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Second Appeal Letter
PA ID# 093-30550-00; Town of Gramercy
PW ID# 16158; Hazard Mitigation Proposal
February 16, 2010
Assistant Deputy Director
Disaster Recovery Division
Governor’s Office of Homeland Security and Emergency Preparedness
State of Louisiana
7667 Independence Boulevard
Baton Rouge, LA 70806
Re: Second Appeal: Town of Gramercy, PA ID 093-30550-00, Hazard Mitigation Proposal
FEMA-1603-DR-LA, Project Worksheet (PW) 16158
Dear Mr. DeBosier:
This is in response to a letter from your office dated April 27, 2009, which transmitted the referenced second appeal on behalf of the Town of Gramercy (Applicant). The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of its request for $342,000 for a Hazard Mitigation Proposal (HMP) associated with the repair of a water intake system funded under PW 16158. In the second appeal, the Applicant is requesting a revised HMP at an estimated cost of $563,913.
On September 23, 2005, high winds caused a ship moored on the Mississippi River, downstream from the Applicant’s water intake structure, to shift and damage the water intake system and a protective dolphin pile. FEMA approved $383,958 under PW 16158 for the replacement of the dolphin pile, the repair of the water intake structure, and an HMP. The HMP, estimated at $49,860, would install a second pipe-support structure and pipe casing around the intake pipe to provide improved strength to the intake pipe. The Applicant requested approval of a second HMP under the same PW, estimated at $342,000, to install a “protective fender” consisting of four new monopiles to supplement the protection provided by the existing dolphin. FEMA denied the second HMP, because the four additional piles did not exist prior to the event, and the HMP was not directly related to the damaged elements of the facility.
On August 6, 2008, the Applicant submitted a first appeal requesting approval of the installation of the four monopiles as an HMP. The Applicant stated that the proposal was cost effective and recommended by the Town engineer. The Regional Administrator denied the first appeal on December 16, 2008, stating that Section 406 mitigation measures must apply only to the damaged elements of the facility, and that the HMP exceeded 15 percent of the total cost of the Applicant’s eligible repair work.
The Applicant submitted a second appeal on April 2, 2009, requesting approval of a revised HMP for the installation of five protective monopiles for $563,913. Under its proposal, the Applicant will not replace the damaged dolphin. The Governor’s Office of Homeland Security and Emergency Preparedness (GOHSEP) contends that the Applicant’s HMP is eligible because the HMP relates to the eligible disaster-related damages and will reduce the potential of future, similar disaster damages. GOHSEP further argues that the damaged facility is an element of a water treatment plant, a public utility, and the HMP is cost effective.
The Director of FEMA’s Public Assistance Division met with Applicant on August 18, 2009, to discuss the appeal. The Applicant restated the arguments in the second appeal. The Public Assistance Division Director asked the Applicant to provide a benefit-cost analysis for the HMP and the Applicant provided one on August 19, 2009.
FEMA has discretionary authority under Section 406 of the Stafford Act and 44 CFR §206.226(e), Hazard mitigation, to provide cost-effective hazard mitigation measures related to the restoration of damaged facilities. Response and Recovery Policy 9526.1 Hazard Mitigation Funding Under Section 406 (Stafford Act), dated August 13, 1998, requires that section 406 hazard mitigation measures be directly related to, and incorporated in, the repair of eligible disaster related damage and must directly reduce the potential of future, similar disaster damages to the eligible facility.
In this case, the HMP to install five monopiles will protect the damaged water intake structure. However, the proposal is not cost effective. The Applicant’s benefit-cost analysis for the five monopiles shows a benefit-cost ratio of 1.1. However, the analysis includes $389,913 for the project cost instead of $563,913. When the correct cost is used, the benefit-cost ratio is 0.82. The Applicant reduced the HMP cost in the benefit-cost analysis to account for cost savings associated with the damaged dolphin that the Applicant would not replace. The Applicant’s decision whether to replace the damaged dolphin does not affect the cost effectiveness of the mitigation proposal.
I have reviewed the information submitted with the appeal and have determined that the HMP to install five monopoles is not cost effective. Therefore, I deny the appeal.
Please inform the Applicant of my determination. This determination is the final decision on this matter pursuant to 44 CFR §206.206, Appeals.
Elizabeth A. Zimmerman
Disaster Assistance Directorate
cc: Tony Russell
FEMA Region VI