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Second Appeal Analysis
PA ID# 055-50258-00; City of Napa
PW ID# (PWs) 205 and 229 ; Predisaster Conditions, Direct Result of Disaster
During the incident period of August 24 through September 7, 2014, the 6.0 magnitude South Napa earthquake damaged the City of Napa’s (Applicant) potable water transmission and distribution system (Facility). FEMA conducted a kickoff meeting on October 15, 2014 and subsequently prepared 10 Project Worksheets (PW) to document repairs to the Facility and awarded $5,059,188.15 in funding.
On December 16, 2014, the Applicant requested Public Assistance (PA) to replace 15 pipe segments within the Facility, as well as repair of any additional water line breaks that occur after the date of its request. FEMA developed PWs 205 and 229 to respectively document these two requests, but did not award funding. For PW 205, FEMA determined the claimed damages ineligible because they had been repaired and the Facility was restored to its predisaster function. For PW 229, FEMA determined the Applicant had not demonstrated the damages resulted from the disaster, and also that the scope of work was for repair of water lines which were damaged outside the incident period and not reported within the 60-day regulatory deadline, which ended on December 16, 2014, for identifying and reporting damage.
In a letter dated August 21, 2015, the Applicant appealed both determinations in the amounts of $3,298,600.00 for PW 205 and $101,249.09 for PW 229, totaling $3,399,849.09. Regarding PW 205, the Applicant argued the frequency of post-disaster repairs and the extent of overall damage clearly indicated the pipe segments at issue no longer met the City’s standard to provide reliable service and that replacement of the pipe segments was consistent with standard repair practices. The Applicant claimed by analogy a FEMA policy regarding electrical conductor replacement (Fact Sheet 9580.6) and a previously issued second appeal decision (City of Tallahassee) supported awarding PA funding for the replacement of the pipe segments. The Applicant asserted that, similar to how Fact Sheet 9580.6 establishes criteria to assess when electrical conductors are damaged beyond repair, its water line breaks were evidence of material damage to the point where the associated pipe segments could no longer be repaired and were not capable of reliable service, and therefore required complete replacement. The Applicant cited to the City of Tallahassee, to argue that FEMA determined it would not have been feasible to limit repairs to observed point breaks on a sewer system and return it to predisaster function. The Applicant asserted its pipe segments were similarly damaged and could not be restored to predisaster design, capacity and function. The Applicant noted customer reports of significant service interruptions and provided a letter from a professional engineer (PEER letter), which concluded disaster-related damage decreased the remaining life of the affected pipe segments to zero.
Regarding PW 229, the Applicant asserted 17 pipe segment breaks occurred after December 16, 2014, representing a rate far above the historical average, and were a direct result of the disaster. The professional engineer confirmed “an additional 17 breaks in the three months after December 16, 2014.” The Applicant asserted repair of the pipe segments constituted “additional work…that occurred or was discovered during performance of work under PW 205.” Finally, the Applicant contended damages expected to occur after December 16, 2014 were timely reported, but, if FEMA disagreed, an exception to the reporting deadline was allowable under Federal regulation and was warranted due to the nature of the disaster, because the pipe segments were impacted by continued seismic activity and such damage is not always visible and identifiable within the 60-day reporting period.
The California Governor’s Office of Emergency Services (Grantee) supported the Applicant’s appeal in separate letters dated October 12, 2015 (PW 205) and October 16, 2015 (PW 229). Regarding PW 205, the Grantee repeated the Applicant’s arguments and questioned FEMA’s determination that the Facility had been restored to its predisaster function and capacity. Noting the Applicant’s appeal arguments, the Grantee referred to FEMA policy indicating that a utility owner is responsible for determining the extent of damage, and the existence and extent of damage should be confirmed through testing. The Grantee noted FEMA provided no hard data to confirm its conclusions. Regarding PW 229, the Grantee repeated the Applicant’s arguments and provided a report from the United States Geological Survey and noted “…the report states…afterslip or creep, continued to occur along parts of the fault and would continue to occur with moderate severity during the three years after the earthquake.”
With regard to PW 205, FEMA sent a Final Request for Information (RFI) noting that a facility is considered repairable if costs to repair do not exceed 50 percent of costs to replace and it is feasible to repair the facility so that it functions as well as it did immediately prior to the disaster. FEMA indicated the administrative record does not appear to contain enough objective evidence to support the Applicant’s position that it was not feasible to restore predisaster function with repairs only. FEMA requested any additional documentation or information that it would like considered and included in the administrative record. The Applicant’s response included records of historical pipe segment replacement projects, which the Applicant argued established its practice of replacing pipe segments with multiple breaks between segments, and slides from a presentation attended by FEMA staff that documented the effects of the earthquake and the Applicant’s efforts to manage them. With regard to PW 229, FEMA’s Final RFI advised that the work must be required as a direct result of the disaster, that the record may not contain enough objective evidence to support the Applicant’s position, and requested any additional documentation or information that it would like FEMA to consider and include in the administrative record. On May 19, 2016, the Applicant replied, saying it would not submit any additional documentation or information supporting the appeal.
In separate letters, both dated October 4, 2016, the FEMA Region IX Regional Administrator (RA) denied the appeals. Regarding PW 205, the RA noted the Applicant did not claim the cost to repair the 15 damaged pipe segments exceeded 50 percent of the replacement cost, and relied instead exclusively on the feasibility prong of the 50 percent rule to support the claim. The RA stated the Applicant provided no evidence that predisaster function and capacity (water quality, pressure, flow rate) suffered as a result of the disaster, and was arguing instead that frequency of breaks alone is evidence the pipe segments were so damaged they could no longer be considered capable of providing reliable service. The RA noted the Applicant did not explain the process it used to identify the damaged pipe segments, suggesting the process was either random or intended to produce a specific outcome. The RA stated the criterion cited by the Applicant (the number of breaks in damaged pipe segments) was not predetermined and varied from segment to segment, whereas Fact Sheet 9580.6 lists objective criteria beyond which an electrical conductor could no longer be considered capable of providing reliable service, namely a predetermined number of or percentage of damaged conductors, poles and other electrical system components. The RA found neither the process the Applicant used to identify the damaged pipe segments, nor the criterion cited by the Applicant as indicating pipe segments were no longer capable of reliable service, could be equated to the criteria in the Fact Sheet or FEMA’s use of it to determine when a conductor must be replaced.
With regard to the City of Tallahassee second appeal decision, the RA pointed out the applicant provided evidence that supported its position (evidence of post-repair ruptures in the sewer main, the results of a fill test that caused additional failures, video inspection showing nine more breaks, etc.), whereas here, the Applicant (City of Napa) did not. The RA noted the PEER letter was based on assumptions and averages and did not establish post-disaster condition of the pipe segments, and stated the likelihood of a decrease in a facility’s predicted service life, and possible future repairs that may be necessary, are not evidence of damage resulting from the disaster. The RA concluded the Applicant failed to establish that any of the pipe segments satisfied the cost or feasibility criteria, set forth in 44 C.F.R. § 206.226(f)(1), to be considered eligible for replacement, and therefore, FEMA considered the pipe segments repairable. Regarding PW 229, the RA determined: (1) the Applicant did not demonstrate the additional breaks were a direct result of the disaster and may just as likely have resulted from afterslip, wear and tear, freeze-thaw events or other causes; (2) the reported breaks were not discovered while performing approved work and so were not hidden damages; (3) requesting PA for repairs before breaks occur is not equal to identifying and reporting eligible damage; and (4) there were no extenuating circumstances beyond the Applicant’s control that justified extension of the reporting deadline of December 16, 2014.
In its second appeal, for PW 205, the Applicant contends the water main has not been restored to its pre-disaster reliable function and capacity, and that increased post-disaster break frequency, the nature of the breaks and decreased service life are evidence of a compromised facility with reduced reliability. The Applicant argues the process used to determine which segments needed replacement is based on quantitative and qualitative factors and was informed by historical practice that included a predetermined minimum threshold of two or more breaks per segment. The Applicant asserts that the City Engineer, using professional judgement based on knowledge and experience, is best positioned to evaluate the system and to decide which segments should be replaced, and that use of predetermined criteria in place of professional judgement would not guarantee a better result. The Applicant argues the PEER letter is not based on assumptions and averages, but on surveys and studies, and provides an analysis specific to the Applicant using pre- and post-Earthquake data. The Applicant reiterates its first appeal argument regarding Fact Sheet 9580.6 and City of Tallahassee and asserts FEMA should defer to the conclusions drawn by its engineer and consultant.
Regarding PW 229, the Applicant asserts “…the specific areas…affected by the ground movement associated with the Earthquake continued to expose water main breakages…at an inordinate rate compared to the five-year historical rate…” The Applicant argues the requirement that damage be identified and reported within 60 days after the kickoff meeting is based on above-ground observation of disaster effects and is not a sound approach to apply to pressurized underground pipe networks subjected to intense ground shaking and movement that cannot be easily inspected when leaks are continuing and emergency repairs are ongoing. The Applicant provides examples of “delayed failures” it attributes to the earthquake, declaring “[i]t is not possible to ascertain whether the initial shaking caused these breaks or the afterslip that continued to be recorded by the USGS in the months after the event – either way, the breaks were caused by the Earthquake.” The Applicant contends FEMA’s conjecture that breaks could have been caused by something other than the earthquake has no basis in fact; points out that failures have increased only in the shake zone, disputing FEMA’s determination that the reported breaks were caused by something other than the disaster; and, submits graphs it claims eliminates freeze-thaw events as a possible cause of line breaks. The Applicant describes its attempt to comply with the 60-day reporting requirement by reporting hidden damages that were occurring but unobservable, and cites a previous second appeal decision, Lewis and Clark Rural Water System, in which FEMA distinguishes between a newly discovered damaged facility and newly discovered damage at a previously identified facility, as precedent in which the 60-day reporting requirement did not apply.
The Grantee transmits the Applicant’s second appeal via memorandum dated February 3, 2017, expressing support for the Applicant’s arguments, and recommending FEMA approve both appeals.
FEMA may reimburse applicants “for the repair, restoration, reconstruction, or replacement of a public facility damaged or destroyed by a major disaster.” Work to restore an eligible facility to its condition as it existed immediately prior to the disaster is eligible for funding. However, the work must be required as a direct result of the disaster. Permanent work includes repair or replacement work that restores an eligible facility back to its predisaster design, function, and capacity. A facility is considered repairable when disaster damages do not exceed 50 percent of the cost of replacing a facility to its predisaster condition, and it is feasible to repair the facility so that it can perform the function for which it was being used as well as it did immediately prior to the disaster. A decrease in a facility’s predicted service life is not disaster-related damage.
Regarding PW 205, the Applicant argues that the predisaster condition has not been restored and the Facility does not provide reliable service due to increased break frequency and exhausted value of useful life. However, the Applicant has not shown that FEMA-funded repairs made to the Facility did not restore the predisaster function and capacity of the pipe segments. For example, the Applicant has not demonstrated persistent damage such as a drop in pressure, flowrate, or water quality, which would indicate that function and capacity have not been restored. The use of couplings and clamps is a common practice to quickly repair leaks; when properly installed, clamps and couplings stop leaks and restore predisaster function and capacity, and are intended for long term application. In addition, the Applicant provided no information in response to the RFI to demonstrate or prove its assertions that clamps are weaker than unpatched pipes and are intended for temporary repairs.
The Applicant argues FEMA’s policy for the replacement of electrical conductors is relevant to the circumstances of the present appeal. Fact Sheet 9580.6 lists criteria for conductors that FEMA has predetermined are damaged to such an extent that replacement is required. FEMA has no predetermined criteria for replacement of pipe segments. However, the criteria the Applicant uses to justify replacing damaged pipe segments (a minimum threshold of two or more breaks per segment and the City Engineer’s professional judgement) are not evidence the pipe segments could not be repaired; as noted above, the Applicant has not demonstrated that predisaster condition was not restored by repairs, or that the Facility does not provide reliable service. The PEER letter submitted by the Applicant indicates the useful life of buried water pipes is about 100 years, and, through analysis of pre-earthquake normal break data and earthquake break data, predicts a likely decrease in service life for the damaged segments, and the future repairs that may be necessary as a result. However, as the RA noted, the PEER letter is not based on physical or empirical evidence and does not establish post-disaster condition of the pipe segments, and a decrease in predicted service life does not satisfy the eligibility requirement that work must be required as a direct result of the disaster.
Finally, the Applicant cites City of Tallahassee as analogous to its claim that it was not feasible to repair pipe segments. In City of Tallahassee, however, the applicant provided evidence that supported its position that point repairs did not restore predisaster condition, including evidence of post-repair ruptures in the sewer main, the results of a low-pressure fill test that caused additional failures, and video inspection showing more point breaks. Here, the Applicant has provided no similar or equivalent evidence to demonstrate that function and capacity have not been restored. As the Applicant has failed to demonstrate that pipe segments were not restored to predisaster condition or that it was not feasible to repair the segments so that they could perform the function for which they were being used as well as they did immediately prior to the disaster as required under § 206.226(f)(1), the project remains ineligible for PA.
Direct Result of Disaster
To be eligible for financial assistance, an item of work must be required as the result of the major disaster event. Work must be required as a direct result of the event. PA is not available unless the damage or hardship to be alleviated resulted from the disaster-causing incident which took place during the incident period or was in anticipation of that incident. It is the applicant’s responsibility to show that the damage is disaster-related. An applicant has 60 days after its first substantive meeting with FEMA to identify and report damage to FEMA. During the performance of work on a project, the applicant may discover hidden damage. FEMA will recognize damage that occurs after the close of the incident period if it is shown to have resulted directly from events that occurred during the incident period. Damage that results from a cause other than the designated event is not eligible.
Regarding PW 229, the Applicant argues the reported breaks are hidden damage as a direct result of the earthquake, and that their repair constituted “additional work” that occurred or was discovered during performance of work under PW 205. The Applicant submitted graphs to refute the Region’s suggestion that all or some of the 17 breaks that occurred between December 2014 and January 2015 were caused by freeze-thaw events but it provided no evidence that the breaks in question were the direct result of events occurring during the incident period and not the result of other factors, for example, traffic vibrations or construction near the site. In fact, both the Grantee (in its first appeal) and the Applicant (in its second appeal) cite afterslip (ongoing fault movement) occurring after the 16-day incident period as a possible cause of pipe breaks. Even assuming this assertion to be true, PA funding cannot be approved for damage that is not shown to have occurred during the incident period.
The Applicant argues Lewis and Clark Rural Water System is analogous to the circumstance of the present appeal, that while evaluating damage and repairing breaks that occurred during the reporting period, the Applicant realized the system was compromised and that additional (hidden) breaks would be observed. Lewis and Clark Rural Water System, however, distinguishes between a newly discovered damaged facility and newly discovered damage at a facility already reported as damaged (i.e., hidden damage); in Lewis and Clark Rural Water System, damage was discovered during performance of approved work. Here, the Applicant anticipated but did not discover the 17 pipe segment breaks or the need to repair them during the performance of other approved work, nor had they yet occurred; therefore, the reported breaks are not hidden damage. As they were not reported within 60 days after the Applicant’s first substantive meeting with FEMA, the project remains ineligible for PA.
The Applicant has not demonstrated that the 15 pipe segments were not restored to predisaster condition or that it was not feasible to repair the pipe segments so that they could perform as they did immediately prior to the disaster. Neither has the Applicant demonstrated that the 17 water line breaks discovered after the regulatory deadline to report disaster damages were hidden damages resulting directly from events that occurred during the incident period and not subject to the 60-day reporting requirement. Therefore, the appeal
 Project Worksheet 205, City of Napa, Version 0 (Apr. 2, 2015); Project Worksheet 229, City of Napa, Version 0 (Apr. 21, 2015).
 FEMA PA Determination Memo, City of Napa, PW 205 (Jun. 17, 2015).
 FEMA PA Determination Memo, City of Napa, PW 229 (Jun. 23, 2015).
 Letter from Admin. Servs. Mgr., City of Napa et al., to Acting Reg’l Adm’r, FEMA Region IX (Aug. 21, 2015) (stating the Applicant “consolidated its appeal of both determinations because both address damage to the City's potable water system.”).
 Fact Sheet 9580.6, Electric Utility Repair, Public and Private Nonprofit, at 3 (Sep. 22, 2009).
 FEMA Second Appeal Analysis, City of Tallahassee, FEMA-1785-DR-FL at 6 (May 11, 2015).
 Letter from Visiting Research Eng’r, Pacific Earthquake Eng’g Research Ctr., Univ. of Cal. Berkeley, to Gen. Mgr. Water Div., City of Napa (Aug. 17, 2015) [hereinafter PEER letter].
 No eligible work was performed under PW 205. The Applicant is likely referring to the work performed to repair leaks on the 15 pipe segments under other PWs.
 Title 44 Code of Federal Regulations (44 C.F.R.) § 206.202(f)(2) (2013) (stating “the Regional Administrator may extend the time limitations [for reporting damages] when the Grantees justifies and makes a request in writing. The justification must be based on extenuating circumstances beyond the grantee’s or subgrantee’s control”).
 Letter from Governor’s Authorized Rep., Cal. Governor’s Office of Emer. Servs. (Cal OES) to Reg’l Adm’r., FEMA Region IX (Oct. 12, 2015).
 Public Assistance Guide, FEMA 322, at 85 (June 2007) [hereinafter PA Guide] (stating “[t]he owner of a facility is responsible for determining the extent of damage [and] … the extent of damage to equipment utilized in the generation or distribution of utilities should be confirmed through testing”).
 United States Geological Survey, Key Recovery Factors for the August 24, 2014 South Napa Earthquake (Dec. 2014). The report defined afterslip as “ongoing fault movement along the surface rupture.”
 Letter from Governor’s Authorized Rep., Cal OES to Reg’l Adm’r., FEMA Region IX (Oct. 16, 2015) at 2 [hereinafter Grantee First Appeal Letter-PW 229].
 Letter from Recovery Div. Dir, FEMA Region IX, to Governor’s Authorized Rep., Cal OES (Dec. 17, 2015).
 Email from Water Gen’l Mgr., City of Napa to Appeals Analyst, FEMA R IX (Mar. 12, 2016, 3:54 PM).
 Letter from Acting Dir., Recovery Div. FEMA Region IX, to Governor’s Authorized Rep., Cal OES (Mar. 11, 2016).
 Email from Water Gen. Mgr., City of Napa, to Appeals Analyst, FEMA Region IX (May 19, 2016, 10:39 AM).
 Letter from Reg’l Adm’r, FEMA Region IX, to Governor’s Authorized Rep., Cal OES (Oct. 4, 2016) (First Appeal Decision for PW 205); Letter from Reg’l Adm’r, FEMA Region IX, to Governor’s Authorized Representative, Cal OES (Oct. 4, 2016) (First Appeal Decision for PW 229).
 Letter from Admin. Servs. Mgr., City of Napa et al., to Asst. Adm’r, Recovery, FEMA, at 9 (Dec. 5, 2016) [hereinafter Applicant Second Appeal Letter]. Cited in and attached to its second appeal, the Applicant provides another response to the Final RFI for PW 205. This letter was not received by FEMA prior to the closure of the administrative record. Therefore, it is not part of the administrative record and cannot be considered. See FEMA Second Appeal Analysis, Nobles Cooperative Electric, FEMA-4112-DR-MN, at 2-3 (July 23, 2015) (explaining that once the administrative record is closed, FEMA will not consider any new information submitted with a second appeal). See also Letter from Recovery Div. Dir, FEMA Region IX, to Governor’s Authorized Rep., Cal OES, at 1 (Dec. 17, 2015) (advising the Applicant the administrative record for PW 205 would close following a first appeal decision.).
 The Applicant again argues Fact Sheet 9580.6 and the second appeal decision for City of Tallahassee are analogous to the circumstances of PW 205, and therefore are applicable to the eligibility of the project.
 Applicant Second Appeal Letter at 16.
 Freeze Thaw Graphs with Breaks, December 1998 through February 2016.
 FEMA Second Appeal Analysis, Lewis and Clark Rural Water System, FEMA-1984-DR-SD, at 5 (Oct. 21, 2014).
 Letter from Governor’s Authorized Rep., Cal OES, to Assistant Adm’r, Recovery, FEMA Headquarters (Feb. 3, 2017).
 The Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, Pub. L. No. 93-288, § 406(a), 42 U.S.C. 5172(a) (2013).
 44 C.F.R. § 206.226.
 44 C.F.R. § 206.201(j), PA Guide, at 29.
 44 C.F.R. § 206.226(f)(1).
 Id. § 206.223(a)(1); PA Guide, at 29. See FEMA Second Appeal Analysis, Jefferson County, FEMA-1791-DR-TX, at 2-3 (Jun. 19, 2012).
 A professional engineer was consulted in adjudication of the Applicant’s appeal and review of the administrative record.
 Second Appeal Analysis, Nobles Cooperative Electric, FEMA-4113-DR-MN, at 5 (July 23, 2015).
 44 C.F.R. § 206.223(a)(1)
 44 C.F.R. § 206.32(f).
 44 C.F.R. § 206.202(d)(1)(ii).
 Grantee First Appeal Letter-PW 229, at 2.
 Applicant Second Appeal Letter, at 19.