Allowable Costs & Reasonable Costs

Appeal Brief

Summary Paragraph

The COVID-19 pandemic resulted in a major disaster declaration for North Carolina. The Applicant requested Public Assistance reimbursement of costs for solar-powered message boards used to disseminate health and safety information in response to COVID-19. FEMA’s 2019 Schedule of Equipment Rates (2019 Schedule) did not specify a cost code for solar-powered message boards. The Applicant utilized the cost code and rate of $11.60/hour for trailer-mounted message boards.  FEMA issued a Determination Memorandum, and partially approved the request for $33,940.00 and denied $64,440.40. The Applicant appealed, arguing that the cost code in FEMA’s 2019 Schedule for trailer-mounted message boards is nonspecific and should apply to all non-Arrow trailer-mounted message boards. The FEMA Region 4 Regional Administrator partially granted the appeal, finding the Applicant did not justify the $11.60/hour rate for the use of solar-powered message boards, nor provide an alternative rate for consideration. FEMA stated the trailer-mounted message board rate was intended to apply to gasoline-powered message boards but adjusted the rates for the solar message boards used by the Applicant based on FEMA’s 2021 Schedule of Equipment Rates (2021 Schedule) ,  and approved costs for an additional $2,158.20. The Applicant submitted its second appeal, seeking the denied costs, reiterating its first appeal arguments, and contending that application of the 2021 Schedule was arbitrary and contrary to FEMA policy.

Authorities and Second Appeals

• 44 C.F.R. § 206.228 (a)(1).
• PAPPG, at 26, 28.
• FP 104-009-19, at 4.
• Fact Sheet, Coronavirus (COVID-19) Pandemic: Eligible Emergency Protective Measures.
• FEMA 2019 and 2021 Schedule of Equipment Rates.

Headnotes

• FEMA provides PA funding for the use of applicant-owned equipment based on hourly rates. If an applicant uses equipment that has no established state, local, tribal rate, FEMA will reimburse that equipment based on the FEMA Schedule of Equipment Rates.
  • The Applicant demonstrated that it does not have established equipment rates and followed FEMA policy when using the 2019 Schedule to determine reimbursement costs for use of its solar powered message boards during the COVID pandemic.

Conclusion

The Applicant demonstrated the 2019 Schedule reimbursement rate of $11.60/hour for the use of its solar powered message boards is eligible. Accordingly, this appeal is granted in the amount of $62,282.20 and the Regional Administrator is requested to take appropriate action to implement this determination.

Appeal Letter

Appeal Analysis

Background

On March 25, 2020, the President declared the coronavirus (COVID-19) pandemic in North Carolina a major disaster, with an incident period of January 20, 2020 to May 11, 2023. The Town of Matthews (Applicant) requested Public Assistance (PA) reimbursement for costs totaling $98,356.40 for four solar-powered message boards it used for 8,479 hours from 

March 12 to December 15, 2020. The Applicant-owned message boards were used along highways to disseminate health and safety information in response to COVID-19 and also used at testing sites to provide guidance. FEMA’s 2019 Schedule of Equipment Rates (2019 Schedule)[1] did not specify a cost code for “solar powered” message boards. The Applicant’s request utilized the scheduled rate of $11.60/hour associated with trailer-mounted message boards. FEMA prepared Grants Manager Project (GMP) 178810 to capture the Applicant’s claimed costs. However, FEMA issued a Determination Memorandum on November 22, 2022, limiting reimbursement to $4.00/hour and denied $64,440.40 of the Applicant’s PA request.

First Appeal 

On January 18, 2023, the Applicant submitted its first appeal, seeking the denied costs. The Applicant contended that the $11.60/hour cost code in FEMA’s 2019 Schedule for trailer-mounted message boards was nonspecific and should apply to every type of message board. On January 31, 2023, the North Carolina Emergency Management (Recipient) transmitted the Applicant’s first appeal to FEMA, with a supporting letter. 

On May 2, 2023, FEMA partially granted the appeal. FEMA found the Applicant did not justify a reimbursement rate of $11.60/hour for the use of solar-powered message boards, nor provide an alternative rate for consideration. FEMA stated that the rate the Applicant used was intended to apply to gasoline-powered message boards that require additional operational handling, maintenance, and fuel. However, FEMA adjusted the rates for the solar message boards used by the Applicant based on FEMA’s 2021 Schedule of Equipment Rates (2021 Schedule)[2] and approved costs for an additional $2,158.20.

Second Appeal

On June 29, 2023, the Applicant submitted a second appeal, seeking $62,282.20 in costs. The Applicant reiterates its first appeal arguments and further contends that: (1) FEMA’s application of unpublished equipment rates is arbitrary and contrary to FEMA policy and (2) the unpublished rates are not applied uniformly given that the 2019 Schedule, applicable for the COVID disaster, do not include solar message board codes/rates nor does the cost code used by the Applicant state that it is limited to gas‐powered message boards. On July 7, 2023, the Recipient transmitted the Applicant’s first appeal to FEMA, with a supporting letter.

Discussion

Work and costs related to disseminating information about health and safety measures may be eligible for Public Assistance (PA).[3] FEMA provides PA funding for the use of applicant-owned equipment to perform eligible work based on hourly rates.[4] If an applicant uses equipment that has no established state, local, tribal, or territorial (SLTT) rate, FEMA will reimburse that equipment based on the FEMA Schedule of Equipment Rates.[5]

Here, the Applicant requested PA for use of its solar powered message boards during the COVID-19 pandemic and used the 2019 Schedule to determine reimbursement costs for equipment that had no established SLTT rates. The 2019 Schedule, not the 2021 Schedule, is applicable to the COVID‐19 pandemic and equipment used in 2020. While the 2019 Schedule does not include separate solar message board rates, it does include a cost code/rate of $11.60/hour, for all non-Arrow trailer mounted message boards like the Applicant’s trailer mounted message boards used for this project. Further, the 2019 Schedule equipment description used by the Applicant neither excludes solar powered trailer mounted message boards nor states the code applies exclusively to gas‐powered message boards. Therefore, the Applicant has demonstrated why the rate of $11.60/hour under the 2019 Schedule applies to its trailer mounted solar message boards. 

Conclusion

FEMA finds the Applicant demonstrated the 2019 Schedule reimbursement rate of $11.60/hour for the use of its solar powered message boards is eligible. Accordingly, this appeal is granted in the amount of $62,282.20 and the Regional Administrator is requested to take appropriate action to implement this determination.[6]