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Second Appeal Analysis
PA ID# 071-78355-00; Village of Warwick
PW ID# 3; Direct Result of the Disaster, Project Management Costs
From August 26 to September 5, 2011, Hurricane Irene caused extensive damage to Warwick Reservoir (Facility) in the Village of Warwick, New York (Applicant). The components of the Facility include three reservoir impoundments (Upper, Middle, and Lower Reservoirs), earthen embankments, a stilling basin upstream of the Upper Reservoir, a concrete spillway that cascades down from the Upper Reservoir to the Middle Reservoir, and a channel that directs the stilling basin’s outflow into the Upper Reservoir near the concrete spillway’s entrance. FEMA prepared Project Worksheet (PW) 3 documenting $306,164.00 in costs to repair and restore the lower end of the concrete spillway, which covered rebuilding collapsed concrete walls, repairing damaged concrete slabs, restoring an eroded earthen embankment, removing fallen trees to gain construction access, and a hazard mitigation proposal for 167 cubic yards of rip-rap. Disaster-related repairs at the upper end of the concrete spillway were completed under PW 5820 approximately nine months prior to the start of work under PW 3 at the spillway’s lower end.
The Applicant obtained environmental permits from the New York State Department of Environmental Conservation (NYSDEC). First, NYSDEC issued a General Permit authorizing work from September 9, 2011 to September 30, 2012, which required all work to take place during low stream flow conditions and the use of all necessary measures to prevent flowing or standing water in the worksite such as diverting the stream around the worksite, lowering reservoir levels, or isolating the work area with a cofferdam. The Applicant obtained another NYSDEC permit to perform the spillway repairs between November 19, 2012 to June 30, 2013, which required the Facility’s water elevation to remain at or below 785 feet. On November 30, 2012, the Applicant contracted with Earth-Tec Associates, Inc. (Contractor) to perform the construction work in PW 3, and construction commenced on December 2, 2012. The Applicant’s engineering firm, Tectonic Engineering and Surveying Consultants P.C. (Tectonic), sent a letter to the Contractor dated January 15, 2013, requesting an estimate to repair post-disaster storm damage to the upper end of the spillway, which was previously repaired in February 2012. On March 21, 2013, Tectonic submitted a letter on behalf of the Applicant to the New York State Division of Homeland Security and Emergency Services (Grantee) requesting a change in scope of work (SOW) for $57,030.00 in costs to repair the post‑disaster storm damage at the spillway entrance and to relocate a water main that was discovered by the Contractor during eligible work. The Grantee submitted the Applicant’s SOW change request to FEMA with its recommendation letter and an attached support memorandum. FEMA denied the Applicant’s SOW change request in a determination letter dated October 1, 2014, deeming the work and costs ineligible because the damage was caused by the Contractor and not the disaster.
The Applicant submitted a letter dated December 8, 2014, appealing FEMA’s denial of $57,030.00 in costs to relocate the water main and repair the post-disaster spillway entrance damage. In its December 4, 2014 letter attached with the appeal, Tectonic asserted that FEMA erred in denying the requested water main work on the false assumption that it included work to repair damage caused by the Contractor. Tectonic emphasized that the requested work included relocating the water main to provide adequate frost protection and to meet project specifications, but did not include repairing damage caused by the Contractor. Tectonic also explained that the requested water main work would have been included in the eligible SOW if the water main’s existence had been known at the onset of the project.
In addition, Tectonic argued that FEMA should fund the work to repair the post-disaster spillway damage because the spillway entrance was left vulnerable to weather conditions as a result of environmental permit requirements and necessary measures to prevent surface water flow through the worksite. Tectonic stressed that the NYSDEC permit restricted the Facility’s water elevation to 785 feet or lower, which left the spillway entrance exposed during the sudden extreme heavy rainfall. Even if the permit did not contain a water elevation restriction, Tectonic explained that reducing the water level was necessary to protect the worksite at the lower end of the spillway from surface water flow. Thus, Tectonic argued that the damage would have never occurred without dewatering the Facility as required during eligible work because water submerging the spillway entrance at the Facility’s normal fill level would have dampened the impact of the high-energy floodwaters during the post-disaster storm. The Grantee submitted the Applicant’s appeal with a transmittal letter dated January 7, 2015, and an attached recommendation letter. In the letter, the Grantee reiterated the Applicant’s first appeal arguments, and cited to Disaster Assistance Policy DAP9524.3, Rehabilitation Assistance for Levees and Other Flood Control Works, dated September 23, 2011, as supportive.
On April 1, 2015, FEMA sent a Final Request for Information (RFI) to advise the Applicant that the first appeal could be denied due to a lack of documentation demonstrating that the water main work and spillway entrance work were required as a direct result of the disaster, and to provide a final opportunity to submit supportive information. In response, the Applicant provided Tectonic’s May 12, 2015 RFI response letter, which reiterated the first appeal arguments. On November 24, 2015, the FEMA Region II Regional Administrator (RA) partially granted the first appeal. The RA approved the water main work, awarding $10,345.00 in related construction costs, but found the work to repair the post‑disaster spillway entrance damage ineligible because it was caused by a post-disaster storm, not the declared disaster.
Through its January 28, 2016 letter appeal of the RA’s first appeal decision, the Applicant requests $42,485.00 in construction costs to repair the post-disaster spillway entrance damage and $4,200.00 in project management costs for the water main work approved on first appeal, and the spillway repairs requested on second appeal. Tectonic’s January 28, 2016 letter attached with the second appeal argues that FEMA should deem the spillway entrance work eligible for Public Assistance (PA) funding because it was necessary to restore the Facility to its predisaster condition, and was required as a result of “unpredictable/unknown” damage that occurred in the execution of eligible work. Tectonic explains that the Contractor was not responsible for protecting the spillway entrance while performing eligible work because it was outside of the Contractor’s work area. Moreover, Tectonic claims that the damage would have never occurred without NYSDEC’s water elevation restriction because the water submerging the spillway entrance at the Facility’s normal water level would have dissipated the impact of the post-disaster storm.
The Grantee submitted the Applicant’s second appeal to FEMA with a recommendation letter dated March 14, 2016, and an attached support memorandum. In its support memorandum, the Grantee argues that the NYSDEC permit restricting the Facility’s water elevation was the key factor contributing to the spillway entrance damage because it prevented the spillway from functioning properly. The Grantee also claims that covering the spillway work in two separate PWs contributed to the post-disaster damage. According to the Grantee, the Contractor could have averted the damage if the upper and lower ends of the spillway were repaired under one PW because the Contractor would have been responsible for protecting the spillway entrance while performing work at the spillway’s lower end. However, the Grantee also asserts that no measures could have prevented the spillway entrance damage from occurring while the Facility’s water level was reduced, even with prior notice of the storm’s arrival. The Grantee further notes that there might have been latent damage to the bypass channel that contributed to the post-disaster spillway damage, and that NYSDEC might have imposed the water elevation restriction without considering its potential impact on the Facility’s function and design. Lastly, the Grantee argues that FEMA should award estimated project coordination and construction inspection costs related to the eligible water main work based on a percentage of construction costs.
Direct Result of the Disaster
Pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) § 406, as implemented by Title 44 of the Code of Federal Regulations (44 C.F.R.) § 206.226, FEMA may reimburse eligible applicants for the repair, restoration, reconstruction, or replacement of a public facility damaged or destroyed by a major disaster on the basis of the facility’s design as it existed immediately prior to the disaster and in conformity with other provisions. However, the Applicant must establish that all requested work items are required as a direct result of the disaster, and must provide documentation differentiating those disaster-related work items from work to repair damage caused by a pre-disaster event, a post-disaster event, or inadequacies that existed prior to the disaster. On appeal, it is the Applicant’s burden to substantiate each of its claims with documentation and to clearly explain how that information supports each claim.
The Applicant has not demonstrated that the requested work to repair the spillway entrance is required as a direct result of the disaster. In fact, Tectonic conceded that a post-disaster storm caused the spillway entrance damage in its January 15, 2013 letter to the Contractor. While Tectonic and the Grantee argue that the repairs are eligible because permit conditions associated with eligible work caused the post-disaster damage, this does not substantiate that the work was the direct result of the disaster.
After reviewing the appeal and its entire record, FEMA finds the work to repair the damage to the spillway entrance was caused by a post-disaster event and is not required as a direct result of the declared disaster. Accordingly, FEMA concludes that the requested work to repair the spillway entrance’s post-disaster damage is ineligible for PA funding.
Project Management Costs
FEMA policy defines project management as the “oversight of an eligible project from the design phase to the completion of work.” Project management activities that are eligible for PA funding include: (1) direct management of projects in the concept and design stages designed by in-house staff or an architectural/engineering firm retained to analyze and design the repair or replacement of damaged facilities; (2) the review and approval of the project design regardless of who performs the design work; (3) procurement activities for architectural/engineering services and performance of work; and (4) management of construction work by contractors. Final reimbursement for project management costs in large projects is based on reasonable actual costs claimed at final inspection and reconciliation. In addition, grantees and applicants must maintain documentation in accordance with 44 C.F.R. § 13.20 to support reimbursement of all requested project costs.
The Applicant argues that FEMA should award project management costs for project coordination and construction inspection activities related to the eligible water main work, but has not stated the actual amount of project management costs incurred in connection with that work. The Grantee proposes that FEMA award estimated project management costs based on a percentage of construction costs. However, FEMA reimburses project management costs based on reasonable actual costs claimed at final inspection and reconciliation, not estimated costs. Thus, FEMA concludes that the Applicant’s reasonable actual project management costs incurred for construction inspection and project coordination activities related to the water main work are eligible for PA reimbursement if those costs are substantiated.
The Applicant has not established that the requested work to repair the post-disaster spillway entrance damage is required as a result of the disaster, but the Applicant’s reasonable actual project management costs incurred for construction inspection and project coordination activities performed for the eligible water main work are eligible for PA funding if substantiated.
Accordingly, the Applicant’s second appeal is denied with respect to the requested funding to repair the post-disaster spillway entrance damage, and the appeal is partially granted with respect to the project management costs related to the eligible water main work contingent upon the Applicant’s ability to substantiate actual project management costs that are reasonable.
 Project Worksheet 5820, Village of Warwick, Version 0, (Apr. 5, 2012). The completion date of all work under PW 5820 to repair the spillway entrance was February 22, 2012.
 N.Y. State Dep’t of Envt’l Conservation (NYSDEC), Gen. Permit No. GP-0-11-008, at 2–3, 7 (Sep. 9, 2011).
 This permit also covered the period from July 15 to December 31, 2013, but those dates apply to a different phase of the project.
 NYSDEC, Dam & Stream Disturbance Permit ID 3-3354-00697, at 3 (Nov. 19, 2012).
 Contract for Emergency Repairs to Upper Warwick Dam Spillway Channel – Lower End & Hold Harmless Agreement executed by Mayor, Vill. of Warwick, and Vice President, Earth-Tec Assocs., Inc. (Nov. 30, 2012) [hereinafter Construction Contract & Hold Harmless Agreement].
 See Letter from Senior Vice President, Tectonic Eng’g & Surveying Consultants, P.C., to Mayor, Vill. of Warwick, at Attachment (Jan. 14, 2013) (providing a copy of the Voucher and Application for Payment from Earth-Tec Associates, Inc. dated December 11, 2012, to document the date construction work began under PW 3).
 Letter from Senior Vice President, Tectonic Eng’g & Surveying Consultants P.C., to Vice President, Earth-Tec Assocs. Inc., at 1 (Jan. 15, 2013). The Applicant or Tectonic did not state the specific date of the subsequent storm event. Based on the facts provided, the subsequent storm occurred on a date after the February 22, 2012 completion date of the spillway entrance work in PW 5820, but prior to Tectonic’s January 15, 2013 letter to the Contractor requesting an estimate to repair the spillway entrance’s post-disaster damage.
 Letter from Senior Vice President, Tectonic Eng’g & Surveying Consultants, P.C., to Disaster Assistance Officer, N.Y. State Div. of Homeland Sec. & Emergency Servs., Office of Emergency Mgmt., at 1–2 (Mar. 21, 2013).
 Letter from Alternate Governor’s Authorized Rep., N.Y. State Div. of Homeland Sec. & Emergency Servs., to Reg’l Adm’r, FEMA Region II (Nov. 5, 2013).
 Letter from Acting Pub. Assistance Branch Chief, FEMA Region II, to Alternate Governor’s Authorized Rep., N.Y. State Div. of Homeland Sec. & Emergency Servs., at 1 (Oct. 1, 2014).
 Letter from Mayor, Vill. of Warwick, to N.Y. State Div. of Homeland Sec. & Emergency Servs. (Dec. 8, 2014).
 Letter from Exec. Vice President, Tectonic Eng’g & Surveying Consultants, P.C., to Mayor, Vill. of Warwick, at 1 (Dec. 4, 2014).
 Letter from Alternate Governor’s Authorized Rep., N.Y. State Div. of Homeland Sec. & Emergency Servs., to Reg’l Adm’r, FEMA Region II (Jan. 7, 2015).
 The cited policy was issued after Hurricane Irene’s incident period, which ended on September 5, 2011. Disaster Assistance Policy DAP9524.3, Rehabilitation Assistance for Levees and Other Flood Control Works (Sep. 23, 2011).
 Letter from Acting Pub. Assistance Branch Chief, FEMA Region II, to Alternate Governor’s Authorized Rep., N.Y. State Div. of Homeland Sec. & Emergency Servs., and Mayor, Vill. of Warwick, at 1 (Apr. 1, 2015).
 Letter from Senior Vice President, Tectonic Eng’g & Surveying Consultants, P.C., to Mayor, Vill. of Warwick, at 1–2 (May 12, 2015).
 Letter from Mayor, Village of Warwick, to Disaster Assistance Officer, N.Y. State Div. of Homeland Sec. & Emergency Servs., Office of Emergency Mgmt., at 1 (Jan. 28, 2016).
 Letter from Senior Vice President, Tectonic Eng’g & Surveying Consultants, P.C., to Mayor, Vill. of Warwick, at 1–2 (Jan. 28, 2016).
 Letter from Deputy Comm’r for Disaster Recovery Programs, N.Y. State Homeland Sec. and Emergency Servs. to Reg’l Adm’r, FEMA Region II (Mar. 14, 2016).
 The Grantee’s attached memorandum cites to the cost summary in Tectonic’s March 21, 2013 SOW change request letter to support its claim that 18.1 percent of the requested project management costs should be awarded for the water main work because that work constitutes 18.1 percent of the total repair costs. However, FEMA’s review of that cost summary reveals that the construction costs for the water main work accounts for 19.58 percent of the total claimed construction costs. See Letter from Senior Vice President, Tectonic Eng’g & Surveying Consultants, P.C., to Disaster Assistance Officer, N.Y. State Div. of Homeland Sec. & Emergency Servs., Office of Emergency Mgmt., at 2–3 (Mar. 21, 2013).
 Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, Pub. L. No. 93-288, § 406, 42 U.S.C. § 5172 (2007); Title 44 Code of Federal Regulations (44 C.F.R.) § 206.226 (2010).
 44 C.F.R. § 206.223(a)(1).
 Public Assistance Guide, FEMA 322, at 29, 100 (June 2007) [hereinafter PA Guide].
 44 C.F.R. § 206.206(a); FEMA Second Appeal Analysis, Village of Waterford, FEMA-4020-DR-NY, at 3 (Sep. 4, 2014); see also FEMA Second Appeal Analysis, Department of Transportation, FEMA-4068-DR-FL, at 5 (Aug. 5, 2016) (stating the “burden to fully substantiate appeals with ‘documented justification’ falls exclusively to the Applicant and hinges upon the Applicant's ability to produce not only its own records but to clearly explain how those records should be interpreted as relevant to support the appeal”).
 See FEMA Second Appeal Analysis, Santa Barbara County, FEMA-1577-DR-CA, at 2 (Jan. 24, 2007) (concluding that the applicant did not demonstrate that the work was required as a result of the declared disaster because the work was required as a result of storms that occurred after the disaster’s incident period).
 FEMA Response and Recovery Directorate Policy RRP9525.6, Project Supervision and Management Costs of Subgrantees, at 2 (Apr. 27, 2001); PA Guide, at 61–62.
 RRP 9525.6, at 2–3; PA Guide, at 56–57.
 Prior to closeout, the Applicant provided all invoices and proof of payment to document its actual costs incurred for Tectonic’s services. However, the Applicant was not given the opportunity to indicate which of those costs pertain to the water main work approved on first appeal, and FEMA did not request that information through an RFI prior to issuing the first appeal decision.