|PW ID#||(PW) 5517, 5523 |
Conclusion: Nashville-Davidson County’s first appeal is untimely because the Tennessee Emergency Management Agency submitted it beyond the 60-day timeframe.
Between April 30 and May 18, 2010, tornadoes and severe storms caused damage throughout Nashville-Davidson County, Tennessee (Applicant). The Applicant applied for public assistance funding for repairs to its K. R. Harrington water treatment plant. FEMA prepared Project Worksheet (PW) 5517 on November 13, 2010, and PW 5523 on February 23, 2011, to reimburse the Applicant for the repairs. The Applicant also submitted a hazard mitigation proposal (HMP) for construction of new switchgear and generator buildings, relocation of critical components in the original generator building and hot house, and repurposing the existing generator building. In the HMP, the Applicant outlined its benefit-cost analysis (BCA) and proposed that FEMA pay 50 percent of the estimated costs. FEMA denied this request for hazard mitigation funding, finding that the Applicant had not used the total project costs in conducting the BCA, but rather only used half of the estimated costs. Moreover, FEMA determined that the building was covered by insurance, and thus, the project did not appear cost-effective. FEMA notified the Tennessee Emergency Management Agency (Grantee) of this determination via e-mail on April 13, 2012. The Grantee then notified the Applicant of the denial via letter dated April 16, 2012, and the Applicant appealed the determination by a letter dated June 5, 2012. The Applicant argued that it had inadvertently left a sentence in the HMP that stated only half the estimated costs were used in the BCA, when in reality, the total costs of $11,037,918.44 were used in the analysis. Although the Grantee’s transmittal letter is dated June 12, 2012, FEMA Region IV did not receive the letter until February 8, 2017. FEMA issued a Final RFI on August 28, 2017, requesting information demonstrating that the Grantee’s transmittal was timely. The Grantee argued that the appeal was timely, as evidenced by the dates on the letters. In addition, the Grantee stated that it had made multiple inquiries of FEMA about the status of the appeal, and that when the Grantee learned FEMA did not have it, the Grantee submitted it again in February of 2017. FEMA denied the first appeal as untimely on February 26, 2018. The Applicant submitted its second appeal by letter dated April 26, 2018, arguing that the Grantee had submitted a timely appeal, but that it believed HMP-related appeals were treated differently than other appeals; that FEMA should have excused the late submittal via a waiver under section 301 of the Stafford Act; that FEMA has instituted a new policy of denying appeals based on grantees’ untimeliness in violation of section 325(a) of the Stafford Act; and that 44 C.F.R. § 206.206(c)(2) abrogates an Applicant’s statutory right of appeal.
Authorities and Second Appeals
- Stafford Act §§ 301, 325(a), 423(a), (c).
- 44 C.F.R. §§ 206.32(d), 206.44, 206.201(e), 206.202, 206.206(c)(2).
- City of Atlanta, FEMA-1858-DR-GA, at 6; Town of Nichols, FEMA-4031-DR-NY, at 5; Dep’t of Transp., FEMA-4068-DR-FL, at 3-4; Village of Waterford, FEMA-4020-DR-NY, at 4.
- Per 44 C.F.R. § 206.206(c)(2), a grantee must review and forward an applicant’s appeal to FEMA within 60-days of receipt.
- The Grantee submitted the Applicant’s second appeal approximately four years and eight months days after receipt, thus, the appeal is untimely.
- Under Stafford Act section 301, FEMA may modify or waive administrative conditions for assistance if an applicant or grantee was not able to satisfy those conditions as a result of the major disaster.
- The Applicant and Grantee have not demonstrated that any delay was caused by the disaster.
- FEMA applies the 60-day submission timeframe to both applicants and grantees, because grantees are legally responsible for any financial awards dispersed under the Stafford Act.
- The 60-day submission timeframe in 44 C.F.R. § 206.206(c)(2) does not abrogate an applicant’s statutory right of appeal.
- Under Stafford Act section 325(a), FEMA cannot apply certain new or modified policies without a notice and comment period and may not apply them retroactively.
- FEMA did provide a notice and comment period for 44 C.F.R. § 206.206(c)(2) and did not retroactively apply a new policy by enforcing the 60-day timeline for grantees.
Patrick C. Sheehan
Tennessee Emergency Management Agency
3041 Sidco Drive
Nashville, Tennessee 37204-1502
Re: Second Appeal – Nashville-Davidson County, PA ID 037-52004-00, FEMA‑1909-DR-TN, Project Worksheet (PW) 5517, 5523 – Appeal Timeliness
Dear Mr. Sheehan:
This is in response to a letter from your office which transmitted the referenced second appeal on behalf of Nashville-Davidson County (Applicant). The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of funding in the amount of $11,037,918.44 for proposed hazard mitigation measures for its water treatment plant.
As explained in the enclosed analysis, I have determined that the Applicant’s first appeal is untimely under Title 44 of the Code of Federal Regulations (44 C.F.R.) § 206.206(c)(2) because the Tennessee Emergency Management Agency did not forward it to FEMA within 60 days of receipt. Accordingly, I am denying the appeal.
Please inform the Applicant of my decision. This determination is the final decision on this matter pursuant to 44 C.F.R. § 206.206, Appeals.
Public Assistance Division
cc: Gracia B. Szczech
FEMA Region IV
Between April 30 and May 18, 2010, tornadoes and severe storms caused damage throughout Nashville-Davidson County, Tennessee (Applicant). This disaster caused damage to the Applicant’s K. R. Harrington water treatment plant (Facility). FEMA obligated PW 5517, awarding $638,776.58 for repairs to the electrical switchgear building, and obligated PW 5523, awarding $59,961.63 for repairs to the generator building. In addition to applying for PA funding for these repairs to the Facility, the Applicant submitted a hazard mitigation proposal (HMP) for construction of new switchgear and generator buildings, relocation of critical components in the original generator building and hot house, and repurposing the existing generator building. FEMA denied this request for hazard mitigation funding on April 13, 2012, finding that the Applicant included only half the project costs in its benefit-cost analysis (BCA) instead of the total amount. FEMA also noted that the parts of the building included in the HMP were covered by insurance and the proposal did not appear to be cost-effective once insurance deductions were applied. The Grantee notified the Applicant of FEMA’s determination via letter dated April 16, 2012.
After receiving notice of FEMA’s HMP denial, the Applicant submitted its first appeal to the Grantee via letter dated June 5, 2012. The Applicant argued that FEMA denied the HMP based on a sentence that was inadvertently left in the HMP from an earlier draft. The sentence reads: “[The Applicant] is requesting a 50/50 match of the total project cost for mitigation. The attached estimate illustrates only half of the total project costs.” The Applicant argued that it had actually included the total costs of the project ($11,037,918.44) in the cost estimate and the BCA that were included in the HMP. Because of this error, the Applicant asked that FEMA review the HMP again, which it attached to its first appeal, this time with the mistaken sentence redacted.
Although the Grantee’s appeal transmittal letter was dated June 12, 2012, FEMA Region IV did not receive the Applicant’s first appeal from the Grantee until February 8, 2017. The Grantee inquired about the appeal after receiving FEMA’s monthly status report on February 1, 2017, and learning that FEMA did not have it, the Grantee submitted it on February 8, 2017. FEMA Region IV issued a Final Request for Information (RFI) on August 28, 2017, requesting documents and information showing that the Grantee transmitted the Applicant’s appeal to FEMA within the requisite 60 days of receipt per 44 C.F.R. § 206.206(c)(2).
The Grantee responded to the Final RFI by letter dated September 22, 2017. The Grantee stated that the dates on each of the letters from the Applicant and the Grantee served as evidence that the appeal was timely. In addition, the Grantee stated that it re-submitted the appeal after it learned that FEMA had not received it. The Grantee did not provide any proof of how or when the appeal initially was submitted, but instead provided e-mail communications between the Applicant and the Grantee. In one of the emails from the Applicant to the Grantee, dated May 29, 2015, PW 5523 is listed as an “APPEAL/HMP” that is still pending before FEMA review, and the Applicant asks the Grantee to consult with FEMA to determine its status. Another e-mail dated April 28, 2015, from the Applicant to the Grantee presents a list of PWs that are pending before FEMA. The Applicant states that the top part of the list are appeals, and the bottom of the list are “HMPs”, and asks the Grantee to follow up with FEMA regarding the status of the PWs. Two of the PWs listed as “HMPs” are 5517 and 5523, and in red font next to these PWs, it states “Denied/Appealed 6/12/2012.” In an e-mail dated June 1, 2015, the Grantee forwarded the e-mails that included the list to a FEMA Region IV staff member and inquired about the status of the PWs.
The FEMA Region IV Regional Administrator (RA) issued her first appeal determination dated February 26, 2018. The RA found that the appeal was untimely and FEMA could not consider the substantive issues. The RA highlighted the fact that neither the Applicant nor Grantee had provided FEMA with evidence, such as a shipping receipt or e-mail read receipt, showing that the Grantee had submitted the appeal within 60 days. The RA also noted that the Region had started sending out monthly appeal status reports in November 2015, and that grantees were told that they were to notify FEMA if they had questions about any pending appeals. The RA stated that although FEMA had submitted monthly status reports to the Grantee, and that the Grantee had inquired about other pending PWs in 2016, the Grantee did not inquire about PWs 5517 and 5523 until receiving FEMA’s status report on February 1, 2017.
The Applicant submitted its second appeal by letter dated April 26, 2018. Although receiving monthly appeals reports that did not show PW 5517 and 5523, the Applicant explains that the Grantee believed that HMPs were dealt with differently than other appeals. Along with its second appeal, the Applicant submitted an e-mail from one of the Grantee’s Public Assistance specialists, who states that a Region IV staff member told her that “HMP appeals were treated separately,” and that when “FEMA appeals” told her otherwise, she re-submitted the first appeal. The Applicant notes that unlike Nashville-Davidson Cty. PW 5543, the Grantee does not concede that it was untimely; therefore, FEMA has no reason to doubt the Grantee’s candor, given that it was forthright in the face of a prior denial. The Applicant also argues that the Grantee has an excellent track record submitting timely appeals, thus, FEMA should give it the benefit of the doubt. In addition, the Applicant argues that nothing in the Stafford Act, implementing regulations, or FEMA policy requires an Applicant or Grantee to provide documentation demonstrating when or how an appeal was submitted. Regarding the merits of the appeal, the Applicant argues that the HMP demonstrated that the costs were eligible, and that an inadvertent clerical error in the narrative of the proposal led to FEMA’s denial. Moreover, the Applicant notes that once it highlighted the issue in its first appeal, FEMA did not conduct a new review of the HMP.
In addition, the Applicant argues that section 301 of the Stafford Act vests FEMA with the authority to waive administrative conditions when warranted. The Applicant contends that in FEMA’s recent second appeal decision, Nashville-Davidson Cty. PW 5543, FEMA admitted that this section extends to cover appeal submission timeframes. Moreover, the Applicant argues that while the Grantee and Applicant do not concede the Grantee’s untimeliness, if the Grantee was untimely, it was a result of the historic nature of the disaster.
As it did in Nashville-Davidson Cty. PW 5543, the Applicant addresses section 423(a) of the Stafford Act and 44 C.F.R. § 206.206, asserting that the regulations improperly insert the Grantee into the appeals process, when the Stafford Act does not. The Applicant contends that FEMA’s reading of the Stafford Act and the C.F.R. is contrary to basic legislative interpretation. Pointing to 44 C.F.R. § 206.201(a), which defines an applicant as a “State agency, local government, or eligible private nonprofit organization . . . submitting an application to the Grantee for assistance under the State’s grant,” the Applicant argues that a word would not mean one thing in the Stafford Act and another in the regulations.
In addition, the Applicant contends that the C.F.R. only provides that grantees “will” transfer applicant appeals within 60 days and that there is no remedy for them failing to do so; thus, FEMA’s policy and regulation contravene an applicant’s statutory right of appeal. Moreover, the Applicant argues this regulation essentially makes the Grantee an agent of FEMA, rather than an agent of the Applicant. Thus, any Grantee failure to transfer an appeal should be imputed to FEMA and not to the Applicant. The Applicant also points to a comment in the Federal Register that it argues provides that Grantees may extend timelines. This, according to the Applicant, is consistent with the Public Assistance Guide, which provides that grantees may request additional information from applicants prior to submitting a written recommendation.
The Applicant reasserts the argument made in Nashville-Davidson PW 5543 that FEMA only recently instituted a policy of denying appeals solely on grantee untimeliness, and changed this policy without a notice and comment period pursuant to section 325(a)(1) of the Stafford Act. This notice and comment period was required because the policy relates to the PA program and could result in a significant reduction of assistance under the program. In addition, FEMA applies this new policy retroactively, violating section 325(a)(2). The Applicant also argues that even if a notice and comment period was afforded in 1990 for the current regulations, FEMA misunderstands that a new interpretation of those regulations is a new policy for purposes of section 325. Finally, because FEMA did not address substantive issues in its Final RFI, the Applicant requests that FEMA issue an RFI on these issues to give the Applicant an opportunity to provide relevant information.
The Grantee transferred the Applicant’s second appeal on April 27, 2018, including no additional arguments, but supporting the appeal.
Section 423(a) of the Stafford Act provides that “any decision regarding eligibility for . . . assistance under this title may be appealed within 60 days after the date on which the applicant for such assistance is notified of the award or denial of award of such assistance.” Within 60 days of receiving an applicant’s appeal, a grantee will review and forward the appeal with a written recommendation. In addition, an applicant has the burden of substantiating its arguments and must explain how documentation supports its appeal.
The Applicant argues that no law, regulation, or policy establishes that applicants and grantees need to provide proof of how and when they submit appeals. However, applicants are tasked with the burden of justifying their bases for appeal; here, the Applicant has the burden of demonstrating that the appeal was timely, seeing that FEMA Region IV has no record of receiving it prior to February 8, 2017.
Beyond pointing to the dates on each of the appeal letters, the Applicant and Grantee rely on e-mails to demonstrate that the Applicant and Grantee believed that the appeal had been submitted prior to February of 2017. While these e-mails from 2015 may show that the Applicant and Grantee were aware of the appeal, they do not demonstrate that the Grantee timely submitted the appeal in June of 2012. Thus, the Applicant has not met its burden of demonstrating that the appeal was timely.
In addition, the Applicant argues that FEMA policy allows for grantees to extend timelines, including the appeal timelines proscribed in 44 C.F.R. § 206.206. The Applicant contends that the following language from the Public Assistance Guide gives grantees the discretion to extend appeal timeframes: “The State reviews the appeal documentation and requests additional information if necessary. The State then prepares a written recommendation on the merits of the appeal and forwards that recommendation to FEMA within 60 days of its receipt of the appeal letter or receipt of additional information that it had requested.” This provision affords the grantee the opportunity to forward a written recommendation in support of the appeal within 60 days after it receives additional information from the Applicant. It does not, however, allow the grantee to delay submitting the Applicant’s appeal outside the 60 days of receiving the appeal from the Applicant. Indeed, FEMA regulation provides that grantees submit an applicant’s appeal within 60 days of receipt, whether or not the grantee submits a written recommendation, or defers submitting a written recommendation until it receives more information. Moreover, the policy in the Public Assistance Guide reaffirms this position, providing that “[t]he State need not endorse the appeal position but must forward all appeals it receives.” Thus, FEMA policy and regulation do not allow grantees to extend the timeframes for appeal submission under 44 C.F.R. § 206.206.
Waiver of Administrative Conditions - Stafford Act § 301
Section 301 of the Stafford Act provides that FEMA may grant a waiver of an administrative conditions “if the inability to meet them is a result of the major disaster.” Here, the Applicant and Grantee both contend that the appeal was timely, but that if it was not, it was because the historic floods were so catastrophic that the effects had a lasting impact. Neither the Applicant nor the Grantee have demonstrated that the late transmittal was related to the disaster, which occurred two years before the Applicant submitted its first appeal to the Grantee. Thus, section 301 of the Stafford Act does not apply, and FEMA cannot waive the 60-day deadline for the Grantee. Thus, this argument is without merit.
FEMA’s Regulatory Implementation of Stafford Act § 423
The Applicant maintains that 44 C.F.R. § 206.206(c)(2) conflicts with the intent of section 423 of the Stafford Act and contravenes an applicant’s statutory right of appeal; however, this is not the case. FEMA is tasked with “issu[ing] rules which provide for the fair and impartial consideration of appeals under” the Stafford Act. Inclusion of grantees within the appeal process is necessary because grantees, as the recipient of grant awards, are legally accountable for use of the funds. As grantees are responsible for any resulting financial outcome of an award, excluding them from them appeal process would not comport with the Stafford Act. Moreover, a contrary interpretation of the implementing regulations would absolve grantees from complying with a basic grant management function that they receive funding to complete and legally agreed to perform by signing the FEMA State Agreement. Therefore, 44 C.F.R. § 206.206(c)(2 does not conflict with section 423 of the Stafford Act.
Notice and Comment Requirements - Stafford Act § 325(a)
Section 325(a) of the Stafford Act provides for a notice and comment period for any new or modified policy that governs implementation of the PA program and that could result in “significant reduction of assistance under the program.” Furthermore, such policies can only apply to a disaster “declared on or after the date on which the policy is issued.” The Applicant argues that while FEMA may have provided a notice and comment period for 44 C.F.R. § 206.206(c) nearly thirty years ago, FEMA has adopted a “revised interpretation” of the regulations that allows for denying appeals solely on a grantee’s untimeliness and thus, a new policy requiring a new notice and comment period. This is not a new interpretation of the regulations, nor is it a new policy; FEMA has enforced submission timeframes that apply to both the applicant and the grantee for years. Furthermore, as the Applicant acknowledges, a notice and comment period was provided for the very section at issue, 44 C.F.R. § 206.206, and neither the regulations nor statute governing the appeal period have changed since that time. The Applicant’s assertion that FEMA has instituted a new policy, without a notice and comment period, and applied it retroactively, is without merit.
The Applicant’s first appeal is untimely because the Grantee submitted the appeal well after the requisite 60-day timeframe. Therefore, the Regional Administrator’s determination on first appeal is appropriate and upheld. Accordingly, the Applicant’s second appeal is denied.
 Project Worksheet 5517, Nashville-Davidson Cty., Version 2 (Nov. 22, 2013).  Project Worksheet 5517, Nashville-Davidson Cty., Version 3 (Nov. 30, 2017).  E-mail from Representative, FEMA, to Deputy State Pub. Assistance Officer, Tenn. Emergency Mgmt. Agency (TEMA) (Apr. 13, 2012, 6:48 PM).  Applicant Hazard Mitigation Proposal, Generator Bldg. and Hot House Mitigation, at 6. The attached estimate totaled $11,037,918.44.  E-mail from Fin. Dir., Metro. Gov’t of Nashville and Davidson Cty., to Pub. Assistance Specialist, TEMA (May 29, 2015, 3:21 PM); e-mail from Finance Dir., Metro. Gov’t of Nashville and Davidson Cty., to Pub. Assistance Specialist, TEMA (May 29, 2015, 1:58 PM).  E-mail from Fin. Dir., Metro. Gov’t of Nashville and Davidson Cty., to Pub. Assistance Specialist and Pub. Assistance Mgr., TEMA (Apr. 28, 2015, 09:04 AM).  E-mail from Pub. Assistance Specialist, TEMA, to Representative, FEMA Region IV (June 1, 2015, 10:51 AM) (“When you are able, please confirm to [Applicant] (via [Grantee]) acknowledgment of the projects currently in appeal and also those that are in review for the HMP additions.”).  Letter from Finance Dir., Metro. Gov’t Nashville and Davidson Cty., Tenn., and Consulting Counsel to the Metro. Gov’t of Nashville and Davidson Cty., Tenn., to Acting Adm’r, Recovery, FEMA (Apr. 26, 2018) [hereinafter Applicant Second Appeal Letter].  E-mail from Public Assistance Specialist, TEMA, to Fin. Representative, TEMA (Apr. 23, 2018 11:39 AM). This explanatory e-mail was dated and submitted after issuance of FEMA Region IV’s first appeal determination and therefore, after the administrative record closed. Thus, FEMA has not considered it for purposes of adjudicating the second appeal. It is worth noting, however, that even if FEMA had this information prior to the administrative record closing, it would still not demonstrate that the Grantee timely submitted the first appeal to FEMA Region IV.  The Applicant is comparing this case, involving the same Grantee, Applicant, and disaster, to FEMA Second Appeal Analysis, Nashville-Davidson Cty., FEMA-1909-DR-TN (Apr. 23, 2018). That decision involved PW 5543.  Disaster Assistance, 55 Fed. Reg. 2,297 (Jan. 23, 1990) (“For those areas within the jurisdiction of the grantee, such as certain time extensions, the grantee will make the determination and is required to do so within in 90 days of its receipt of the appeal”).  Public Assistance Guide, FEMA 322, at 113 (June 2007) [hereinafter PA Guide].  Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) of 1988, 42 U.S.C. § 5189a (2007).  Title 44 Code of Federal Regulations (44 C.F.R.) § 206.206(c)(2) (2009).  FEMA Second Appeal Analysis, Town of Nichols, FEMA-4031-DR-NY, at 5 (May 10, 2018) (citing FEMA Second Appeal Analysis, Village of Waterford, FEMA-4020-DR-NY, at 4 (Sept. 4, 2014) (an “[a]pplicant has the burden of substantiating its claims . . .”)).  FEMA Second Appeal Analysis, City of Atlanta, FEMA-1858-DR-GA, at 6 (May 10, 2018).  44 C.F.R. § 206.206(c)(2).  PA Guide, at 113; City of Atlanta, FEMA-1858-DR-GA, at 6-7.  The Applicant also argues that the Federal Register demonstrates that grantees have the power to extend appeal timelines. Disaster Assistance, 55 Fed. Reg. 2,297 (Jan. 23, 1990) (“For those areas within the jurisdiction of the grantee, such as certain time extensions, the grantee will make the determination and is required to do so within in 90 days of its receipt of the appeal”). However, the Applicant ignores the qualifying language in the Federal Register that the grantee may do so for areas within its jurisdiction; the appeal submission timeframe is not within the jurisdiction of the grantee, but rather, FEMA. In addition, the Federal Register states that “[t]he 60 day limit for submission of the appeal is contained in the Act and thus cannot be extended . . . .” Disaster Assistance, 55 Fed. Reg. 2,297 (Jan. 23, 1990). Therefore, the Federal Register does not allow grantees to extend appeal submission timeframes.  Stafford Act § 301, 42 U.S.C. § 5141. The Applicant asserts that in Nashville-Davidson Cty. PW 5543, FEMA found that section 301 applies to appeal timeframes. Rather, FEMA stated that the Applicant had not demonstrated that the disaster caused the delay in submission, and did not address whether the section applies to appeal procedures in general. See FEMA Second Appeal Analysis, Nashville-Davidson Cty., FEMA-1909-DR-TN, at 4 (Apr. 23, 2018).  Stafford Act § 423(c), U.S.C. § 5189a(c) (“The President shall issue rules which provide for the fair and impartial consideration of appeals under this section.”).  44 C.F.R. § 206.201(e) (defining “grantee” as “the government to which a grant is awarded which is accountable for the use of the funds provided . . . For purposes of this regulation, except as noted in § 206.202, the State is the grantee”); id. § 206.202 (describing grantee application procedures; the grantee is “responsible for processing subgrants to applicants . . .”).  Stafford Act § 423(c), 42 U.S.C. § 5189a(c).  44 C.F.R. §§ 206.32(d), 206.44.  Stafford Act § 325(a)(1); 42 U.S.C. § 5165c(a)(1).  Id. § 325(a)(2), 42 U.S.C. § 5165c(a)(2).  Applicant Second Appeal Letter, at 16.  See Disaster Assistance, 55 Fed. Reg. 2,297 (Jan. 23, 1990) (“. . . the 60 day limit applies separately to the actions of the subgrantee and the grantee, and not to the combined actions of those two parties”).