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Second Appeal Analysis
PA ID# 125-U00B3-00; Clarksville Gas and Water
PW ID# 5225; Codes and Standards
Severe storms, flooding, straight-line winds, and tornadoes impacted the City of Clarksville, Tennessee from April 30 to May 18, 2010. The Gallows Hollow Lift Station (Facility) owned by Clarksville Gas and Water (Applicant) sustained damage to its pump motors, shaft bearings, pump seals, two variable frequency drives (VFDs), bubbler system, and motor control center (MCC). The Applicant contracted for completion of the necessary work items.
FEMA prepared Project Worksheet (PW) 5225 as a Category F project to reimburse the Applicant for work already completed and to fund additional repair work not yet finished. The work already completed at the Gallows Hollow Lift Station included project management services as well as electrical evaluation and testing services. The work to be completed included removing, rebuilding and installing two 60 hp pumps or, alternatively, a Hazard Mitigation Proposal (HMP) to replace the two 60 hp non-submersible pumps with two 70 hp submersible pumps, repairing two pump seal assemblies, rebuilding of the MCC, replacement of two VFDs, and a new bubbler system. FEMA found certain tasks in the contractor’s scope of work (SOW) to be partially or wholly ineligible. FEMA prepared PW 5225 for $170,049.14, which included reimbursement for work completed, Direct Administrative Costs (DAC), and a Cost Estimating Format (CEF) estimate. Following a review of PW 5225, FEMA disallowed the $170,049.14 in costs, as the Facility was located within a United States Army Corps of Engineers (USACE) flowage easement boundary area.
The Applicant’s first appeal is dated June 24, 2011. In it, the Applicant requested that FEMA: (1) increase the SOW to account for electrical contractor services, actual costs for project management services, increased repair costs for the MCC, replacement of the two VFDs, and the rebuild of the two motors and pumps; (2) approve code compliance upgrades for the flow meter, the heating, ventilation, and air conditioning (HVAC) system, combustible gas detectors, an emergency generator, stairs and walkways; (3) approve an HMP to elevate the equipment platform for the MCC and VFDs, replace the non-submersible pumps with submersible pumps; (4) address a time extension request through January 2013; and (5) award unspecified design costs. The Grantee transmitted the first appeal in a letter dated August 17, 2011.
In a letter dated May 12, 2015, the FEMA Region IV Regional Administrator (RA) partially approved the appeal for $550,403.15, subject to insurance reductions, for electrical contractor services, MCC repair, replacement of two VFDs, HMP costs for the 70 hp submersible pumps, and the elevated platform for the MCC and VFDs as a code compliance upgrade. The amount awarded also included the reinstated costs that FEMA initially denied due to the Facility being located in the USACE flowage easement. However, the RA denied the code compliance upgrades, finding that the flow meter, HVAC system, combustible gas detectors, stairs and walkways, and emergency generator were not damaged elements, but rather are new components. In addition, the RA denied the HMP work for the elevated platform for the switchgear as it was duplicative of the code compliance upgrade, as well as the refurbished non-submersible pumps as duplicative of the awarded HMP submersible pumps. The RA also denied some of the project management costs due to being too vague, and the unspecified design costs. The RA noted that FEMA would reconcile eligible project management costs, design services and the new structure to house the elevated MCC and VFDs at closeout. Outside of the appeal issues, the RA noted that the Applicant had submitted a time extension request through January 2013, which the State appropriately granted.
In a second appeal dated July 31, 2015, the Applicant requests $254,642.45 for what it asserts are code compliance costs denied on first appeal. The Applicant contends that its code compliance requests are mandated by Tennessee Department of Environment and Conservation (TDEC) design requirements. The Applicant further asserts that the TDEC design requirements are acceptable “standards” under Title 44 of the Code of Federal Regulations (44 C.F.R.) 206.226(d), and as such, upgrades performed in accordance with the criteria are eligible for Public Assistance (PA) funding. To substantiate its claim, the Applicant references Tennessee Rule 0400-40-02, which it states requires TDEC approval for all design plans, and in order to obtain such approval, the design must be performed in accordance with TDEC requirements. In addition, the Applicant offers a July 23, 2015 letter from Chief Engineer for the Division of Water Resources, which provides “that as part of the TDEC approval process, all design[s] must be in full compliance with TDEC Design Standards and all applicable code requirements.”
Codes and Standards
The Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) § 406 and implementing regulations authorize FEMA to provide federal assistance to a local government for the repair, restoration, or replacement of a facility damaged by a declared disaster and in conformity with current applicable codes, specifications, and standards. The regulations define “standards” as codes, specifications, or standards required for the construction of facilities. Pursuant to 44 C.F.R. § 206.226(d), FEMA may reimburse costs of federal, state, and local repair or replacement codes or standards, if the codes or standards (1) apply to the type of repair or restoration required; (2) are appropriate to the predisaster use of the facility; (3) are found reasonable, in writing, and formally adopted and implemented by the state or local government on or before the disaster declaration date or be a legal federal requirement applicable to the type of restoration; (4) apply uniformly to all similar types of facilities within the jurisdiction of the owner of the facility and; (5) were enforced during the time the standards were in effect. All five prongs must be met in order to be eligible for PA funding. Further explaining eligibility criteria, FEMA Disaster Assistance Policy (DAP) 9527.4, Construction Codes and Standards, states FEMA has the authority and responsibility to determine which repairs, code-mandated or otherwise, are eligible for assistance, and generally does not fund code-mandated work that does not meet all five prongs of 44 C.F.R. § 206.226(d), regardless of whether the work is needed to obtain a building, occupancy or environmental permit.
FEMA does not dispute that the TDEC Design Criteria apply to the type of repair or restoration required,  are appropriate to the predisaster use of the Facility, and are reasonable, in writing, and in effect at the time of the disaster. However, the TDEC Design Criteria do not meet the “formally adopted and implemented,” “uniformly applied,” and “enforced during the time it was in effect” requirements of 44 C.F.R. § 206.226(d)(3)-(5).
The Applicant asserts that the TDEC Design Criteria are required by Tennessee Rule 0400-40-02, because the Rule references the document. This is the Applicant’s primary argument for why TDEC Design Criteria are acceptable standards pursuant to 44 C.F.R. § 206.226(d). However, although Tennessee Rule 1200-40-02 was in effect at the time of the disaster and includes an identical reference, it does not mandate the use of the TDEC Design Criteria. It only requires that a licensed engineer prepare an engineering report or plans in accordance with “generally accepted wastewater engineering practices.” While Tennessee Rule 1200-40-02 recommends the TDEC Design Criteria as guidance, it explicitly provides that an engineer may deviate from the TDEC Design Criteria when their design is “adequately supported by calculations and actual testing data.”
DAP 9527.4, Construction Codes and Standards, explains that codes or standards are considered “formally adopted” if they are adopted by an appropriate legislative body or regulatory authority within the jurisdiction and formally incorporated into the building code or local government ordinance. Further, the policy stipulates that design standards, guidelines, policies, industry practices, or other non-mandatory provisions do not meet this criteria.
The TDEC Design Criteria are not rules formally adopted by the TDEC. Rather, as Tennessee Rule 1200-40-02 explains, the TDEC Design Criteria are internal guidance that TDEC made available to the public. The Applicant has not demonstrated that the TDEC Design Criteria have been formally incorporated into the jurisdiction’s building code or government ordinance, as required by FEMA policy. Instead, the TDEC Design Criteria seem to serve as design standards or guidelines because they explicitly state that they are meant to provide consistency while also allowing engineers to use their own judgment in supplementing the TDEC Design Criteria. For these reasons, the TDEC Design Criteria do not meet the “formally adopted” requirement of 44 C.F.R. § 206.226(d)(3).
Uniformly Applied and Enforced
Pursuant to 44 C.F.R. §206.226(d), the code or standard must be uniformly applied to all similar types of facilities in the jurisdiction and enforced during the time it was in effect. FEMA policy explains that the code or standard cannot be subject to discretionary enforcement by building or permitting officials and must provide for uniform accountability in the event of noncompliance. Moreover, the code or standard cannot be merely a recommendation or allow for variances.
On second appeal, the Applicant provides a letter from the TDEC Division of Water Resources Chief Engineer stating, “[i]n cases when required repairs [to the damaged wastewater collection, transfer, and treatment infrastructure] were greater than those considered typical maintenance activities, design of the repairs were required to be performed by a Tennessee licensed professional engineer. The design documents were then required to be submitted to TDEC-Division of Water Resources for approval prior to construction.” The letter goes on to state, “…as part of the TDEC approval process, all design[s] must be in full compliance with TDEC Design Standards and all applicable code requirements.” Although these statements imply that the TDEC Design Criteria are more than just a suggestion, the TDEC Design Criteria state otherwise. The TDEC Design Criteria not only allow for variances, if the variances can be substantiated by calculations and testing data, the approving regulatory body may use its discretion when approving engineering plans that deviate from the TDEC Design Criteria. In addition, neither the second appeal nor the letter from TDEC’s Chief Engineer provide the method for uniform accountability in the event of noncompliance. As such, the Applicant has not substantiated that the TDEC Design Criteria are uniformly applied and enforced pursuant to 44. C.F.R. § 206.226(d)(4)-(5).
TDEC Requirements Approved on First Appeal
In response to the Applicant’s first appeal, the RA determined that the Applicant’s HMP request on first appeal to construct a platform to elevate the MCC and VFDs was eligible because it was required by the TDEC Design Criteria and pertained to damaged elements of the facility. However, because the TDEC Design Criteria do not meet the formally adopted or uniformly applied and enforced prongs of 44 C.F.R. § 206.226(d), the upgrades are not eligible for funding on the basis of code compliance. This upgrade, however, may be eligible as an HMP under the Stafford Act § 406 as the MCC and VFD were damaged as a result of the disaster. To be considered as an HMP, the upgrade must comply with the requirements in DAP 9526.1, Hazard Mitigation Funding Under Section 406 (Stafford Act). Most notably, DAP 9526.1 requires that mitigation measures are shown to be cost effective. This work is ineligible as a code or standard compliance requirement, however FEMA will consider the potential eligibility of this work as an HMP under Stafford Act § 406.
Pursuant to 44 C.F.R. § 206.226(d) and Disaster Assistance Policy (DAP) 9527.4, Construction Codes and Standards, the TDEC Design Criteria do not meet the criteria as standards under the PA Program because they were not formally adopted or uniformly applied and enforced at the time of the disaster. As such, the upgrades performed to comply with TDEC Design Criteria are not eligible for PA reimbursement. Further, work to construct an elevated platform is not eligible as a code or standard requirement. However, FEMA will consider the potential eligibility of this work as an HMP.
 The amount of the second appeal is $254,642.45, however based on the figures in the first appeal, the total sum of the code compliance upgrades is $191,269.00.
 While the Applicant makes reference to TDEC “design requirements,” the citation for the document that the Applicant provided is State of Tennessee, Department of Health and Environment, Division of Water Pollution Control, Design Criteria for Sewage Works (Apr. 1989) [hereinafter Design Criteria].
 Tenn. Comp. R. & Regs. 0400-40-02 (2013).
 Letter from Chief Eng’r, TN Dep’t of Env’t and Conservation, Div. of Water Res., to Public Assistance Specialist, TN Emergency Mgmt. Agency (July 23, 2015) [hereinafter Letter from Chief Engineer].
 The Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, Pub. L. No. 93-288, § 406, 42 U.S.C. § 5172 (2007); see also 44 C.F.R. § 206.226 (2009).
 44 C.F.R. § 206.221(i).
 44 C.F.R §§ 206.226(d)(1)-(5).
 Disaster Assistance Policy DAP9527.4, Construction Codes and Standards, at 3 (Feb. 5, 2008).
 Though FEMA will not dispute in the analysis that the Design Criteria apply to the type of repair or restoration required, in that there may be a technically supportable relationship with the flow meter, it is neither simple nor obvious. Moreover, there are no technically supportable relationships between the rest of the code compliance upgrades and the damaged elements.
 FEMA does not dispute that Tennessee Rule 0400-40-02 was formally promulgated by an agency that has the authority to promulgate rules. However, Tennessee Rule 0400-40-02 was formally adopted in December 2013. Because it was adopted after the disaster event, the 2013 Rule is not applicable to this appeal. However, during the disposition of this appeal, FEMA obtained Tenn. Comp. R. & Regs. 1200-40-02 (1988), in effect at the time of the disaster.
 Tenn. Comp. R. & Regs. 1200-40-02-.03(2).
 DAP 9527.4, Construction Codes and Standards, at 5-6 (emphasis added).
 Tenn. Comp. R. & Regs. 1200-40-02-.03(2).
 DAP 9527.4, Construction Codes and Standards, at 6.
 44 C.F.R. §§ 206.226(d)(4)-(5).
 DAP 9527.4, Construction Codes and Standards, at 7.
 See FEMA Second Appeal Analysis, City of Gulfport, FEMA-1604-DR-MS, at 3 (Sep. 25, 2012) (determining that Design Criteria for public water systems published by the Mississippi Department of Health did not meet FEMA's requirements for uniform application because the criteria provided recommendations, not requirements, and allowed for variances in application).
 Letter from Chief Engineer, at 1.
 Design Criteria, at Chapter 1, § 18.104.22.168.
 Disaster Assistance Policy DAP9526.1, Hazard Mitigation Under Section 406 (Stafford Act), at 3 (Mar. 30, 2010).