Mr. Miles E. Anderson
Bureau Chief, Mitigation
Florida Division of Emergency Management
255 Shumard Oak Boulevard
Tallahassee, Florida 32399-2100
RE: Second Appeal: Request for additional management cost funds for the Hazard Mitigation Grant Program (HMGP)
DR-1785, DR-1806, DR-1831 and DR-1840
State of Florida Division of Emergency Management (FDEM)
Dear Mr. Anderson:
I am writing in response to your second level HMGP appeal dated June 12, 2014. In your appeal the Florida Division of Emergency Management requests the Federal Emergency Management Agency (FEMA) to consider additional management costs for the referenced HMGP disasters.
The 4.89 percent HMGP lock-in rate for management costs is fixed by 44 C.F.R. § 207.5 (b)(4)(ii) and cannot be changed except through the periodic review process set forth in 44 C.F.R. § 207.10. Pursuant to 44 C.F.R. § 207.5(e), the FEMA Chief Financial Officer (CFO) has the authority to change the lock-in amount, to raise the $20,000,000 total management costs cap, or to extend the time before lock-in. The CFO’s authority in this regard does not include the authority to change the HMGP lock-in rate. FEMA is currently reviewing the Regulation in effect; however, until a new rule is published establishing a higher management cost rate for the HMGP, FEMA is required to follow the regulation in effect at this time.
On September 18, 2013, the FDEM requested an increase in management costs for four active disaster declarations (DRs-1785, 1806, 1831, and 1840). On January 6, 2014, FEMA Region IV informed FDEM that the request for increased management costs above the current 4.89 percent provided for in 44 C.F.R. § 207.5 (b)(4)(ii) could not be approved. FDEM submitted an appeal of this decision on January 22, 2014. In this appeal, FDEM explained the rationale and justification for the need of increased management costs under the aforementioned declarations. Further, the periodic review of management cost rates provided for in 44 C.F.R. § 207.10 indicates the inherent need for re-assessment to ensure funding adequacy for program implementation success.
FEMA responded to the first appeal on April 15th, 2014, again citing 44 C.F.R. § 207.5 (b)(4)(ii) as the reason the management costs could not be increased. FEMA also noted that the CFO’s authority does not include the ability to unilaterally change the lock-in rate.
On June 12, 2014, FDEM submitted a second level appeal. In this memorandum FDEM reiterated their previous arguments, adding the request for information on the details and methodology of the three-year review of management cost rates required by 42 U.S.C. 5165b(c) and 44 C.F.R. § 207.10(a).
The CFO conducted a review of the request for additional HMGP management costs as requested by FDEM in correspondence dated October 21, 2013. The applicable regulation 44 C.F.R. § 207(b)(4)(ii), sets the management cost rate for the HMGP for major disaster declarations at 4.89 percent. Under the current regulation, the management cost rate for the HMGP cannot be increased above 4.89 percent.
After review of the second level appeal documentation, FEMA Headquarters concurs with the determination by the Region and the request for additional management costs is denied. This determination is consistent with current regulations and policy. My determination is FEMA’s final decision on this matter pursuant to 44 C.F.R. § 206.440, Appeals.
Roy E. Wright
Deputy Associate Administrator for Mitigation
Federal Insurance and Mitigation Administration
cc: Andrew Velasquez III, Acting Administrator, FEMA Region IV
Jacky Bell, Chief, Hazard Mitigation Assistance Branch, FEMA Region IV