Conclusion: Carrollton Utilities (Subrecipient) substantiated the disaster eroded cover exposing its gas pipelines (Facility) but did not submit documentation demonstrating the additional work it completed to replace and lower the undamaged lines further below grade was eligible to restore the Facility. Additionally, it failed to demonstrate the upgraded repair was required by federal regulation or eligible for hazard mitigation funding. As such, the second appeal is denied.
In July 2015, in Kentucky, disaster-generated floodwaters eroded fill cover, exposing sections of the Subrecipient’s gas pipelines (Facility) located beneath Canip Creek. In Project Worksheet (PW) 83, FEMA documented the Subrecipient’s claim for $24,062.00, proposing to use directional boring to replace and lower its 4-inch steel gas pipe (200 feet) and 2-inch plastic gas pipe (300 feet) further below the creek bed. FEMA later explained in a Determination Memorandum, that pipeline replacement was ineligible work because the lines were not damaged by the disaster. Though the disaster damaged the pipelines’ covering, because the estimate for replacing fill cost less than the eligible project threshold, FEMA found that none of the work was eligible and reduced the PW to zero dollars. The Subrecipient appealed the determination, asserting the loss of cover exposed the plastic line and partially exposed the steel line, and in earlier 2015 inspections both lines were covered. Although feasible as a repair option, it questioned whether replacing the cover could withstand subsequent erosion should another storm occur. It preferred installing new lines with directional bore further below ground as the safest, most-expedient option because it minimized ground disturbance and covered the lines with undisturbed soil. In a Final Request for Information (Final RFI), FEMA Region IV concluded the record did not support replacing the lines. The Final RFI requested the Subrecipient to: describe the disaster-damage in detail; quantify the area of erosion; provide the scope of work (SOW) and costs necessary to replace the cover; provide a benefit-cost analysis demonstrating that gas pipeline replacement beyond the existing depth was cost-effective mitigation pursuant to FEMA RP 9526.1; and provide any other documentation believed relevant to support its position. In response, the Subrecipient: reiterated the lines were exposed due to erosion; provided the SOW to repair in kind, 1,400 cubic feet (CF) of fill for $6,430.00; and argued that replacing and lowering the lines 4 feet further below the surface provided better, cost-effective protection below the washout zone and met requirements for pipeline construction. It also provided a 5-page partial excerpt of various federal provisions, but did not address them specifically. In a first appeal decision, the Regional Administrator (RA) partially granted $6,430.00 to restore the eroded cover, but denied work and costs related to replacing/lowering the undamaged lines. Because a benefit-cost analysis was not submitted and the proposed mitigation exceeded the eligible total cost, the RA determined the additional work was not cost-effective. In a second appeal, the Subrecipient: renews its request for the full cost of its replacement project, contending the total is eligible; argues that repairing only the cover fails to meet required Federal provisions regulated by the Pipeline and Hazardous Materials Safety Administration; argues it must take all practicable steps to protect the lines or mains from unstable soil and other hazards, contending, due to the disaster, that more than the regulatory minimum of 36 inches of cover is required; and contends the work completed to replace and lower the lines is eligible hazard mitigation, asserting it is cost-effective because the total of all the work does not exceed 100 percent of costs.
Authorities and Second Appeals
- Stafford Act § 406.
- 44 C.F.R. §§ 206.223(a)(1), 206.206(a), 206.226.
- PA Guide, at 29, 33-34, 83, 101, 125-126.
- RP 9526.1, Hazard Mitigation Funding under Section 406 (Stafford Act), at 2-3.
- Stutsman Cty., FEMA-1981-DR-ND, at 4-5; Dep’t of Transp., FEMA-4068-DR-FL, at 5; St. Tammany Parish School Bd., FEMA-1603-DR-LA, at 5-6.
- Stafford Act § 406 and implementing regulations authorize funding to restore a damaged facility to its predisaster design and function. FEMA will fund reasonable upgrades required by code that apply to the type of repair or restoration required, and meet criteria pursuant to 44 C.F.R. § 206.226(d). The burden is on the applicant to provide documented justification to substantiate claims made on appeal.
- The Subrecipient does not demonstrate that work beyond replacing the cover to address the eligible damage, is necessary to restore the Facility.
- Many of the cited provisions do not apply to the type of restoration required nor would FEMA find the application reasonable based on the record. None of the provisions require the additional work. Further, there is no evidence supporting that replacing the cover per regulations would fail, be technically-infeasible or unsafe, or otherwise impair the Facility’s serviceability or functionality.
- Stafford Act Section 406 hazard mitigation funding must be applied to eligible disaster-damaged elements and found cost-effective.
- The Subrecipient fails to substantiate with documentation that replacing/lowering the undamaged lines bears a direct relationship to the loss of pipeline cover. It declined to submit a benefit-cost analysis, which is required to substantiate cost-effective mitigation.