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Second Appeal Analysis
PA ID# 000-UD6JQ-00; Tennessee Department of Finance and Administration
PW ID# PW's 167, 168, 187, 188, 189, 190, 198, 199, 205, 209 ; Direct Result of Disaster – Scope of Work – Codes and Standards
During the incident period from February 5 through 6, 2008, severe storms, tornadoes, straight-line winds, and flooding impacted Tennessee; due to their severity and magnitude, the President declared a major disaster on February 7, 2008. A tornado caused substantial damage to the Wynnewood State Historic Site (Site), located in Castalian Springs, Tennessee. The Site, consisting of original log structures centered around historic Sulphur mineral springs, was designated as a National and Historic Landmark by the United States Department of the Interior in 1971.
FEMA prepared PWs 167, 168, 187, 189, 190, 198, 205, and 209, and obligated funding for the reimbursement of repairs made to eight structures at the Site. Furthermore, FEMA approved PWs 188 and 199, obligating funding for the replacement of a guest cottage and a barn, respectively. A summary for each approved scope of work (SOW) is as follows:
Name of Structure
Approved Scope of Work
Repair the shingles, chimney, and gutter.
Repair to the roof system, copper gutter, eave siding.
Repair to the roof shingles, gutter, siding and interior wall.
Repair roof system, exterior walls and doors.
Bledsoe Cabin 2
Repair copper gutter and roof flashing.
Repair gutter and shingles.
Repair roof system, end walls and planking/side doors.
Bledsoe Cabin 1
Repair to roof system, upper floor, and interior.
On April 11, 2011, the Applicant submitted documentation to the State of Tennessee Department of Finance and Administration (Grantee) related to requests for changes in the SOW for the Wynnewood project. The Grantee forwarded these requests to FEMA Region IV via email on April 13, 2011. In response, the Region requested the Grantee identify which PW numbers required a change in SOW, as there were many PWs related to the Wynnewood Project. FEMA considered this request while also completing an insurance review and determined that the Applicant’s insurance would cover the total costs of the project.
During closeout in 2015, the Applicant requested reimbursement for cost overruns of the Wynnewood project as well as additional costs to repair damages it asserted were not evident at the time the PWs were prepared. Such hidden damages included damage to the flooring and plumbing lines in the Bungalow (PW 167), damage to the salt block housing in the Smoke House (PW 168), additional vintage materials for the Guest Cottage and Barn 2 (PWs 188 and 205), repair items for the wall battens in the Buggy Shed (PW 189), abatement and additional exterior repairs to Bledsoe Cabin 2 (PW 190), and damage to the flooring in Bledsoe Cabin 1 (PW 209). Additionally, it sought costs for code-mandated upgrades in the Doctor’s Office (PW 187), Bledsoe Cabin 2 (PW 190), the Old Garage/Restroom (PW 198), and Bledsoe Cabin 1 (PW 209), which the Applicant asserted were required by the National Electrical Code (NEC) and International Building Code (IBC). FEMA only approved costs for the original SOW.
The Applicant appealed on August 4, 2016, requesting $339,425.98 in reimbursement, and arguing certain damages were not evident at the time FEMA prepared the PWs. Regarding costs for code-mandated upgrades, the Applicant asserted it had to incur these costs to restore and preserve the Site. As support, it attached a letter from its insurer, dated July 28, 2016, which stated that the repairs to the Site had to be completed with vintage materials and a certain method of craftsmanship to meet standards that fit the correct time period.
On August 18, 2016, the Grantee transmitted a request for additional documentation to the Applicant. It requested: (1) an explanation of why some damages were only discovered during the repair process, (2) verification that some repair items were not included in the original SOW, and (3) copies or narratives of the codes or standards that the Applicant contended required the upgrades, and that were in effect and enforced at the time of the disaster. Specifically, the Grantee requested: (1) the code or standard requiring electrical service, entrance cabling, and wiring upgrades (PW 187); (2) the code or standard requiring asbestos abatement (PW 190); (3) the Americans with Disabilities Act (ADA) provision requiring both restrooms to be gutted and made into a smaller unit, as well as the upgrading for electrical, wiring, plumbing, heating, new sewage line, and large swell (PW 198); and (4) the upgrade work requested to be included in PW 209.
The Applicant responded by attaching numerous documents to an August 31, 2016 letter. The attachments included a letter dated August 24, 2016 which explained that workers did not discover some damages until after power and water was restored to the properties and were not able to ascertain that some materials were unsalvageable until after work began. The letter additionally provided the 2009 IBC and the 2008 NEC in the form of weblinks. The attachments also included a list of hidden damages for PWs 167, 187, 188, 190, 198, and 209, respectively, as well as Chapter 11 of the 2008 IBC entitled, Accessiblity.
The Grantee forwarded the Applicant’s appeal by way of a concurrence letter dated September 2, 2016, recommending FEMA approve funding in the amount of $339,425.98. With the Applicant’s appeal, the Grantee submitted the information it received from its August 18, 2016 request as well as a list of hidden damages from the remaining PWs on appeal, PWs 168, 189, 199, and 205 respectively, photographs, and a Memorandum of Agreement (MOA) between the Applicant, FEMA, and the Grantee, among others. The Grantee argued in its letter that the upgrades meet the five criteria listed under 44 Code of Federal Regulations (C.F.R.) § 206.226(d), requiring that the upgrades (1) apply to the repair work being performed; (2) be appropriate to the pre-disaster use of the facility, (3) be reasonable, in writing, formally adopted, and implemented prior to the disaster declaration date or be a legal Federal requirement; (4) apply uniformly to all facilities of the type being repaired within the applicant’s jurisdiction; and (5) be enforced during the time that it was in effect.
On November 22, 2016, FEMA sent a Final Request for Information (RFI) to the applicant, requesting: (1) the specific building codes that required upgrades, (2) the work that triggered the codes and standards upgrades, (3) documentation that proffered codes and standards comply with the eligibility criteria found at 44 C.F.R. § 206.226(d), (4) the pre-disaster design of the public restrooms (PW 198) (compliance with ADA standards), and (5) any correspondence prior to final inspection with the Grantee or FEMA indicating a need to include additional work within the SOW.
The Applicant’s December 16, 2016 response included a letter from its insurer, wherein it was noted that the Applicant held monthly meetings designed to ensure it was meeting current building code requirements as well as complying with the MOA. The letter also noted that several people, such as the architect of record, the project construction manager for the State of Tennessee, historical consultants, and representatives from the Grantee, regularly attended these meetings and routinely discussed any changes to the projects. By way of a December 21, 2016 letter, the Grantee further provided email correspondence, which demonstrated that the Applicant notified the Grantee of requested changes to the SOW in April 2011, and confirmed the Grantee forwarded the email to FEMA later the same month, stating it was also requesting changes to the SOW. They also included an Interim Inspection Report, dated December 8, 2009 and signed by representatives from FEMA, the Grantee, and the Applicant, which noted that the applicant was keeping detailed records of disaster related work versus improvements.
On June 2, 2017, the FEMA Region IV Regional Administrator (RA) partially granted the appeal, approving funding in the amount of $3,851.00 for work related to the historic preservation of Indian artifacts, but denying the other requests. The RA determined that the Applicant’s SOW change request was untimely because it was made on April 13, 2011, three years after the disaster occurred. Additionally, the RA concluded the request did not comply with FEMA policy because it did not set forth a detailed explanation or justification for the changes. Furthermore, the RA determined the Applicant did not establish that certain work was required as a result of the disaster, as many of the additional damages claimed in the Applicant’s appeal were labeled as “not storm related” within a spreadsheet that was developed by the Applicant’s insurer.
Regarding funding for code-mandated upgrades, the RA determined the upgrades were not eligible because they did not comply with the eligibility requirements outlined in 44 C.F.R. § 206.226(d), noting that code-mandated upgrades, which change the predisaster construction of a facility, must apply to the type of repair or restoration required as a result of the disaster.
The Applicant filed a second appeal on July 14, 2017, again requesting reimbursement for costs it incurred to perform work “made necessary by the mandatory building code upgrade requirements imposed on the State of Tennessee during the repairs to the [Site].” Without specifying an amount in dispute, the Applicant asserts that upgrades were mandated by codes and standards and were not simply improvements. The Applicant requests reimbursement for costs associated with the following work:
Name of Structure
Upgrades Requested for Reimbursement
Repair flooring, repair plumbing, heating, ventilation, and air conditioning (HVAC), electrical upgrades, building code upgrades, replace window glazing, replace plumbing line in basement, relocate 2 vents, install deadbolt on attic door, replace damaged kitchen door, insulate Bungalow wall and floor, replace damaged foundation vents, replace sash locks, replace hot water heater and associated water lines
Clean and raise smoke house salt box
Electrical upgrades per IBC building code
Change floor material to vintage material to match existing materials in cottage time era, install second top plate on new wall framing to match existing time era, revise end band to vintage material to match existing time era, revise skip decking to vintage material to match existing time era, install 2 additional window rough frames to match existing time era, delete porch fence skirt, install 3 damaged window frames with sashes to match existing time era, replace gutters and downspouts due to damaged materials from existing time era, replace damaged steps and railing on front porch with materials in existing time era
Replace battens damaged by loss (hidden damage)
Bledsoe Cabin 2
Abatement, log replacement, painting, HVAC, electrical upgrades, replace log puncheons, replace floor finish, rebuild stone piers, repaint chimney firebox, install hardware cloth to protect floor insulation, replace additional deteriorated logs, rebuild dining room's west porch floor, door security/weather-stripping, garage/toilet insulation change, kitchen flooring investigation
Abatement, demolition, concrete, carpentry, roofing, finish carpentry/sheet metal trim, wallboard, tile, painting, bath hardware, HVAC, plumbing, electrical upgrades (building code), install drainage swell (building code)
Repair ground where barn was knocked down. Indian artifacts discovered so ground must be covered and protected.
Replace hidden damage to flooring, preservation/storage of materials, replace select plate sections and columns, replace damaged west hay manger, window sash damage, additional damaged roof trusses
Bledsoe Cabin 1
Electrical upgrades per IBC Building Codes, floor replacement, north sleeper log repairs, dining room north floor band repairs, floor repairs, west floor band repairs/replacement, paint existing floor, termite control
The Grantee forwarded the Applicant’s appeal on July 26, 2017, arguing that the code-mandated upgrades are eligible and asserting the work meets the general eligibility requirements outlined at 44 C.F.R. § 206.223(a)(1)–(3) and the eligibility criteria for code-mandated upgrades outlined at 44 C.F.R. § 206.226(d). Additionally, it argues 44 C.F.R. § 206.226(f)(3) is applicable, asserting it provides an exception to eligibility requirements should a facility be eligible for or on the National Register of Historic Properties.
Direct Result of the Disaster
Pursuant to Section 406 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, eligible applicants may receive Public Assistance (PA) funding for the repair, restoration, reconstruction, or replacement of a public facility damaged or destroyed by a major disaster. In addition, federal regulations provide that for work to be eligible, it must be required as the result of a declared disaster. Work is eligible if it relates to damage that occurred during the incident period, or is the direct result of events that occurred during the incident period. The burden is on the applicant to demonstrate that damage is a direct result of a disaster, and therefore eligible for FEMA funding. An applicant must provide more than statements or opinions to substantiate its claims; documentation or other evidence supporting its position must be submitted.
The Applicant has not substantiated with supporting documentation its prior claims that certain damage or items of work were a direct result of the disaster. It is unclear from documentation contained within the Administrative Record whether the facility components existed prior to the disaster. The predisaster condition of the components is also not sufficiently documented and detailed which would allow for the identification or distinguishment of disaster related damage. Photographs of the facilities are inconclusive because they do not depict damage that clearly aligns with damage the Applicant claims on appeal.
Moreover, an August 7, 2009 document developed by Centric Architecture, one of the Applicant’s contractors for the Site, noted that some buildings received “improvements beyond the pre-disaster condition.” This list included items of work submitted to FEMA for reimbursement beyond the original SOW for PW 167 (Bungalow), PW 198 (Garage/Restroom), and PW 209 (Bledsoe Cabin 1). Additionally, various items of work submitted to FEMA for reimbursement were listed as “Not Storm Related Damage” in a spreadsheet created by VeriClaim, the Applicant’s insurance adjuster. This included work outside the original SOW for PW 167 (Bungalow), PW 188 (Guest Cottage), PW 190 (Bledsoe Cabin 2), PW 198 (Garage/Restroom), and PW 209 (Bledsoe Cabin 1). These improvements were not present prior to the disaster and are not eligible for reimbursement.
Scope of Work
“During the performance of work on a project, [an] applicant may discover hidden damage, additional work that is necessary to properly complete the project, or that certain costs are higher than those used to make the original estimate for the PW.” When an applicant discovers hidden damage on a project already identified and approved by FEMA, the applicant is required to request a change in the SOW. In some instances, the change in SOW may result in additional environmental/historic preservation (EHP) compliance reviews and/or new permits. Federal regulation prohibits FEMA from awarding PA funding without prior approval from FEMA and the proper EHP compliance reviews.
In addition to the regulations regarding changes in the SOW, FEMA and the Applicant entered into a Memorandum of Agreement (MOA) for the repair and reconstruction of the Site. The MOA, signed September 9, 2008, includes a section entitled “Scope of Work Changes, Late Discoveries, and Unforeseen Effects.” This section states,
[The Applicant] will immediately notify, in writing, [the Grantee], FEMA and the State Historic Preservation Office (SHPO) concurrently if a change in the scope of work is proposed [or] if hidden conditions are discovered that may result in a change in the scope of work. FEMA may require [the Applicant] to stop work . . . until FEMA concludes consultation with the SHPO.
The Applicant notified FEMA via email correspondence regarding the intent to request a change in the SOW on the PWs on April 13, 2011. In response, FEMA requested clarification about which changes were needed on which PWs. The Administrative Record does not reflect that the Applicant responded with clarification or justification for the requested changes. This limited FEMA’s ability to determine the eligibility of the work requested and the timing of the request prevented FEMA from consulting with the appropriate parties regarding environmental/historic preservation compliance.
In its response to FEMA’s Final RFI, the Grantee agreed that there was confusion on exactly what changes would be made to which PWs and that the April 13, 2011 email was not a notification of approval. Without obtaining FEMA’s prior approval, the Applicant did not comply with the terms of the grant, nor did it allow FEMA the opportunity to consult with the SHPO as required by regulation and the MOA or conduct the proper compliance reviews. As such, all costs associated with this appeal are ineligible.
Codes and Standards
Costs associated with work that changes the pre-disaster construction of a facility may be eligible for PA funding if work is done to comply with codes or standards. However, the code or standard must (1) apply to the type of repair or restoration required (standards may be different for new construction and repair work); (2) are appropriate to the pre-disaster 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) for any standard in effect at the time of a disaster, it must have been enforced during the time it was in effect. All five criteria must be met in order to be eligible for PA funding.
Per FEMA regulation and policy, an appeal must contain documented justification supporting the applicant’s position. An applicant is required to substantiate its appeal by not only producing records, but explaining how those records should be applied to support the appeal. FEMA has routinely held that in cases where an Applicant provides documentation without specification as to how those documents support the Applicant’s appeal, the Applicant has not met the appeal requirements by regulation.
Apply to the Type of Repair Required
There must be a direct relationship between the upgrade work and the disaster damage. The electrical upgrades requested for inclusion in PWs 167, 187, and 198 do not apply to the type of repair work required because the corresponding structures received only minimal external damage, as reflected in the SOW which approved the repair of external components, such as shingles, gutters, and siding. The Applicant has not demonstrated how the external repairs related to or necessitate the requested electrical repairs.
Appropriate to Pre-Disaster Use of the Facility
The Applicant has not demonstrated that the electrical systems for the Bungalow (PW 167), Doctor’s Office (PW 187), Garage/Restroom (PW 198), and Bledsoe Cabin 1 (PW 209) were damaged by the disaster, nor has the Applicant demonstrated that the claimed electrical components existed prior to the disaster. In the August 7, 2009 document developed by Centric Architecture, the upgrades corresponding to PW 187, 198, and 209 are described as “improvements beyond the pre-disaster condition.” For example, the document reads, “Electrical: we are adding new electrical outlets to meet current Codes and additional lights in the following buildings: …Bledsoe Cabin 1.” It appears as though the electrical upgrades were not present in these facilities prior to the disaster and were installed during the course of reconstruction.
Formally Documented and Implemented
The Applicant has not, with any specificity, provided the building codes or standards that justify the asbestos abatement, upgrades for the electrical systems or compliance with the ADA. Moreover, the Applicant provided one webpage link to the NEC, 840 pages in length, and a broken webpage link to the IBC, acknowledging that the code book is also about 840 pages in length, without identifying the specific code that mandated the building upgrades. As a result, the Applicant has not identified an applicable code or standard or provided FEMA with documentation to determine whether the code or standard is appropriate to the predisaster use of the facility, reasonable, formally adopted and enforced during the disaster, or uniformly applied as required by regulation. As the Applicant has not established the additional work was the result of code-mandated improvements, all claimed costs are ineligible.
National Historic Properties
The Grantee argues that 44 C.F.R. § 206.226(f)(3) is applicable in this case, noting it provides for an exception to the eligibility requirements for code mandated upgrades, should a facility be eligible for or on the National Register of Historic Properties. Additionally, it provides that if an applicable standard requires repair in a certain manner, costs associated with that standard will be eligible. As discussed in the prior subsection, the Applicant has not provided any standard or supporting documentation that establishes the Site must be repair in a certain manner. Without substantiating that there was a standard requiring the structures to be repaired in a certain manner, the exception does not apply and the costs are ineligible.
The Applicant has not demonstrated that the additional items of work were required as a direct result of the disaster. The Applicant also did not obtain prior approval from FEMA before changing the SOW for the PWs on appeal. Moreover, the Applicant has not demonstrated the upgrades were the result of code-mandated requirements. Therefore, all costs associated with this appeal are ineligible for PA reimbursement.
Letter from Nat’l Insurance Adjuster, VeriClaim, Inc., to Tenn. Risk Mgmt Div. (July 28, 2016).
Letter from Alternate Governor’s Authorized Rep., Tenn. Emergency Mgmt. Agency (TEMA), to Deputy Comm’n, Tenn. Dep’t of Finance and Admin., at 1 (Aug. 18, 2016) (asking the Applicant to explain how the plaster and flooring was overlooked following the disaster, in response to the Applicant’s identification of the following hidden damages in PW 167: cracking in plaster, cracking of wood flooring, breaks in some of the flooring joints and supports, etc.).
. at 2 (in response to the Applicant’s generic claim that repair items were not included in the original scope of work (SOW) for PW 188, the Grantee requested the Applicant specify the exact items not included).
Letter from Deputy Comm’n, Tenn. Dep’t of Finance and Admin., to Tenn. Emerg. Mgmt. Agency (Aug. 31, 2016).
Letter from Nat’l General Adjuster, VeriClaim, Inc., to Tenn. Risk Mgmt. Div. (Aug. 24, 2016) [hereinafter Letter from Insurance Adjuster
Memorandum of Agreement among FEMA, Tenn. Dept. of Fin. and Admin., et. al
., at 7 (Sept. 9, 2008) [hereinafter Memorandum of Agreement
Letter from Nat’l Insurance Adjuster, VeriClaim, Inc., to Pub. Assistance Manager, Tenn. Emergency Mgmt. Agency (Dec. 8, 2016).
 See generally Memorandum of Agreement
(requiring the Applicant to immediately notify the Grantee and FEMA, concurrently, if a change in SOW is proposed).
FEMA First Appeal Analysis, Tenn. Dep’t of Finance and Admin.
, FEMA-1745-DR-TN, at 6 (June 2, 2017) (noting that the line item for the protective topsoil expense, incurred as a result of discovering Indian artifacts near the structure, was inadvertently overlooked at final inspection for PW 199).
. at 6 (citing Spreadsheet, Tenn., Wynnewood Historical Site Tornado Loss (undated) [hereinafter Insurer’s Spreadsheet
Letter from Deputy Comm’n, Tenn. Dep’t of Finance and Admin., to Dir., TEMA (July 14, 2017).
The Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, Pub. L. No. 93-288, § 406(a)(1)(A), 42 U.S.C. § 5172 (2007).
Title 44 Code of Federal Regulations (44 C.F.R.) § 206.223(a) (2010).
FEMA Second Appeal Analysis, Palisades Medical Center
, FEMA-4086-DR-NJ, at 4 (Mar. 10, 2017) (citing FEMA Second Appeal Analysis, Village of Waterford
, FEMA-4020-DR-NY, at 3 (Sept. 4, 2014) (noting that “[t]he Applicant has the burden of substantiating its claims”)).
FEMA Second Appeal Analysis, Town of Stillwater
, FEMA-4020-DR-NY, at 4-5 (Oct. 23, 2015) (finding that the applicant had not submitted sufficient documentation to establish that damage was the direct result of the disaster, in part because “[t]he Applicant has not provided maintenance records to support the opinions of the Highway Superintendent and Saratoga National Historical Park Superintendent”).
 Restoration and Stabilization, Wynnewood State Historic Site
, Centric Architecture (August 7, 2009) [hereinafter Centric Document
 VeriClaim Spreadsheet
 Public Assistance Guide
, FEMA 322, at 139 (June 2007) [hereinafter PA Guide
 PA Guide
, at 140. See
FEMA Second Appeal Analysis, Lockwood Irrigation District
, FEMA-1996-DR-MT, at 2 (Jan. 16, 2014).
44 C.F.R. § 13.30(d)(1).
 Memorandum of Agreemen
t, at 7.
44 C.F.R. § 206.226(d).
FEMA Disaster Assistance Policy 9527.4, Construction Codes and Standards (February 5, 2008).
44 C.F.R. § 206.206(a). See also PA Guide
, at 113.
FEMA Second Appeal Analysis, City of Sweetwater
, FEMA-1345-DR-FL, at 3 (Aug. 15, 2017); FEMA Second Appeal Analysis, The Opportunity Center
, FEMA-1539-DR-FL, at 6 (Dec. 22, 2016).
44 C.F.R. § 206.223(a)(1) (stating an item of work must be required as the result of the major disaster event in order to be eligible for assistance.)
 Centric Document
, at 2 (emphasis added).
 See Letter from Insurance Adjuster
, note 8.
44 C.F.R. § 206.226(f)(3) (stating that “[a]n exception to the limitation in paragraph (d)(2) of this section may be allowed for facilities eligible for or on the National Register of Historic Properties. If an applicable standard requires repair in a certain manner
, costs associated with that standard will be eligible.”) (emphasis added).
The exception described at 44 C.F.R. § 206.226(f)(3) references a limitation in (d)(2); however, the reference should direct the reader to the limitation in funding found at (f)(2). The error is a result of 2001 revisions that changed subsection enumerations, but omitted changes to subsection cross-references. 66 Fed. Reg. 22445 (May 4, 2001). Therefore, 44 C.F.R. § 206.226(f)(3) does not create an exception from any of the codes and standards eligibility criteria.