Flood Control Works

Appeal Brief

Appeal Letter

Appeal Analysis

Background

From April 30, 2010 through May 18, 2010, severe storms, tornadoes, heavy rains, high winds, flooding, and flash flooding affected the City of Clarksville (Applicant).  FEMA prepared Project Worksheet (PW) 2826 to address debris removal from the Applicant’s various parks, including Trice Landing Park (Park).  FEMA prepared PW 5011 to address damage to the Applicant’s boat dock (Dock) located at the Park.  FEMA later determined that the facilities were located within a United States Army Corps of Engineers (USACE) flowage easement and, as a policy matter, Public Assistance (PA) grant funding was not available to reimburse restoration work or debris removal work for such facilities. 

First Appeal

In its first appeal dated June 24, 2011, pertaining to PW 2826, and first appeal supplement dated October 18, 2011, pertaining to PW 5011, the Applicant appealed FEMA’s determination that the projects reflected in these PWs were not eligible because the facilities were within a USACE flowage easement.  The Applicant argued that the USACE easement did not include a hold harmless provision.  In addition, the Applicant asserted that Stafford Act[1] claims are unrelated to any contractual provisions regarding liability or flood rights. 

In separate letters dated October 16, 2014, the Region IV Regional Administrator (RA) determined that the Park was located within a USACE flowage easement, and as a policy matter, FEMA does not provide PA funding “in such circumstances where the agreement reflects the Government’s intent that the risk of damage to facilities in the high risk flood area be borne by the owner.”  As both appeals related to work performed in the Park, the RA denied $1,873.72 in funding related to PW 2826 and $7,960.00 for work addressed in PW 5011.  However, the RA partially approved the first appeal for PW 2826, obligating $3,747.43 in debris removal costs for other parks owned by the Applicant. 

Second Appeal

In separate appeals for PWs 2826 and 5011, both dated January 23, 2015, the Applicant requests an additional $1,873.72 in FEMA funding for PW 2826 and $7,960.00 in funding for PW 5011.  The Applicant asserts that, while the facilities are located within a USACE flowage easement and governed by a lease agreement, the terms of the lease do not absolve the Government from liability when natural flooding occurs.  In addition, the Applicant asserts that the May 2010 flooding was not caused in any way by action or inaction of the USACE, as evidenced by an USACE After Action Report[2] and Memorandum in Support of Motion to Dismiss submitted by the USACE in A.O. Smith Corp., et al. v. United States.[3]  Finally, the Applicant argues that FEMA’s policy to deny PA funding for damaged facilities located within USACE flowage easements directly contradicts the intent of the Stafford Act. 

Discussion

The Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) authorizes FEMA to provide federal assistance to a local government for the repair, restoration, reconstruction, or replacement of a facility damaged by a declared disaster.[4]  While FEMA is authorized to provide reimbursement to eligible applicants, the Stafford Act does not obligate FEMA to provide PA reimbursement; meaning FEMA’s authority is discretionary.[5]  Pursuant to Title 44 of the Code of Federal Regulations (C.F.R.) § 206.223(a)(3), disaster-related work must be the legal responsibility of the applicant to be eligible for PA funding.  Ownership of a facility is generally sufficient to establish responsibility.^[6]  FEMA does not dispute that Clarksville Gas and Water is an eligible applicant, nor that the Park and Dock are eligible facilities.  On second appeal, the issues in dispute are whether the damage was disaster-related or intentionally caused by the USACE and, if the damage was disaster-related, whether the Applicant is legally responsible for disaster-related repair work. 

USACE Easement

In the past, FEMA has denied PA funding to restore facilities located in USACE flowage easements, in particular when the flowage easement includes provisions that identify risks to the facility and hold the Federal Government harmless.[7]  FEMA reviews each project on a case-by-case basis and determines eligibility using the terms of the legal instrument.[8]  FEMA considers the hold harmless provisions to evaluate the inherent level of risk and as evidence of the state or local government’s awareness and acceptance of risk.[9]  If the governing legal instrument includes language that clearly holds the applicant responsible for any flood damage that occurs to its facilities due to USACE actions or inactions, and/or any other causes specified in the legal instrument, FEMA will deny PA funding for the project because inclusion of such language indicates that the risk of damage is great,[10] and that the owner of the facility is aware of and has assumed it should damage occur.  FEMA’s existing practice is to deny assistance to facilities located in USACE flowage easements where the language in the flowage easement is clear that the Applicant is responsible for any flood damage that occurs to its facilities due to USACE actions or any other causes specified in the flowage easement.[11]  However, if the legal instrument does not include such language, the project is potentially eligible, and other eligibility criteria for the PA Program apply.[12] 

Both the Park and the Dock are subject to a lease agreement between the USACE, the Lessor, and the Applicant, the Lessee.[13]  The relevant lease agreement states, “[t]he United States shall in no case be liable for any damage or injury to the structures herein consented to, which may be caused by any action of the United States under its easement, or that may result from future operations undertaken by the United States, and no claim or right to compensation shall accrue from such exercise of the United States’ easement rights.”[14]  The lease agreement does not include language regarding liability for damage caused by natural flooding, specifically holding the Applicant responsible for damage caused by natural flooding, nor does it extend the Government’s limited liability to damage caused by natural flooding.  In this instance, the flooding was caused by natural flooding, not USACE action or inaction.[15]  Therefore, as a matter of practice, FEMA is not precluded from providing PA reimbursement for these projects; so FEMA will evaluate other criteria to determine project eligibility.[16] 

Legal Responsibility

Parks and public boat docks are generally eligible for PA funding.[17]  While federal agencies are not eligible for PA funding, and legal responsibility usually lies with the owner of the facility, there are circumstances where a federally-owned facility that is operated and maintained by a local government may be eligible for assistance because the local government has the legal and financial responsibility for the operation, maintenance, and repairs for the facility.^[18]  Examples include roads constructed by the U.S. Forest Service and the Bureau of Indian Affairs, and reservoirs and water delivery systems constructed by the U.S. Bureau of Reclamation.^[19]  FEMA’s practice is to provide Public Assistance for leased facilities if the applicant can establish legal responsibility for disaster-related repair or replacement of the damaged facility.[20] 

The lease agreement governing the Park contains several provisions that require the Applicant to assume responsibility for the repair and replacement of disaster-related damage.  First, the Applicant accepted the condition of the property “without obligation on the part of the United States to make any alterations, repairs, or additions.”[21]  In addition, the lease agreement permits the erection of new structures that “remain the property of the [Applicant].”[22]  The Applicant must also keep the premises in good order and in a safe condition, which includes correcting and eliminating immediate threats to health, life, or property.[23]  Finally, the Applicant must “exercise due diligence in the protection of all property located on the premises against fire or damage from any and all other causes.”[24]  In reading the terms of the lease agreement together, it is clear that the Applicant was legally responsible for removing disaster-related debris and repairing disaster-related damage to property located on or within the Park as a result of Disaster 1909.

Work Eligibility

Generally, debris removal is eligible for PA reimbursement.[25]  The scope of work for PW 2826 utilized force account labor and equipment and contract services to collect and remove mud, trash, woody and vegetative debris from the Park.  For PW 2826, a FEMA Project Specialist reviewed timesheets, payroll, and equipment records and invoices and found them to be accurate and reasonable.[26]  Based on the Stafford Act and implementing regulations, the work completed in PW 2826 is eligible for PA reimbursement. 

FEMA may reimburse costs associated with permanent repair work of a facility damaged by a declared disaster.[27]  The scope of work for PW 5011 includes utilizing contract labor to install an aluminum boat dock ramp, repair a damaged television router, replace breakers and outlets, and remove and replace hand rails on the boat dock ramp.  However, procurement for the project had not occurred at the time of PW formulation.  If the Applicant can demonstrate that the replacement of the Dock was procured in compliance with federal grant requirements, it is also eligible for PA reimbursement.

Conclusion

The lease agreement governing PWs 2826 and 5011 does not contain language demonstrating that the Applicant had assumed the risk for all causes of flooding within the flowage easement such that it should be precluded from receiving PA funding.  As such, the existence of the lease and USACE easement do not justify denying eligibility.  In addition, debris removal work outlined in PW 2826 is eligible under the PA program.  Regarding PW 5011, replacement of the Dock is potentially eligible, contingent upon the Applicant successfully demonstrating the work was procured in compliance with federal grant requirements.  As such, the appeal is granted.