Debris Monitors

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

DisasterFEMA-1403-DR
ApplicantCity of Kansas City
Appeal TypeSecond
PA ID#095-38000-00
PW ID#661
Date Signed2005-08-16T04:00:00
Citation: FEMA-1403-DR-MO; City of Kansas City, MO: PW #661, Debris Monitoring Costs

Cross-reference: Reasonable Costs; Category A

Summary: In response to the debris resulting from the winter ice storms in late January 2003, the City of Kansas City, Missouri (Applicant), contracted for debris removal services. FEMA and the State met with the Applicant to determine a reasonable cost to perform monitoring of the contractor activities. Rates obtained by six nearby Missouri counties were reviewed (average rate $14.87/hr) during the meeting, concluding that a base rate of $17 per hour would be reasonable. However, after failing to recruit and hire a sufficient number of monitors by a variety of means, the Applicant utilized an existing on-call emergency contract with Asplundh Tree Expert Company with a base rate for monitors of $34 per hour. Monitors were classified as degreed foresters and certified arborers. Neither the State nor FEMA were notified of the increased costs to perform the work until the Applicant submitted a request for reimbursement in the amount of $1.5 million, based on the hourly rate of $34. Without justification to support the increased rates, FEMA limited the hourly rate to the originally quoted $17 per hour and obligated the PW in the amount of $645,960.07.

The Applicant submitted a first appeal asserting the rates were reasonable “because of the specific qualifications required of the inspectors, the fact that less costly means provided inadequate, and because the prevailing rate charged under the emergency contract was within range of other temporary inspector costs”. The Regional Director denied the appeal stating that the rate of $34 per hour was excessive and unreasonable in that it exceeded comparable rates for debris monitoring performed during the disaster. The Applicant’s second appeal asserts that the costs are reasonable for the specific qualifications required for the inspectors and are comparable to applicants in close proximity to Kansas City.

Issues: (1) Are the costs reasonable for the monitoring services performed?
(2) Should the costs be increased based on the rates allowed in nearby Kansas counties?

Findings: (1) No. The applicant engaged skill levels (Foresters/Arborers) in excess of those necessary to perform the required tasks, such that the associated rates are not considered reasonable when applied to the debris monitoring services actually performed.
(2)
(3) No. The Applicant is comparing costs to those funded in Kansas, when the surrounding in-state communities retained monitoring staff at significantly less costs than those being requested.

Rationale: OMB Circular A-87, Reasonable costs

Appeal Letter

August 16, 2005

Jerry Uhlmann
Director
State Emergency Management Agency
Post Office Box 116
Jefferson City, Missouri 65102

Re: Second Appeal - City of Kansas City, Ice Storm of 2002,
Debris Monitors, FEMA-1403-DR-MO, Project Worksheet (PW) 661,
Dear Mr. Uhlmann:

This letter is in response to the referenced second appeal transmitted by your letter dated November 29, 2004. The City of Kansas City (Applicant) is appealing FEMA’s determination to limit the debris monitoring rate to $17 per hour rather than the actual rate incurred of $34 per hour. This determination resulted in a reduction of funding from the $1,499,526 requested to $645,960 obligated to PW 661. This reduction was applied based on a review of reasonable rates for such services.

As explained in the enclosed analysis, I have determined that the increased hourly rate for monitoring efforts is not eligible. The Applicant engaged skill levels in excess of those necessary to perform the required tasks, such that the associated rates are not considered reasonable when applied to the debris monitoring services actually performed. Accordingly, the Applicant’s appeal is denied.

Please inform the Applicant of my determination. My determination constitutes the final decision on this matter pursuant to 44 CFR §206.206.

Sincerely,
/S/
Daniel A. Craig
Director
Recovery Division
Emergency Preparedness and Response
Enclosure

cc: Dick Hainje
Regional Director
FEMA, Region VII

Appeal Analysis

BACKGROUND

A severe winter ice storm in late January 2002 (FEMA-1403, declared February 6, 2002) severely impacted the Kansas City metropolitan area and other western and west central Missouri communities. The weight of wind driven sleet and freezing rain in the city uprooted trees and snapped tree limbs or branches on most mature trees citywide. Many city streets and right-of-ways were impassable.

In order to eliminate immediate threats to life and public health and safety from the public right-of-ways and parks, the City of Kansas City, Missouri (Applicant) solicited bids and awarded a debris removal contract to Ceres Environmental. As a condition of Federal assistance, the State and FEMA required the Applicant to monitor the actions of the contractor. After failing to recruit and hire by a variety of means a sufficient number of monitors, the Applicant utilized an existing on-call emergency contract with Asplundh Tree Expert Company to retain sufficient numbers of monitors for the duration of the Ceres Environmental contract.

The FEMA Public Assistance Coordinator, his counterpart for the Applicant, and other officials discussed the hiring of monitors on February 25, 2002, and agreed that a $17 per hour base rate for monitors and a $4.50 per hour vehicle charge were reasonable. However, using the existing on-call emergency contract with Asplundh, the Applicant entered an agreement to pay the monitors a base rate of $34 per hour regular time, $51 per hour for overtime (1.5 x the base rate), and $68 per hour (2 x the base rate) for Sundays. Neither the State nor FEMA were contacted prior to entering this agreement, nor notified of the increased costs during the conduct of the work. It was not until May 15, 2003, that the Applicant submitted a request to the Missouri State Emergency Management Agency (SEMA) for reimbursement of a total cost of approximately $1.5 million, which was based on the hourly rates indicated above.

On May 16, 2003, SEMA requested the Applicant provide additional information to support their increased costs. After nearly seven months passed without a response from the Applicant, FEMA obligated PW 661 to reimburse the Applicant for their debris monitoring efforts. Without justification to support the increased rates, FEMA limited the hourly rate to the originally quoted $17 per hour base rate for regular time, time-and-a-half for overtime, and double-time for work performed on Sundays and holidays, plus associated transportation and per diem charges. Disallowed were claimed monitoring costs incurred from February 9 to February 28, 2002, because the Ceres contract did not commence until March 1, 2002. The total approved project cost for monitoring the Ceres debris removal contract was $645,960.07.

First Appeal

The Applicant submitted a first appeal of FEMA’s determination to limit the monitoring rates in PW 661 on February 18, 2004, transmitted by SEMA in a letter dated March 8, 2004. The Applicant asserted that the rates paid to their contractor were reasonable “because of the specific qualifications required of the inspectors, the fact that less costly means proved inadequate, and because the prevailing rate charged under the emergency contract was within range of other temporary inspector costs.” In a letter dated July 6, 2004, the Regional Director denied the appeal to reinstate the previously denied monitoring costs. The Regional Director agreed that monitors were necessary to properly manage the debris removal contractor, however, it was determined that the rate of $34 per hour was excessive and unreasonable in that it exceeded comparable rates for debris monitoring performed during the disaster.

Second Appeal

The Applicant submitted a second appeal of FEMA’s determination to deny funding for the increased monitoring costs, transmitted by SEMA in a letter dated November 29, 2004. To support their request, the Applicant again states that the costs are reasonable for the “specific qualifications required for the inspectors, the fact that less costly means proved inadequate.” The Applicant further states that entities in close proximity to Kansas City including Shawnee, Overland Park, and Johnson County, Kansas, also hired contract monitors during the 2002 ice storm, and asserts that the price structure approved for those governments should also apply to Kansas City.

DISCUSSION

The primary issue of the Applicant’s second appeal is the reasonableness of monitoring rates paid by the Applicant for debris monitoring services.

Qualifications for Debris Monitors
The Applicant asserts that the hourly rates are reasonable for the “specific qualifications required for the inspectors.” The information provided by the Applicant in their first appeal indicated that the contract workers are classified as "General Forester/Inspector" (Degreed Forester or Certified Arborer). Yet, the work performed was referenced as "monitors/inspectors … required to observe debris collection in the field to ensure that non-eligible debris was not included.” While the description of work is consistent with the expectations of FEMA, there is no basis to support that degreed foresters or certified arborers are necessary, or “required” as suggested by the Applicant, to perform this work. Therefore, it is concluded that the requested rate structure is reflective of the advanced skill level contracted for by the Applicant, rather than representative of a rate for lower-skilled field monitors which would be more appropriate for the monitoring task. As these higher skill levels cannot be justified as necessary for the work performed, the associated rate is not considered reasonable when applied to the actual work. It is appropriate, therefore, to limit the eligible rate structure to that agreed upon between the Applicant and FEMA prior to the Applicant engaging in these higher cost services ($17 per hour base rate).

Comparison of Costs to Surrounding Communities

As was provided in the first appeal response by the Regional Director, the review of debris monitoring rates incurred by six other nearby Missouri applicants found that the average base rate was $14.87. The data evaluated includes Johnson County at $8.50 per hour, City of Sedalia at $10 per hour, City of Blue Springs at $15.02 per hour, City of Warrensburg at $17.77 per hour, City of Raytown at $18.19 per hour, and the City of Independence at $19.74 per hour. It was this data that formed the basis for the earlier agreement between the Applicant and FEMA that the rate of $17 an hour was a reasonable rate for debris monitors.

The Applicant asserts that FEMA should consider their debris monitoring costs reasonable in that they are comparable to FEMA approved rates in nearby Kansas counties during the same disaster event. It is noted that while the City of Shawnee, Kansas, may have been reimbursed at a rate of $40 per hour, this rate is not typical of the nearby Missouri counties, nor may it alone provide the basis for increasing the allowable rate for the City of Kansas City.

While we do understand that certain efforts were made by the Applicant to contract with resources by other means than the emergency stand-by contract, the cost data reported for the nearby Missouri counties suggests that more reasonable hourly rates were attainable for the monitoring services. As such, it is not reasonable to allow reimbursement at the Forester/Arborer rate.

CONCLUSION

Based on a review of the information provided in the Applicant’s second appeal, we have concluded that the increased hourly rate for monitoring efforts is not eligible. The Applicant engaged skill levels in excess of those necessary to perform the required tasks, such that thedee Applicant’s appeal is denied.
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