Replacement of Police Vehicles - Improved Project

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster1604-DR-MS
ApplicantCity of D’Iberville
Appeal TypeSecond
PA ID#047-19180-00
PW ID#10079
Date Signed2013-12-20T00:00:00

Citation:  FEMA-1604-DR-MS, City of D’Iberville, Replacement of Police Vehicles, Project Worksheet (PW) 10079

Cross-Reference:  Improved Project           

Summary:  During Hurricane Katrina, eight police vehicles owned by the City of D’Iberville (Applicant) were destroyed: six Ford Crown Victorias (spanning model years 1995 to 2005), one 2000 Ford Expedition sport utility vehicle (SUV), and one 1999 Dodge Ram truck.  To replace the vehicles, the Applicant purchased, at a cost of $193,240, three 2006 Chevrolet Tahoe SUVs, three 2006 Chevrolet Silverado trucks, one 2006 GMC Sierra truck, and one 2005 Dodge Ram truck.  FEMA prepared Project Worksheet (PW) 10079 to document reasonable replacement costs of the eight lost police vehicles, which totaled $150,206.  With an insurance reduction of $94,634, the total amount obligated was $55,572.    The Applicant requested an improved project for the replacement of the vehicles.  The Mississippi Emergency Management Agency approved the Applicant’s request, but capped funding at the obligated PW amount of $55,572.                       

The Applicant submitted a first appeal on May 31, 2011, requesting reimbursement of $43,034, which represents the purchased amount less the insurance proceeds and obligated PW amount.  The Applicant stated it was in desperate need of police vehicles to protect its citizens and, because it would take weeks to order comparable vehicles, it purchased SUVs and trucks from local automobile dealerships.  The Applicant argued FEMA guidelines provide for the purchase of new SUVs and other vehicles, and that such purchases would be considered on a case-by-case basis.  On September 28, 2012, the Regional Administrator denied the first appeal, explaining that the SUVs the Applicant purchased were not comparable to its destroyed Ford Crown Victoria sedans.  In its second appeal, the Applicant reiterates the same arguments it asserted on first appeal.                        

Issue:   Did the Applicant demonstrate that it is eligible for reimbursement for the difference in the reported cost to replace the destroyed police vehicles?                       

Finding:  Partially.  The purchase of SUVs in lieu of vehicles similar to those that were destroyed (i.e., sedans) is considered an improved project, and reimbursement based on the originally obligated amount for those destroyed vehicles is warranted.  However, one SUV and one truck were replaced with similar vehicles, and additional funding is eligible for those two vehicles.

Rationale:  44 CFR §206.203(d), Federal grant assistance, Funding options—(1) Improved projects; FEMA Public Assistance Guide (1999 edition), page 57.

Appeal Letter

December 20, 2013

Mr. Robert Latham, Jr.
Executive Director
Mississippi Emergency Management Agency
220 Popps Ferry Road
Biloxi, Mississippi  39531

Re:  Second Appeal–City of D’Iberville, PA ID 047-19180-00, Replacement of Police Vehicles - Improved Project, FEMA-1604-DR-MS, Project Worksheet (PW) 10079

Dear Mr. Latham:

This letter is in response to a letter from your office dated January 10, 2013, which transmitted the referenced second appeal on behalf of the City of D’Iberville (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) decision to deny $43,034 in funding associated with the replacement of eight disaster-damaged police vehicles.

As explained in the enclosed analysis, I have determined that the costs of replacing the Applicant’s 2000 Ford Expedition sport utility vehicle (SUV) and its 1999 Dodge Ram truck with new SUVs are fully eligible.  The purchase of six additional new SUVs and trucks to replace six destroyed Ford Crown Victoria sedans, however, represents an improved project, and I have determined that the additional funding the Applicant is requesting is not eligible. Accordingly, I am partially approving this appeal.  By copy of this letter, I am requesting the Regional Administrator take appropriate action to implement this determination.

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

Sincerely,

/s/

Deborah Ingram
Assistant Administrator
Recovery Directorate

Enclosure

cc:  Major P. May
      Regional Administrator
      FEMA Region IV

Appeal Analysis

Background

In 2005, Hurricane Katrina’s high winds and storm surge destroyed eight police vehicles owned by the City of D’Iberville (Applicant).  The vehicles consisted of six Ford Crown Victoria sedans (spanning model years 1995 to 2005), one 2000 Ford Expedition sport utility vehicle (SUV), and one 1999 Dodge Ram truck.  Prior to FEMA preparing PW 10079, the Applicant purchased the following vehicles to replace those destroyed during the hurricane:  three Chevrolet Tahoe SUVs, three Chevrolet Silverado trucks, one GMC Sierra truck, and one Dodge Ram truck.  The total cost of these eight replacement vehicles was $193,240. 

Using Applicant-provided insurance appraiser reports as well as a $22,246 purchase invoice for a 2005 Ford Crown Victoria, FEMA prepared PW 10079 for a total of $150,206 for the replacement costs of the six destroyed Ford Crown Victoria sedans (amounting to $133,476), the 2000 Ford Explorer SUV ($9,675), and the 1999 Dodge Ram truck ($7,055).  A reduction of $78,170 was initially applied for anticipated insurance proceeds.  PW 10079 was adjusted (-$16,464) in version 2 to reflect $94,634 in actual insurance proceeds the Applicant received, resulting in a total PW obligation of $55,572.

The Applicant requested an improved project at an estimated cost of $98,606 (the $193,240 it paid to replace its eight destroyed police vehicles less the $94,634 it received in insurance proceeds).  The Mississippi Emergency Management Agency (Grantee) approved the Applicant’s improved project request; however, recommended that the improved project be capped at $55,572 (the value of the PW after reducing insurance proceeds).  FEMA closed PW 10079 Version 2 on March 30, 2011. 

First Appeal

On May 31, 2011, the Applicant submitted a first appeal, which was transmitted by the Grantee to FEMA on July 26, 2011, requesting reimbursement of $43,034, (the difference between the replacement purchased amount of $193,240 and the actual insurance proceeds of $94,634 and previously obligated $55,572).  The Applicant stated that it was in desperate need of police vehicles to protect its citizens in the wake of Hurricane Katrina.  Because it would take weeks to order comparable vehicles, the Applicant asserted, it purchased SUVs and trucks from local dealerships— the only vehicles it could procure in the days immediately following the hurricane.  The Applicant referenced Disaster Specific Guideline (DSG) #10, FEMA-1604-DR-MS, Replacement of Police/Fire Vehicles and Fire Trucks, dated February 1, 2006, regarding replacement of damaged police vehicles equipped as an interceptor/cruiser model with new, similar models—such as replacing a Ford Crown Victoria with a Chevrolet Impala.  The Applicant states in its first appeal that, under DSG #10 guidelines, the purchase of new SUVs and other vehicles that are represented as specifically equipped will be considered on a case-by-case basis.

On September 28, 2012, the Regional Administrator denied the first appeal, explaining that pursuant to 44 CFR §206.226(h), Restoration of damaged facilities, Equipment and furnishings, if equipment is “damaged beyond repair, comparable items are eligible as replacement items.”  In this case, the Regional Administrator determined, the SUVs the Applicant purchased were not comparable to Ford Crown Victoria sedans and were not eligible as replacement vehicles.  The Regional Administrator also referenced the 1999 version of the FEMA Public Assistance Guide to note that, although a replacement not being available within a reasonable time and distance is justification for replacing a used item with a new item, such circumstances do not justify replacing a used item with a more expensive new item.  According to the Regional Administrator’s decision, FEMA will fund the full cost of a replacement item only if the replacement is comparable to the original item.

The Regional Administrator concluded that pursuant to 44 CFR §206.203(d), Federal grant assistance, Funding options—(1) Improved projects, the Applicant “properly submitted the request for an improved project in connection with the vehicle purchases.  Its decision to limit eligible costs at the approved amount instead of the [Applicant’s] actual costs for incomparable vehicles conforms to Federal regulations and FEMA policy.”

Second Appeal

The Applicant submitted a second appeal on December 27, 2012, which was forwarded to FEMA from the Grantee on January 10, 2013.  The Applicant reiterates the same position it claimed in the first appeal: that it could not locate comparable vehicles to replace the damaged police vehicles immediately following Hurricane Katrina and that the purchase of SUVs was its only option.  The Applicant argues that FEMA guidelines provide for approval for this type of scenario. 

Discussion

DSG #10 was issued to provide clarification related to the preparation of PWs for police and fire vehicles that were completely destroyed as a direct result of the disaster.  As it relates to police vehicles, it specifically addresses the replacement of an “interceptor/cruiser model,” i.e., replacement of a Ford Crown Victoria with a Chevrolet Impala.  The DSG states that a proposed new replacement involving these specific model vehicles that are not similarly equipped will be considered on a case by case basis.  As it relates to SUV, SUVs and other vehicles “that are represented as specially equipped will be considered on a case by case basis.”  Additionally, the DSG states that “[v]ehicles other than these models will continue to be replaced with vehicles that are approximately the same age, capacity, and condition.”  The DSG does not state that a Ford Crown Victoria can be replaced with a SUV. 

The Applicant’s improved project request for its purchase properly was approved by the Grantee.  The six Ford Crown Victoria police vehicles were replaced with SUVs and trucks.  This is considered an improved project. 

Under the 1999 edition of the Public Assistance Guide, replacing a used item with a new item is permissible under limited circumstances.  In this case, FEMA determines that funding such a replacement with respect to the Applicant’s destroyed SUV and truck is appropriate.  FEMA accepts the Applicant’s assertion that it purchased SUVs and trucks from a local dealer because those were the only vehicles it could procure in the days immediately following the hurricane.  At the time of the disaster, the Applicant owned a 2000 Ford Expedition SUV and a 1999 Dodge Ram truck.  To replace them, the Applicant purchased a 2006 Chevrolet Tahoe SUV (for $29,770) and a 2005 Dodge Ram truck ($17,412) for a total cost of $47,182.    PW 10079 included $16,730 to account for these two vehicles.  The difference between the total cost for replacement ($47,182) and the cost previously approved ($16,730) is $30,452.  FEMA concludes, therefore, that the Applicant should be reimbursed an additional $30,452.

Conclusion

The additional costs requested related to the Applicant’s replacement of Ford Crown Victoria sedans with new SUVs are not eligible.  However, in this case, FEMA finds that the purchase of new SUVs to replace its damaged Chevrolet Tahoe SUV and Dodge Ram truck is justified.  Therefore, those purchases are eligible for reimbursement.


 
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