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Second Appeal Analysis
PA ID# 000-UB2M9-00, ; Missouri Department of Natural Resources
PW ID# PW 574; Scope of Work – Direct Result of Disaster
From June 1 to August 1, 2011 severe storms and flooding from the Missouri River damaged two sewage lift stations (Facilities) at Big Lake State Park. FEMA prepared Project Worksheet (PW) 574 to repair the Facilities. The PW scope of work (SOW) was for the “repair of [two] lift stations, to replace [one] duplex pump control panel, timers, relays and terminals for environmental controls, running time meter for each pump, pressure switch level controls, station light, air compressors, sump pump, ventilation blower, dehumidifier, check valve repair kits, and paint the interior of each lift station.”
FEMA prepared the PW for $230,844.00 worth of repairs and hazard mitigation.
In an environmental and historic preservation (EHP) review, FEMA noted the potential presence of state listed protected species and/or habitats located in the project vicinity, but determined that the project was categorically excluded from the need to prepare an environmental impact statement or environmental assessment because the SOW did not impact potential species of concern or sensitive habitats.
Conditions attached to the PW stipulated that any change to the approved SOW would require reevaluation for compliance with the National Environmental Policy Act (NEPA) and other laws and executive orders.
On April 28, 2014, the Applicant contracted to replace the Facilities with new lift stations and valve boxes and install 258.4 linear feet of 8 inch sewer line.
On March 4, 2015, the Grantee requested a large project closeout, stating that the Applicant exceeded the approved SOW by replacing both lift stations and installing 259 linear feet of 8 inch sewer line and two manholes.
On April 23, 2015, FEMA issued an eligibility determination memorandum denying costs to repair the Facilities because the Applicant failed to notify the Grantee and FEMA about deviations from the approved SOW, and therefore FEMA was unable to perform the proper environmental reviews required by NEPA.
On June 24, 2015, the Applicant submitted a first appeal for $230,844.00 to replace the Facilities. The Applicant argued that: (1) it tried to repair the Facilities, but subsequently determined that the original parts were too damaged; (2) the replacement facilities were designed to replicate the original function, but didn’t include any capacity or function improvements; (3) the design, function, and capacity were not changed, though the footprint and some components were modified; and (4) the work is not an improved project since there were no significant changes. The Applicant concluded that no NEPA review was required and the project was categorically excluded because the work did not extend outside the original excavated footprint nor disturb new ground. For support, the Applicant cited a September 18, 2013 email in which a State Parks Archaeologist stated that FEMA EHP visited the site and had no concerns.
On July 10, 2015, the Grantee forwarded the first appeal to FEMA and argued that replacement of the Facilities complied with the SOW and that the Applicant’s process complied with all environmental requirements. The Grantee stated that the function and capacity of the Facilities were not changed and there were no significant changes to the footprint. The Grantee notes that the Applicant obtained a Floodplain Development Permit from the Missouri State Emergency Management Agency (SEMA) and that the Applicant is not requesting Federal funds to replace the sewer line.
On September 21, 2015, FEMA Region VII issued a Final Request for Information (RFI) seeking documentation demonstrating that the additional damages prevented repair as detailed in the SOW, the additional damages were the result of the disaster, and the Applicant notified the Grantee of a change in SOW. Region VII also requested details about the change in footprint, including as built drawings, and an itemized accounting of the work performed, with a separate accounting of the work performed as authorized in the SOW. On October 21, 2015, the Applicant responded to the Final RFI stating soon after construction started, on approximately May 10, 2014, it discovered that all of the lift station valves were seized, all electric components were corroded, all safety features were damaged, the entire bubbler system was damaged, the entry and exit ladder was severely corroded, and groundwater was infiltrating both main tank enclosures due to corrosion.
On January 27, 2016, the FEMA Region VII Regional Administrator (RA) denied the first appeal. The RA determined that the Applicant: (1) did not notify the Grantee or FEMA of additional damages; (2) exceeded the SOW; (3) pursued an improved project without obtaining advance approval from the Grantee or FEMA; and (4) did not differentiate between the costs incurred to complete the approved SOW and additional costs incurred to replace the Facilities. The RA also noted that the Applicant changed the footprint of the Facilities by adding an extra vault.
On March 8, 2016, the Applicant submitted a second appeal for $230,844.00 in funding. The Applicant states that it did not consider the necessary work an improved project and therefore did not notify FEMA. On March 14, 2016, the Grantee forwarded the second appeal to FEMA, additionally arguing that replacement of the Facilities was included in the SOW. The Grantee also pointed out that although the Public Assistance Program and Policy Guide (PAPPG) was not in effect until 2016, it states that if FEMA discovers improvements, FEMA should designate the project as an improved project, cap the funding at the original estimated amount, and review the additional SOW for EHP compliance. The Grantee believes that this is a clarification of existing policy that FEMA should follow.
Direct Result of the Disaster
FEMA may reimburse eligible applicants for the repair, restoration, reconstruction, or replacement of a public facility damaged or destroyed by a major disaster.
All work must be required as a direct result of the declared disaster.
An applicant 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.
It is an applicant’s burden to substantiate each of its claims with documentation and to clearly explain how that information supports each claim.
FEMA conducted a site visit on Dec. 16, 2011
and wrote PW 574 to document the damage to each lift station. PW 574 was awarded in March of 2012.
Nearly 2.5 years passed before the Applicant identified additional damages in May of 2014.
During this time intervening forces could have caused the damage, especially given ongoing corrosion and groundwater infiltration. Through a Final RFI, the RA provided the Applicant with an opportunity to provide supporting documentation to explain how additional damages were a direct result of the disaster. However, the Applicant failed to provide any new information to substantiate its claims. Therefore, the RA’s finding that that the Applicant failed to document that additional damages were a direct result of the disaster was correct.
Scope of Work
Applicants must obtain prior approval from FEMA whenever a SOW revision is anticipated.
When a change in the SOW or a need for additional funding is discovered, the applicant should notify the Grantee as soon as possible.
It should not be assumed that such costs can be reported at the end of the project and that the additional funds will be approved automatically.
When an applicant materially fails to comply with any term of an award, including the SOW, FEMA may take appropriate enforcement actions, including disallowing all or part of the grant award.
The FEMA-approved SOW included repairs to the Facilities by replacing the damaged components and painting the interior. The SOW did not involve replacing the lift stations themselves. The Applicant proceeded to replace both Facilities with new lift stations, including the replacement of the foundations, walls, a second vault, and components that were not identified in the FEMA-approved SOW.
The Applicant failed to follow the eligible SOW, and thus did not follow the terms of the grant, as stipulated in the PW. The PW cautioned the Applicant to “notify the grantee in writing prior to initiating any variance to the approved SOW or conditions of the grant,” and that, “failure to do so may jeopardize the federal funding of this sub-grant award.”
In a letter dated March 4, 2015 and the attached State Voucher Analysis, the Grantee stated that the Applicant exceeded the approved SOW.
There is no evidence in the administrative record that the Applicant notified the Grantee or received approval for a change in SOW.
In this case, the Applicant changed the design and footprint of the Facilities without notifying the Grantee or FEMA, and therefore materially failed to comply with the terms of the award. The Grantee argues that FEMA should designate the project as an improved project, cap the funding at the original estimated amount, and review the additional SOW items for EHP compliance, as stated in the PA Program and Policy Guide, however, the RA was within her discretionary enforcement authority to deobligate all funding.
FEMA must consider a range of federal statutes, regulations and Executive Orders related to EHP when providing PA funding.
The National Environmental Policy Act (NEPA) requires all federal agencies to consider the environmental impact of a proposed action as well as whether any alternatives exist, prior to obligating funds and beginning work.
FEMA’s review must be completed before the approval of funding and before the applicant starts work “since the review may identify steps to be taken or conditions to be met before the project can be implemented.”
When an applicant initiates or completes work on a project before FEMA is able to conduct the necessary EHP compliance review, the work generally is not eligible for PA funding.
In this case, FEMA performed an EHP review for the eligible SOW to repair the Facilities. Any change to the approved SOW requires a new review to ensure compliance with NEPA. Instead, the Applicant replaced the Facilities without notifying FEMA. As the work completed by the Applicant went beyond the approved SOW, this change necessitated a new NEPA review. The Applicant’s failure to abide by the conditions of the grant prevented FEMA from performing its federally mandated NEPA review prior to construction commencing. As such, the work is not eligible for PA funding.
The Applicant exceeded the approved SOW and replaced items that were not included in the damage description. The Applicant did not request prior approval from the Grantee or FEMA before deviating from the approved SOW as required by 44 C.F.R. § 13.30(d) and the terms of the grant. In failing to notify FEMA prior to completing the additional work, the Applicant prevented FEMA from conducting any necessary EHP reviews. As such, the project is ineligible.
Project Worksheet 574, Mo. Dep’t of Nat. Res., Version 0 (Mar. 15, 2012).
PW 574, Mo. Dep’t of Nat. Res. (Version 1), Internal Comments, No. 23.
, Conditions Information, Standard Condition #1.
Mo. Div. of State Parks, Project Manual, BLSP-Rebuild Sewer System, Big Lake State Park, Job Order Contract
(Apr. 28, 2014) [hereinafter Job Order Contract
Letter from Recovery/Fin. Div. Mo. State Emergency Mgmt. Agency, to Disaster Assistance Div., FEMA Region VII, at 2 (Mar. 4, 2015).
The Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, Pub. L. No. 93-288, § 406, 42 U.S.C. § 5172 (2011).
Title 44 Code of Federal Regulations (44 C.F.R.) § 206.223(a)(1) (2010).
 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”).
EMMIE Case Management Contact Log Report, Administrative Record, at 35 (Dec. 16, 2011).
PW 574, Mo. Dep’t of Nat. Res. (Version 0), at internal comments.
Letter from Accounting Program Dir., Mo. Dep’t of Nat. Res., to Mo. State Emergency Mgmt. Agency, at 1 (Oct. 21, 2015).
Second Appeal Analysis, Republic County Highway Department,
FEMA-4230-DR-KS, at 4 (Jul. 26, 2017) (finding that the applicant has the burden to demonstrate that the work claimed is a direct result of the disaster); See
Second Appeal Analysis, City of Elizabeth,
FEMA-4086-DR-NJ, at 6 (Apr. 27, 2017) (determining that the applicant has not demonstrated that work is required as a direct result of the disaster).
44 C.F.R. § 13.30(d)(1).
44 C.F.R. § 13.43(a); FEMA Second Appeal Analysis, Essex County
, FEMA-4020-DR-NY, at 6 (Aug. 18, 2016) (determining that work performed outside of the approved SOW was not eligible for funding); FEMA Second Appeal Analysis, Rubio Cañon Land and Water Association
, FEMA-1008-DR-CA, at 4 (May 17, 2001) (upholding the regional director’s deobligation of all funding when applicant exceeded the approved SOW).
 Job Order Contract
, at 1.
PW 547, Mo. Dep’t of Nat. Res. (Version 0), at 5.
Letter from Recovery/Fin. Div., Mo. State Emergency Mgmt. Agency, to Dir. Disaster Assistance Div., FEMA Region VII, at Enclosed State Voucher Analysis (Mar. 4, 2015).
Environmental Policy Memo #3, at 1 (stating it is FEMA policy that actions initiated and/or completed without fulfilling the specific documentation and procedural requirements of NEPA may not be considered for funding.)
National Environmental Policy Act of 1969, 42 U.S.C. §§ 4331-4332 (2011); PA Guide,
FEMA Second Appeal Analysis, Village of Pardeeville
, FEMA-1768-DR-WI, at 3 (Dec. 16, 2014) (denying PA funding due to the applicant completing an improved project before FEMA could conduct necessary EHP review).