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Second Appeal Analysis
PA ID# 057-04752-00; Lafourche Parish School Board
PW ID# (PW) 588; Insurance
Between August 26, 2012 and September 10, 2012, strong winds and driving rain from Hurricane Isaac caused water intrusion and loss of electricity at 20 of the Lafourche Parish School Board’s (Applicant) facilities, and ultimately resulted in significant mold growth. On January 23, 2013, FEMA obligated $1,266,158.22 in Project Worksheet (PW) 588 to address the storm-related mold remediation work performed at the Applicant’s facilities from September 4 to September 28, 2012. In PW 588 (Version 1), FEMA later obligated an additional $62,500.00 in funding required for “emergency response efforts” documented in the project’s eligible scope of work. As part of the process of formulating PW 588 (Version 1), FEMA determined that $428,681.41 in prior loss reductions were required because the Applicant used blanket insurance coverage to meet its insurance requirements for previous damage sustained at its facilities in Hurricane Katrina.
The Applicant appealed on March 8, 2017, and the Grantee transmitted the appeal to FEMA with a recommendation letter dated May 8, 2017. The Grantee argued that there were no previous requirements to obtain and maintain insurance (O&M) in effect for the purposes of PW 588 because FEMA did not notify the Applicant of any such requirements until after Hurricane Isaac. As a result, the Grantee contended that the Applicant did not have an opportunity to request a state insurance commissioner certification of its insurance coverage’s reasonableness (ICC) prior to the disaster. The Grantee also argued that FEMA reduced eligible costs in error, per the February 8, 2013 memorandum rescinding Disaster Assistance Fact Sheet DAP9580.3, Insurance Considerations for Applicants (DAP9580.3), which states FEMA will not reduce eligible costs by an insurance deductible.
FEMA issued a Final Request for Information (Final RFI) on September 5, 2017, requesting the Applicant provide an ICC issued prior to the disaster for the facilities at issue in PW 588. The Applicant responded to the Final RFI by letter dated October 11, 2017 (RFI Response), arguing that the windstorm insurance policy in effect during the time of Hurricane Isaac satisfied its insurance requirements, and that FEMA should give the ICC dated September 24, 2014 retroactive effect. The Applicant also claimed that FEMA misapplied DAP9580.3, and disregarded the February 8, 2013 memorandum rescinding that policy. The Region VI Regional Administrator (RA) denied the appeal on February 15, 2018, finding the prior loss reductions were properly applied in accordance with 44 C.F.R. 206.253(b)(2) because the Applicant used blanket coverage to meet its insurance requirements from Hurricane Katrina and did not provide an ICC issued prior to the disaster with regard to that coverage.
The Applicant submitted its second appeal via letter dated April 25, 2018, concurring with the Grantee’s arguments that: (1) the O&M requirements were not in effect for the purposes of PW 588 because FEMA did not notify the Applicant of those requirements until after Hurricane Isaac, and (2) as a result, it was not afforded an opportunity to request an ICC prior to the disaster. The Applicant also explains that FEMA applied DAP9580.3 in error because FEMA rescinded the policy on February 8, 2013. Lastly, the Applicant contends that the PW from Hurricane Katrina documenting its closeout incentive award and its projects valued under $5,000.00 are not subject to O&M requirements. The Grantee transmitted the Applicant’s appeal with a recommendation letter dated June 19, 2018, reiterating its previous arguments and also contending that FEMA improperly reduced eligible funds based on prior losses sustained at facilities not included in PW 588. The Grantee also argues that O&M requirements from Hurricane Katrina only apply to subsequent damage caused by the same hazards such as wind, rain, and flooding, and thus do not apply here because the damage addressed in PW 588 resulted from mold.
The Stafford Act authorizes FEMA to provide assistance required to address immediate threats to life and property resulting from a major disaster. Following any such disaster in which an applicant receives assistance for permanent work to repair damages other than flood damages, that applicant typically must obtain and maintain insurance in “such types and amounts . . . as are reasonable and necessary to protect against future loss . . . based on the eligible damage that was incurred to the damaged facility as a result of the major disaster.” If a facility insured under a blanket insurance policy, insurance pool arrangement, or some combination thereof, is damaged in a future similar other than flood disaster, eligible costs for permanent work to address such damage will be reduced by the amount of eligible damage sustained in the previous disaster pursuant to 44 C.F.R. § 206.253(b)(2). However, O&M requirements for future losses and the prior loss reduction provision under 44 C.F.R. § 206.253(b)(2) do not apply to an applicant’s assistance received for eligible Category B emergency work.
Unlike permanent work, Category B emergency protective measures are those which, among other criteria, are necessary to “eliminate or reduce an immediate threat to life, public health, or safety,” and FEMA generally requires completion of such measures within 6 months of the disaster declaration date. Mold remediation activities undertaken in the immediate aftermath of a disaster may be eligible for funding as Category B emergency work, such as: (1) wet vacuuming, damp wiping or HEPA vacuuming of the interior space; (2) removal of contaminated gypsum board, plaster (or similar wall finishes), carpet or floor finishes, and ceilings or permanent light fixtures; and (3) cleaning of contaminated heating and ventilation (including ductwork), plumbing, and air conditioning systems, or other mechanical equipment.
The scope of work for PW 588 included remediating moldy ceiling tiles, and cleaning mold from each facility as required to address an immediate threat to the health and safety of students and faculty who use the various facilities at issue. In addition, the Applicant performed the mold remediation activities in PW 588 in the immediate aftermath of Hurricane Isaac from September 4 to September 28, 2012, which was within the required six-month timeline for emergency work. On second appeal FEMA finds: (1) the mold remediation work performed in PW 588 constitutes Category B emergency work, and (2) PW 588 is not subject to the prior loss reduction provision under 44 C.F.R. § 206.253(b)(2) because the provision only applies to permanent work.
FEMA finds that the mold remediation work performed in PW 588 constitutes Category B emergency protective measures, and thus is not subject to the prior loss reduction provision under 44 C.F.R. § 206.253(b)(2), which only applies to permanent work. Accordingly, the appeal is granted.
 Project Worksheet 588, Lafourche Par. Sch. Bd., Version 1 (Dec. 28, 2016).
 Letter from Business Mgr., Lafourche Par. Sch. Bd., to Dep. Dir., Pub. Assistance (PA), Gov.’s Office of Homeland Sec. and Emergency Preparedness (GOHSEP), at 1 (March 8, 2017).
 Letter from Dep. Dir., PA, GOHSEP, to Reg’l Adm’r, FEMA Region VI, at 1 (May 8, 2017).
 Id. at 4 (citing Memorandum from FEMA Asst. Adm’r, Recovery Dir., to FEMA Regional Adm’rs., Regions I–X, at 2 (Feb. 8, 2013) [hereinafter DAP9580.3 Rescission Memorandum]).
 Letter from Recovery Div. Dir., FEMA Region VI, to Dir., GOHSEP and Business Mgr., Lafourche Par. Sch. Bd., at 1 (Sept. 5, 2017).
 Letter from Business Mgr., Lafourche Par. Sch. Bd., to Asst. Dep. Dir., PA, GOHSEP at 2–3 (Oct. 11, 2017).
 Id. at 2 (quoting DAP9580.3 Rescission Memorandum).
 FEMA First Appeal Analysis, Lafourche Par. Sch. Bd., FEMA-4080-DR-LA (Feb. 15, 2018). As a basis for denial, the RA specifically cited the following PWs from DR-1603: 1742, 3345, 4201, 4213, 5202, 5404, 5476, 5828, 6154, 6414, 6478, 7113, 7129, 7150, 7168, 7660, 7694, 7919, 7969, 8039, 8052, 8192, 9435, 9473, 9495, 11727, 15453, and 21014. Id. at 1 n.1. The Insurance Deductions spreadsheet for PW 588, however, cites the following PWs from DR-1786: 1184, 1291, 2080, 2110, 2672, 2673, 2844, 2884, 2966, 3220, 3307, 3647, 4655, 5599, and 6050. The RA did not address the Applicant’s O&M requirements from DR-1786 in the First Appeal Determination.
 Letter from Business Mgr., Lafourche Par. Sch. Bd., to Asst. Dep. Dir., PA, GOHSEP, at 3 (Apr. 25, 2018).
 Letter from Asst. Dep. Dir., PA, GOHSEP, to Assistant Adm’r, Recovery, FEMA, through Region VI Reg’l Adm’r, FEMA, at 3–4, 7–9 (June 19, 2018).
 Robert T. Stafford Disaster Relief and Emergency Assistance (Stafford) Act § 403(a), 42 U.S.C. § 5170b(a).
 Title 44, Code of Federal Regulations (44 C.F.R.) § 206.253(b)(1) (2011).
 44 C.F.R. § 206.253(b)(2); see also Disaster Assistance; Subpart I – Public Assistance Insurance Requirements, 56 Fed. Reg. 64560 (Dec. 11, 1991).
 Stafford Act § 311(b), 42 U.S.C. § 5154(b) (establishing O&M requirements for assistance for permanent work provided pursuant to Stafford Act § 406, 42 U.S.C. § 5172); see also 44 C.F.R. § 206.250(a) (clarifying that the subpart’s insurance requirements, which include O&M requirements and prior loss reductions, apply to assistance for permanent work under Stafford Act § 406, rather than to assistance for emergency work provided under Stafford Act § 403, 42 U.S.C. § 5170b).
 44 C.F.R. §§ 206.204(c)(1), 206.225(a); Public Assistance Guide, FEMA 322, at 71 (June 2007) [hereinafter PA Guide].
 FEMA Fact Sheet (FS) 9580.100, Mold Remediation, at 1 (Nov. 7, 2006). See also PA Guide, at 32, 74, and 83 (June 2007) (noting general circumstances under which mold remediation may be eligible as Category B emergency work).
 See FS 9580.100, at 3 – 4 (listing application of mold remediation methods to various activities).
 FEMA separately addressed the permanent work for the Applicant’s facilities under PW 766.
 The administrative record indicates that the Applicant possibly received more insurance proceeds than reflected in the project’s current insurance proceeds reduction. Thus, an additional insurance review may be necessary to ensure that there is no duplication of benefits with regards to the actual insurance proceeds the Applicant received.