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Time Limitations/Extensions – Change in Scope of Work

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster4337
ApplicantTitusville
Appeal TypeSecond
PA ID#009-71900-00
PW ID#PW 616
Date Signed2021-03-18T16:00:00

Summary Paragraph

Hurricane Irma made landfall in the Florida Keys on September 10, 2017, severely damaging communities with strong winds, heavy rain, and storm surge.  The City of Titusville (Titusville) (Applicant) sustained damage to its lift stations (Facilities) and requested Public Assistance (PA) funding.  FEMA held a Recovery Scoping Meeting (RSM) on November 20, 2017, and inspected the Facilities on March 1, 2018.  FEMA prepared Project Worksheet 616 on April 12, 2018, to address permanent repairs to the Facilities and obligated $77,181.32.  The Applicant appealed the obligated amount and sought $1,200,000.00 in funding due to significant cost differences its Consultant identified at three of the lift stations.  FEMA issued a Request for Information seeking photographs identifying damages claimed, maintenance /inspection records, and itemized cost estimates.  The FEMA Region IV Regional Administrator denied the Applicant’s first appeal because it determined the Applicant did not provide sufficient documentation to show the additional repairs it requested were required as a result of the disaster; the proposed scopes of work appeared to include ineligible improvements; and the Applicant did not pursue maximum insurance recovery.  On second appeal, the Applicant reiterates that FEMA obligations for the Facilities are inadequate and revises its estimates to eliminate any upgrades.

 

Authorities and Second Appeals

  • 44 C.F.R. § 206.202(d)(1)(ii); § 206.204(e); § 206.223(a).
  • PAPPG, at 19, 134, 136-138.

 

Headnotes

  • Per 44 C.F.R. §206.223(a)(1) and PAPPG at 19, to be eligible for financial assistance, an item of work must be required as the result of the disaster.
    • The Applicant has not substantiated that the repairs conducted or requested were required as a direct result of the declared incident.
  • Federal regulation states that a PA applicant has 60 days from the first substantive meeting, usually the Recovery Scoping Meeting, to identify and report all damage and submit all costs for disaster-related funding.  Failure to report damage within the required timeframe can jeopardize funding.  If an applicant discovers hidden damage or additional work that is necessary to complete a project, the applicant should notify the Grantee as soon as possible.
    • The Applicant did not report the additional damages within the required timeframe.
  • An applicant may discover additional work that is necessary to complete the project, but the applicant is responsible for requesting changes in the scope of work when identified. 
  • The Applicant did not make a SOW change request prior to completing repairs to lift station 31 which exceeded the SOW, or ask for a SOW change for the additional damages identified in stations 25 and 29.

 

Conclusion

The Applicant did not demonstrate that the work to repair additional damages was required as a result of the declared incident.  In addition, the Applicant did not identify the additional damages within the required timeframe or provide detailed justification and documentation to support the eligibility of the requested revision to the SOW or costs.  Therefore, this appeal is denied.

 

Appeal Letter

Jared Moskowitz                    

Director                                                          

Florida Division of Emergency Management           

2555 Shumard Oak Boulevard                                              

Tallahassee, Florida 32399-2100

 

Re:  Second Appeal – Titusville, PA ID: 009-71900-00, FEMA-4337-DR-FL, Project Worksheet (PW) 616, Time Limitations/Extensions – Change in Scope of Work

 

Dear Mr. Moskowitz:

This is in response to your letter dated December 23, 2020, which transmitted the referenced second appeal on behalf of the City of Titusville (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 $381,123.00 for repairs of additional damages at three of its lift stations. 

As explained in the enclosed analysis, I have determined that the Applicant did not demonstrate that the work to repair additional damages was required as a result of the declared incident.  In addition, the Applicant did not identify the additional damages within the required timeframe or provide detailed justification and documentation to support the eligibility of the requested revision to the SOW or costs.  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:  Gracia B. Szczech

Regional Administrator

FEMA Region IV

Appeal Analysis

Background

During the incident period of September 4 to October 18, 2017, Florida was inundated by Hurricane Irma which brought strong winds, heavy rain, and storm surge.  The City of Titusville (Applicant) sustained damage to five lift stations (Facilities) as a result of the disaster.[1]  The Applicant requested Public Assistance (PA) through the Florida Department of Emergency Management (Grantee) for repairs of the Facilities.  FEMA held a Recovery Scoping Meeting (RSM) on November 20, 2017, with a deadline to inventory and report all damages by January 19, 2018.  A FEMA site inspector inspected the Facilities to assess the damage on March 1, 2018.  FEMA prepared Project Worksheet (PW) 616 on April 12, 2018 to address permanent repairs to the Facilities.[2]  The Applicant subsequently hired a consultant engineer, CDM Smith Inc. (Consultant) to perform an independent inspection of the Facilities.  On April 25, 2018, the Consultant submitted conceptual scopes of work (SOWs) for the Facilities.

The Applicant hired Gregori Construction Inc. (Contractor) on November 27, 2018 to repair one of the lift stations, lift station 31.  The Contractor completed the work and submitted pay requests totaling $73,400.00 to the Applicant in February 2019.  On April 16, 2019, FEMA notified the Applicant it had obligated $77,181.32 for the repairs at five of the Facilities.[3]

 

First Appeal

On May 16, 2019, the Applicant appealed the obligated amount as insufficient due to additional damages and significant cost differences its Consultant identified in April 2018 at lift stations 25, 29, and 31.  The Applicant sought $1,200,000.00 in PA funding.  The Applicant attached supporting documentation including its Consultant’s estimates for repairs at the three lift stations.  The Grantee forwarded the appeal on July 19, 2019, along with a letter of support.

On February 24, 2020, FEMA issued a Request for Information (RFI) seeking: (1) photographs identifying damages claimed; (2) lift station maintenance records/inspection reports and; (3) itemized cost estimates for each site and documentation showing improvements were disaster-related or triggered by codes and standards.  On March 20, 2020, the Applicant responded to the RFI and attached the Consultant’s technical memorandum dated August 8, 2018, detailing the work that needed to be performed, a contract with the Contractor to make the repairs to lift station 31, pay requests for the completed work on lift station 31, and photographs of that completed work.

The FEMA Region IV Regional Administrator denied the Applicant’s first appeal on September 9, 2020 because it determined the Applicant did not provide sufficient documentation to show the additional repairs it requested were required as a result of the disaster, and the proposed SOWs appeared to include ineligible improvements.  FEMA also found the Applicant did not demonstrate it amended its insurance claim after discovering additional damage, meaning the Applicant failed to pursue insurance proceeds as FEMA policy requires.

Second Appeal

In its second appeal dated November 9, 2020, the Applicant revises its funding request to $381,123.00 and submits revised damages estimates for lift stations 25 and 29 that it states eliminate any upgrades and include only line items associated with work to repair damages caused by the disaster.  The Applicant on second appeal reiterates that current FEMA obligations for those Facilities are inadequate to address the necessary repairs. The Applicant provides its Consultant’s revised estimates for repairing the Facilities: $191,069.00 for lift station 25 and $116,654.00 for lift station 29.[4]  For the completed repairs on lift station 31, the Applicant requests $73,400.00, for actual costs of the repairs the Contractor made to the station.[5]

 

Discussion

To be eligible for financial assistance, work must be required as the result of the emergency or major disaster event.[6]  FEMA does not provide funding for repair of damage caused by deterioration or deferred maintenance.[7]  Federal regulations also provide that an applicant has 60 days from the first substantive meeting, the Recovery Scoping Meeting (RSM), to identify and report all damage and submit all costs for disaster-related funding.[8]  When the applicant discovers, during the course of repair work, a need for a change in scope or a need for additional funding, the applicant should notify the grantee and FEMA as soon as possible.[9]  A change requires a written request from an applicant to the grantee, including detailed justification and documentation to support the eligibility of the requested revision.[10]  If the applicant begins work associated with a change before FEMA review and approval, it will jeopardize PA funding.[11]

In this case, the Applicant did not report additional damages to the lift stations or SOW or cost estimate discrepancies until its first appeal on May 16, 2019, more than one year after the deadline to report damages.[12]  During the review of the Applicant’s first appeal, FEMA requested, but the Applicant did not provide, documentation regarding the additional damages, such as predisaster pictures, inspection reports, logs or maintenance records or itemization of costs to substantiate the additional damages or distinguish that work was required as a result of the declared incident.  The Applicant provided only conceptual budget estimates for the repairs to lift stations 25 and 29, and did not provide itemized costs or specific descriptions of the damage to those stations.  Similarly, due to the Applicant’s lack of documentation to support its damages claim, the Applicant’s insurer did not pay a claim for lift station 25.[13] 

For lift station 31, the Contractor’s repairs and costs greatly exceeded the SOW and estimated costs the Applicant agreed to in the PW and indicated that some work may have been required as the result of deterioration or deferred maintenance.  For example, the Contractor repaired and extended lift station 31’s broken pipe, provided new access to the top of the wetwell, installed railing/fencing, installed riprap and geotextile fabric, and slope grading, which exceeded the original SOW.  In addition, the Applicant provided a technical memorandum from its Consultant showing significant deterioration issues existed at lift station 31 prior to the disaster.[14]  The Applicant did not request or provide justification and documentation to support a change to the SOW or funding.

The Applicant has not demonstrated that any additional work or costs of repairs to lift stations 25, 29 or 31 beyond the approved SOWs is required as a direct result of the declared incident.  Furthermore, the Applicant did not meet the 60-day deadline to report additional damages set forth in 44 C.F.R. § 206.202(d)(1)(ii), nor did it request a change in the SOWs for lift stations 25 and 29. As such, PA funding for the additional work and estimated costs at lift stations 25 and 29 is not eligible.  In addition, reimbursement for the completed work at lift station 31 to repair damages not included in the original SOW is ineligible.

 

Conclusion

The Applicant did not demonstrate that the work to repair additional damages was required as a result of the declared incident.  In addition, the Applicant did not identify the additional damages within the required timeframe or provide detailed justification and documentation to support the eligibility of the requested revision to the SOW or costs.  Therefore, this appeal is denied.

 

[1] The damaged Facilities included lift stations 15, 25, 29, 31, and 51 but the Applicant is appealing the obligated amounts for only lift stations 25 (South Street), 29 (Seminole), and 31 (Bayview).

[2] Project Worksheet 616, Version 0 [hereinafter PW 616], provides the following scope of work (SOW) for lift station 31: 1. Replace 480 square feet of tar and rock roof; 2. Replace one wooden door (3 ft x 7 ft x 2 inches);  3. Replace 48 cubic feet of concrete wall; 4. Replace 6,240 cubic feet of sand on Side 1 of the Building; and 5. Replace 4,800 cubic feet of sand on Side 2 of the Building.

[3] There was no Determination Memo issued for this appeal.  Instead, the Applicant appealed the amount FEMA obligated for Project Worksheet 616.  See Letter from Special Projects Coordinator/FEMA Liaison, City of Titusville to Dir., Fla. Div. of Emergency Mgmt. (May 16, 2019).

[4] The Applicant’s revised cost estimates for lift stations 25 and 29 at $191,069.00 and $116,654.00 greatly exceed the PW’s original obligations for those stations of $24,753.61 and $22,895.75.  The Applicant states its new estimates are conceptual only and it cannot currently provide more specific information.

[5] For lift station 31, the Contractor’s repairs and costs greatly exceeded the SOW and estimated costs the Applicant agreed to in the PW.  For example, the Contractor repaired and extended lift station 31’s broken pipe, provided new access to the top of the wetwell, installed railing/fencing, installed riprap and geotextile fabric, and slope grading, which exceeded the original SOW.  FEMA obligated $22,895.75 for repairs at lift station 31; the Contractor’s repairs cost $73,400.00, a more than 220 percent increase.

[6] Title 44 Code of Federal Regulations (C.F.R.) § 206.223(a) (2017).

[7] PAPPG, at 19.

[8] PAPPG, at 134.

[9] PAPPG, at 136-137.

[10] 44 C.F.R. § 206.204(e); PAPPG, at 137.

[11] PAPPG, at 137.

[12] See Grants Manager (GM) Portal, GM Project 21605, Damage Inventory Report [hereinafter Report] (The Report lists the following damages: Lift Station 25: Water damage to wall and paint, screen damage, severe erosion, damaged seawall; Lift Station 29: Damaged screen and severe erosion; Lift Station 31: Tar/Rock roof blown off, needs replacement, erosion around station). The RSM occurred on November 20, 2017; the deadline for reporting damages was January 19, 2018.

[13] See Letter from Senior Exam’r and Exec. Gen. Adjuster, Engle Martin & Assocs., to City of Titusville (Oct. 14, 2020)  (“With regards to Lift Station #25– Seminole – 6 South Street, Scheduled location #60, we were informed Lift Station #25 sustained damages and that photos and repair invoices would be provided. As no damage photos or repair invoices were presented to confirm the damages and costs, no payment was issued.”).  Lift station 25 is the only one of the three lift stations at issue in this appeal that was insured.

[14] Exhibit A to Technical Memorandum from Professional Engineers, CDM Smith, to Engineering Manager, City of Titusville (Aug. 8, 2018) (“This lift station was planned for an upgrade, but it was never started due to a dispute with the neighbor.  The neighbor owns part of the property that the pump station is on.  The pump station has significant structural issues.  The driveway is undermined and cannot be used.  A new walkway and stairs are needed to access the north side of the building and wetwell.  A stormwater pipe is broken under the building and causing an erosion issue.  There is significant undermining of the building foundation and the building slab is sagging.  The existing structure is old and in need of multiple structural and cosmetic repairs.  The electrical and pump equipment are old and in need of replacement. A generator is needed.”).

Last updated March 26, 2021