Beaches – Direct Result of the Disaster – Legal Responsibility – Other Federal Agency – Sand Replacement

Appeal Brief

Appeal Letter

Appeal Analysis

Background

Severe storm surge from Hurricane Isaac during the incident period August 26 to September 10, 2012 caused damage to sand fencing, a beach and dunes on Pelican Island, a barrier island that had been modified by the Barataria Barrier Island Complex Project (BA-38).  BA-38 is comprised of two separate components: the Pelican Island Restoration (BA-38(1)), and the Pass La Mer to Chaland Pass Restoration (BA-38(2)).  This appeal relates only to the Pelican Island Restoration Project (BA-38(1)). 

BA-38(1) was under construction at the time of the disaster and the work was completed in 2013[1] under the authority of the Coastal Wetlands Planning, Protection and Restoration Act of 1990 (CWPPRA).[2]  State responsibilities for BA-38(1) were transferred from the Office of Coastal Restoration and Management within the Louisiana Department of Natural Resources (DNR) to the Coastal Protection and Restoration Authority (CPRA) (Applicant) in 2009.[3]

FEMA prepared Project Worksheet (PW) 1567, Category G to document replacement of approximately 119,500 cubic yards of beach and dune fill.  FEMA found that $1,458,750.00 in sand fencing and beach and dune fill replacement was ineligible because (1) funding to repair BA-38(1) is the responsibility of another federal agency;[4] (2) the Applicant did not demonstrate the improved beach and dunes were regularly maintained, and (3) the project was under construction at the time of the incident.[5]

First Appeal

The Applicant appealed FEMA’s determination on January 31, 2014.  The Applicant argued that: (1) the work is eligible because there is no specific authority under the CWPPRA to repair the damages in question; (2) FEMA’s denial of eligibility on the basis of another federal agency’s legal authority is contrary to Section 312 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) and FEMA’s regulations and policies; (3) BA-38(1) is an eligible nonstructural project for shoreline stabilization designed to mimic, enhance, or restore natural stabilization systems per FEMA’s regulations implementing the Coastal Barrier Resources Act (CBRA); (4) a maintenance plan should not be essential for eligibility because BA-38(1) does not require routine maintenance to function as designed, or FEMA should recognize inspection reports as sufficient to establish pre-disaster condition; and (5) FEMA’s denial of eligibility on the basis that construction was not complete at the time of the disaster is contrary to FEMA policy.[6] 

The State of Louisiana Governor’s Office of Homeland Security and Emergency Preparedness (Grantee) transmitted the first appeal on April 3, 2014.  The Grantee argued that: the National Marine Fisheries Service (NMFS) was the sponsor of the BA-38(1) project, not its funding source and that BA-38(1) does not require routine maintenance.[7]

On March 18, 2015, FEMA sent a Final Request for Information (RFI) to the Grantee, requesting: (1) the amount of funding being appealed for each project component; (2) all cost sharing agreements; (3) construction contracts; (4) official notifications of project completion; (5) maintenance plans, maintenance budgets, long-term monitoring plans and monitoring budgets; and (6) documentation establishing that the beach is an engineered beach.[8]  In its response to the Final RFI, the Applicant asserted it submitted all required documentation and requested that FEMA review the “Cooperative Agreement” and letters from the Natural Resources Conservation Service, Environmental Protection Agency, and the National Oceanic and Atmospheric Administration.  The Applicant also reserved the right to provide written confirmation that no other federal agency has responsibility for the work, which it was in the process of obtaining.[9] 

The FEMA Region VI Regional Administrator (RA) denied the first appeal on August 6, 2015.  The RA found that: (1) the natural features of BA-38(1) were not maintained and thus failed to meet the regulatory requirements for improved beaches at the time of the disaster; (2) BA-38(1) was federally funded by the National Oceanic and Atmospheric Administration/NMFS under the CWPPRA; (3) the project was under construction and under the authority of the Federal Contracting Officer at the time of the disaster; (4) the cost share provision of the CWPPRA does not allow FEMA to fund the state share; and (5) projects must meet PA eligibility requirements before determining whether the project is compliant with the Coastal Barrier Resources Act (CBRA).[10]  The RA also clarified that Section 312(a) of the Stafford Act, rather than Section 312(b)(1), is the relevant authority applicable to duplication of benefits.

Second Appeal

The Applicant submitted a second appeal by letter dated October 12, 2015.  The Applicant argues: (1) FEMA’s denial of funding is erroneous as there is no other federal agency responsible for funding these disaster-related repairs; and (2) FEMA’s denial of eligibility is incorrect because BA-38(1) is a “facility” eligible for Public Assistance (PA).[11] 

The Grantee transmitted the second appeal to FEMA Region VI on December 10, 2015 and supplemented the Applicant’s main arguments by asserting that FEMA did not acknowledge that the barrier islands do not require traditional maintenance.  According to the Grantee, the project had a life expectancy of 20 years and did not require normal maintenance if performing its intended purpose.  The Grantee argued that even if another federal agency has legal responsibility to provide funding for BA-38(1), Stafford Act § 312(b) allows FEMA to provide funding if the Applicant has not yet received benefits or has only received partial benefits from the other agency. 

Discussion

Facility Eligibility of Louisiana’s Coastal Barrier Resources System

The Applicant claims that FEMA’s denial of eligibility of PW 1567 is incorrect because BA-38(1) is a facility eligible for PA.[12]  It argues that FEMA has failed to recognize BA-38(1) as part of the CBRS, a “system,” and that all of its component parts comprise an eligible “facility.”[13]

FEMA recognizes that BA-38(1) is part of the Barataria/Plaquemines barrier shoreline system,[14] numbered S01 on the Louisiana CBRS maps.[15]  FEMA also notes that the Coastal Barrier Resources Act (CBRA) uses the term “system” to mean the barrier resource system defined in the Act,[16] which is comprised of “undeveloped” system units.[17]  However, the CBRA and its implementing regulations perform a different function than the Stafford Act, which uses the term “system” as part of a definition to establish PA eligibility for a wide range of facilities.  The Stafford Act definition of “public facility” includes “any other public building, structure, or system.”[18]  The word “system” is used in conjunction with the words “building” and “structure” to describe other types of public facilities that are man-made, such as sewage systems or electric power distribution systems.  In contrast, the CBRA defines “system unit” to mean “any undeveloped coastal barrier, or combination of closely-related undeveloped coastal barriers, included within the [CBRS].”[19]  This definition is inclusive of Louisiana’s barrier islands because, as a whole, the islands are not man-made but are naturally occurring landforms that are undeveloped and subject to constant change due to wave and tidal action.  In line with legislative intent, FEMA’s regulatory definition of “facility” excludes such undeveloped systems that are not “built or manufactured.”[20]  As Louisiana’s CBRS was not “built or manufactured,” it does not qualify as a “system.”

The statutory and regulatory constraints that limit eligible facilities to structures, buildings, and systems that are “built or manufactured” by man, is supported by the fact that the Stafford Act bases the amount of assistance off “the design of the facility as it existed immediately before the disaster event.”[21]  FEMA regulation embodies this by requiring that permanent work restore an eligible facility on the basis of its predisaster design and applicable standards.[22]  Louisiana’s system of barrier islands lack a predisaster design because they are naturally occurring and their formations as a system constantly change.  Louisiana’s CBRS does not have a “predisaster design” to which it can be constructed because the system as a whole was never designed in the first place.

Facility Eligibility of BA-38(1) as a Natural Feature

The Applicant alternatively argues that BA-38(1) is eligible for PA funding because it is an improved and maintained natural feature.[23]  The Applicant supports its claim that the island has been maintained by asserting that projects (past and ongoing) have improved and maintained the “system” of barrier islands, of which it is a part.  It asserts that system wide projects equate to maintenance for BA-38(1).  Specifically it cites Louisiana’s 2002 Barrier Island Comprehensive Monitoring Program (BICM) to provide long-term data about the system,[24] and two bills passed by the Louisiana legislature (House Bills No. 429 and 1034) in 2004 establishing the Barrier Island Stabilization and Preservation Program (BIMP), to select and prioritize maintenance projects.[25]  To these arguments the Grantee adds that FEMA did not acknowledge that barrier islands do not require traditional operation or maintenance.  According to the Grantee, BA-38(1) had a life expectancy of 20 years and did not require normal maintenance if performing its intended purpose.[26]

Pursuant to 44 C.F.R. § 206.201, a facility is defined as “any publicly or privately owned building, works, system or equipment, built or manufactured, or an improved and maintained natural feature.”[27]  For an “improved and maintained natural feature”[28] to be eligible, maintenance “must have been done on a regular schedule and to standards to ensure that the improvement performed as designed.”[29]  FEMA also looks to maintenance or inspection reports to verify the pre-disaster condition of facilities and to determine if the work is required as a direct result of the disaster.[30]  BA-38(1) is a barrier island, which is a natural feature, and held to the requirement of being improved and maintained.

The Applicant has failed to provide any evidence that BA-38(1) has been regularly maintained.  The Applicant’s argument that maintenance of one piece of a “system” constitutes maintenance of the entire system is flawed.  For example, if one segment of a road system is maintained regularly (e.g., a bridge), that does not constitute maintenance of the entire road system and other bridges within the system.  When considering BA-38(1) individually, the administrative record is void of documentation demonstrating regular maintenance since its construction.  The Cooperative Agreement states that “maintenance will be funded through a series of Cooperative Agreements between NMFS and LDNR,”[31] but the Applicant has not provided any of the agreements or documentation demonstrating that maintenance occurred.  Likewise, the Coastal Protection and Restoration Authority of Louisiana Operations, Maintenance, and Rehabilitation Plan states that new sand fencing will be constructed in years two, seven, and twelve.[32]  It has been over two years since the project was completed, therefore the Applicant should have been able to provide documentation that this maintenance occurred.  Furthermore, and specifically relevant to the issue on appeal, the Coastal Protection and Restoration Authority of Louisiana 2009 Operations, Maintenance, and Monitoring Report explicitly notes that “[c]laims for FEMA assistance resulting from extensive or catastrophic damage to barrier islands from tropical storms and hurricanes are ineligible because there is no scheduled maintenance.”[33]  Thus, the Applicant has not only not provided documentation demonstrating the performance of maintenance, nor a design to which BA-38(1) is maintained, but has actually provided explicit guidance reflecting an understanding that BA-38(1) is ineligible for FEMA PA.

Finally, the Grantee’s claim that the project does not require maintenance once the initial construction is complete lends support to the conclusion that BA-38(1) is a natural feature rather than an “improved and maintained” natural feature.  The barrier islands appear to be designed to develop naturally rather than maintain a strict design standard, allowing for erosion to some degree during storms as part of its natural migration, which is why there are no maintenance requirements.  In sum, the barrier islands continue to exist as a natural feature without any regular maintenance by the Applicant.[34]  As such, FEMA finds the proposed work ineligible for PA grant funding.[35]

Eligibility of BA-38(1) as an Improved Beach

To the extent that the Applicant and Grantee request consideration of the work in accordance with FEMA regulatory[36] and policy requirements[37] for beaches, the work is not eligible for PA grant funding.  To be eligible for PA funding, an improved beach must be constructed by the placement of sand (of proper grain size) to a designed elevation, width, and slope; and the applicant must establish and adhere to a maintenance program involving periodic renourishment of sand.  The Applicant has not provided documentation necessary to demonstrate that BA-38(1) was designed to a certain elevation, width, and slope with sand of a particular grain size.[38]  Additionally, as discussed above, the Applicant has not demonstrated a maintenance program involving periodic sand renourishment nor routine maintenance to BA-38(1).  Finally, the Applicant has not demonstrated BA-38(1) was constructed according to specific requirements and maintained to those standards.  As such, it is not eligible for PA grant funding. 

Applicability of FEMA’s Regulations Implementing the CBRA

The Applicant argues that Congress intended the CBRA’s statutory exemption of BA-38(1), being numbered S01 on the Louisiana CBRS maps, to be interpreted broadly so that federal agencies provide funding for “stabilization and erosion control projects in units depicted on maps S01 through S11 so as to address the serious erosion problems facing Louisiana's coastline.”[39]  The Applicant’s interpretation of Congress’ intent ignores important context.  The exemption was established in recognition that “the coastal erosion problem is largely the result of Federal policies and actions,” such as the leveeing and channelization of the Mississippi and Atchafalaya Rivers which once renourished the marsh system.[40]  The exemption was not established to repair damage caused by natural disasters, such as hurricanes, but was focused solely on remedying the damage caused by federal “policies and actions.”[41]  Consequently, it appears Congress only intended for agencies to broadly interpret the “types of stabilization projects that may be undertaken” under the exemption.[42]  However, legislative history does not demonstrate Congressional intent for federal agencies to broadly interpret their own statutory authority to award grant funding for stabilization and erosion control projects in the Louisiana CBRS.[43] 

Lastly, the Applicant contends that BA-38(1) falls within the CBRA exceptions, specifically 44 C.F.R. § 206.345(b)(6), and therefore does not need to meet PA eligibility requirements.  This is incorrect.  If an applicant proposes to complete work within a CBRS and the work falls within one of the exceptions, the CBRA limitations, detailed in 44 C.F.R. § 206.344, on new expenditures or financial assistance do not apply and a regional administrator “may make” disaster assistance available.  The exceptions only pertain to the CBRA limitations; not the foundations of PA eligibility.

Responsibility of Other Federal Agency

The Applicant also claims that FEMA’s denial of eligibility of PW 1567 was erroneous as there is no specific authority to repair the damages in question under CWPPRA.[44]  The Applicant argues that the cooperative agreement between the NMFS and the Applicant does not convey any specific authority because the plain language of the CWPPRA does not include authority for funding disaster damages;[45] NMFS, along with other CWPPRA task force members, have indicated they do not have authority; and CWPPRA does not authorize any specific federal agency to fund projects from its operating budget.  Moreover, the Applicant asserts that FEMA failed to comply with its responsibility to contact other federal agencies about their authority; and has previously approved work for sand fence repair, which contradicts an assertion the work is another federal agency’s responsibility.

PA funding is not available when “another Federal agency has specific authority to restore facilities damaged or destroyed by an event which is declared a major disaster.”[46]  While the Applicant contends that CWPPRA does not provide for restoration for disaster related damages, FEMA disagrees.

CWPPRA authorizes the Secretary of the Army to “carry out projects to protect, restore, and enhance wetlands and aquatic/coastal ecosystems.”[47]  The definition of a coastal wetlands restoration project in the CWPPRA does not specifically address disaster related repairs, rather it states simply that project activities include but are not limited to “new projects, completion or expansion of existing or on-going projects, individual phases, portions, or components of projects and operation, maintenance and rehabilitation of completed projects.”[48]  Direction with regard to the distribution of appropriations for such projects is also contained within CWPPRA.[49] 

Further, a June 26, 2015 letter from the U.S. Army Corps of Engineers (USACE) provides that “if the Federal and State sponsors of an existing CWPPRA project submit a request to restore infrastructure constructed with CWPPRA funding that was damaged or destroyed by a storm event, the Task Force has the discretion to approve or disapprove the request.”[50]  While FEMA has not consulted with the Department of the Army regarding this project, this letter reflects the discretionary authority of USACE and the Task Force, under the CWPPRA, to approve or deny project work to repair disaster related damage. 

The Applicant also argues FEMA’s previous approval of work for sand fencing repair contradicts an assertion that the work is the responsibility of another federal agency.[51]  The funding of such repairs was in error and FEMA will take appropriate action to correct the matter.[52]

In conclusion, FEMA finds that pursuant to the plain language of CWPPRA, the responsibility for this proposed work rests with another federal agency.  Accordingly, the Applicant’s claim that CWPPRA does not include or intend to authorize projects to repair hurricane damaged structures is not supported by a reading of the plain language of the Act and PA funding is not available due to another agency’s authority.

Project Under Construction During Incident Period

To be eligible for PA funding, an eligible applicant must be responsible for the work.[53]  Facilities under construction at the time of the disaster are generally not eligible for PA because they are the responsibility of the contractor until the owner has accepted the work as complete.[54]  However, repairs may be eligible if the contract places responsibility on the Applicant during the construction period or the Applicant accepted the work as complete prior to the disaster.[55]  The cooperative agreement noted that NMFS was responsible for the administration of the dredging construction contract and accepting the finished work from the contractor.[56]  After the completion of construction, the Applicant assumed responsibility for the long-term monitoring of the project.[57]  In a Final RFI, FEMA asked for official notification of project completion and construction contracts for the project.  The Applicant failed to provide the requested documentation and as a result has not demonstrated its legal responsibility for the work at the time of the disaster.

Conclusion

FEMA finds that Louisiana’s coastal barrier islands, as a whole, do not qualify as a “system” within 44 C.F.R § 206.201(c)’s definition of a “facility” as they were not “built or manufactured” in accordance with a design.  Additionally, BA-38(1) cannot be considered a “facility” because the Applicant failed to demonstrate that the barrier island has been maintained.  Finally, funding is also precluded by the Stafford Act and regulation because there is another Federal program specifically designed to address the environmental restoration of Louisiana’s barrier islands.  Consequently, the RA was correct in denying $1,458,750.00 in beach and dune fill replacement.