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Kekaha Landfill capital, operations, and post-closure monitoring costs
Appeal Brief
Appeal Letter
Appeal Analysis
PURPOSE: Respond to third appeal submitted by Kauai County for Kekaha Landfill capital, operations, and post-closure monitoring costs.
DISCUSSION: Hurricane Iniki generated large volumes of debris requiring disposal in the Kekaha Landfill. FEMA prepared DSRs 95656 and 15527 to cover debris disposal in both the Phase I and Phase II portions of the landfill. We also funded the closure of Phase I, lost landfill capacity, and Phase II design and construction (capital) costs. FEMA reanalyzed these DSRs in February 1996 and deobligated $18,575,366 from the original combined estimate of $49,896,931. The bulk of the deobligation resulted from the abandonment of the biofuel-processing project. The Subgrantee's second appeal requested 100% funding of Phase II capital costs and increased funding for lost landfill capacity. FEMA prorated capital costs and provided funding for capacity lost due to poor compaction, resulting in net additional funding of $125,834. In the third appeal the County requests an additional $10,451,391. We are recommending that an additional $1,653,471 of eligible costs be obligated.
RECOMMENDED ACTION: Sign the letter informing the GAR of the decision.
On September 11, 1992, Hurricane Iniki passed over the island of Kauai with sustained winds of 130 mph and gusts of up to 165 mph. On September 12, 1992, the President declared a major disaster in those areas affected by the hurricane. The President also raised the Federal share of disaster funds to 100% of eligible public assistance for costs exceeding $10 per capita of the State of Hawaii, or $2,837,000. Seventy-five percent of the initial $2,837,000 was funded by FEMA, with the remaining 25% funded by the State.
Hundreds of thousands of tons of debris were generated by the storm. Kauai County reacted quickly to establish a solid waste disposal system that consisted of five temporary hurricane debris receiving sites where debris was stored and sorted before recycling or disposal in the Kekaha Landfill. The County also contracted with Harding Lawson Associates (HLA) to prepare a debris management plan, which was presented in December 1992. On December 14, 1992, representatives from FEMA, the State of Hawaii, and Kauai County met with HLA to discuss long-term debris management. At this meeting, Kauai County presented their plan for continued management of temporary and permanent debris collection sites, recycling of debris, and replacement of lost landfill capacity. Damage survey report (DSR) 95656 was prepared to cover disposal of an estimated 400,000 tons of hurricane debris. This DSR covered lost landfill capacity due to hurricane debris, as well as the costs associated with the establishment of permanent debris collection sites. The unit price estimated for the debris was $100/ton, for a DSR total amount of $40,000,000. At the time of the meeting, it was understood that the debris generated by Hurricane Iniki would cause the Kekaha Landfill Phase I (Phase I) to close earlier than previously forecasted, and create a need for the design and construction of Kekaha Landfill Phase II (Phase II) to be fast-tracked.
DSR 15527 was written in July of 1993 as a supplement to DSR 95656. This DSR provided $9,265,014 to cover landfilling of 120,450 tons of hurricane debris based on an estimate for debris operation costs from HLA.
Review of DSR 95656 was completed on March 18, 1993, and the subgrantee was presented with a copy of the papped DSR on April 8, 1993. The subgrantee indicated that it was not until they received the papped DSR that they received any indication that funding from FEMA for the Phase II landfill would be prorated based on the percent of the landfill used for disaster debris. Subsequent meetings concerning the proration of the design and construction (capital) costs of Phase II, as well as other line item clarifications for DSR 95656, resulted in a January 24, 1996, meeting attended by the Associate Director for Response and Recovery, the Infrastructure Support Division Director, and the Mayor of Kauai County.
Following the January 24, 1996, meeting, Region IX, in conjunction with FEMA's national office, analyzed DSRs 95656 and 15527 to determine eligible costs. A February 23, 1996, letter from the Regional Director transmitted the following results of this analysis to the State Coordinating Officer:
Second Appeal
The subgrantee submitted an appeal on May 31, 1996. Because this was the second time that the eligibility of the scope of work was evaluated, FEMA considered this a second appeal. The subgrantee requested the following items:
FEMA also denied second appeal issues concerning ineligible costs for a public convenience center at Phase II and a cost analysis by Harding Lawson Associates for the management of the Phase II operation. The merits of these concerns were actually not considered in the appeal because submittal of these concerns did not meet the deadline for appeals of 60 days from notification of the deobligation as set forth in 44 CFR 206.206. The net result of the second appeal was an additional $125,834 of funding.
Third Appeal
A third appeal was submitted by letter dated April 9, 1997, to the State of Hawaii Civil Defense Office, and forwarded to the Regional Director through the Pacific Area Office on June 12, 1997. The subgrantee appealed DSR 94065 and requested the following items:
DISCUSSION
Deadline for eligible debris disposal
The subgrantee requests that FEMA extend the deadline for eligible debris disposal. They state that they are not pursuing the deadline issue as it relates to recovery of Phase II operating costs. Instead, the subgrantee requests that all Iniki-related debris deposited in the Phase II landfill be considered eligible for the purposes of prorating the Phase II design and construction costs. The subgrantee also states that they should not have to pay to provide new landfill capacity for storage of Iniki-related debris.
We maintain our position specified in the February 23, 1996, letter. The cost to dispose of private structures is the responsibility of the owner and is most likely covered by private insurance. FEMA determined that it was in the public interest and essential to the economic recovery of the community at large to support extensions of the deadline to December 31, 1995. However, FEMA no longer considers further extensions to be essential to the immediate recovery of the area.
FEMA's Share of Prorated Phase II Capital Costs
As stated in the February 23, 1996, letter, the Regional Director determined that FEMA can only fund those Phase II capital costs associated with disaster debris while the applicant is responsible for the costs associated with disposing of normal municipal waste. Our second appeal analysis determined a proration rate of 32.4% of these costs. The subgrantee adjusted this rate to 34.23% in their third appeal, indicating that the volume of wood debris disposal in DSR 50336 should be included in the total quantity of debris we calculated for Phase II during second appeal. The subgrantee also requests that the proration rate be further increased to 36.04%, indicating that they are now including data that was not available at the time they prepared the second appeal.
DSR 50336 was written to dispose of 11,000 tons of wood debris in the Phase II landfill. Since this quantity of debris was not factored into our proration determination during second appeal, we agree that the total quantity of debris (i.e., 228,570 tons) should be increased to 239,570 tons for determining the proration rate. This results in a rate of 34.0%. We do not agree with the subgrantee's revised proration rate of 34.23% because it was determined by using a quantity that does not agree with the quantity reported in DSR 50336. The subgrantee cited 12,717 tons of wood debris landfilled per DSR 50336. This number does not agree with the eligible quantity provided in DSR 50336 and the subgrantee has not provided documentation to support this quantity.
The subgrantee has also requested that the proration rate be further increased based on including an additional 12,824 tons of "future debris" to the total quantity of debris disposed of in Phase II. Their appeal states that "none of the major resorts previously identified as unrepaired has been reconstructed." As mentioned earlier, this debris is not eligible since it does not meet the deadline for debris disposal. Furthermore, we maintain the position stated in our February 23, 1996, letter to the State Coordinating Officer that the cost to dispose of private structures is the responsibility of the owner and is most likely covered by private insurance.
In summary, the proration rate should be adjusted to 34.0% based on a total of 239,570 tons of debris determined eligible, and a total Phase II landfill capacity of 705,000 tons.
The State has also requested FEMA to clarify whether we intend to close the landfill DSRs based on a final debris estimate determined in the third appeal decision, or on actual debris quantity calculated when Phase II reaches capacity on or about April 1, 1998. The final debris estimate will be based on the third appeal decision, and as specified in our February 23, 1996, letter, this estimate is determined from the quantity disposed of through December 31, 1995 (plus any previously approved tipping fee waivers).
Cost Analysis - Public v. Private Operation
The subgrantee appeals the ineligibility of a cost analysis associated with public versus private management of Phase II operations. The subgrantee contends that the cost analysis directly impacted the engineering and design of Phase II and would not have been required if not for the disaster. A review of the subgrantee's files indicates that these costs were already prorated and included in Phase II costs previously obligated. Additional funding for the cost analysis would result in a duplication of funding and is, therefore, ineligible.
Monitor Accelerated Construction
The subgrantee indicates that FEMA provided 100% funding for Amendment No. 4 to Contract 4071A in DSR 94065. Through Contract 4071A, HLA provided construction management services for the Phase II landfill. The scope of services described in Amendment No. 4 includes acceleration of construction, revisions to State Department of Transportation Highway Modifications, preparation of an environmental assessment for the nonpotable water system and extension of the construction contract. During our second appeal decision, the subgrantee believes that FEMA inadvertently reversed this determination and made this item subject to proration. The subgrantee argues that since this item was solely necessary due to the emergency situation precipitated by Iniki, it should continue to be funded at 100 %. We agree that this item should not have been prorated and will provide the balance of funding to 100%. This amounts to an additional $36,976.
Acceleration of Work on Stage 1
This issue involves the same argument as the immediately preceding issue. This line item for $s w were prorated during second appeal consistent with FEMA's position that funding may only be provided for costs associated with disaster debris and based on updated information from the County concerning the increased capacity of Phase II. Some Phase II capital costs were inadvertently included in the proration process despite being previously found 100% eligible. We agree that this item should not have been prorated and will provide the balance of funding to 100%. This amounts to an additional $321,988.
Phase II DROP Site/Public Convenience Center
The subgrantee requests that funding for the Public Convenience Center be made eligible. The subgrantee contends that these costs are directly related to the disaster because the public convenience center handled disaster-debris and was designed to be an integral part of the FEMA-funded debris recycling center. A review of the subgrantee's files indicates that these costs were already considered in construction costs as part of Contract 4191. Additional funding for the public convenience center would result in a duplication of funding and is, therefore, ineligible.
Temporary Scale Facility
The subgrantee requests funding for a temporary scale at a cost of $173,854, indicating that it was necessitated solely as a result of the disaster. During our second appeal analysis, we determined that this scale was one of the permanent scales for the Phase II landfill. As such, the cost for this scale was prorated. The subgrantee argues that FEMA confused the nature of these scales, and requests full funding.
Based on new information we received, this scale was a temporary scale that was set-up at the entrance of the landfill. As indicated in Change Order #70, the scale was rented for a period of nine months for the sole purpose of weighing hurricane-related debris. We agree with the subgrantee that the scale was for temporary use, and the full $173,854 should be funded. This results in an increase of $117,525 of funding.
Debris Measurements
The subgrantee states that during a review of landfill costs in preparation for the third appeal, "the final debris measurement task was discovered in Amendment #2 to Contract 4071A." The purpose of the debris measurement task was to estimate the amount of debris generated by Hurricane Iniki. This estimate would provide a quantity of debris that would be used in determining the amount to authorize for reimbursing previous and planned disposal activities and for accomplishing planned diversion activities. The subgrantee notes that similar costs were previously found eligible for 100% funding in DSRs 94063 and 95035 because "debris measurements were essential to FEMA's evaluation of debris management proposals." The subgrantee requests consistent funding for the full $87,065 incurred during debris measurement. FEMA agrees with the subgrantee, and the costs for the final disaster-related debris measurement should be funded at 100%. This results in an additional $57,263 in eligible costs.
Phase I Displaced MSW Increased Costs: Capital Component
During the third appeal, the subgrantee updated the second appeal calculations for the capital component of displaced MSW. This recalculation results in a $29,710 decrease in costs from $5,155,885 determined eligible by FEMA in the second appeal to $5,126,175 proposed by the subgrantee in this appeal. The reduction resulted from lower total Phase II capital costs used in the calculation. FEMA agrees with this recalculation, and the capital component cost will be reduced by $29,710.
Phase I Displaced MSW Increased Costs: Operations Component
In the second appeal the applicant received $711,011 for Phase I operating costs. This funding represented the difference between the calculated Phase II operations cost ($3,211,011) and the increased operating cost associated with keeping Phase I open beyond the October 9, 1993, application date of RCRA Subtitle D. The subgrantee submitted an estimated operating cost of $2.5 million. This estimate acknowledged that keeping Phase I open past October 9, 1993, would have resulted in post-closure groundwater monitoring costs of this amount. In the third appeal the subgrantee submits that the $2.5 million is an estimated cost that could potentially be incurred if groundwater contamination is detected beneath the active Phase I landfill after October 9, 1993. The subgrantee opines that because these costs may never have been realized, $2.5 million should not be deducted from the eligible funding. The subgrantee requested that if the $2.5 million were not found eligible, FEMA prorate funding between hurricane and non-hurricane capacity of the Phase I landfill and provide $1.49 million.
A review of the subgrantee's operating costs indicates that the subgrantee did not budget funds in the amount of $2.5 million for post-closure groundwater monitoring. As this groundwater monitoring cost was never realized by the subgrantee this potential saving should not be deducted from the Phase II operations cost. Therefore, the $2.5 million deducted from the capital component of displaced waste during second appeal will be provided to the subgrantee as a result of this appeal.
Lost Landfill Capacity
In this appeal, the subgrantee raises the issue that they lost 482,652 tons of available Phase I landfill space that was originally planned for MSW (i.e., non-disaster related debris), and now requests funding to purchase replacement space for this amount of MSW at another location. They argue that, in the future, 482,652 tons of MSW will need a disposal location once the Kekaha Landfill is closed.
In this case, the subgrantee is requesting additional space to dispose of 482,652 tons of non-disaster related MSW. FEMA has already provided funding for all of the disaster-related debris that was disposed of in Phase I and II landfills. Since the subgrantee is requesting funding for costs associated with the construction of a landfill that would not receive disaster debris, we cannot provide any Federal assistance for this landfill.
Post-Closure Monitoring for Phase II Debris
FEMA previously approved $1,661,014 for Phase II post-closure monitoring and maintenance, based on 227,225 tons of debris at $7.31 per ton. The subgrantee estimated this unit cost based on proposed EPA regulations at the time of project approval. However, the EPA regulations originally proposed were never adopted, and the subgrantee has now submitted a revised proposal that "will permit the County to budget post-closure funds annually as needed." The revised proposal increases the request for Phase II post-closure monitoring by $398,430.
It is not customary for FEMA to fund speculative work that is based on proposed regulations. At the time of project approval, we understood that the regulations requiring the $1.6 million for post-closure monitoring costs had been adopted. Upon review we have determined that, because the EPA regulations were not enforced or uniformly applied or even adopted at the time of the disaster, FEMA inappropriately obligated $1.6 million for post-closure monitoring costs. Therefore, the Regional Director will deobligate funding in this amount.
Post-Closure Monitoring for Displaced Phase I MSW
The subgrantee requests that FEMA provide funding for 30 years of post-closure monitoring and maintenance of 228,541 tons of non-disaster MSW. The subgrantee believes that this work should be eligible because this MSW was displaced from the Phase I landfill by hurricane-related debris. The displaced MSW will require disposal at another facility, and this disposal will eventually need post-closce o of this non-disaster debris. To be eligible for FEMA funding costs must be incurred as a direct result of the disaster. FEMA has already provided funding for costs associated with hurricane-related debris. As this request pertains to non-disaster debris monitoring and maintenance, it is not eligible for FEMA funding.
CONCLUSION
In summary, the third appeal analysis results in the following decisions:
Appeal Brief
| Disaster | FEMA-0961-DR |
| Applicant | Kauai County Landfill |
| Appeal Type | Third |
| PA ID# | 007-00000 |
| PW ID# | 94065 |
| Date Signed | 1998-03-17T05:00:00 |
DISCUSSION: Hurricane Iniki generated large volumes of debris requiring disposal in the Kekaha Landfill. FEMA prepared DSRs 95656 and 15527 to cover debris disposal in both the Phase I and Phase II portions of the landfill. We also funded the closure of Phase I, lost landfill capacity, and Phase II design and construction (capital) costs. FEMA reanalyzed these DSRs in February 1996 and deobligated $18,575,366 from the original combined estimate of $49,896,931. The bulk of the deobligation resulted from the abandonment of the biofuel-processing project. The Subgrantee's second appeal requested 100% funding of Phase II capital costs and increased funding for lost landfill capacity. FEMA prorated capital costs and provided funding for capacity lost due to poor compaction, resulting in net additional funding of $125,834. In the third appeal the County requests an additional $10,451,391. We are recommending that an additional $1,653,471 of eligible costs be obligated.
RECOMMENDED ACTION: Sign the letter informing the GAR of the decision.
Appeal Letter
March 17, 1998
Mr. Edward V. Richardson
Governor's Authorized Representative
Director of Civil Defense
3949 Diamond Head Road
Honolulu, HI 96816-4495
Dear Mr. Richardson:
This letter is in response to your June 12, 1997, submittal of Kauai County's third appeal of Damage Survey Report (DSR) 94065 under FEMA-0961-DR-HI. This DSR deobligated $2,184,858 from Phase II design and construction costs at the Kekaha Landfill.
The subgrantee raised several issues in the third appeal, primarily associated with the proration rate, lost landfill space, and post-closure monitoring. They request that the amount of funding provided in DSR 94065 be increased by $10,451,391. The subgrantee also requests that the December 31, 1995, deadline for depositing eligible hurricane-related debris be extended until the Phase II portion of the landfill closes.
Our response is fully explained in the enclosed Appeal Analysis. In summary, FEMA's position remains that the deadline for disaster debris disposal is December 31, 1995 (plus any tipping fee waivers previously determined eligible), and this date should be used when determining the final debris estimate for calculating the proration rate. We determined that FEMA inappropriately provided funding for costs associated with Phase II post-closure monitoring and maintenance based on revised proposed Environmental Protection Agency (EPA) regulations. It is not customary for FEMA to fund speculative work that is based on proposed regulations. At the time of project approval, we understood that the regulations requiring the $1.6 million for post-closure monitoring costs had been adopted.
We also determined that additional funding for lost landfill space and construction of the proposed replacement landfill is not eligible. The replacement landfill would not receive disaster-related debris. In order for the work to be eligible for FEMA funding, the work must be related to the declared disaster. We also found that costs associated with the Phase I Public Convenience Center and the analysis of Phase II operation management by Harding Lawson Associates were already prorated and included in funds previously obligated. Funding for post-closure monitoring costs for displaced Phase I municipal solid waste were also denied as explained in the enclosed third appeal analysis.
In regards to the remaining appeal issues, we found $707,222 of Phase II capital costs for debris and $57,263 for debris measurement eligible. We determined that a reduction of $2.5 million in eligible costs for Phase I operating costs was inappropriate. Therefore, that amount is reinstated. We also determined that $1.6 million was inappropriately approved for Phase II post-closure monitoring costs. Therefore, eligible costs are reduced by that amount. The net result of all the third appeal additions and subtractions is an additional $1,653,471 in eligible costs. By copy of this letter, I am requesting the Regional Director to obligate funding of this amount.
Please inform the subgrantee of my determination, which constitutes the final level of appeal in accordance with 44 CFR 206.206(e).
Sincerely,
/S/
James L. Witt
Director
Enclosure
cc: Acting Regional Director
FEMA Region IX
Mr. Edward V. Richardson
Governor's Authorized Representative
Director of Civil Defense
3949 Diamond Head Road
Honolulu, HI 96816-4495
Dear Mr. Richardson:
This letter is in response to your June 12, 1997, submittal of Kauai County's third appeal of Damage Survey Report (DSR) 94065 under FEMA-0961-DR-HI. This DSR deobligated $2,184,858 from Phase II design and construction costs at the Kekaha Landfill.
The subgrantee raised several issues in the third appeal, primarily associated with the proration rate, lost landfill space, and post-closure monitoring. They request that the amount of funding provided in DSR 94065 be increased by $10,451,391. The subgrantee also requests that the December 31, 1995, deadline for depositing eligible hurricane-related debris be extended until the Phase II portion of the landfill closes.
Our response is fully explained in the enclosed Appeal Analysis. In summary, FEMA's position remains that the deadline for disaster debris disposal is December 31, 1995 (plus any tipping fee waivers previously determined eligible), and this date should be used when determining the final debris estimate for calculating the proration rate. We determined that FEMA inappropriately provided funding for costs associated with Phase II post-closure monitoring and maintenance based on revised proposed Environmental Protection Agency (EPA) regulations. It is not customary for FEMA to fund speculative work that is based on proposed regulations. At the time of project approval, we understood that the regulations requiring the $1.6 million for post-closure monitoring costs had been adopted.
We also determined that additional funding for lost landfill space and construction of the proposed replacement landfill is not eligible. The replacement landfill would not receive disaster-related debris. In order for the work to be eligible for FEMA funding, the work must be related to the declared disaster. We also found that costs associated with the Phase I Public Convenience Center and the analysis of Phase II operation management by Harding Lawson Associates were already prorated and included in funds previously obligated. Funding for post-closure monitoring costs for displaced Phase I municipal solid waste were also denied as explained in the enclosed third appeal analysis.
In regards to the remaining appeal issues, we found $707,222 of Phase II capital costs for debris and $57,263 for debris measurement eligible. We determined that a reduction of $2.5 million in eligible costs for Phase I operating costs was inappropriate. Therefore, that amount is reinstated. We also determined that $1.6 million was inappropriately approved for Phase II post-closure monitoring costs. Therefore, eligible costs are reduced by that amount. The net result of all the third appeal additions and subtractions is an additional $1,653,471 in eligible costs. By copy of this letter, I am requesting the Regional Director to obligate funding of this amount.
Please inform the subgrantee of my determination, which constitutes the final level of appeal in accordance with 44 CFR 206.206(e).
Sincerely,
/S/
James L. Witt
Director
Enclosure
cc: Acting Regional Director
FEMA Region IX
Appeal Analysis
BACKGROUNDOn September 11, 1992, Hurricane Iniki passed over the island of Kauai with sustained winds of 130 mph and gusts of up to 165 mph. On September 12, 1992, the President declared a major disaster in those areas affected by the hurricane. The President also raised the Federal share of disaster funds to 100% of eligible public assistance for costs exceeding $10 per capita of the State of Hawaii, or $2,837,000. Seventy-five percent of the initial $2,837,000 was funded by FEMA, with the remaining 25% funded by the State.
Hundreds of thousands of tons of debris were generated by the storm. Kauai County reacted quickly to establish a solid waste disposal system that consisted of five temporary hurricane debris receiving sites where debris was stored and sorted before recycling or disposal in the Kekaha Landfill. The County also contracted with Harding Lawson Associates (HLA) to prepare a debris management plan, which was presented in December 1992. On December 14, 1992, representatives from FEMA, the State of Hawaii, and Kauai County met with HLA to discuss long-term debris management. At this meeting, Kauai County presented their plan for continued management of temporary and permanent debris collection sites, recycling of debris, and replacement of lost landfill capacity. Damage survey report (DSR) 95656 was prepared to cover disposal of an estimated 400,000 tons of hurricane debris. This DSR covered lost landfill capacity due to hurricane debris, as well as the costs associated with the establishment of permanent debris collection sites. The unit price estimated for the debris was $100/ton, for a DSR total amount of $40,000,000. At the time of the meeting, it was understood that the debris generated by Hurricane Iniki would cause the Kekaha Landfill Phase I (Phase I) to close earlier than previously forecasted, and create a need for the design and construction of Kekaha Landfill Phase II (Phase II) to be fast-tracked.
DSR 15527 was written in July of 1993 as a supplement to DSR 95656. This DSR provided $9,265,014 to cover landfilling of 120,450 tons of hurricane debris based on an estimate for debris operation costs from HLA.
Review of DSR 95656 was completed on March 18, 1993, and the subgrantee was presented with a copy of the papped DSR on April 8, 1993. The subgrantee indicated that it was not until they received the papped DSR that they received any indication that funding from FEMA for the Phase II landfill would be prorated based on the percent of the landfill used for disaster debris. Subsequent meetings concerning the proration of the design and construction (capital) costs of Phase II, as well as other line item clarifications for DSR 95656, resulted in a January 24, 1996, meeting attended by the Associate Director for Response and Recovery, the Infrastructure Support Division Director, and the Mayor of Kauai County.
Following the January 24, 1996, meeting, Region IX, in conjunction with FEMA's national office, analyzed DSRs 95656 and 15527 to determine eligible costs. A February 23, 1996, letter from the Regional Director transmitted the following results of this analysis to the State Coordinating Officer:
- Disposal costs agreed upon by FEMA and the subgrantee were reduced, with the bulk of the deobligation attributed to the abandonment of the biofuel processing project. DSR 94063 deobligated $12,375,295 from debris disposal activities and DSR 94064 deobligated $266,386 from greenwaste processing activities;
- Since FEMA can only fund those landfill costs associated with disaster debris, the design and construction costs associated with Phase II were prorated based on percent of total capacity taken by disaster debris. DSR 94065 deobligated $2,184,858 from Phase II design and construction;
- FEMA funded operational costs associated with disaster debris, while disposal of normal municipal waste was the responsibility of the subgrantee. DSR 94066 deobligated $3,748,827 from Phase II operations;
- FEMA provided funding to account for the lost landfill capacity used by disaster debris in Phase I landfilling. DSR 94055 obligated $631,917 to account for original estimates.
Second Appeal
The subgrantee submitted an appeal on May 31, 1996. Because this was the second time that the eligibility of the scope of work was evaluated, FEMA considered this a second appeal. The subgrantee requested the following items:
- The time frame for depositing eligible hurricane-related debris should be extended until Phase II closes, which will be approximately July 31, 1997;
- The eligible funding for lost landfill capacity should be increased due to increases in the amount of debris claimed and an increased cost of disposal;
- The design and construction costs of Phase II should be funded 100% by FEMA; and
- The eligible Phase II operational costs should consider actual costs to the subgrantee and should include scale house and recycling center operation costs.
- The deadline for disaster debris disposal remained unchanged at December 31, 1995. However, an additional 1,073 tons of debris deposited in the Phase II portion of the landfill were considered eligible because fee waivers were granted before December 31, 1995.
- Lost landfill capacity in Phase I Landfill was modified to include capacity lost due to poor compaction. The unit capital cost for lost landfill capacity was decreased based on Phase II capacity information submitted from the subgrantee during the appeal. The increased operations cost associated with Phase II was included. Funding for the capital and operational costs for the lost landfill capacity was calculated at $5,866,896, representing additional funding in the amount of $2,294,916.
- FEMA maintained that only Phase II costs associated with disaster debris are eligible for Federal assistance, while the applicant is responsible for the costs associated with disposing of normal municipal waste. Although the amount of eligible Phase II disaster debris increased, the percentage of Phase II taken up by disaster debris was reduced because the total capacity of Phase II was reported by the applicant to be greater than initially reported. As a result, this decreased the percentage of disaster-related debris that was disposed of in Phase II from 44% (February 23, 1996, memo) to 32.4% (second appeal). This resulted in FEMA funding for Phase II capital costs in the amount of $5,394,015, representing a decrease in funding of $2,225,050.
- The amount of eligible Phase II operation costs was increased based on updated information from the subgrantee. The eligible amount was revised to $5,572,155, representing additional funding of $55,968.
FEMA also denied second appeal issues concerning ineligible costs for a public convenience center at Phase II and a cost analysis by Harding Lawson Associates for the management of the Phase II operation. The merits of these concerns were actually not considered in the appeal because submittal of these concerns did not meet the deadline for appeals of 60 days from notification of the deobligation as set forth in 44 CFR 206.206. The net result of the second appeal was an additional $125,834 of funding.
Third Appeal
A third appeal was submitted by letter dated April 9, 1997, to the State of Hawaii Civil Defense Office, and forwarded to the Regional Director through the Pacific Area Office on June 12, 1997. The subgrantee appealed DSR 94065 and requested the following items:
- The DecendPhase II closes. This would generate an additional volume of debris that would be factored into the computation of the prorated Phase II design and construction costs.
- FEMA's share of prorated Phase II capital costs should be increased from 32.4% to 36.04%. The subgrantee requests this increase based on their proposal that (i) certain Phase II capital costs be fully funded by FEMA, and (ii) both the cost analysis of public versus private operation of Phase II and the construction of the Phase II public convenience center be made eligible. The subgrantee requests an additional $854,381.
- The final debris quantity estimate should be paid at 100%, rather than being included and prorated with design costs. This amounts to an additional $57,263.
- The subgrantee has updated the second appeal calculations for the Phase I capital component of displaced municipal solid waste (MSW). This results in a $29,710 reduction in these costs.
- The subgrantee states that the $2.5 million for Phase I groundwater monitoring should not be deducted from the amount FEMA awarded for Phase I operating costs because these costs were never initially included in their overall operating budget.
- The subgrantee states that they lost 482,652 tons of available landfill space that was originally planned for non-disaster-related debris, and now requests $2,655,263 to purchase replacement space for this amount of non-disaster related MSW at another location.
- The cost for Phase II post-closure monitoring should be increased by $398,430 in order to meet the conditions of a revised post-closure monitoring proposal since the previously proposed EPA regulations were never adopted.
- Post-closure monitoring and maintenance costs for Phase I displaced MSW should be eligible. The subgrantee requests an additional $1,033,005.
DISCUSSION
Deadline for eligible debris disposal
The subgrantee requests that FEMA extend the deadline for eligible debris disposal. They state that they are not pursuing the deadline issue as it relates to recovery of Phase II operating costs. Instead, the subgrantee requests that all Iniki-related debris deposited in the Phase II landfill be considered eligible for the purposes of prorating the Phase II design and construction costs. The subgrantee also states that they should not have to pay to provide new landfill capacity for storage of Iniki-related debris.
We maintain our position specified in the February 23, 1996, letter. The cost to dispose of private structures is the responsibility of the owner and is most likely covered by private insurance. FEMA determined that it was in the public interest and essential to the economic recovery of the community at large to support extensions of the deadline to December 31, 1995. However, FEMA no longer considers further extensions to be essential to the immediate recovery of the area.
FEMA's Share of Prorated Phase II Capital Costs
As stated in the February 23, 1996, letter, the Regional Director determined that FEMA can only fund those Phase II capital costs associated with disaster debris while the applicant is responsible for the costs associated with disposing of normal municipal waste. Our second appeal analysis determined a proration rate of 32.4% of these costs. The subgrantee adjusted this rate to 34.23% in their third appeal, indicating that the volume of wood debris disposal in DSR 50336 should be included in the total quantity of debris we calculated for Phase II during second appeal. The subgrantee also requests that the proration rate be further increased to 36.04%, indicating that they are now including data that was not available at the time they prepared the second appeal.
DSR 50336 was written to dispose of 11,000 tons of wood debris in the Phase II landfill. Since this quantity of debris was not factored into our proration determination during second appeal, we agree that the total quantity of debris (i.e., 228,570 tons) should be increased to 239,570 tons for determining the proration rate. This results in a rate of 34.0%. We do not agree with the subgrantee's revised proration rate of 34.23% because it was determined by using a quantity that does not agree with the quantity reported in DSR 50336. The subgrantee cited 12,717 tons of wood debris landfilled per DSR 50336. This number does not agree with the eligible quantity provided in DSR 50336 and the subgrantee has not provided documentation to support this quantity.
The subgrantee has also requested that the proration rate be further increased based on including an additional 12,824 tons of "future debris" to the total quantity of debris disposed of in Phase II. Their appeal states that "none of the major resorts previously identified as unrepaired has been reconstructed." As mentioned earlier, this debris is not eligible since it does not meet the deadline for debris disposal. Furthermore, we maintain the position stated in our February 23, 1996, letter to the State Coordinating Officer that the cost to dispose of private structures is the responsibility of the owner and is most likely covered by private insurance.
In summary, the proration rate should be adjusted to 34.0% based on a total of 239,570 tons of debris determined eligible, and a total Phase II landfill capacity of 705,000 tons.
The State has also requested FEMA to clarify whether we intend to close the landfill DSRs based on a final debris estimate determined in the third appeal decision, or on actual debris quantity calculated when Phase II reaches capacity on or about April 1, 1998. The final debris estimate will be based on the third appeal decision, and as specified in our February 23, 1996, letter, this estimate is determined from the quantity disposed of through December 31, 1995 (plus any previously approved tipping fee waivers).
Cost Analysis - Public v. Private Operation
The subgrantee appeals the ineligibility of a cost analysis associated with public versus private management of Phase II operations. The subgrantee contends that the cost analysis directly impacted the engineering and design of Phase II and would not have been required if not for the disaster. A review of the subgrantee's files indicates that these costs were already prorated and included in Phase II costs previously obligated. Additional funding for the cost analysis would result in a duplication of funding and is, therefore, ineligible.
Monitor Accelerated Construction
The subgrantee indicates that FEMA provided 100% funding for Amendment No. 4 to Contract 4071A in DSR 94065. Through Contract 4071A, HLA provided construction management services for the Phase II landfill. The scope of services described in Amendment No. 4 includes acceleration of construction, revisions to State Department of Transportation Highway Modifications, preparation of an environmental assessment for the nonpotable water system and extension of the construction contract. During our second appeal decision, the subgrantee believes that FEMA inadvertently reversed this determination and made this item subject to proration. The subgrantee argues that since this item was solely necessary due to the emergency situation precipitated by Iniki, it should continue to be funded at 100 %. We agree that this item should not have been prorated and will provide the balance of funding to 100%. This amounts to an additional $36,976.
Acceleration of Work on Stage 1
This issue involves the same argument as the immediately preceding issue. This line item for $s w were prorated during second appeal consistent with FEMA's position that funding may only be provided for costs associated with disaster debris and based on updated information from the County concerning the increased capacity of Phase II. Some Phase II capital costs were inadvertently included in the proration process despite being previously found 100% eligible. We agree that this item should not have been prorated and will provide the balance of funding to 100%. This amounts to an additional $321,988.
Phase II DROP Site/Public Convenience Center
The subgrantee requests that funding for the Public Convenience Center be made eligible. The subgrantee contends that these costs are directly related to the disaster because the public convenience center handled disaster-debris and was designed to be an integral part of the FEMA-funded debris recycling center. A review of the subgrantee's files indicates that these costs were already considered in construction costs as part of Contract 4191. Additional funding for the public convenience center would result in a duplication of funding and is, therefore, ineligible.
Temporary Scale Facility
The subgrantee requests funding for a temporary scale at a cost of $173,854, indicating that it was necessitated solely as a result of the disaster. During our second appeal analysis, we determined that this scale was one of the permanent scales for the Phase II landfill. As such, the cost for this scale was prorated. The subgrantee argues that FEMA confused the nature of these scales, and requests full funding.
Based on new information we received, this scale was a temporary scale that was set-up at the entrance of the landfill. As indicated in Change Order #70, the scale was rented for a period of nine months for the sole purpose of weighing hurricane-related debris. We agree with the subgrantee that the scale was for temporary use, and the full $173,854 should be funded. This results in an increase of $117,525 of funding.
Debris Measurements
The subgrantee states that during a review of landfill costs in preparation for the third appeal, "the final debris measurement task was discovered in Amendment #2 to Contract 4071A." The purpose of the debris measurement task was to estimate the amount of debris generated by Hurricane Iniki. This estimate would provide a quantity of debris that would be used in determining the amount to authorize for reimbursing previous and planned disposal activities and for accomplishing planned diversion activities. The subgrantee notes that similar costs were previously found eligible for 100% funding in DSRs 94063 and 95035 because "debris measurements were essential to FEMA's evaluation of debris management proposals." The subgrantee requests consistent funding for the full $87,065 incurred during debris measurement. FEMA agrees with the subgrantee, and the costs for the final disaster-related debris measurement should be funded at 100%. This results in an additional $57,263 in eligible costs.
Phase I Displaced MSW Increased Costs: Capital Component
During the third appeal, the subgrantee updated the second appeal calculations for the capital component of displaced MSW. This recalculation results in a $29,710 decrease in costs from $5,155,885 determined eligible by FEMA in the second appeal to $5,126,175 proposed by the subgrantee in this appeal. The reduction resulted from lower total Phase II capital costs used in the calculation. FEMA agrees with this recalculation, and the capital component cost will be reduced by $29,710.
Phase I Displaced MSW Increased Costs: Operations Component
In the second appeal the applicant received $711,011 for Phase I operating costs. This funding represented the difference between the calculated Phase II operations cost ($3,211,011) and the increased operating cost associated with keeping Phase I open beyond the October 9, 1993, application date of RCRA Subtitle D. The subgrantee submitted an estimated operating cost of $2.5 million. This estimate acknowledged that keeping Phase I open past October 9, 1993, would have resulted in post-closure groundwater monitoring costs of this amount. In the third appeal the subgrantee submits that the $2.5 million is an estimated cost that could potentially be incurred if groundwater contamination is detected beneath the active Phase I landfill after October 9, 1993. The subgrantee opines that because these costs may never have been realized, $2.5 million should not be deducted from the eligible funding. The subgrantee requested that if the $2.5 million were not found eligible, FEMA prorate funding between hurricane and non-hurricane capacity of the Phase I landfill and provide $1.49 million.
A review of the subgrantee's operating costs indicates that the subgrantee did not budget funds in the amount of $2.5 million for post-closure groundwater monitoring. As this groundwater monitoring cost was never realized by the subgrantee this potential saving should not be deducted from the Phase II operations cost. Therefore, the $2.5 million deducted from the capital component of displaced waste during second appeal will be provided to the subgrantee as a result of this appeal.
Lost Landfill Capacity
In this appeal, the subgrantee raises the issue that they lost 482,652 tons of available Phase I landfill space that was originally planned for MSW (i.e., non-disaster related debris), and now requests funding to purchase replacement space for this amount of MSW at another location. They argue that, in the future, 482,652 tons of MSW will need a disposal location once the Kekaha Landfill is closed.
In this case, the subgrantee is requesting additional space to dispose of 482,652 tons of non-disaster related MSW. FEMA has already provided funding for all of the disaster-related debris that was disposed of in Phase I and II landfills. Since the subgrantee is requesting funding for costs associated with the construction of a landfill that would not receive disaster debris, we cannot provide any Federal assistance for this landfill.
Post-Closure Monitoring for Phase II Debris
FEMA previously approved $1,661,014 for Phase II post-closure monitoring and maintenance, based on 227,225 tons of debris at $7.31 per ton. The subgrantee estimated this unit cost based on proposed EPA regulations at the time of project approval. However, the EPA regulations originally proposed were never adopted, and the subgrantee has now submitted a revised proposal that "will permit the County to budget post-closure funds annually as needed." The revised proposal increases the request for Phase II post-closure monitoring by $398,430.
It is not customary for FEMA to fund speculative work that is based on proposed regulations. At the time of project approval, we understood that the regulations requiring the $1.6 million for post-closure monitoring costs had been adopted. Upon review we have determined that, because the EPA regulations were not enforced or uniformly applied or even adopted at the time of the disaster, FEMA inappropriately obligated $1.6 million for post-closure monitoring costs. Therefore, the Regional Director will deobligate funding in this amount.
Post-Closure Monitoring for Displaced Phase I MSW
The subgrantee requests that FEMA provide funding for 30 years of post-closure monitoring and maintenance of 228,541 tons of non-disaster MSW. The subgrantee believes that this work should be eligible because this MSW was displaced from the Phase I landfill by hurricane-related debris. The displaced MSW will require disposal at another facility, and this disposal will eventually need post-closce o of this non-disaster debris. To be eligible for FEMA funding costs must be incurred as a direct result of the disaster. FEMA has already provided funding for costs associated with hurricane-related debris. As this request pertains to non-disaster debris monitoring and maintenance, it is not eligible for FEMA funding.
CONCLUSION
In summary, the third appeal analysis results in the following decisions:
- The deadline for disaster debris disposal is December 31, 1995 (plus any tipping fee waivers previously determined eligible), and this date is used when determining the final debris estimate for calculating the proration rate.
- 11,000 tons of wood debris should be added to the total quantity of Phase II landfill debris used to calculate the proration rate. This revised total quantity should be 239,570 tons. Accordingly, the proration rate should be revised from 32.4% to 34.0%. Based on a total capital cost of $16,630,759, the funding for capital costs of Phase II should be $5,654,458, representing an additional $260,443 of funding. Debris deposited in Phase II after December 31, 1995, is not eligible, nor should it be factored into the recalculation of the proration rate.
- We will not provide additional funding for the cost analysis associated with public versus private management of Phase II operations or the Phase II DROP Site/ Public Convenience Center as these costs were already prorated and accounted for in funding previously provided.
- The costs associated with accelerated construction of the Phase II landfill will be funded at 100%. This results in an additional $358,964 in eligible costs.
- The costs for the temporary scale facility will be funded at 100%. This results in an additional $117,525 in eligible costs.
- The cost for final debris measurements incurred under Contract 4071A, Amendment #2, Task 7.4 will be funded at 100%. This results in an additional $57,263 in eligible costs.
- Based on updated information provided to the subgrantee the total Phase II capital costs should be reduced by $29,710.
- Savings in post-closure groundwater monitoring realized by the subgrantee from closing Phase I before the effective date of RCRA subtitle D that were deducted from the capital component of displaced MSW are found eligible. This results in an additional $2.5 million in eligible costs.
- Costs for post-closure monitoring for Phase II debris is not eligible because the proposed EPA regulation was not enforced or uniformly applied at the time of the disaster, reducing funding by $1.6 million.
- Funding for replacement of lost landfill capacity and post-closure monitoring for displaced Phase I MSW are not eligible for funding because they address costs associated with non-disaster debris.