Immediate Threat, Time Limitations/Extensions

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster	4339
Applicant	PR Aqueduct and Sewer Authority
Appeal Type	Second
PA ID#	000-UK500-00
PW ID#	PW 353
Date Signed	2021-04-16T16:00:00

Summary Paragraph:

Between September 17, 2017 and November 15, 2017, Hurricane Maria impacted Puerto Rico, damaging the Guajataca Dam (Dam).  To enable Dam and spillway repairs and allow continuous Dam operation, the United States Army Corps of Engineers (USACE) installed by-pass stations and lowered the reservoir level.  These measures impacted the Puerto Rico Aqueduct and Sewer Authority’s (Applicant’s) ability to utilize gravity to transport raw water to its pumps and treatment facilities.  To compensate for the water restrictions and prepare for a potential drought, the Applicant proposed to purchase and install floating pumps and intake system.  FEMA prepared and obligated Project Worksheet (PW) 353 for $2,342,353.86.  The Applicant submitted several revised estimates and time extension requests.  FEMA extended the deadline to January 31, 2020 but did not obligate additional funds.  On January 23, 2020, the Applicant requested another time extension.  FEMA issued a Determination Memorandum finding the work ineligible because USACE completed the spillway repairs, yet the Applicant had not begun the work before the project deadline.  FEMA also deobligated the funding and denied the further time extension.  The Applicant appealed, stating no work had commenced because it was working with FEMA on revised estimates and USACE spillway repair work restricted its worksite access.  FEMA denied the appeal, finding: 1) sedimentation in the reservoir is a pre-existing condition; 2) the Dam system continued functioning; 3) USACE completed the spillway repairs; 4) the proposed project did not reduce an immediate threat from the disaster to public life, health, safety or property; 5) the work had not commenced before the deadline; 6) deobligating funds was authorized; and 7) a further time extension was not justified.  On second appeal, the Applicant reiterates its first appeal arguments.

Authorities and Second Appeals

• Stafford Act § 403.
• 44 C.F.R. §§ 206.204(c); (d); 206.223(a)(1); 206.225(a)(3).
• PAPPG, at 43, 142.
• City of Waveland, FEMA-1604-DR-MS, at 3; Univ. of TX Med. Branch, FEMA-1791-DR-TX, at 5.

Headnotes

• The Stafford Act authorizes FEMA to provide assistance essential to perform work that reduces or eliminates immediate threats to lives, public health, or safety, or to improved property resulting from a major disaster.
  • The work is ineligible for Public Assistance (PA) funding because the Applicant’s documentation shows the work is predicated on a potential future event, a drought, and, together with the Applicant’s lengthy time delay and failure to commence work on the project outside of its normal operations, shows no existing immediate threat from the disaster.
• Emergency work must be completed within 6 months of the major disaster declaration date unless extended by the grantee or FEMA when an applicant encounters extenuating circumstances or unusual project requirements beyond its control.
  • The Applicant’s disagreement with the amount of obligated funding and worksite access restrictions do not justify an additional time extension to complete work to be eligible for PA funding.

Conclusion

The requested work and associated costs for this project are not required to address an immediate threat from the declared disaster, and, are therefore ineligible for PA funding as emergency work.  Furthermore, FEMA properly denied the Applicant’s time extension and because no eligible work was performed before the January 31, 2020 completion deadline, no costs were incurred and no costs are eligible.  Therefore, this second appeal is denied.

Appeal Letter

Appeal Analysis

Background

From September 17, 2017 through November 15, 2017, Hurricane Maria impacted Puerto Rico, damaging the Guajataca Dam (Dam) and the Puerto Rico Aqueduct and Sewer Authority’s (Applicant’s) ability to provide raw water to its nearby lift and pump stations, as well as downstream filtration, water, and sewer treatment plants.  After conducting damage assessments, the U.S. Army Corps of Engineers (USACE), recommended installing by-pass stations to restore water and to draw down the reservoir to enable spillway repairs.[1]  On May 16, 2018, FEMA obligated Category B Project Worksheet (PW) 353 for $2,342,353.86 to purchase and install floating pumps and intake system.[2]

On September 5, 2018, the Applicant submitted an amended proposal for $7,733,228.28 in estimated costs.  On October 30, 2018, FEMA determined that $5,217,261.00 was a reasonable cost estimate for the scope of work, but did not obligate additional funding.  On March 6, 2019 and April 8, 2019, the Applicant submitted revised estimates ($11,304,911.04 and $10,451,012.12 respectively).

FEMA approved a series of time extensions for PW 353 and on January 23, 2020, the Applicant requested a further time extension from January 31, 2020 to December 31, 2021.[3]  The Applicant contended that, although PW 353 was approved in 2017, no work had commenced because it had been working with FEMA on revised cost estimates and its access to the work site was restricted due to USACE spillway repair work.

On April 1, 2020, FEMA issued a Determination Memorandum (DM) finding the floating pumps and intake system ineligible because, as of March 19, 2020, no work had commenced.[4]  FEMA stated that it is only authorized to provide funding for work completed and costs incurred within the regulatory timeframe for completion of work; therefore, it would deobligate funding for PW 353.[5]  In addition, FEMA pointed out that the USACE completed the Dam spillway repairs on September 12, 2019, thus allowing for water diversion as needed.[6]  On May 21, 2020, FEMA denied the Applicant’s time extension request because the project was ineligible and the work was no longer needed to supplement the water flow.[7]

 

First Appeal

On May 21, 2020, the Applicant appealed FEMA’s ineligibility determination, stating that between May 2018 and March 2019, FEMA obligated funding for this project and held meetings with the Applicant to resolve differences in funding and estimated costs.[8]  The Applicant stated that it conducted the public bid process on March 6, 2019 and awarded a contract in June 2019; however, it could not start the project without the funding, nor mobilize the project until the USACE completed work on September 12, 2019.  On July 6, 2020, the Government of Puerto Rico (Grantee) forwarded the appeal, concurring with the Applicant.[9]  The Grantee also stated that the amount FEMA obligated did not represent the total estimated costs, the USACE work did not restore the raw water supply to the northwest part of Puerto Rico, and the Applicant’s access to the worksite was restricted until after the USACE completed spillway repairs.  

On July 20, 2020, the Applicant also appealed FEMA’s denial of the time extension request reiterating by reference all the arguments made in its May 21, 2020 appeal.[10]  The Grantee forwarded this appeal on August 13, 2020, further stating that FEMA’s denials were based on the Applicant’s failure to begin work by the January 31, 2020 deadline, despite a pending extension request that, if approved, would have allowed work to continue beyond the current deadline.[11]

On September 23, 2020, the FEMA Region II Regional Administrator (RA) denied the May 21, 2020 and July 20, 2020 appeals,[12] determining any incurred costs for installation of a floating intake system are increased operating costs because: 1) sedimentation in the reservoir is a pre-existing condition; 2) the new reduced maximum reservoir water level is sufficient to allow the system to continue to function during non-drought conditions; and 3) the requested costs sought to reduce the threat of a potential drought rather than an immediate threat from Hurricane Maria.  The RA also determined that, without an eligible project, FEMA could not approve a time extension and reserved the right to address the $7,733,288 in funding sought by the Applicant upon second appeal or arbitration.

 

Second Appeal

On January 17, 2021, the Grantee forwarded the Applicant’s November 18, 2020 second appeal.[13]  The Applicant reiterates its first appeal arguments and further states that eligible costs should be equivalent to the total actual bid received, because the reduction in the maximum level of the reservoir, the loss of over 100 days of water supply, and the decrease in water flow were a direct result of the disaster.  The Applicant also states that it has received prior time extensions due to delays caused by circumstances beyond its control, including lack of Public Assistance (PA) funding.  The Grantee, concurring with the Applicant’s appeal, states that FEMA did not consider the merits of the January 23, 2020 extension request or that completing the project is critical to protecting the health and safety of residents, due to the reservoir’s reduced maximum storage capacity.

 

Discussion

Immediate Threat

FEMA is authorized to provide assistance for emergency work that reduces or eliminates immediate threats to lives, public health, or safety, or to improved property resulting from a major disaster.[14]  To be eligible, the work must be required as the result of the emergency or major disaster event.[15]  FEMA considers the urgency with which the applicant proceeds with emergency work in determining eligibility.[16]  Once the immediate threat ceases, FEMA may no longer provide funding for emergency work, even if certain non-immediate public health and safety threats remain.[17]  

The Applicant supports its appeal with a technical analysis indicating that an immediate threat exists due to a reduced maximum water level in the reservoir combined with potential drought conditions.  That analysis concludes that pre-existing sedimentation in the reservoir exacerbate the water level issue.  The analysis also shows the maximum water level in the reservoir, while three meters lower than its predisaster level, causes a reduction in its operational capacity and a reliance on the temporary pumps installed by USACE to discharge water downstream.[18]  This pumping allows the system to continue operating and the Applicant to continue to provide its service “at the new operating reality.”[19]  

The Applicant’s documentation demonstrates that the requested work is not needed to reduce an immediate threat following the disaster, but rather to address a potential future event, a drought.  The lengthy time delay and failure to commence work on the project also do not support the requirement that work is necessary as an emergency protective measure to address an immediate threat caused by the disaster. 

The purpose of purchasing and installing the floating pumps and intake system was to operate the water supply at lower than normal levels until the USACE’s completion of spillway repairs.  Once USACE completed its spillway repair work, the floating pumps and intake system were no longer needed to for this purpose.[20]  In this absence of an immediate threat from the declared disaster, the work is ineligible for PA funding.

 

Time Limitations/Extensions

Emergency work must be completed within six months of the major disaster declaration date unless extended by the grantee when an applicant encounters extenuating circumstances or unusual project requirements beyond its control.[21]  If additional time is required to complete the project beyond the grantee’s authority, the grantee must submit the request to the RA for approval and include the dates and provisions of all previous project time extensions, a detailed justification for the delay, and a projected completion date.[22]  FEMA has discretionary authority to extend individual project deadlines beyond these timeframes if extenuating circumstances justify additional time.[23]  FEMA generally considers the lack of funding to be a circumstance within the control of an applicant and not justifiable for a time extension.[24]  If the project is not completed within the completion deadline, FEMA deobligates funding for the uncompleted work.[25]  If the project was not initiated, then no PA funding will be provided for that project.[26]

The Applicant failed to begin, or to complete, work on the project before either the January 23, 2020 time extension request or the January 31, 2020 completion deadline, more than two years after the declared disaster.  In addition, the Applicant did not provide documentation to support its claims that the work could not be commenced until after USACE completed its spillway repairs or until FEMA agreed to a specific funding amount.

FEMA properly exercised its discretion in denying the Applicant’s time extension and because no work was performed on an eligible project before the January 31, 2020 completion deadline, no costs were incurred, and thus no costs are eligible for funding. 

 

Conclusion

The requested work and associated costs for this project are not required to address an immediate threat from the declared disaster, and, are therefore ineligible for PA funding as emergency work.  Furthermore, FEMA properly denied the Applicant’s time extension and because no eligible work was performed before the January 31, 2020 completion deadline, no costs were incurred and no costs are eligible.  Therefore, this second appeal is denied.

 

[1]  Final Report from USACE, Guajataca Dam-Interim Risk Reduction Measures, at 3 (Dec. 2019).

[2] Project Worksheet 353, PR Aqueduct and Sewer Authority, Version 1 (Apr. 16, 2018).  PW 353 scope of work also provided that, “The proposed floating pumps cost ($2,342,353.86) represent an offset to the estimated monthly costs of $3,102,669.33 for alternate delivery methods.”

[3] Letter from FEMA, Acting Caribbean Area Div. Dir. to Exec. Dir., Cent. Office for Recovery, Reconstruction, and Resiliency, Commonwealth of PR (Apr. 1, 2019); Letter from FEMA, Acting Recovery Dir., PR Joint Recovery Office to Exec. Dir., Cent. Office for Recovery, Reconstruction, and Resiliency, Commonwealth of PR (May 28, 2019); Letter from FEMA, PA Operations Dir., PR Joint Recovery Office to Exec. Dir., Cent. Office for Recovery, Reconstruction, and Resiliency, Commonwealth of PR (July 31, 2019): Letter from Gov’t of PR to Exec. Dir., Cent. Office for Recovery, Reconstruction, and Resiliency, Commonwealth of PR, at 1-3 (Jan. 23, 2020).

[4] Letter from FEMA Infrastructure Branch Dir., PR Joint Recovery Office to Exec. Dir., Cent. Office for Recovery, Reconstruction, and Resiliency, Commonwealth of PR (Apr. 1, 2020).

[5] Id.

[6] Id.

[7] Letter from FEMA Infrastructure Branch Dir., PR Joint Recovery Office to Exec. Dir., Cent. Office for Recovery, Reconstruction, and Resiliency, Commonwealth of PR (May 21, 2020) [hereinafter Time Extension Denial Letter].

[8] Letter from Exec. Dir. of Infrastructure, Gov’t of PR to Reg’l Adm’r, FEMA Region II (May 21, 2020).

[9] Letter from Chief Legal Counsel, Cent. Recovery and Reconstruction Office of PR to Reg’l Adm’r, FEMA Region II (July 6, 2020).

[10] Letter from Exec. Dir. of Infrastructure, Gov’t of PR to Reg’l Adm’r, FEMA Region II (July 20, 2020).

[11] Letter from Chief Legal Counsel, Cent. Recovery and Reconstruction Office of PR to Reg’l Adm’r, FEMA Region II (Aug. 13, 2020).

[12] Letter from Reg’l Adm’r, FEMA Region II to Exec. Dir., Cent. Recovery and Reconstruction Office of PR and Exec. Dir. of PRASA (Sept. 23, 2020).

[13] Letter from Chief Legal Counsel, Cent. Recovery and Reconstruction Office of PR to Reg’l Adm’r, FEMA Region II (Jan. 21, 2020) [hereinafter Grantee’s Second Appeal Letter]. The letter was misdated as 2020 instead of 2021.

[14]  Robert T. Stafford Disaster and Emergency Assistance (Stafford) Act § 403(a), Title 42 United States Code (42 U.S.C.) §5170; Title 44 Code of Federal Regulations (44 C.F.R.) §206.225(a)(3).

[15] 44 C.F.R. § 206.223(a)(1).

[16] Public Assistance Program and Policy Guide, FP 104-009-2, at 43 (Apr. 2018) [hereinafter PAPPG].

[17] FEMA Second Appeal Analysis, University of Texas Medical Branch, FEMA-1791-DR-TX, at 5 (Sept. 30, 2016).

[18] Ferdinand Quinones, PE, PRASA Subject Matter Expert Analysis, at 4-5 (Apr. 23, 2020).

[19] Grantee’s Second Appeal Letter, at 3.

[20] Time Extension Denial Letter.

[21] 44 C.F.R. §206.204(c); PAPPG, at 43.

[22] 44 C.F.R. §206.204(d).

[23] Id.; PAPPG, at 141.

[24] 44 C.F.R. §206.204(d); .PAPPG, at 142.

[25] Id.

[26]Id.; FEMA Second Appeal Analysis, City of Waveland, FEMA-1604-DR-MS, at 3 (Apr. 23, 2014).