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Second Appeal Letter
PA ID# 081-UZMC8-00; Johnson Memorial Hospital
PW ID# 2002; Hazard Mitigation
August 17, 2010
Governor’s Authorized Representatives
Indiana Department of Homeland Security
302 W. Washington Street, Room 321
Indianapolis, Indiana 46204
Re: Second Appeal–Johnson Memorial Hospital, PA ID 081-UZMC8-00, Hazard Mitigation,
FEMA-1766-DR-IN, Project Worksheet (PW) 2002
Dear Mr. Copeland:
This letter is in response to your letter dated October 26, 2009, which transmitted the referenced second appeal on behalf of the Johnson Memorial Hospital (Applicant). The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $387,840 for a mitigation proposal to modify and improve the Applicant’s sanitary sewer system.
Severe storms flooded approximately 51,173 square feet of Johnson Memorial Hospital to a depth of 18 inches on June 8, 2008. The Applicant determined that the flood damage resulted from surcharging of both the storm and sanitary sewers, which caused flooding around the hospital building entrances, parking and ambulance garage areas and penetrated into the building. The Applicant requested reimbursement from FEMA for the damages to the hospital as well as funding for a Hazard Mitigation Proposal (HMP) that consisted of flood route improvements, offsite drainage and sanitary sewer modifications. FEMA prepared PW 2002 for $777,794 to reimburse the Applicant for the repairs to the hospital, but denied the Applicant’s request for $1,354,116 for a HMP because the project was not cost effective. The Benefit Cost Analysis (BCA) resulted in a benefit-cost ratio of 0.22.
The Applicant submitted a first appeal in a letter dated May 12, 2009. The Applicant adjusted the scope of the HMP and reduced the cost to $387,840. The adjusted project consisted of constructing a lift station and associated sanitary sewer improvements as well as storm water rerouting measures. The Applicant argued that the adjusted project scope and cost resulted in a benefit-cost ratio greater than 1.0, which made the HMP cost effective. In a letter dated September 22, 2009, the Acting Regional Administrator denied the first appeal because the HMP did not directly relate to the damage elements of the facility as required by Disaster Assistance Policy DAP9526.1, Hazard Mitigation Funding under Section 406, dated July 30, 2007.
The Applicant submitted a second appeal on October 23, 2009, requesting $387,840 for the HMP. The Applicant stated that FEMA funded a hazard mitigation project for St. Joseph Hospital in Kokomo, IN following FEMA-1476-DR-IN, which was not directly related to eligible disaster-related damages. Therefore, FEMA should approve its request for hazard mitigation funding.
Section VII A of DAP9526.1 states “…The mitigation measures must be related to eligible disaster-related damages and must directly reduce the potential of future, similar disaster damages to the eligible facility. The work is performed on the parts of the facility that were actually damaged by the disaster and the mitigation measure provides protection from subsequent events. Exceptions to this provision will be reviewed on a case-by-case basis.” In addition, 44 CFR 206.226(e) and Section VII B of DAP9526.1 require hazard mitigation projects to be cost effective. Although the hazard mitigation project is not directly related to the damaged elements of the facility, the Applicant has demonstrated that the hazard mitigation project will directly reduce future, similar disaster damage to the hospital. However, the proposed project is not cost effective. Based on information that the Applicant submitted, we calculate a benefit-cost ratio of 0.8. A project with a benefit/cost ratio of 1.0 or greater is considered cost effective.
I have reviewed all information that the Applicant submitted and determined that the hazard mitigation project is not eligible for funding. Therefore, I deny the appeal.
Please inform the Applicant of my decision. This determination is the final decision on this matter pursuant to 44 CFR §206.206, Appeals.
Elizabeth A. Zimmerman
cc: Andrew Velasquez
FEMA Region V