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Change in Scope of Work, Environmental and Historic Preservation Compliance

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster4087
ApplicantTown of Fairfield
Appeal TypeSecond
PA ID#001-26620-00
PW ID#PW 680
Date Signed2021-03-31T16:00:00

Summary Paragraph

From October 29 to November 9, 2012, Hurricane Sandy produced storm surge impacting the Town of Fairfield (Applicant) and its Penfield Pavilion (Facility).  On December 17, 2015, FEMA approved a scope of work (SOW) replacing the Facility in the amount of $4,340,054.11.  Subsequently, the Applicant requested revisions to the approved SOW.  FEMA expressed concerns that the revised SOW would not comply with environmental and historic preservation (EHP) laws, and placed a financial hold on the project pending further review.  The Applicant then completed construction of the new Facility, and FEMA denied funding in a November 28, 2018 Determination Memorandum.  On January 23, 2019, the Applicant appealed, asserting that it had complied with all applicable EHP laws and FEMA’s denial was unreasonable.  The FEMA Region I Regional Administrator denied the appeal on June 20, 2019, finding that the Applicant had violated the terms and conditions of the grant by changing the SOW without prior approval, and by completing the work without affording FEMA the opportunity to review the SOW for EHP compliance.  The Applicant submitted a second appeal dated August 16, 2019, reiterating its first appeal arguments and requesting the $4,340,054.11 in Public Assistance (PA) funding. 

 

Authorities and Second Appeals

  • Stafford Act § 406.
  • National Environmental Policy Act §§ 101-102.
  • 44 C.F.R. §§ 9.11(d)(6), 13.30(d)(1), 13.43.
  • PA Guide, at 127-128, 134-136, 140.
  • Decatur Cnty. Secondary Rds., FEMA-4181-DR-IA, at 5.
  • City of Milford, FEMA-4023-DR-CT, at 4-5.
  • City of Sundance, FEMA-4007-DR-WY, at 5.

Headnotes

  • 44 C.F.R. § 13.30(d)(1) requires an applicant to obtain the prior approval of FEMA for any revision of the scope or objective of the project.
    • The Applicant proceeded with, and completed, its revised SOW without prior approval from FEMA.
  • FEMA must complete all necessary EHP reviews before an applicant starts work.  When an applicant initiates or completes work on a project before FEMA is able to conduct the necessary EHP compliance review, the work generally is not eligible for PA funding.
    • The Applicant initiated and completed work on the revised SOW before FEMA completed its EHP compliance review.

Conclusion

FEMA determines that the Applicant materially violated the terms and conditions of the grant and did not allow FEMA to perform its required EHP reviews prior to changing the SOW and constructing the new Facility (despite explicit caution from FEMA against doing so).  Consequently, the project is ineligible for PA funding and the appeal is denied.

Appeal Letter

William J. Hackett

Director

Connecticut Department of Emergency Services and Public Protection

1111 Country Club Road

Middletown, Connecticut 06457

 

Re:  Second Appeal – Town of Fairfield, PA ID: 001-26620-00, FEMA-4087-DR-CT, Project Worksheet 680 – Change in Scope of Work, Environmental and Historic Preservation Compliance

 

Dear Mr. Hackett:

This is in response to a letter from your office dated October 15, 2019, which transmitted the referenced second appeal on behalf of the Town of Fairfield (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of funding in the amount of $4,340,054.11 for replacement of the Penfield Pavilion (Facility).  

As explained in the enclosed analysis, I have determined that the Applicant completed a revised scope of work without prior FEMA approval.  This violated the terms and conditions of the grant and precluded FEMA from performing its necessary EHP reviews.  FEMA appropriately denied funding for the project as a result.  Therefore, this appeal is denied.

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.

 

                                                                     Sincerely,

                                                                         /S/

                                                                     Ana Montero

                                                                     Division Director

                                                                     Public Assistance Division

 

Enclosure

cc:  Paul Ford  

Acting Regional Administrator

FEMA Region I

Appeal Analysis

Background

From October 29 to November 9, 2012, Hurricane Sandy produced storm surge impacting the State of Connecticut, including the Town of Fairfield (Applicant).  FEMA developed Project Worksheet (PW) 680 to capture damages to the Applicant’s Penfield Pavilion (Facility), a 16,756 square foot single-story structure surrounded by 10,811 square feet of wooden decking.

FEMA calculated that the cost to repair the Facility exceeded 50 percent of the cost to replace it,[1] and on December 17, 2015 approved and awarded a replacement scope of work (SOW) for PW 680 in the amount of $4,340,054.11.[2]  The SOW stated that the Applicant must return the Facility to “its original design, function, and capacity within the original footprint, meeting all  appropriate Codes and Standards.”[3]  The SOW included a new foundation for the Facility, elevating the lowest floor to at least 15.5 feet, or 2.5 feet above Base Flood Elevation. 

On April 18, 2016 and June 30, 2016, the Connecticut Department of Emergency Services and Public Protection (Grantee) transmitted the Applicant’s SOW change requests.  Among other changes, the Applicant sought to salvage part of the Facility by removing it for foundation repairs before returning it, regrade and steepen the pitch of the parking lot, install a new patio replacing the existing exterior wooden deck, and install fill in the project site to establish a new intermediate grade plane under and around the building.

The Grantee and the Connecticut Department of Energy and Environmental Protection (CT DEEP) requested technical assistance from FEMA on June 1, 2016, as to whether the revised SOW would comply with National Flood Insurance Program (NFIP) regulations.  FEMA responded by letter on August 9, 2016, expressing concerns that the SOW may not comply with local and NFIP regulations, and that by commencing the revised SOW without FEMA approval, not elevating the lowest floor to 15.5 feet, and conducting work outside FEMA’s environmental and historic preservation (EHP) review, the Applicant had materially violated the terms and conditions of PW 680.  FEMA placed a financial hold on PW 680, advised the Applicant and Grantee to carefully consider whether to continue construction on the Facility, and issued a request for information (RFI) on September 30, 2016 seeking information addressing these concerns.  The Applicant replied on October 28, 2016, acknowledging that construction had commenced on February 29, 2016, but stated that the work was within the approved SOW.[4]  The Applicant completed construction on its revised SOW without FEMA approval, and on November 28, 2018, FEMA issued a Determination Memorandum disallowing all costs for PW 680, pursuant to Title 44 Code of Federal Regulations (44 C.F.R.) §13.43, stating the Applicant had violated the terms of the award by completing a revised SOW without prior FEMA approval and the project was no longer eligible for Public Assistance (PA) funding.

First Appeal

The Applicant submitted a first appeal dated January 23, 2019, which was transmitted by the Grantee with a letter of support on March 22, 2019.  The Applicant argued that had it not continued construction on the revised SOW, its contracts would have expired, thereby increasing its costs, and the damaged facility would continue to present a public safety hazard and result in a loss of income to the town.[5]  Therefore, it argued, it was too late and unreasonable for FEMA to impose the requirement for prior approval.[6]  The Applicant asserted that the revised SOW complied with all environmental regulations, including the NFIP and the Coastal Zone Management Act (CZMA).[7]  Moreover, the Applicant contended that there is no statutory or regulatory prohibition against initiation or completion of work on a scope change to an approved project before FEMA conducts additional necessary EHP review.[8]

On June 20, 2019, the Regional Administrator for FEMA Region I denied the appeal, finding that the Applicant violated the terms and conditions of the PA grant award by changing the SOW without FEMA approval.  FEMA specified that the changes to the SOW included not raising the lowest floor of the Facility to 15.5 feet, not fully demolishing the Pavilion, regrading the parking lot, constructing a new patio, and installing large amounts of fill.  FEMA also found that the project was ineligible because the Applicant initiated the work on the revised SOW without affording FEMA the opportunity to conduct an EHP review, including a floodplain management review, as required by Executive Order 11988, rendering the project ineligible for PA funding. 

Second Appeal

The Applicant’s second appeal, dated August 16, 2019, reiterates the arguments it made in the first appeal.  The Applicant contends that it did not violate the terms and conditions of the PA grant, as it replaced the Facility with a new facility of the same design, capacity, and function, including demolition, disposal, and elevation above new FEMA flood height.  The Applicant states that its revised SOW merely changed the construction methodology.[9]  The Applicant asserts that the change in the SOW was inconsequential with regard to EHP compliance and that the work completed complies with all applicable environmental regulations.[10]  The Grantee forwarded the Applicant’s appeal with its support on October 15, 2019.

Discussion

Change in Scope of Work

FEMA provides PA funding to eligible applicants for the repair, restoration, reconstruction or replacement of facilities damaged or destroyed by major disasters.[11]  Applicants must obtain the prior approval of FEMA for any revision of the scope or objective of the project.[12]  FEMA policy cautions applicants not to assume that such costs can be reported at the end of the project and that the additional funds will be approved automatically.[13]  Where an applicant materially fails to comply with any term of an award, including failing to obtain FEMA’s prior approval for a SOW change, FEMA may disallow all or part of the grant award.[14] 

The terms of the SOW approved on December 17, 2015 required the Applicant to request approval through the Grantee prior to initiating any work that changes the scope of approved work, as it may result in additional EHP compliance reviews.  The Applicant’s requested SOW changes entailed preserving the west wing of the Facility for several months on the parking lot while new foundations were placed and then replacing it atop the new foundation; reducing the exterior wall height and reshaping the footprint of another wing of the Facility; demolishing the existing wooden deck and replacing it with a smaller patio at a lower grade than the building; regrading the parking lot and increasing its pitch; and establishing a new intermediate grade plane under and around the building by the placement of fill.  FEMA responded in an August 9, 2016 letter, stating its concerns that the changes would jeopardize the project’s eligibility and placing a financial hold on the project.  The letter concluded that “in view of the potential for disallowance for all costs for this project…[t]he Grantee and Applicant should also carefully consider whether the Applicant should continue performing its construction of the [Facility], as such work could compromise future eligibility.”[15]

The Applicant nevertheless continued construction and completed the revised SOW without the necessary approval from FEMA required by 44 C.F.R. § 13.30(d)(1).  This violated the terms and conditions of the PA grant, and disallowance of the costs was an appropriate enforcement action in response.

 

Environmental and Historical Preservation

FEMA must consider a range of federal statutes, regulations, and executive orders related to EHP prior to providing PA funding.[16]  The National Environmental Policy Act (NEPA) requires all federal agencies to consider the environmental impact of a proposed action, as well as any alternatives, prior to obligating funds and beginning work.[17]  In addition to NEPA, FEMA must ensure compliance with other environmental protection laws prior to approval of funding, including the CZMA and Executive Order 11988, which requires FEMA review projects for NFIP compliance.[18]  FEMA’s review must be completed before the approval of funding and before the applicant starts work “since the review may identify steps to be taken or conditions to be met before the project can be implemented.”[19]  When an applicant initiates or completes work on a project before FEMA is able to conduct the necessary EHP compliance review, the work generally is not eligible for PA funding.[20]

Following the Applicant’s request for SOW revisions, the Grantee and CT DEEP asked FEMA for an EHP compliance review, citing concerns that the revisions did not comply with NFIP and CZMA requirements.[21]  FEMA’s response, on August 9, 2016, concluded that more information would be necessary to reach an EHP compliance determination and cautioned the Applicant to carefully consider whether to continue with construction, as such work risked future eligibility.[22]  The Applicant completed construction of the Facility according to its proposed, unapproved, revised SOW before FEMA performed its EHP reviews and reached its determinations of noncompliance.[23]  Continuing construction on the project prevented FEMA from conducting the necessary EHP reviews.  FEMA’s termination of funding for the project was an appropriate enforcement action for this noncompliance.

 

Conclusion

The Applicant completed a revised SOW without prior FEMA approval.  This violated the terms and conditions of the grant and precluded FEMA from performing its necessary EHP reviews.  FEMA appropriately denied funding for the project as a result.  Therefore, this appeal is denied.

 

[1] Cost Estimating Format Fact Sheet, Town of Fairfield, CT – Penfield Pavilion, rev. 3 (June 30, 2015).  Repair costs were estimated at $2,090,442.85; the replacement cost was estimated at $3,833,932.60 (base construction cost only).

[2] The total estimated cost to replace the Facility, including direct administrative costs, was $6,590,054.11.  Following insurance reductions of $2,250,000, FEMA calculated final project costs of $4,340,054.11.

[3] Project Worksheet 680, Fairfield (Town of), Version 0 (Dec. 17, 2015).

[4] Letter from First Selectman, Town of Fairfield, to Reg’l Adm’r, FEMA Region I, at 5 (Oct. 28, 2016).

[5] Letter from First Selectman, Town of Fairfield, to Acting Deputy Reg’l Adm’r, FEMA Region I, at 10 (Jan. 23, 2019).

[6] Id. at 11.

[7] Id. at 12-25.

[8] Id. at 26.

[9] Letter from First Selectman, Town of Fairfield, to Reg’l Adm’r, FEMA Region I, at 9-10 (Aug. 16, 2019).

[10] Id. at 14-20.

[11] Robert T. Stafford Disaster Relief and Emergency Assistance (Stafford) Act, § 406(a)(1), 42 U.S.C. § 5172(a)(1) (2012).

[12] Title 44 Code of Federal Regulations (44 C.F.R.) § 13.30(d)(1) (2012).

[13] Public Assistance Guide, FEMA 322, at 140 (June 2007) [hereinafter PA Guide].

[14] 44 C.F.R. § 13.43(a)(2); see also FEMA Second Appeal Analysis, Decatur Cnty. Secondary Rds., FEMA-4181-DR-IA, at 5 (Mar. 12, 2019); FEMA Second Appeal Analysis, City of Milford, FEMA-4023-DR-CT, at 4-5 (May 18, 2018).

[15] Letter from Disaster Recovery Manager, FEMA Region I, to Nat’l Flood Ins. Program (NFIP) Coordinator, Conn. Dep’t of Energy and Envtl. Prot. (CT DEEP) and Pub. Assistance (PA) Coordinator, Conn. Dep’t of Emergency Servs. and Pub. Prot., at 6 (Aug. 9, 2016) [hereinafter Aug. 9 Letter].

[16] PA Guide, at 127.

[17] National Environmental Policy Act (NEPA) of 1969, §§ 101-102, 42 U.S.C. §§ 4331-4332 (2012); PA Guide, at 128.

[18] 44 C.F.R. § 9.11(d)(6); PA Guide, at 134-136.

[19] PA Guide, at 128.

[20] FEMA Second Appeal Analysis, City of Sundance, FEMA-4007-DR-WY, at 5 (May 4, 2018).

[21] Letter from NFIP Coordinator, CT DEEP and PA Coordinator, Conn. Dep’t of Emergency Servs. and Pub. Prot., to Branch Chief, Floodplain Mgmt. and Ins. Branch, FEMA Region I, at 2-3 (June 1, 2016).

[22] Aug. 9 Letter, at 6.

[23] Letter from Disaster Recovery Manager, FEMA Region I, to First Selectman, Town of Fairfield, at 21 (Nov. 28, 2018) (the Determination Memorandum).

Last updated April 7, 2021