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Second Appeal Analysis
PA ID# 059-99059-00; Franklin County
PW ID# (PW) 335 ; Direct Result of Disaster – Support Documentation
Between May 4 and June 21, 2015, severe storms occurred throughout Franklin County, Kansas (Applicant) causing widespread flooding. The Applicant claimed damages to corrugated metal pipe (CMP) culverts at a total of 19 sites and sections of roadways immediately adjacent to the culverts in addition to damage to the corresponding roads. FEMA prepared Project Worksheet (PW) 335 in the amount of $232,803.89, the estimated costs to replace the culverts and repair the roads. However, on August 23, 2016, FEMA issued a determination memorandum advising the Applicant that all the work mentioned in PW 335 was ineligible for funding because, among other reasons, the documentation submitted by the Applicant did not demonstrate that the damages claimed were a direct result of the disaster.
In a letter dated September 9, 2016, the Applicant filed its first appeal with the Kansas Division of Emergency Management (Grantee) challenging FEMA’s denial of $232,803.89 in costs associated with PW 335. The Applicant argued that FEMA representatives previously determined that the culvert and road repairs were accomplished and that the costs were reasonable. It also argued that it provided photographs displaying the damages to FEMA representatives who had subsequently misplaced them.
On October 14, 2016, the Applicant filed a supplement to its September 9, 2016 letter. In this letter, the Applicant reiterated its previous arguments and, further, argued that there was no requirement to show photographs of the damage and that there were other ways to prove the damage. The Applicant also contended that it had submitted time cards, equipment records, and invoices which demonstrated that it undertook significant work to repair the damage. Further the Applicant asserted that FEMA never claimed the Applicant had failed to maintain its roads. Finally, the Applicant argued that FEMA’s determination, finding its costs were unreasonable, without notification regarding why or what would be reasonable, was arbitrary and capricious. On October 20, 2016, the Grantee forwarded the Applicant’s appeal with its own analysis reiterating the same arguments made by the Applicant.
On December 13, 2016, FEMA issued a Final Request for Information (RFI) to the Applicant and the Grantee. In this letter, FEMA requested:
- Itemized costs associated with purchasing the alternate materials at Site 5 versus the estimated cost to replace the removed CMPs with the same size and type without including road repair costs;
- A detailed line-item report of costs for Site 8, with a differentiation of the costs for the road repair versus the cost to repair the culverts and the road directly above the culverts; and
- Pre-repair photographs of the damaged sites not already submitted with the Applicant’s first appeal.
The Applicant responded to the Final RFI on January 4, 2017. The Applicant provided the cost comparison for the culvert replacements as well as another set of photographs it claimed it had already submitted on at least four prior occasions. Additionally, the Applicant claimed that the line items for the road repair costs versus the culvert and accompanying road repairs were already differentiated when the Grantee wrote PW 335 and PW 395 (the PW which funded only the repair of certain roads).
On March 30, 2017, the FEMA Region VII Regional Administrator (RA) issued the first appeal decision. The RA determined that the Applicant demonstrated damage resulting in $24,480.39 in costs was a direct result of the disaster. However, the RA also determined that the Applicant had not demonstrated that the remaining costs, associated with work to repair the rest of the damage, were a direct result of the disaster. Furthermore, the RA found that while the Applicant differentiated between only the road repairs versus the culvert and corresponding road repairs, because the sites overlapped, the Applicant’s claim would result in duplicated funding.
Additionally, the RA acknowledged that photographs were not the only documentation by which the Applicant could demonstrate disaster related damage, but the RA noted that the Applicant did not provide other documentation to adequately demonstrate its position. Finally, the RA acknowledged that FEMA erred in determining that equipment hours excessively exceeded labor hours. However, the RA still found that the cost estimate resulting from the use of Region VII’s gravel road and culvert calculator was reasonable and that, in comparison, the Applicant’s costs were unreasonable. Therefore, the RA partially granted the appeal in the amount of $24,480.39, and denied the remaining costs.
The Applicant filed its second appeal with the Grantee in a letter dated April 18, 2017. It argued that there was no overlap between the repair of the roads themselves and the repair of the culverts and corresponding roads. Additionally, the Applicant reiterated its claim that it submitted documentation showing disaster related damage, but such documentation was misplaced by FEMA representatives. The Applicant also argued that the first appeal decision did not provide an explanation of why the costs were deemed unreasonable or how FEMA made that decision. Further, the Applicant claimed that it did not have access to Region VII’s gravel road and culvert calculator so it could not create an argument to rebut the first appeal decision’s conclusion on the matter. Finally, the Applicant contended that FEMA’s first appeal decision was in violation of Section 325(a) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act). The Applicant argued there was no law or policy in effect at the time of the disaster that required applicants to submit pre- and post-disaster photographs of each and every damaged site. Therefore, the Applicant believed FEMA’s Final RFI relating to this matter was the result of a rule change which significantly reduced the amount of assistance that it was eligible for without FEMA providing public notification of such a change.
The Grantee forwarded the Applicant’s second appeal to FEMA on June 22, 2017, with its own analysis. The Grantee concurred with the Applicant’s arguments and expounded upon them saying that FEMA was changing its “rules concerning eligibility by requiring more documentation, such as multiple photographs for every site, than in any previous disaster,” thereby violating Section 325 of the Stafford Act. The Grantee conceded that there were not multiple photographs of each site but asserted that the Applicant supplied other documentation demonstrating disaster related damage.
On February 6, 2018, FEMA issued its second appeal decision. FEMA conceded that the work, which the first appeal decision claimed overlapped, in fact did not overlap and therefore there was no duplication of assistance. FEMA then discussed the issue of cost reasonableness, acknowledging that the RA did not provide the Applicant notice of which costs were unreasonable, explain why they were unreasonable, or provide the Applicant an opportunity to supply additional documentation to address the question of reasonableness. Therefore, FEMA determined the Agency had deprived the Applicant of an opportunity to provide supporting documentation related to that issue.
Additionally, FEMA found that while the first appeal decision acknowledged there were alternative methods of demonstrating disaster related damage in addition to photographs, the Final RFI did not include a request for any of those additional documents. FEMA stated that if there was not enough information in the record to support the Applicant’s claim that the damage was disaster related, the Final RFI should have included such information. Thus, FEMA remanded the appeal back to the Region to issue a new Final RFI to rectify the aforementioned issues. FEMA further stated that if the Region made a determination based on the Region VII gravel road and culvert calculator, the calculator should be provided to the Applicant so that it may form an adequate response.
Remanded First Appeal
In accordance with the remanded appeal, FEMA issued a new Final RFI on April 10, 2018. This second Final RFI requested:
- Documentation to support the claim that the costs incurred were reasonable, broken out by gravel, and CMP material costs, labor, and equipment;
- Proof of maintenance and corresponding inspection reports from before the disaster on a site by site basis;
- Causative links between multiple rain incidents and damage to each site in the PW showing that the amount of water exceeded the capacity of the culverts and created a situation where the roads above the culvert would be damaged;
- Any newly discovered photographs that documented the damage to the sites; and
- Any documentation to support the position that the damages were a direct result of the disaster, and the work and costs incurred as a result were reasonable.
The Applicant responded on May 4, 2018. The Applicant’s response included a revised scope of work (SOW) and damage description and dimension statements for the requested sites along with the quantity and cost of labor, equipment, and materials. It also included the job descriptions of the maintenance employees in question with a narrative of the claimed maintenance work they performed. The Applicant also attached spreadsheets for the years 2013-2017 displaying its total rock costs to demonstrate that it maintained its roads on a routine schedule prior to the disaster. In response to FEMA’s request for documentation demonstrating causation between the rain incidents and the damage, the Applicant submitted a report of rainfall totals from the incident period, claiming that the report and previously submitted photographs together show how the rainfall clearly overwhelmed the culverts during the disaster’s incident period. Finally, the Applicant stated that FEMA policy in effect at the time of the disaster did not require pre-disaster maintenance records to demonstrate disaster related damage.
On July 9, 2018, FEMA issued its first appeal decision on the remanded appeal. First, the RA found that the after-the-fact development of the PW’s SOW, submitted in response to the second Final RFI, provided enough information to show that the higher than average costs were reasonable, but, that the process utilized by the Applicant was contrary to policy. The RA stated that because applicants have 60 days to identify damages from the date of the first substantive meeting, FEMA could not accept the after-the-fact identification of damages as eligible costs. Next, the RA acknowledged that the Applicant’s submission of the rock tickets from 2013-2017 was an attempt to show regular maintenance, but stated that the Applicant did not provide any documentation, as required, to show where the maintenance took place. Therefore, without the location of the work, the Applicant could not demonstrate that the maintenance occurred on the specific sites in question on appeal. Finally, the RA noted that the rain totals and photographs submitted by the Applicant acted merely as conjecture and did not serve to demonstrate a causative link between the disaster and the claimed damage. Ultimately, the RA concluded that the Applicant failed to establish that the damage at several sites was a direct result of the disaster.
However, notwithstanding the above, the RA approved $37,943.65 (an increase from the original first appeal decision) for costs associated with repairs to sites 9, 11, 14, 17, and 19 which were deemed eligible. The RA noted that the increased costs were associated with repairs to eligible sites which the RA determined were damaged by the disaster.
Remanded Second Appeal
On September 6, 2018, the Applicant appealed, requesting FEMA approve $174,102.64 in additional costs. The Applicant first notes that in the original first appeal decision, the RA deemed $5,890.00 in costs associated with Site 5 eligible, but in the second first appeal decision omitted these costs. Therefore, the Applicant argues the RA improperly omitted those costs from the approved amount. The Applicant also points out that in the original first appeal decision, the RA only approved partial funding of the costs associated with Site 9, and then in the second first appeal decision, the RA approved all requested costs associated with that site without explanation. On the whole, the Applicant expresses confusion regarding the different findings present in the original first appeal decision versus the second first appeal decision, arguing there is not sufficient rationale present in the second first appeal decision to explain why certain costs were deemed ineligible that were previously approved, while others were found to be eligible even though they were previously denied. Next, the Applicant argues that when it rewrote the SOW in the second Final RFI response, it did not change the scope or damage descriptions, but simply provided a clearer explanation of what work was completed. Finally, the Applicant states that it fails to understand why FEMA would estimate costs when it possesses all actual costs associated with the completed work.
The Grantee forwarded the Applicant’s appeal to FEMA on November 5, 2018. The Grantee reiterates the Applicant’s argument regarding the alleged inconsistency between the original first appeal decision and the second first appeal decision. The Grantee additionally contends that the RA required more documentation and specificity than what is required by regulation, in the attempt to relate maintenance records to specific locations. Moreover, the Grantee states that FEMA is required to fund actual, not estimated costs through procedures like cost-estimating calculators. Finally, the Grantee discusses why it believes the Applicant’s costs are in fact reasonable.
Direct Result of Disaster
FEMA may fund the cost of repairing, restoring, reconstructing, or replacing a facility damaged or destroyed by a major disaster. However, to be eligible for financial assistance, an item of work must be required as the result of the disaster. Meaning, the “specific cause of damage must relate to the incident for which the disaster was declared” in order for the work to be eligible. For facilities that require routine maintenance to maintain their designated function, such as dams or bridges, FEMA may review the predisaster maintenance or inspection reports to verify the predisaster condition and assess eligible disaster damage. It is the applicant’s responsibility to demonstrate that damage is disaster related and to provide documented justification supporting its position.
To support its claim that the damages were disaster related, the Applicant provided certain documents. First, the Applicant provided several sets of photographs of the sites in question. However, there are no photographs of the sites in question in their predisaster condition. It also provided the annual budget for 2015 which showed the Applicant apportioned some of its annual funds into the category for “Road & Bridge” funds. Yet, there is no more specific delineation regarding what these funds were spent on or where they were spent. The information provided in the certified annual budget does not document specific items of maintenance work which would enable FEMA to assess the predisaster condition of the sites on appeal.
Third, the Applicant provided invoices displaying orders for new culverts as well as aggregate for road work. These invoices were all dated May 13, 2015, or later—after the onset of the incident period. Moreover, the Applicant submitted records of its gravel orders from 2013-2017, which included the date of the order, the type of aggregate, the net weight, the price per ton, and the total price for each order. The Applicant also provided spreadsheets outlining the rock budgets for 2003-2016, displaying the rock budget for individual months along with the corresponding actuals spent each month.
Next, the Applicant submitted the job descriptions for employees which it claims were performing predisaster maintenance on the roads and culverts. For example, the job descriptions for blade operators I and II include a summary which states that the employee is responsible for “work in the maintenance of an assigned district of the County road system.” Included in the essential functions of these employees is the ability to: maintain unpaved road surfaces, clean culvert entrances, and perform daily maintenance on motor grader. Finally, the Applicant provided timesheets for several employees which portray the employee’s name, the date, and the number hours worked for each work period.
All this documentation demonstrates the performance of road and culvert repair work prior to the disaster. However, nothing in them documents specific items of maintenance work, which would enable FEMA to assess the predisaster condition of the sites on appeal. Meaning, there is no documentation to show that there was any predisaster maintenance performed on any of the culvert sites in question. Moreover, none of the documentation provided by the Applicant demonstrates where or in what manner the Applicant used the culverts it purchased or undertook the maintenance it claims following the disaster. Therefore, FEMA is unable to determine whether the damage to the sites in question occurred as a result of the disaster or through other means.
FEMA finds that the Applicant has not demonstrated it had a routine maintenance program in place prior to the disaster to allow FEMA to verify the predisaster condition of the sites on appeal. Moreover, the Applicant has not provided documentation that the work completed at the sites in question was required as a direct result of the disaster. Therefore, the second appeal is denied.
 Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988 (Stafford Act), § 325; 42 U.S.C. § 5165c(a) (2012).
 Letter from Deputy Dir., KS Div. of Emergency Mgmt., to Assistant Adm’r, FEMA Recovery Office, through Reg’ Adm’r, FEMA Region VII, at 5 (June 22, 2017). The Grantee supported this assertion by claiming that for FEMA-4230-DR-KS, FEMA denied 67 of 322 category C road projects (almost 21 percent) which resulted in the denial of about 30 percent of the total costs for category C projects. The Grantee claimed this was the highest number of denials for any disaster in Kansas and that the project specialists writing the PWs must have been using a standard accepted by FEMA in past disasters but one which was no longer accepted. The Applicant stated that there was no other explanation for the high number of projects being denied other than FEMA employing a more stringent standard.
 The Applicant also cites to the Public Assistance Program and Policy Guide, FP 104-009-2 (PAPPG) (Jan. 2016) to demonstrate that it was not required to reference specific latitude/longitude coordinates. However, because the PAPPG went into effect in January 2016, the Applicant acknowledges that the PAPPG does not apply to this disaster. Letter from Dir., Franklin Cty. Public Works, to Dir., Recovery Div., FEMA Region VII, at 5-6 (May 4, 2018).
 Letter from Reg’l Adm’r, FEMA Region VII, to Deputy Dir., Kan. Div. of Emergency Mgmt., and Dir., Franklin Cty. Pub. Works (July 9, 2018).
 However, due to a mathematical error the amount awarded for Sites 9, 11, 14, 17, and 19, should have been $37,954.80.
 The RA upheld the amount of eligible actual costs associated with Sites 11, 14, 17, and 19 that were awarded in the original first appeal decision. The increase in the total amount awarded comes from the RA approving all actual costs submitted by the Applicant for Site 9. Whereas the original first appeal decision awarded only estimated costs of $3,113.10 for Site 9, the second first appeal decision awarded all $22,477.51 in actual costs.
 The $5,890.00 in costs associated with Site 5 correspond with the Applicant’s use of a squash tube replacement for a CMP culvert. The squash tube was approved in the original first appeal decision. However the change was pending the submission of an Environmental and Historic Preservation review, and therefore the associated $5,890.00 in costs was not included in the total amount awarded by the RA in the second first appeal decision. At this point, there is no documentation in the administrative record to demonstrate that such a review has been completed.
 Stafford Act § 406(a).
 Title 44 Code of Federal Regulations (44 C.F.R.) § 206.223(a)(1) (2014); Public Assistance Guide, FEMA 322, at 29 (June 2007) [hereinafter PA Guide].
 PA Guide, at 100; FEMA Second Appeal Analysis, Republic Cty. Highway Dep’t., FEMA-4230-DR-KS, at 3 (July 26, 2017).
 44 C.F.R. § 206.206(a); PA Guide, at 33.
 2015 Adopted Budget, Franklin Cty.
 See, e.g., Invoice from Metal Culverts Inc., to Franklin Cty. Pub. Works (May 13, 2015). However, none of the culvert invoices can be linked to the specific sites in question on appeal.
 Letter from Dir., Franklin Cty. Public Works, to Dir., FEMA Region VII Recovery Div., at Enclosure 1 (May 4, 2018).
 Id., at Enclosure 2.
 Id., at Enclosure 3.
 See FEMA Second Appeal Analysis, Sherman Twp., FEMA-2340-DR-KS, at 4-5 (Apr. 24, 2018) (finding that while the Applicant’s annual budget was detailed, it did not document any specific items of maintenance work which would allow FEMA to verify the predisaster condition of the Applicant’s sites. Moreover, the material purchase invoices did not allow FEMA to tie any of the claimed work to sites in question. Thus, FEMA could not determine if the claimed damage was disaster related). Contra, e.g., FEMA Second Appeal Analysis, Lowe Twp., FEMA-4230-DR-KS, at 4 (Feb. 1, 2018) (stating that the Applicant’s annual budget provided specific items of maintenance work to allow FEMA to assess the predisaster condition of the sites in question. Further, the Applicant submitted checks and corresponding material purchase invoices that showed the exact location of the damage and the costs associated with repair at each individual site, therefore allowing FEMA as tie the post disaster work and costs directly to specific sites in question. Thus, FEMA was able to determine that the damage was disaster related).
 However, as noted above, due to a mathematical error, the proper amount awarded for Sites 9, 11, 14, 17, and 19, should have been $37,954.80. This award was based on actual costs submitted by the Applicant, contrary to claims by the Grantee that FEMA used only estimated costs.