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Duplication of Benefits

Appeal Brief Appeal Letter

Appeal Brief

DisasterFEMA 3134-EM
ApplicantCity of Chicago
Appeal TypeSecond
PA ID#000-00834-00
PW ID#Project Worksheets 7056 and 1494
Date Signed2008-05-01T04:00:00
Citation: FEMA-3134/3161-EM-IL; City of Chicago

Cross-reference: Duplication of Benefits

Summary: Snow emergencies FEMA-3134-EM-IL and FEMA 3161-EM-IL were declared as a result of heavy snow storms in January 1999 and December 2000. For both declarations, FEMA reimbursed the City of Chicago $7,849,565 for its snow removal costs at the O’Hare and Midway Airports. The Department of Homeland Security’s Office of the Inspector General (OIG) conducted an audit (DD-16-03) of the Applicant’s grants and determined that the $7,849,565 was a duplication of benefits based on the Airline Use Agreements between the Applicant and its two airport facilities. The audit concluded that the agreements establish that the airlines are required to pay for net operating and maintenance expenses, including costs for snow removal. FEMA agreed with the finding and notified the Illinois Emergency Management Agency of its determination to de-obligate the funds on February 8, 2005. The Applicant submitted its first appeal on June 13, 2005, appealing the OIG’s audit and claiming that it did not receive payment for these snow removal costs from the airlines. The Applicant also asserted that it is FEMA’s responsibility to pay for these costs. The Regional Director denied the appeal on August 2, 2006, because it was not clear that a duplication of benefits had not occurred and that the agreements did not relieve the airlines of funding snow removal work. The Applicant submitted its second appeal on October 23, 2006.

Issues: 1. Are the airlines required to pay for snow removal according to the Airline Use Agreements?
2. Has the applicant provided documentation demonstrating that a duplication of benefits has not occurred?

Findings: 1. Yes.

2. No.

Rationale: Section 312, Duplication of Benefits, Robert T. Stafford Disaster Relief and Emergency Assistance Act.

Appeal Letter

May 1, 2008

Mr. David L. Smith
Chief of Disaster Assistance and Preparedness
Illinois Emergency Management Agency
1035 Outer Park Drive
Springfield, Illinois 62701-1109

Re: Second Appeal—City of Chicago, PA ID 000-00834-00, Duplication of Benefits,
FEMA-3134/3161-EM-IL, Project Worksheets (PW) 7056 and 1494

Dear Mr. Smith:

This is in response to your letter dated October 24, 2006, which transmitted the referenced second appeal on behalf of the City of Chicago (Applicant). The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) de-obligation of funding in PWs 7056 and 1494 for snow removal at the Applicant’s O’Hare and Midway Airports following severe snow storms in January 1999 and December 2000.

The Department of Homeland Security’s Office of the Inspector General (OIG) conducted an audit (DD-16-03) of the Applicant’s grants and determined that $7,849,565 in snow removal costs was a duplication of benefits based on the Airline Use Agreements between the Applicant and the two airport facilities. The audit concluded that the Airline Use Agreements establish that the airlines are required to pay for net operating and maintenance expenses, including costs for snow removal. FEMA agreed with the finding and notified the Illinois Emergency Management Agency of the determination to de-obligate the funds on February 8, 2005. PW 7056 de-obligated $6,397,236 for FEMA-3134-EM-IL. PW 1494 de-obligated $1,452,330 for FEMA-3161-EM-IL.
The Applicant submitted its first appeal on June 13, 2005. It challenged the findings of the OIG audit and claimed that it did not receive duplicative payment for these snow removal costs from the airlines. The appeal also asserted that it is FEMA’s responsibility to pay for these costs. The Regional Director denied the appeal on August 2, 2006, because the agreements did not relieve the airlines of the responsibility to fund snow removal work and because the Applicant failed to provide documentation establishing that a duplication of benefits had not occurred.
The Applicant submitted its second appeal on October 23, 2006. The Applicant failed to provide any additional information to support its claim that it had not received duplicative reimbursement from the airlines. We have reviewed all information submitted with the Applicant’s second appeal and have determined that the conclusion of the OIG’s audit and the Regional Director’s decision in the first appeal are correct. The provisions in the Airline Use Agreements establish that the airlines are required to pay for net operating and maintenance expenses, including costs for snow removal. The Applicant failed to provide any additional information to support its claim that it had not received duplicative reimbursement. Further, the OIG audit shows that the Applicant had credited the airlines the amount of the assistance provided by FEMA for the snow removal work, indicating that a duplication of benefits had occurred. For these reasons, this second appeal is denied.
Please inform the Applicant of my decision. My determination constitutes the final decision on this matter as set forth in 44 CFR §206.206.

Sincerely,
/s/
Carlos J. Castillo
Assistant Administrator
Disaster Assistance Directorate

cc: Edward G. Buikema
Regional Administrator
FEMA Region V