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Second Appeal Analysis
PA ID# 099-99099-00; Palm Beach County
PW ID# (PW) 8283 ; Support Documentation
From September 3 to October 8, 2004, high winds, heavy rainfall, and flying debris from Hurricane Frances caused extensive damage to the roof and interior of Building 503 (Facility), a building used by employees of the Palm Beach County, Florida (Applicant) Facilities Department.
FEMA prepared Project Worksheet (PW) 8283 to document Category B (emergency protective measures) work for temporary repairs to the Facility, as well as moving, rent, and other expenses incurred in moving the Applicant’s employees to a temporary location while the Facility was repaired to its predisaster condition. The scope of work (SOW) included funding to cover 18 months of rental expenses at the temporary location. FEMA estimated project costs to total $820,744.54, but reduced funding by anticipated insurance proceeds resulting in an obligation of $9,800.00 in Public Assistance (PA) funding for temporary repairs to the Facility’s roof. Version 1 of PW 8283 updated the assessment of the anticipated insurance settlement, and increased obligated funding to $420,744.54.
Under a separate PW,
the Applicant demolished the Facility, and received approval for an improved project to construct a new building in a different location.
In a Project Application Summary (P.2), signed on January 20, 2012,
FEMA limited eligible PA to the time required to complete the restoration of the Facility, estimated in the Applicant’s insurance settlement at 8 months. FEMA determined the Applicant’s employees remained in the temporary location over 8 months due to reasons unrelated to PW 8283 and the Facility. FEMA determined eligible PA in the amount of $404,309.70, the amount the Applicant received through its insurance settlement, and reduced funding under PW 8283 to $0.00. The Florida Division of Emergency Management (Grantee) notified the Applicant of FEMA’s decision on January 25, 2012.
In a letter dated March 28, 2012, the Applicant appealed FEMA’s closeout determination related to PW 8283.
The Applicant argued that FEMA policy
applicable to improved projects allowed for reimbursement of temporary relocation expenses up to 18 months, provided time extensions are requested and granted. The Applicant stated it had received such extensions for the new building; FEMA should have based the closeout eligibility determination on the time required to construct the improved project rather than that required to repair the Facility. The Grantee’s appeal transmittal letter, dated December 4, 2014, expressed support for the appeal.
The Grantee reiterated the Applicant’s first appeal arguments, and stated that the Applicant was no longer able to seek additional insurance proceeds. Additionally, the Grantee argued section 705(c) of the Stafford Act applied and prevented FEMA from recouping funding in this case..
FEMA issued a Final Request for Information (RFI)
on February 1, 2016. FEMA requested clarification of the amount on appeal, information related to the building occupied during the temporary relocation, and details on the Applicant’s insurance settlement. Additionally, FEMA noted apparent discrepancies between the approved SOW for temporary relocation and where the Applicant subsequently relocated its employees. FEMA requested a copy of any SOW change request that the Applicant may have submitted. The Applicant responded to the Final RFI via email,
stated it was unable to find any additional information related to the project, and agreed with the Grantee’s assertion that the section 705(c) prohibition on recoupment of funds applied to its case.
In a letter dated September 27, 2017,
the FEMA Region IV Regional Administrator (RA) denied the appeal. The RA determined the Applicant had timely submitted its first appeal to the Grantee; however, the Grantee transmitted the appeal to FEMA Region IV approximately 31 months after the timeframe allowed by regulation had expired. As the Applicant’s appeal rights were therefore exhausted, the RA also found the section 705(c) prohibition inapplicable.
In a letter dated November 16, 2017,
the Applicant submits its second appeal for $398,156.00 in rental expenses for the building occupied during the temporary relocation of its employees. The Applicant asserts its first appeal was timely, as it submitted the appeal to the Grantee within the time period allowed, and requests that the Grantee’s untimely transmittal be considered extenuating circumstances beyond the Applicant’s control. Regarding the substantive issues on appeal, the Applicant states FEMA initially approved $716,680.00 in relocation rental expenses, and later reduced this amount to $318,524.00 based on the anticipated insurance settlement. The Applicant states the settlement negotiations were difficult, it acted in a “commercially reasonable manner,”
and, since no further insurance proceeds are available, it should be reimbursed in the amount of the initial obligation. Finally, the Applicant asserts FEMA’s reduction of funding was improper, per section 705(c) of the Stafford Act and related case law.
The Grantee’s December 4, 2017 transmittal letter
expresses support for the Applicant’s appeal, reiterates its argument regarding the applicability of section 705(c), and asserts that the burden of demonstrating the inapplicability of the statute rests with FEMA. Therefore, as FEMA did not substantively address section 705(c) conditions in the context of this project, prior to reducing funding, the Grantee argues that the Applicant’s appeal rights were not exhausted.
When an RA is considering denying a first appeal in whole or in part, he or she must issue to the applicant a Final RFI noting all information in the administrative record the Region is considering in deciding the appeal, and requesting the Applicant provide any additional information to support the appeal.
As the administrative record contains all documents and materials directly considered by FEMA in making its first appeal decision,
the Final RFI will explain the administrative record does not appear to contain enough evidence with regard to the key issue(s) the RA is considering in deciding the appeal.
In the Final RFI, FEMA did not note appeal timeliness as a key issue or potential basis for denial, or request additional information related to the timeline of the appeal’s submission. The RA subsequently denied the appeal based on the timeliness of the Grantee’s appeal transmittal. Consequently, FEMA erred by not providing the Applicant or Grantee an opportunity to address the procedural issue before issuance of the appeal determination, as required by the Appeals Manual.
Due to the procedural error, this appeal is remanded to Region IV so that a new Final RFI
can be issued, which addresses any timeliness issues that may be the basis for the denial of the appeal. Accordingly, the administrative record will be reopened to afford the Applicant and/or Grantee the opportunity to submit additional documentation. After this, a new first appeal determination will be issued taking any responses into consideration, at which point the administrative record will close.
Project Worksheet 8283, Palm Beach Cty., Version 1 (May 31, 2007).
Project Worksheet 8289, Palm Beach Cty. (Public Buildings and Facilities), Version 3 (Apr. 22, 2016).
Project Application Summary (P.2), Project Worksheet 8283 (Jan. 20, 2012).
Letter from Interim Dir., Fla. Div. of Emergency Mgmt. (FDEM), to Asst. Adm’r, Recovery, FEMA, at 1 (Dec. 4, 2017) (stating “[o]n January 25, 2012, the [Grantee] notified the [Applicant] of deobligation and of their right [to] an administrative appeal”) [hereinafter Grantee Second Appeal
Letter from Fiscal Mgr., Facilities Dev. and Operations Dept., Palm Beach Cty., to Dir., FDEM (Mar. 28, 2012). The Applicant appealed for $820,744.54, the estimated project cost before any anticipated insurance adjustment(s).
Response and Recovery Policy RRP9523.3, Provision of Temporary Relocation Facilities
, at 2-3 (July 16, 1998)).
Letter from Governor’s Authorized Representative, FDEM, to Acting Reg’l Adm’r, FEMA Region IV (Dec. 4, 2014).
Letter from Dir., Recovery Div., FEMA Region IV, to Dir., FDEM and Fiscal Mgr., Facilities Dev. and Operations Dept., Palm Beach Cty. (Feb. 1, 2016).
Email from Palm Beach Cty., to FDEM (Apr. 22, 2016, 10:21 EDT).
Letter from Reg’l Adm’r, FEMA Region IV, to Dir., FDEM and Fiscal Mgr., Facilities Dev. and Operations Dept., Palm Beach Cty. (Sept. 27, 2017).
Letter from Fiscal Mgr., Facilities Dev. and Operations Dept., Palm Beach Cty., to Interim Dir., FDEM (Nov. 16, 2017).
 Grantee Second Appeal
, at 1.
Recovery Directorate Manual, Public Assistance Program Appeals Procedures
, Version 3, at 14 (Apr. 7, 2014).
at 14, App. E; FEMA Second Appeal Analysis, Miami-Dade County
, FEMA-1345-DR-FL, at 2 (Oct. 20, 2017).
FEMA will issue the Final RFI consistent with the procedures outlines in Version 4 of the Public Assistance Program Appeal Procedures