Temporary Facilities

Appeal Brief

Summary Paragraph

From September 1-3, 2021, Hurricane Ida caused extensive damage throughout New York State and created an immediate threat to the health and safety of the general public. Williamsburg Infant & Early Childhood Development Center, Inc. (Applicant), a private nonprofit, provided special education services to preschool and school-aged students with disabilities from a leased facility (Facility) that sustained storm-related damage. The Applicant entered a lease agreement to relocate the preschool services to a separate building (Temporary Space) and requested PA for temporary relocation. FEMA denied the requested emergency protective measures, determining the Applicant’s Facility did not provide an eligible service. On first appeal, FEMA found the Applicant provided essential community services at its Facility and was therefore eligible for temporary relocation. FEMA approved $48,415.84 in PA funding for temporary relocation and associated expenses, including $31,000.00 for increased rent, but denied, among other costs, a portion of the claimed temporary relocation rent. The Applicant’s second appeal is for costs associated with an increase in rent, based on the amount the Applicant paid for undamaged space it continued to use at the damaged Facility. 

Authorities and Second Appeals

• Stafford Act § 403(a)(3)(D).
• PAPPG, at 65, 130, and 132.
• 2 C.F.R. §§ 200.403, 200.404. 

Headnotes

• If an applicant provides essential community services at a facility that is unsafe, inaccessible, or destroyed as a result of the incident, temporarily relocation of these services to another facility is eligible. If the applicant was leasing the damaged facility and had to temporarily relocate to another leased facility, the increase in rent is eligible. 
• Here, the Applicant temporarily relocated essential services from its Facility’s damaged basement to a Temporary Space but continued to pay rent for the undamaged portion of its Facility after the disaster, in addition to the rent it paid for the Temporary Space. Therefore, the Applicant is eligible for an additional $59,062.50.

Conclusion

FEMA finds that the Applicant is eligible for an additional $59,062.50 in PA funding for increased rent associated with temporary relocation. The appeal is granted.

Appeal Letter

Appeal Analysis

Background

From September 1 through 3, 2021, Hurricane Ida caused extensive damage throughout New York.[1] The Williamsburg Infant & Early Childhood Development Center, Inc. (Applicant), a Private Nonprofit organization, provided special education services to preschool and school-aged students with disabilities. Prior to the disaster, the Applicant provided these services at a leased facility (Facility), paying $28,500.00 per month for rent. The Facility’s ground floor basement sustained storm-related damages, causing the Applicant to relocate the preschool services to another school’s unutilized building (Temporary Space) between September and December 2021. The Applicant entered into a lease agreement with the other school for the Temporary Space for $35,000.00 per month during the initial term of the lease from September through November 2021, and $40,000.00 for December 2021. The Applicant continued to provide non-preschool services at the Facility’s undamaged first floor and use office space on the undamaged second floor. The Applicant continued to pay rent for the first floor and the second-floor office space, while it contemporaneously relocated preschool services to the Temporary Space. The Applicant resumed preschool services in the Facility’s basement by the end of December 2021.

Relevant to this appeal, the Applicant requested reimbursement of the full amount it paid in rent for the Temporary Space. FEMA prepared Grants Manager Project (GMP) 660080 to document the Applicant’s request. On August 24, 2022, FEMA denied the request, determining the Applicant’s Facility did not provide an essential community service or fall within an eligible category of educational institutions under PA policy. Therefore, FEMA found the Applicant had not satisfied the policy requirements for temporary relocation eligibility.

First Appeal

The Applicant appealed on October 23, 2022, asserting that it was eligible for funding because it provided statutorily required services to preschool-aged children with disabilities. The Applicant provided documentation in support of its claim. The New York State Division of Homeland Security and Emergency Services (Recipient) supported the appeal by letter dated December 22, 2022.

FEMA issued multiple Requests for Information (RFI). FEMA’s April 20, 2023 RFI requested additional documentation including the leasing arrangements for the Facility and Temporary Space. FEMA also asked the Applicant for documentation clarifying whether the Applicant continued to lease the damaged Facility and pay rent after the disaster, and documentation supporting that the Applicant performed a cost analysis when attempting to relocate its preschool. The Applicant responded on May 17, 2023, with the requested documentation, including the Commercial Lease Agreement (Lease) for the Facility as well as the lease for the Temporary Space and associated invoices.[2] The Applicant clarified that it continued to lease the Facility after the disaster, but that rent was reduced by $14,650.00 per month for the period it was unable to occupy the basement. Regarding FEMA’s request for a cost analysis, the Applicant explained that it did not perform a cost analysis due to exigent circumstances and its inability to timely locate other suitable options like the Temporary Space, which was licensed for preschool education and met all code requirements. However, it believed the rent for the Temporary Space was reasonable as it was consistent with the rent that the other school was paying its own property owner and it only required minimal work.

On February 12, 2024, the FEMA Region 2 Regional Administrator partially granted the appeal. FEMA determined the Applicant provided essential community services at its Facility and was eligible for PA. FEMA determined $31,000.00 constituted increased rent that was eligible for PA funding. FEMA noted that although the Applicant was requesting reimbursement for the full amount of rent it paid for the Temporary Space, FEMA was only authorized to provide funding for the increased rent amount. FEMA calculated the increased rent as $6,500.00 per month for September, October, and November 2021, and $11,500.00 for December 2021.[3] In finding the increased rent reasonable, FEMA noted that the Temporary Space was previously licensed for preschool education, met code requirements, and was a short distance from the Facility. 

Second Appeal

The Applicant submitted a second appeal, dated March 4, 2024, requesting an additional $59,062.50 for increased rent. The Applicant states that it continued to pay a portion of its predisaster monthly rent for partial use of the damaged Facility during the temporary relocation of services. The Applicant explains that the basement level preschool was relocated to the Temporary Space due to disaster damage. However, the Applicant continued to use the Facility’s undamaged first floor, where the special education school-aged school was located, and office space on the second floor. The Applicant provided cancelled checks showing that it paid a negotiated monthly rent of $13,850.00 for use of the undamaged space in the Facility during September through November 2021, with a monthly abatement of $14,650.00 for the damaged space. For December, the Applicant paid $17,512.50 in rent and received an abatement of $10,987.50 for the damaged space at the Facility. As such, the Applicant asserts that the total increase in rent is not $31,000.00 previously found eligible on first appeal, but rather $90,062.50; thus, it asserts additional costs of $59,062.50 (the difference between the aforementioned costs) are eligible for reimbursement. 

In a letter dated May 3, 2024, the Recipient transmitted the appeal with its support. The Recipient notes the basis of the appeal is the Applicant was responsible for paying rent for the Temporary Space as well as rent for the undamaged areas it continued to use in the damaged Facility.

Discussion

FEMA is authorized to provide emergency protective measures to save lives and protect public health and safety.[4] Eligible emergency protective measures may include the temporary relocation of essential services.[5] If the applicant provides essential community services at a facility that is unsafe, inaccessible, or destroyed as a result of the incident, temporarily relocation of these services to another facility is eligible.[6]If the applicant was leasing the damaged facility and had to temporarily relocate to another leased facility, the increase in rent is eligible.[7] To be eligible, costs must be, among other requirements, reasonable to accomplish the work properly and efficiently.[8]A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost.[9]

Here, the Applicant temporarily relocated essential services from its leased Facility’s damaged basement to a leased Temporary Space. Prior to the disaster, the Applicant paid $28,500.00 per month in rent for its Facility. The Applicant then prudently negotiated a reasonable rent abatement for the damaged Facility space following the disaster, pursuant to the terms of its Lease. However, it continued to pay a monthly rent of $13,850.00 for the Facility’s undamaged space from September through November 2021, in addition to the $35,000.00 per month that it paid for the Temporary Space during those months. Therefore, the increase in rent for the months of September through November 2021 was $20,350.00 per month.[10] In December, the rent for the Temporary Space was $40,000.00, while the rent for the undamaged Facility space was $17,512.50, because the value of the abatement decreased when the Facility’s basement became usable prior to the end of the month. Therefore, the increase in rent for December was $29,012.50.[11] Given the steps the Applicant took to negotiate a rent abatement for the damaged Facility, as well as the factors FEMA considered to find the Temporary Space rent eligible on first appeal, FEMA finds that the total increase in rent of $90,062.50 is reasonable. Therefore, the additional requested cost of $59,062.50 is eligible for reimbursement.

Conclusion

The Applicant is eligible for an additional $59,062.50 in PA funding for increased rent associated with temporary relocation. Therefore, this appeal is granted.