Improved Project

Appeal Brief

Summary Paragraph

From April 30 through May 18, 2010, severe storms and flooding damaged the Applicant’s Community Resource Center (CRC), which housed its pre-kindergarten (Pre-K) program.  FEMA prepared Project Worksheet (PW) 4882 Version 0 to repair and replace equipment damaged in the disaster, estimating costs at $176,634.83.  Due to multiple floods over the years at the CRC, the Applicant decided to relocate the Pre-K program to the Trenton Elementary School (TES).  As such, FEMA prepared PW 4882 Version 1, as an improved project, capping costs at the previously obligated estimate and deducting the insurance proceeds.  In addition to replacing the damaged playground equipment listed in PW 4882, the Applicant also moved undamaged playground equipment from CRC, constructed new surfacing, and purchased swing mats and a new playground structure at TES.  The costs for relocating the Pre-K program totaled over $1 million.  The Applicant received insurance proceeds, which FEMA subtracted from the estimated repair cost and closed the project at a capped cost of $33,159.63.  The Applicant appealed FEMA’s determination, requesting the costs associated with moving the undamaged equipment, resurfacing the playground, and the purchase of the swing mats and new playground structure at TES.  The Region IV Regional Administrator (RA) denied the appeal noting the Applicant requested $32,135.16 in additional costs.  The RA determined that the costs requested were either for ineligible work or work already covered under PW 4882, in which FEMA capped the costs.  The Applicant appeals the RA’s determination and in addition to its prior arguments, the Applicant stated it needed to comply with the Handbook for Public Playground Safety (Handbook) and replace the mulch at TES with the surfacing.

Authorities and Second Appeals

• Stafford Act § 406.

• 44 C.F.R. §§ 206.201(j) and 206.203(d)(1).

• PA Guide, at 29 and 110.

Headnotes

• Pursuant to 44 C.F.R. 206.203(d)(1), funding for improved projects is limited to the Federal share of the approved estimate of eligible costs, or actual costs, whichever is lessThe PA Guide notes FEMA may adjust its contribution if the approved costs exceeded the original estimate and costs can be separately documented.

  • FEMA approved the improved project and capped funding.The costs requested are for work related to the improvements, rather than eligible work under the PW.Thus, the costs are the responsibility of the Applicant.

• The PA Guide further states that any additional costs for complying with a code or standard required by the construction of the improvements, but not required by the original eligible SOW, are not eligible.

  • The Applicant cites to the Handbook, arguing it needed to replace the mulch at TES’s playground with new surfacing.However, in arguendo, were the costs otherwise eligible to comply with code upgrades, it still would not be eligible in this instance because it is required by the improvements.

Appeal Letter

Appeal Analysis

Background

From April 30 through May 18, 2010, severe storms, flooding, and straight-line winds damaged Trenton Special School District’s (Applicant) Community Resource Center (CRC).  The Applicant’s pre-kindergarten (Pre-K) program and the offices of the Coordinated School Health Programs occupied the CRC’s flooded classrooms.  FEMA prepared Project Worksheet (PW) 4882 Version 0 to reimburse the Applicant for work to repair and replace equipment damaged at the CRC, at an estimated cost of $176,634.83, including costs to replace ten pieces of damaged playground equipment.  The anticipated insurance proceeds were $76,634.83 for a total amount obligated of $100,000.00.

Subsequently, the Applicant requested an improved project to relocate the Pre-K program to the Trenton Elementary School (TES) due to multiple floods over the years at the CRC.  Upon moving from CRC to TES, the Applicant determined the existing playground at TES, designed for older children, was not age appropriate for Pre-K children.  As such, in addition to replacing the equipment damaged at CRC, the Applicant elected to modify the playground at TES to accommodate the Pre-K students.  These improvements included the following: (1) moving several pieces of undamaged playground equipment to TES at a cost of $3,900.00; (2) installing fixed surfacing to replace mulch, which it determined was unsafe for Pre-K children, costing $51,979.20; (3) purchasing swing mats for $3,458.00; and (4) purchasing a new piece of playground equipment for $10,000.00.  The costs for relocating the Pre-K program totaled over $1 million.  The Applicant subsequently received $143,475.20 in insurance proceeds, which FEMA deducted from the estimated costs.  On February 24, 2014, FEMA prepared PW 4882 Version 1, reclassified the work as an improved project, in which it capped the funding at $33,159.63.

First Appeal

The Applicant appealed FEMA’s determination in a letter dated May 29, 2014, requesting a balance due of $32,135.16.  The Applicant argued that it spent $69,338.14 for moving and setting up the existing equipment, and replacing a new piece of equipment.  The Applicant stated it only claimed $37,202.98 in PW 4882 for costs associated with the playground, leaving a balance of $32,135.16.  The Tennessee Emergency Management Agency (Grantee) emailed the appeal to FEMA Region IV on August 1, 2014, claiming FEMA’s deobligation of funding in the amount of $66,840.37 (the original obligation amount less FEMA’s capped costs of $33,159.63).   On August 7, 2015, FEMA sent the Applicant a Request for Information (RFI), asking for documentation showing what equipment sustained damage as a result of the disaster.  On September 4, 2015, the Applicant responded to the RFI with invoices for the surfacing, swing mats, and relocation of the undamaged equipment, and noted that due to the cost of replacing items, cleaning, and interruption of the Pre-K program, it was in the best interest of the students and the Applicant to move the program.

On February 19, 2016, the Region IV Regional Administrator (RA) denied the appeal, determining that FEMA does not reimburse costs associated with undamaged equipment and denied funding for relocating the undamaged playground equipment.  The RA noted that FEMA reimbursed the cost of replacing the ten items listed in PW 4882 for damaged playground equipment and denied funding for the surfacing, swing mats, and additional Pre-K playground equipment, stating that the existing PW’s scope of work (SOW) did not mention any damage or costs to the CRC’s playground surface area.  As such, funding was limited to the costs associated with the work outlined in the PW’s SOW and capped as an improved project.

Second Appeal

In a letter dated April 6, 2016, the Applicant appeals the RA’s determination.  The Applicant notes a difference of $22,135.16 in costs not funded for moving and installing undamaged equipment, purchasing and installing the fixed surfacing and swing mats, as well as purchasing a new piece of playground equipment for $10,000.00.  The total amount in dispute on appeal is $32,135.16.  The Applicant argues it needed to comply with the U.S. Consumer Product Safety Commission’s Handbook for Public Playground Safety (Handbook) and avoid using loose fill on the playground.  It states that the mulch surfacing used at TES was not safe or appropriate and so the Applicant purchased and installed proper surfacing and swing mats.  The Applicant notes FEMA informed it of the improved project cap, but thought the decrease in funding would only be approximately $12,000.00.  Forwarding the appeal on April 8, 2016, the Grantee concurred with the Applicant and noted the FEMA project specialist recommended a deobligation in the amount of $12,277.32.[1]

Discussion

Improved Project

Pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) § 406, FEMA may provide grant assistance for the costs to repair, restore, reconstruct, or replace a facility damaged or destroyed by a major disaster.[2]  FEMA may reimburse costs when an applicant makes improvements, but still restores the predisaster function of a damaged facility.[3]  However, funding for improved projects is limited to the federal share of the approved estimate of eligible costs, or actual costs of completing the improved project, whichever is less.[4]  If an applicant can show eligible repair or replacement costs exceed the original capped estimate and costs can be tracked separately, an applicant may appeal the amount of the subgrant.[5] 

In this instance, FEMA approved the funding for the improved project, delineated the SOW in PW 4882 Version 0 and capped funding at $176,634.83, before reducing by the insurance proceeds received.[6]  FEMA determined the estimated costs (less insurance proceeds) were less than the actual costs, which the Applicant states are over $1 million, and obligated $33,159.69 in accordance with 44 C.F.R. § 206.203(d)(1) and the PA Guide.

The PW’s intent was to replace 10 playground items damaged during the disaster.[7]  As such, the PW’s capped amount accounted for all costs associated with the work to replace the playground items.  All of the work claimed in the Applicant’s appeal is related to the improvements at TES, rather than work related to repairing or replacing equipment damaged as a direct result of the disaster.  The Applicant has not contended nor demonstrated on appeal that moving undamaged equipment, installing the new fixed surfacing and swing mats, and purchasing a new piece of equipment are eligible work to repair or restore disaster related damage.  As PA funding is only available to reimburse work that repairs or replaces damaged facilities and is a direct result of the disaster, the work is ineligible for additional PA funding.  The Applicant therefore is responsible for the additional costs associated with those improvements. 

The Applicant also argues on second appeal that it needed to install the new surfacing and swing mats to comply with the Handbook.[8]  In this instant, an analysis of whether the Handbook actually meets FEMA’s regulatory criteria to be considered an eligible code and standard[9] is unnecessary because the underlying work the Applicant asserts must allegedly comply with the Handbook is ineligible for PA funding.

Conclusion

In accordance with 44 C.F.R. § 206.203(d)(1), the appealed costs associated with the playground are ineligible for FEMA funding, as they are part of the improvements and funding has been capped.  Accordingly, the appeal is denied.