrantee, and a reconsideration of all available information related to the site and the project. That December 24 letter advised OES and the subgrantee that FEMA would accept another appeal of the finding regarding the eligibility of additional funding for Bell Springs.
Second Appeal
The subgrantee has submitted an appeal of the determination that the additional costs claimed by the subgrantee for work it had performed at Bell Springs (essentially the same costs denied in 1996) are not eligible for funding. As this issue has been previously addressed by Region IX, we are treating the appeal as a second appeal.
The subgrantee's appeal is based on four principal assertions. The first relates to the time period within which it was required to submit its Project Completion and Certification Reports (P.4 Alternates) for 979-DR, 1044-DR and 1046-DR. The time period within which the subgrantee was required to submit its P.4 Alternate is not, however, relevant to the determination which is the subject of this appeal and need not be addressed in this analysis.
Principally, the subgrantee's appeal is based on its disagreement with the Landslide Policy itself. The subgrantee states that FEMA cannot apply the policy with the force of a regulation, because it "has not followed administrative rule-making procedure set forth in 5 U.S.C.A. 553, et seq." Further, the subgrantee states that the Landslide Policy is inconsistent with "Congressional Policy set forth in 42 U.S. Code, Chapter 68 generally and specslf `Natural Disaster,' and as applied to a public facility of [the subgrantee]."
Finally, the subgrantee asserts that the disallowance of costs claimed by the subgrantee is a "deobligation" of funding for work at Bell Springs. The subgrantee states "a DSR is in the nature of a contract and the operation of deobligation is inconsistent with the same." Since FEMA never approved a DSR for the work that is the subject of this appeal, this assertion is without a factual basis and need not be addressed in this analysis.
Specific to the Bell Springs site, the subgrantee states that the only work it had performed up to the time of the FEMA audit was rebuilding the roadbed to restore the track to its original alignment. Further, the subgrantee states that the damage at Bell Springs was caused by river bank erosion and the Bell Springs area only becomes unstable when "disasters caused by heavy rains and flooding inundate the soil and the river washes away the roadbed."
DISCUSSION
Landslide Policy Relating to Public Facilities
The subgrantee contends that FEMA cannot apply the Landslide Policy with the force of a regulation because it has not followed the administrative rulemaking procedures set forth in the Administrative Procedures Act (APA).
The Landslide Policy, as are policies generally, was adopted by FEMA to clarify our interpretation and application of the Stafford Act and its implementing regulations to a specific situation. In the case of the Landslide Policy, it clarifies Section 406(a) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, P.L. 93-288, as amended (Stafford Act). Specifically, it clarifies the requirements that to be eligible for permanent restoration funding, a public facility must have been damaged or destroyed by a major disaster. These Stafford Act requirements are set forth in FEMA implementing regulations, 44 CFR 206.201(c) and 44 CFR 206.223(a)(1), respectively. The term "public facility" is defined in 44 CFR 206.201(c) as any publicly or privately owned building, works, system, or equipment, built or manufactured, or an improved and maintained natural feature. To be eligible for disaster assistance, work must be required as a direct result of a major disaster. This threshold eligibility requirement is set forth in 44 CFR 206.223(a)(1) and discussed in more detail in the Public Assistance Guide on pages 37 and 38. As such and contrary to the subgrantee's assertion, the Landslide Policy does not represent administrative rulemaking in violation of the APA but instead simply clarifies and further refines Section 406(a) of the Stafford Act and its implementing regulations.
The subgrantee further asserts that the Landslide Policy is inconsistent with Congressional intent as expressed in the definition of "major disaster" in Section 102(2) of the Stafford Act that specifically includes natural landslide and mudslide events. The Landslide Policy is not inconsistent with this definition, as the subgrantee contends, because it does not state that a landslide or a mudslide cannot result in a disaster declaration nor does it preclude the provision of assistance for the restoration of facilities damaged by landslides or mudslides. Instead, the Landslide Policy clarifies the eligibility requirements applicable to the repair of public facilities (including the restoration of integral ground). Further, it does so in accordance with the Stafford Act and applicable implementing regulations as discussed above.
Bell Springs
The subgrantee states that "it is readily apparent that river bank erosion was the cause of track roadbed failure" and has submitted a report from its geotechnical consultant, Shannon & Wilson, Inc., to support the claim. While the consultant's report does indicate that erosion of the toe of the slope by the Eel River is a primary contributor to the slope failure, it also mentions the "nature of the soils and geology at the site, the tendency for these soils to move, and the pre-existing landslides and slide planes that have developed in the area." This report notes that the "limits of the affected area also correspond to the limits of a complex, very large, rotational-translational-earthflow landslide." The report also confirms the existence of large, active landslides on both sides of the Eel River. In other words, the report confirms the findings set forth in FEMA's letter dated September 18, 1996, that a number of non-disaster related conditions have contributed to the damage at Bell Springs.
The consultant's report also states that the subgrantee should expect to expend a significant effort maintaining the track grade and alignment at Bell Springs "due to continued movements of the slopes below and above the tracks." This statement confirms the determination made by FEMA that this site is unstable.
The Landslide Policy states that if a site is found to be unstable and the instability was exclusively cause by the disaster, the cost to restore the facility at the original site is eligible. If the site is found to be unstable due to an identified, pre-existing condition, the subgrantee is responsible for stabilizing the site. Once the site is stabilized, the cost to restore the facility at the original site is eligible. Geotechnical consultants employed by the subgrantee and by FEMA have confirmed that the site known as Bell Springs is unstable due to a number of pre-existing conditions. There has not been any geotechnical information provided that supports the conclusion that the instability of the site has exclusively been caused by 979-DR (or subsequent disasters).
During the closeout of the federal portion of the subgrantee's disaster application, it was determined that the additional costs claimed for the repairs at Bell Springs were for site stabilization. The subgrantee states that the only work accomplished was rebuilding the roadbed to restore the track to its original alignment and that it has not performed any site stabilization work. FEMA never approved an expanded scope of work for the Bell Springs site encompassing approximately 4000 feet. In fact, FEMA denied the subgrantee's request for supplemental funding because the site was unstable and because FEMA considered the work to include ineligible site stabilization. Nevertheless, in connection with the closeout of its application for 979-DR more than three years later, the subgrantee again requests funding for the same work that had previously been denied.
Regardless of whether the scope of work included site stabilization, FEMA never approved as eligible the expanded scope of work for the Bell Springs site. The costs relating thereto are not, therefore, eligible. Further and as set forth in the Landslide Policy, if a site is unstable as a result of identified, pre-existing conditions, the subgrantee is responsible for stabilizing the site. The cost to restore the facility at the original site is eligible after the site is stabilized. The site has not been stabilized by the subgrantee and remains highly unstable. The additional work and funding that is the subject of this appeal is not, therefore, eligible. Although the site has not been stabilized, we will not deobligate previously approved funding; however, we will not approve additional funding for an expanded scope of work for the Bell Springs site.
CONCLUSION
The instability of the site known as Bell Springs and the multiple causes of the instability have been documented both by FEMA geotechnical engineers and the subgrantee's geotechnical consultant. As the instability was not exclusively caused by the disaster, the subgrantee is responsible for stabilizing the site. Once the site is stabilized, the cost to restore the facility at the has refore, the restoration of the site is not eligible. Accordingly, the subgrantee's appeal is denied.
Appeal Brief
| Disaster | FEMA-0979-DR |
| Applicant | North Coast Railroad Authority |
| Appeal Type | Second |
| PA ID# | 023-91022 |
| PW ID# | 44661 |
| Date Signed | 1999-09-07T04:00:00 |
Cross Reference: Landslide Policy
Summary: Due to heavy rainfall and storm runoff during the FEMA-979 storm event, numerous sites along the railway owned and operated by the North Coast Railroad Authority (subgrantee) were damaged. Numerous DSRs were prepared to fund the repairs of various damage sites along the railway. DSR 44661 was prepared to fund the repairs along an approximately 1000-foot area of the track within the site known as Bell Springs, as well as five other sites. The subgrantee submitted a request for supplemental funding for the repair of approximately 4000 feet of track within the Bell Springs site area; however, it was determined that the site was unstable due to a number of pre-existing conditions and that the request included landslide stabilization work. The supplement request was initially denied on September 18, 1996. During the OIG audit and closeout of its disaster application, the subgrantee claimed costs for essentially the same type of repairs at Bell Springs as denied in the September lettter. That request was denied by letter dated December 24, 1998, and is considered the substantive equivalent of a first appeal. The subgrantee submitted an appeal of that determination which is considered a second appeal. In its appeal, the subgrantee states that the only work accomplished at the site was rebuilding the roadbed to restore the track to its original alignment. Further, the subgrantee states that the damage at Bell Springs was caused by river bank erosion, and the Bell Springs area only becomes unstable when "disasters caused by heavy rains and flooding inundate the soil and the river washes away the roadbed."
Issues:
- 1. Is the site unstable?
- 2. Was the instability exclusively caused by the disaster?
- Yes. The subgrantee's geotechnical consultant confirms the instability.
- No. A number of identified, pre-existing conditions have contributed to the instability of the site.
Appeal Letter
September 7, 1999
Mr. D.A. Christian
Governor's Authorized Representative
Governor's Office of Emergency Services
Post Office Box 419023
Rancho Cordova, CA 95741-9023
Reference: Second Appeal - North Coast Railroad Authority; DSR 44661 (Bell Springs site); FEMA-979-DR-CA, P. A. 023-91022
Dear Mr. Christian:
This is in response to your letter dated April 30, 1999, transmitting the referenced second appeal. Damage Survey Report (DSR) 44661 was prepared for permanent restoration of six sites, including the site measuring approximately 4000 feet in length within the Bell Springs block that is the subject of the appeal, along the railroad line owned and operated by the subgrantee. We initially denied supplemental funding for this work in a letter dated September 18,1996. This determination was re-evaluated in conjunction with the Federal close-out process, at which time there were discussions and site evaluations with representatives of the subgrantee. The re-evaluation upheld the September 18, 1996, decision that the actual costs claimed for repair work at the Bell Springs site include costs for site stabilization that are not eligible for funding. The results of that re-evaluation was formally communicated to the grantee and subgrantee in a letter dated December 24, 1998, and is considered the substantive equivalent of a first appeal. The subgrantee has appealed the findings of the re-evaluation.
Based on a review of the documentation submitted in support of the appeal, I have found that the Bell Springs site is unstable principally due to identified, pre-existing conditions and that the subgrantee is, therefore, responsible for stabilizing the site. The subgrantee claims that the only work it performed was to rebuild the roadbed to restore the track to its original alignment and, therefore, it has not performed any work to stabilize the site. Regardless of whether the scope of work included site stabilization, FEMA never approved as eligible the expanded scope of work for the Bell Springs site. The site has not been stabilized by the subgrantee and remains highly unstable. The additional work and funding that is the subject of this appeal is not, therefore, eligible.
Under this disaster, FEMA has approved funding in the amount of $608,439 for the restoration of the track at the Bell Springs site. Although the site has not been stabilized, we will not deobligate the funding already approved; however, no additional funding will be provided. Accordingly, I have denied the subgranteee's second appeal. My analysis is enclosed for your review.
Please inform the subgrantee of my determination. In accordance with the appeal procedure governing appeal decisions made on or after May 8, 1998, my decision constitutes the final decision on this matter. The current appeal procedure was published as a final rule in the Federal Register on April 8, 1998. It amends 44 CFR 206.206.
Sincerely,
/S/
Lacy E. Suiter
Executive Associate Director
Response and Recovery Directorate
Enclosure
cc: Richard A. Buck
Disaster Recovery Manager
FEMA Region IX
Mr. D.A. Christian
Governor's Authorized Representative
Governor's Office of Emergency Services
Post Office Box 419023
Rancho Cordova, CA 95741-9023
Reference: Second Appeal - North Coast Railroad Authority; DSR 44661 (Bell Springs site); FEMA-979-DR-CA, P. A. 023-91022
Dear Mr. Christian:
This is in response to your letter dated April 30, 1999, transmitting the referenced second appeal. Damage Survey Report (DSR) 44661 was prepared for permanent restoration of six sites, including the site measuring approximately 4000 feet in length within the Bell Springs block that is the subject of the appeal, along the railroad line owned and operated by the subgrantee. We initially denied supplemental funding for this work in a letter dated September 18,1996. This determination was re-evaluated in conjunction with the Federal close-out process, at which time there were discussions and site evaluations with representatives of the subgrantee. The re-evaluation upheld the September 18, 1996, decision that the actual costs claimed for repair work at the Bell Springs site include costs for site stabilization that are not eligible for funding. The results of that re-evaluation was formally communicated to the grantee and subgrantee in a letter dated December 24, 1998, and is considered the substantive equivalent of a first appeal. The subgrantee has appealed the findings of the re-evaluation.
Based on a review of the documentation submitted in support of the appeal, I have found that the Bell Springs site is unstable principally due to identified, pre-existing conditions and that the subgrantee is, therefore, responsible for stabilizing the site. The subgrantee claims that the only work it performed was to rebuild the roadbed to restore the track to its original alignment and, therefore, it has not performed any work to stabilize the site. Regardless of whether the scope of work included site stabilization, FEMA never approved as eligible the expanded scope of work for the Bell Springs site. The site has not been stabilized by the subgrantee and remains highly unstable. The additional work and funding that is the subject of this appeal is not, therefore, eligible.
Under this disaster, FEMA has approved funding in the amount of $608,439 for the restoration of the track at the Bell Springs site. Although the site has not been stabilized, we will not deobligate the funding already approved; however, no additional funding will be provided. Accordingly, I have denied the subgranteee's second appeal. My analysis is enclosed for your review.
Please inform the subgrantee of my determination. In accordance with the appeal procedure governing appeal decisions made on or after May 8, 1998, my decision constitutes the final decision on this matter. The current appeal procedure was published as a final rule in the Federal Register on April 8, 1998. It amends 44 CFR 206.206.
Sincerely,
/S/
Lacy E. Suiter
Executive Associate Director
Response and Recovery Directorate
Enclosure
cc: Richard A. Buck
Disaster Recovery Manager
FEMA Region IX
Appeal Analysis
BACKGROUNDDue to heavy rainfall and storm runoff during the FEMA-979-DR winter storm event, numerous sites along the railway owned and operated by the North Coast Railroad Authority (subgrantee) were damaged. The damage to the railway was generally caused by washouts, slipouts, roadbed depressions, and landslides. Damage included damage to the railroad track bed and immediate area adjacent to the track. In some locations, roadbed subgrade material, wood ties, and ballast were lost. Some culverts were clogged with debris. Inspection teams, consisting of representatives of FEMA, the Governor's Office of Emergency Services (OES) and the subgrantee, inspected the railway to document damages and review cost documentation for repair work that had already been performed by force account labor. On March 5, 1993, FEMA approved Damage Survey Report (DSR) 97427 in the amount of $133,000 to fund the estimated cost of restoration of the damaged railway. Also on March 5, 1993, FEMA approved DSR 97426 in the amount of $40,000 to fund the estimated cost of debris removal that was to be performed by contract.
In September 1993, the railway was re-inspected and it was determined that considerable work remained to restore the railway. It was estimated that only 30% of the necessary repair work had been completed at that time. The inspection team reviewed cost documentation for repair work that had been completed along the railway and prepared supplemental DSR 65922 in the amount of $254,133 to adjust eligible funding to account for actual costs incurred to date. In addition, DSR 48873 was prepared in the amount of $158,185 to fund the estimated cost of repair of four discrete damaged areas along the railway. At the time of the inspection, sufficient data did not exist to develop a scope of additional eligible work for the remaining damaged sites or a cost estimate for that work.
An additional site visit was conducted on April 30, 1994. As a result of this site visit, two additional DSRs were prepared to fund the estimated cost of repairs at additional sites along the railway. DSR 41205 was approved in the amount of $270,630 to fund the estimated cost of repair of thirteen sites and DSR 41206 was approved in the amount of $542,808 to fund the estimated cost of the repair of four sites. It was during the eligibility review of DSR 41206 when the issue of the eligible scope of work at the site known as Bell Springs (the issue of this appeal) was first addressed. When originally prepared, the scope of work of DSR 41206 included the repair of the damage at Bell Springs; however, during eligibility review it was determined that the condition of the Bell Springs site was a result of "recurring problems that are clearly pre-existing" though the reviewer noted that the conditions were exacerbated by the disaster. Accordingly, the scope of work approved in DSR 41206 did not include the repair of the damage at Bell Springs.
On March 10, 1995, DSR 44661 was approved at the request of the subgrantee in the amount of $1,982,935 to fund the estimated cost of the repair of six sites that were not included in DSRs 41205 and 41206. The eligibility of the repair at Bell Springs was re-evaluated and it was determined that repairs necessitated as a result of the disaster were eligible for funding. Therefore, the scope of work of DSR 44661 included the repair of disaster damage at Bell Springs that was estimated to cost $608,439. It is noted that the damage site covered approximately 1000 feet.
On January 9, 1996, the State transmitted a request for supplement to DSR 41206 for additional funding for the Bell Springs site that now encompassed approximately 4000 feet. This request was supported by a geotechnical report prepared by the subgrantee's consultant, SHN Consulting Engineers and Geologists, that noted that damage "was associated with horizontal and vertical displacement of the railway due to chronic landslide activity and by erosion along the west bank of the main fork of the Eel River." It is noted that in January and March 1995, two winter storm disasters were declared (1044-DR and 1046-DR) and the railroad suffered additional damage as a result. This also is noted in the geotechnical report.
For purposes of evaluating the eligibility of the subgrantee's supplement request, a site visit was conducted to inspect the damage at Bell Springs in August 1996. By letter dated September 18, 1996, FEMA advised OES and the subgrantee that the request was denied because the site was unstable as a result of number of conditions that were not disaster-related (e.g., pre-existing landslides, ongoing erosion). Further, FEMA noted that the work was considered to be stabilization of a natural slope. As a result, FEMA advised OES and the subgrantee that in accordance with the Landslide Policy Relating to Public Facilities (Landslide Policy), the work for which supplemental funding was requested was not eligible.
First Appeal
In the course of performing its audit of funding provided to the subgrantee under 979-DR, 1044-DR and 1046-DR, the Office of Inspector General (OIG) consulted with FEMA program officials concerning the eligibility of additional costs claimed by the subgrantee for work it performed in the Bell Springs area. The subgrantee claimed a total of $1,345,096 for the work performed at Bell Springs. The amount previously approved by DSR 44661 was $608,439. FEMA program officials advised the OIG that it did not consider the additional costs of $736,657 to be eligible. This finding is reflected in OIG Audit Report W-05-99, as well as in FEMA's closeout of the subgrantee's application for 979-DR. While FEMA did not approve additional funding for work to the Bell Springs sites, FEMA did not deobligate previously approved funding under DSR 44661.
By letter dated December 24, 1998, formal notification was provided to the State and the subgrantee regarding the determinations made as the result of the OIG audit, including upholding the September 1996 determination that no additional funding would be provided for work at the Bell Springs site. The letter is considered the substantive equivalent of a first appeal determination, because it was made after discussions and site visits with representatives of the subgrantee, and a reconsideration of all available information related to the site and the project. That December 24 letter advised OES and the subgrantee that FEMA would accept another appeal of the finding regarding the eligibility of additional funding for Bell Springs.
Second Appeal
The subgrantee has submitted an appeal of the determination that the additional costs claimed by the subgrantee for work it had performed at Bell Springs (essentially the same costs denied in 1996) are not eligible for funding. As this issue has been previously addressed by Region IX, we are treating the appeal as a second appeal.
The subgrantee's appeal is based on four principal assertions. The first relates to the time period within which it was required to submit its Project Completion and Certification Reports (P.4 Alternates) for 979-DR, 1044-DR and 1046-DR. The time period within which the subgrantee was required to submit its P.4 Alternate is not, however, relevant to the determination which is the subject of this appeal and need not be addressed in this analysis.
Principally, the subgrantee's appeal is based on its disagreement with the Landslide Policy itself. The subgrantee states that FEMA cannot apply the policy with the force of a regulation, because it "has not followed administrative rule-making procedure set forth in 5 U.S.C.A. 553, et seq." Further, the subgrantee states that the Landslide Policy is inconsistent with "Congressional Policy set forth in 42 U.S. Code, Chapter 68 generally and specslf `Natural Disaster,' and as applied to a public facility of [the subgrantee]."
Finally, the subgrantee asserts that the disallowance of costs claimed by the subgrantee is a "deobligation" of funding for work at Bell Springs. The subgrantee states "a DSR is in the nature of a contract and the operation of deobligation is inconsistent with the same." Since FEMA never approved a DSR for the work that is the subject of this appeal, this assertion is without a factual basis and need not be addressed in this analysis.
Specific to the Bell Springs site, the subgrantee states that the only work it had performed up to the time of the FEMA audit was rebuilding the roadbed to restore the track to its original alignment. Further, the subgrantee states that the damage at Bell Springs was caused by river bank erosion and the Bell Springs area only becomes unstable when "disasters caused by heavy rains and flooding inundate the soil and the river washes away the roadbed."
DISCUSSION
Landslide Policy Relating to Public Facilities
The subgrantee contends that FEMA cannot apply the Landslide Policy with the force of a regulation because it has not followed the administrative rulemaking procedures set forth in the Administrative Procedures Act (APA).
The Landslide Policy, as are policies generally, was adopted by FEMA to clarify our interpretation and application of the Stafford Act and its implementing regulations to a specific situation. In the case of the Landslide Policy, it clarifies Section 406(a) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, P.L. 93-288, as amended (Stafford Act). Specifically, it clarifies the requirements that to be eligible for permanent restoration funding, a public facility must have been damaged or destroyed by a major disaster. These Stafford Act requirements are set forth in FEMA implementing regulations, 44 CFR 206.201(c) and 44 CFR 206.223(a)(1), respectively. The term "public facility" is defined in 44 CFR 206.201(c) as any publicly or privately owned building, works, system, or equipment, built or manufactured, or an improved and maintained natural feature. To be eligible for disaster assistance, work must be required as a direct result of a major disaster. This threshold eligibility requirement is set forth in 44 CFR 206.223(a)(1) and discussed in more detail in the Public Assistance Guide on pages 37 and 38. As such and contrary to the subgrantee's assertion, the Landslide Policy does not represent administrative rulemaking in violation of the APA but instead simply clarifies and further refines Section 406(a) of the Stafford Act and its implementing regulations.
The subgrantee further asserts that the Landslide Policy is inconsistent with Congressional intent as expressed in the definition of "major disaster" in Section 102(2) of the Stafford Act that specifically includes natural landslide and mudslide events. The Landslide Policy is not inconsistent with this definition, as the subgrantee contends, because it does not state that a landslide or a mudslide cannot result in a disaster declaration nor does it preclude the provision of assistance for the restoration of facilities damaged by landslides or mudslides. Instead, the Landslide Policy clarifies the eligibility requirements applicable to the repair of public facilities (including the restoration of integral ground). Further, it does so in accordance with the Stafford Act and applicable implementing regulations as discussed above.
Bell Springs
The subgrantee states that "it is readily apparent that river bank erosion was the cause of track roadbed failure" and has submitted a report from its geotechnical consultant, Shannon & Wilson, Inc., to support the claim. While the consultant's report does indicate that erosion of the toe of the slope by the Eel River is a primary contributor to the slope failure, it also mentions the "nature of the soils and geology at the site, the tendency for these soils to move, and the pre-existing landslides and slide planes that have developed in the area." This report notes that the "limits of the affected area also correspond to the limits of a complex, very large, rotational-translational-earthflow landslide." The report also confirms the existence of large, active landslides on both sides of the Eel River. In other words, the report confirms the findings set forth in FEMA's letter dated September 18, 1996, that a number of non-disaster related conditions have contributed to the damage at Bell Springs.
The consultant's report also states that the subgrantee should expect to expend a significant effort maintaining the track grade and alignment at Bell Springs "due to continued movements of the slopes below and above the tracks." This statement confirms the determination made by FEMA that this site is unstable.
The Landslide Policy states that if a site is found to be unstable and the instability was exclusively cause by the disaster, the cost to restore the facility at the original site is eligible. If the site is found to be unstable due to an identified, pre-existing condition, the subgrantee is responsible for stabilizing the site. Once the site is stabilized, the cost to restore the facility at the original site is eligible. Geotechnical consultants employed by the subgrantee and by FEMA have confirmed that the site known as Bell Springs is unstable due to a number of pre-existing conditions. There has not been any geotechnical information provided that supports the conclusion that the instability of the site has exclusively been caused by 979-DR (or subsequent disasters).
During the closeout of the federal portion of the subgrantee's disaster application, it was determined that the additional costs claimed for the repairs at Bell Springs were for site stabilization. The subgrantee states that the only work accomplished was rebuilding the roadbed to restore the track to its original alignment and that it has not performed any site stabilization work. FEMA never approved an expanded scope of work for the Bell Springs site encompassing approximately 4000 feet. In fact, FEMA denied the subgrantee's request for supplemental funding because the site was unstable and because FEMA considered the work to include ineligible site stabilization. Nevertheless, in connection with the closeout of its application for 979-DR more than three years later, the subgrantee again requests funding for the same work that had previously been denied.
Regardless of whether the scope of work included site stabilization, FEMA never approved as eligible the expanded scope of work for the Bell Springs site. The costs relating thereto are not, therefore, eligible. Further and as set forth in the Landslide Policy, if a site is unstable as a result of identified, pre-existing conditions, the subgrantee is responsible for stabilizing the site. The cost to restore the facility at the original site is eligible after the site is stabilized. The site has not been stabilized by the subgrantee and remains highly unstable. The additional work and funding that is the subject of this appeal is not, therefore, eligible. Although the site has not been stabilized, we will not deobligate previously approved funding; however, we will not approve additional funding for an expanded scope of work for the Bell Springs site.
CONCLUSION
The instability of the site known as Bell Springs and the multiple causes of the instability have been documented both by FEMA geotechnical engineers and the subgrantee's geotechnical consultant. As the instability was not exclusively caused by the disaster, the subgrantee is responsible for stabilizing the site. Once the site is stabilized, the cost to restore the facility at the has refore, the restoration of the site is not eligible. Accordingly, the subgrantee's appeal is denied.
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