West Cotati Reclamation Pipeline

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

DisasterFEMA-1155-DR
ApplicantCITY OF SANTA ROSA
Appeal TypeSecond
PA ID#097-70098
PW ID#94960
Date Signed2001-02-16T05:00:00
U>Citation: FEMA-1155-DR-CA, PA 097-70098, City of Santa Rosa, DSR 94960, West Cotati Reclamation Pipeline

Cross-reference: Legal Responsibility, Facilities Under Construction

Summary: From January 2-5, 1997, El Ni?o storms washed out a pipeline owned by the City of Santa Rosa (City). FEMA approved DSR 94960 for $14,391 to replace the damaged portion in-kind (150 linear feet). The City later found that approximately 1,100 linear feet of pipeline had been damaged. It requested a change in the scope of work to relocate the pipeline to a more stable area. FEMA approved the City's request on January 26, 1999. While writing the new DSR, FEMA discovered that the pipeline was under construction at the time of the disaster and on June 23,1999, rescinded the January 26, 1999, letter and deobligated DSR 94960. The City claims that the pipeline was in use and 97 percent complete by December 31, 1996. However, the City did not sign the Notice of Completion (NOC) until January 21, 1997. Contract documents for the pipeline construction state that the work was to be done in accordance with the City's provisions, plans, specifications and the California Department of Transportation (Caltrans) Standard Specifications. The first appeal was denied based on language in the City's contract documents, which state that the contractor "assumes sole and complete responsibility for job site conditions during the course of construction, including safety of all persons and property." The City submitted its second appeal on June 16, 2000, asking for a total of $71,345. It claims that the Caltrans Standard Specifications, which may relieve the contractor from legal responsibility for disaster-related repair, do not conflict with its provisions and therefore are applicable in this situation.

Issues: Is the City legally responsible for the disaster-related repair work?

Findings: Yes, the Caltrans Standard Specifications (California Department of Transportation Standard Specifications, July 1992, Sections 7-1.16 and
7-1.165) allow the City to terminate the contract and relieve the contractor of legal responsibility in the event of a natural disaster.

Rationale: 44  CFR 206.223(a)

Appeal Letter

February 16, 2001

D.A. Christian
Governor's Authorized Representative
Governor's Office of Emergency Services
Post Office Box 419023
Rancho Cordova, CA 95741-9023

Re: Second Appeal - City of Santa Rosa, West Cotati Reclamation Pipeline, FEMA-1155-DR-CA, DSR 94960

Dear Mr. Christian:

This is in response to the referenced second appeal forwarded by your office on August 2, 2000. The City of Santa Rosa (City) is asking FEMA to reconsider its decision to deobligate Damage Survey Report (DSR) 94960 and to rescind the approval of a change in the scope of work. The total amount in dispute is $71,345, of which FEMA previously obligated $14,391. The City is requesting the difference of $56,954.

El Ni?o storms in early 1997 caused a slide, which dislodged 150 feet of the City's West Cotati reclamation pipeline. FEMA later found that the pipeline was under construction at the time of the disaster. Therefore, FEMA determined that the contractor was legally responsible for repairs to the pipeline. As explained in the enclosed analysis, we have determined that project specifications allowed the City, in the event of a natural disaster, to terminate the contract and relieve the contractor of obligations to repair the damaged pipeline. Therefore, the City is legally responsible for the repairs. For this reason, I am granting this appeal.

By copy of this letter I am asking the Regional Director to prepare a DSR to reimburse eligible costs. Funding should reflect work required to complete the project according to the change in the scope of work granted on January 29, 1999.

Please inform the applicant of this determination. My decision constitutes the final decision on this matter as set forth in 44 CFR  206.206.

Sincerely,


/S/
Lacy E. Suiter
Executive Associate Director
Response and Recovery Directorate

Enclosure

cc: Karen Armes
Acting Regional Director
FEMA Region IX

Appeal Analysis

BACKGROUND

In early January 1997, severe storms caused a slide, which dislodged 150 linear feet of the West Cotati reclamation pipeline. On February 13, 1997, DSR 94960 was approved for $14,391 to replace this section of pipeline (stations 132+50 to 134+00). It was noted that the pipeline supplies irrigation water to and is located on land owned by the Gallo Glass Company, and the Company was responsible for stabilizing the area prior to repair. On June 12, 1998, the City requested a supplement in the amount of $92,189, claiming that it was necessary to realign the pipeline in order to avoid the area where the settling occurred. A FEMA inspection team met with the City on December 2, 1998, to address the supplement request. The City planned to relocate 1,756 linear feet of pipeline out of the unstable area. At the time, no repairs had been made and temporary lines were being used. FEMA advised the City that they would not be given a supplement, but instead must request an improved project.

On January 26, 1999, the City reported that it had hired a contractor to repair the storm damage and had decided to abandon the old pipeline route in favor of a route designed to avoid areas that are at risk of slides. It stated that the revised estimate of "repairing the pipeline along its original route" was $68,000. An engineers estimate dated January 22, 1999, stated that in formulating the estimate, it considered completely removing and replacing the pipeline from stations 123+00 to 134+00 due to the extent of earthwork undertaken to stabilize the area. FEMA approved the request to relocate the damaged portion of the facility to an alternate site on January 29, 1999.

In preparing a new DSR to account for the change in the scope of work, FEMA found that the West Cotati reclamation pipeline was part of a construction project that was to begin in September 1996 and end in March 1997. The City signed a Notice of Completion (NOC) for the project on January 21, 1997, after the disaster occurred. FEMA informed the City that for this reason, the new DSR would not be completed, and DSR 39982 was prepared to deobligate DSR 94960 on June 23, 1999. The City supplied FEMA with two letters to describe why the NOC was filed late. In a letter dated March 29, 1999, the City stated that the project was 97 percent complete on December 31, 1996, and all materials had been installed. It stated that the last 3 percent consisted of as-built drawings and a manual to be turned in to the City. On
June 23, 1999, it submitted a timeline of events, which included pipeline-testing dates.

FEMA responded to the City on June 23, 1999, rescinding the January 29, 1999, letter which had granted a change in the scope of work. It stated that while the City received the NOC from its contractor on December 11, 1996, it did not accept legal responsibility for the facility until it signed the document on January 21, 1997. At the time the damage was discovered,
January 8, 1997, the facility was still under the legal authority of the contractor. On July 12 and July 20, 1999, the City provided letters to FEMA containing additional information. The first stated that none of the items to be completed as of December 10, 1996, pertained to the pipeline and that tests of the pipeline in December met all requirements for pressure and use. In its second letter, the City claimed that it does not file an NOC until all work is complete, but that the City accepted "substantial completion" of the pipeline on December 2, 1996, and began using it to fill the Gallo reservoir. The City defines substantial completion as: "the work has progressed to the point where, in the opinion of the Engineer, it is sufficiently complete in accordance with the contract documents so that the work can be utilized for the purposes for which it was intended."

FIRST APPEAL

In its first appeal, dated September 22, 1999, the City argued that its contract documents state that work should be done in accordance with the California Department of Transportation (Caltrans) Standard Specifications. The City claims that in the event of a governor-declared emergency, these specifications relieve the contractor from responsibility to repair disaster-related damage without compensation from the City. The City also claimed that while it did not sign the NOC until after the event occurred, it was legally responsible for the facility, as it had accepted the project as substantially complete. It stated that it had put the pipeline into use, just as many of its projects are put into operation before the NOC is signed.

FEMA denied this appeal on March 20, 2000. It cited contract documents, which state that the "contractor shall assume sole and complete responsibility for the job site conditions during the course of construction of this project" with the only exception of liability "arising from the sole negligence of the owner." FEMA found that this passage conflicts with the Caltrans Standard Specifications and therefore, takes precedence according to contract provisions. In addition, FEMA found that under the terms of the contract, the contractor was not relieved of the legal responsibility for the facility until the City accepted the work as complete. This did not occur until the NOC was filed.

SECOND APPEAL

The City submitted its second appeal on June 16, 2000. It contends that Caltrans Standard Specifications, which may relieve the contractor of the responsibility of repairing disaster-related damage, apply to this situation. In addition, it argues that the contract provision cited by FEMA does not supercede the Caltrans Specifications in this instance because the two provisions are not in conflict. The City also claims that it accepted legal responsibility for the facility when it was put into operation on December 2, 1996. The total amount the City is asking for is $71,345. Since FEMA obligated $14,391, the City is asking for the difference of $56,954. (Note: the $14,391 was determined ineligible and DSR 39982 was written on June 23, 1999, to deobligate this amount. However, it appears that this funding was not recovered from the City.)


DISCUSSION

The City claims that the pipeline project was 97 percent complete when the disaster occurred and that it had accepted legal responsibility for the project before the disaster and prior to filing the NOC. As evidence, it states that the pipeline was put into use on December 2, 1996, one month before the disaster. However, the NOC was not signed until January 21, 1997, at which time "said work was completed and accepted by the City of Santa Rosa."

The special contract provisions for the West Cotati Reclamation Pipeline Project say that the work shall be done in accordance with the Caltrans Standard Specifications, but that in the event of a conflict, the City's provisions, plans, standards and specifications take precedence. The City's provisions state that the contractor must obtain insurance against property damage, but it is unclear if this insurance must cover damage caused by natural disasters. The contract itself says that the contractor accepts all loss or damage arising out of the nature of the work, or from "acts of the elements, or from any unforeseen difficulties or obstruction which may arise or be encountered in the prosecution of the work until its acceptance by the said City." The section of the plans previously cited by FEMA states that the contractor "assumes sole and complete responsibility for job site conditions during the course of construction, including safety of all persons and property . excepting liability arising from the sole negligence of the Engineer, Owner, and City."

The Caltrans Standards Specifications are explicibytion 7-1.16 states that "until the acceptance of the contract, the contractor shall . bear the risk of injury, loss or damage to any part thereof by the action of the elements or from any other cause . The contractor shall rebuild, repair, restore and make good all injuries, losses or damages to any portion of the work or the materials occasioned by any cause before its completion and acceptance and shall bear the expense thereof, except as otherwise expressly provided in Section 7-1.65, `Damage by Storm, Flood, Tsunami or Earthquake.'"

Section 7-1.65 of the Standard Specifications says that, "in the event damage to the work is caused by a storm, flood, tsunami, earthquake or other natural disaster . the contractor may apply in writing to the engineer for the [City] to pay or participate in the cost of repairing damage to the work from that cause or, in lieu thereof, and at the sole discretion of the [City Utilities Department], terminate the contract and relieve the contractor of further obligation to perform the work." The Specifications then outline requirements if the contractor requests that the City pay or participate in the cost of damage repair and the type of repair work to be done (restoration in-kind).

It appears that the City's contract documents do not conflict with the Caltrans Standard Specifications because the Standard Specifications distinguish between "the action of the elements" (also mentioned in the contract) and a natural disaster for which the governor has declared a state of emergency. It is clear that the definition of "occurrence," Section 7-1.65 A includes events such as 1155-DR, and therefore, this specification applies in this situation.

CONCLUSION

While the contractor did not request that the City pay or participate in the cost of repairing the disaster-related damage in-kind, the City did, in effect, terminate the contract and relieve the contractor of any obligation to repair the damage when it signed the NOC on January 21, 1997. Therefore, the City was legally responsible for the damage to the facility For this reason, the appeal is granted.

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