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Overtime Costs Reimbursement

Appeal Brief

DisasterFEMA-1545/15
ApplicantSt Johns County, Florida
Appeal Type2nd
PA ID#109-99109-00
PW ID#1721
Date Signed
Citation: FEMA-1545/1561-DR-FL: St. Johns County, Florida; PW 1721, Overtime Reimbursement Cross- Reference: Overtime Labor Policy Summary: On September 4, 2004, Hurricane Frances generated high velocity winds and heavy rains in the vicinity of St. Johns County. St. Johns County Division of Emergency Management activated its Emergency Operations Center and opened three emergency shelters. The Applicant submitted a request for reimbursement of $24,221.62 in overtime costs for its exempt employees. FEMA determined that the Applicant’s overtime policy, established by County Resolution 99-47, is discretionary and does not apply uniformly to both Federal awards and non-Federal activities. The Applicant’s first appeal of the decision argued that its policy for providing overtime costs to exempt employees was adopted prior to the disaster, and was not written with the objective of obtaining federal funding. FEMA’s Regional Director denied the appeal citing OMB Circular A-87 which states that only those costs that apply uniformly to both Federal awards and other activities of the governmental unit are allowable under federal awards. In its second appeal, the Applicant asserts that it is its documented practice to compensate exempt employees whether or not an event is a federally-declared disaster. The Applicant did not provide any additional documentation to support its position as part of the second appeal. Issues: 1. Was the Applicant’s overtime policy for exempt employees in place before the disaster? 2. Has St. Johns County provided specific documentation to demonstrate that its overtime policy was not discretionary and had been applied to non-Federal events? Findings: 1. Yes. The policy was adopted March 23, 1999. 2. No. The Applicant has not provided any documentation demonstrating that overtime was paid in events other than those that were federally-declared disasters.

Appeal Letter

February 9, 2007 Mr. W. Craig Fugate Director Florida Division of Emergency Management 2555 Shumard Oak Boulevard Tallahassee, Florida 32399-2100 Re: Second Appeal – St Johns County, Florida, PA ID 109-99109-00, Overtime Costs Reimbursement, FEMA-1545/1561-DR-FL, Project Worksheet 1721 Dear Mr. Fugate: This is in response to your April 4, 2006 letter forwarding the above referenced second appeal from St. Johns County (Applicant). On May 27, 2005, the Applicant requested that the Department of Homeland Security’s Federal Emergency Management Agency (FEMA) reconsider its previous denial of reimbursement of $24,221.62 in overtime costs for exempt employees. Upon review of the St. Johns County overtime labor policy, FEMA initially determined that payment of overtime to exempt employees was ineligible because it was discretionary, contingent upon a Presidential disaster declaration, and appeared to be paid only when Federal funding was available. On April 25, 2005, the Applicant submitted its first appeal asserting that the County’s Resolution 99-47 dated March 23, 1999, established its policy regarding overtime pay to exempt St. Johns County employees. The Grantee supported the applicant’s appeal “because the applicant has made a good faith attempt to implement an exempt employee overtime policy for catastrophic events.” The Applicant asserted that its policy was in place prior to the disaster and, therefore, its overtime costs for exempt employees should be eligible. The Applicant also argued that FEMA set a precedent by obligating funds for the same overtime policy in 2001, during FEMA 1393-DR-FL, Tropical Storm Gabrielle. By a letter dated November 1, 2005, FEMA’s Regional Director denied the appeal stating that even though the Applicant had a policy in place regarding the overtime pay of exempt employees at the time of disaster, the policy “does not specify that the costs would be paid if no declaration is forthcoming, nor does it provide documentation that the Applicant has paid these costs during non-declared incidents.” On March 23, 2006, the Applicant submitted a second appeal, which claims that FEMA misinterpreted Resolution 99-47. The Applicant states that the title of the resolution specifically addresses, “County personnel exempt from the Fair Labors and Standards Act who are on duty in excess of forty (40) hours per week resulting from a major or catastrophic declared disaster.” The Applicant also emphasizes that section three of the resolution makes no distinction between federally declared disasters or any other type of emergency. It argues that the statement in the resolution regarding federally declared disasters is actually included as a specific example rather than a contingency. Finally, the Applicant asserts that the same overtime policy was applied prior to impact from Hurricane Charlie and before receiving a Presidential disaster declaration. As such, the Applicant argues that the policy applies whether or not there is a federal disaster declaration. FEMA Policy 9525.7, Labor Costs Emergency Work, Sections 7.D. and E., states the following: “Straight time and overtime will be determined according to the applicant’s written policies and labor union contracts in effect prior to the disaster, and the costs of salaries and benefits for individuals sent home or told not to report due to emergency conditions are not eligible for reimbursement. However, extraordinary costs for essential employees who are called back to duty during administrative leave to perform disaster-related emergency work are eligible if the costs were provided for in the written policy prior to the disaster.” Office of Management and Budget (OMB) Circular A-87 defines the costs that are allowable under Federal grants. Paragraph 1.e of Section C, Basic Guidelines, states, “[t]o be allowable under Federal awards, costs must meet the following criteria: Be consistent with policies, regulations, and procedures that apply uniformly to both Federal awards and other activities of the governmental unit.” Additionally, Attachment B, Paragraph 8.a.1 states the compensation of employees is allowable to the extent, “it is reasonable for the services rendered and conforms to the established policy of the governmental unit consistently applied to both Federal and non-Federal activities.” Under the terms of Section A of the resolution, overtime is paid at the discretion of the County Administrator when the Board of County Commissioners has declared a major or catastrophic emergency. Additionally, the County Administrator is authorized to make determinations on a case-by-case basis as to the appropriate form of compensation. Because the resolution is discretionary, it is not evident that the overtime policy applies uniformly to both Federal awards and other activities of the governmental unit. Furthermore, the resolution appears to have been passed with the specific purpose of obtaining FEMA reimbursement. It states, whereas, the provision of compensation to exempt employees during a federally declared disaster is a Federal Emergency Management Agency (FEMA) reimbursable expense only when a definitive policy is in place at the time of impact.” Section A further states, “all hours worked by exempt and nonexempt personnel will be documented by the Director of Emergency Services to define scope and hours of work to assist in the Federal Emergency Management Agency (FEMA) reimbursement procedure.” Based on this language, it is not apparent that overtime pay would have been provided regardless of whether FEMA funding was available. Furthermore, the Applicant has not provided any documentation to demonstrate that it has paid overtime for non-federal activities. The overtime policy articulated in the resolution does not meet the requirement of OMB A-87; therefore, overtime for the Applicant’s exempt employees is not eligible for reimbursement. The appeal is denied. Please inform the Applicant of my determination. My determination constitutes the final decision on this matter, as set forth in Title 44 Code of Federal Regulations §206.206. Sincerely, /s/ David Garratt Acting Director of Recovery cc: Major Phil May Regional Director FEMA Region IV

Appeal Analysis

Last updated Feb 4, 2020

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