Codes and Standards

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster	1609
Applicant	Toras Emes Academy of Greater Miami
Appeal Type	Second
PA ID#	086-UTJTC-00
PW ID#	PW 6102
Date Signed	2021-02-18T17:00:00

Summary Paragraph

From October 23 to November 18, 2005, strong winds from Hurricane Wilma damaged the Main Academy (Facility), a building owned by Toras Emes Academy of Greater Miami (Applicant).  FEMA prepared Project Worksheet (PW) 6102 to document the work and estimated costs to replace the Facility.  The Applicant requested a change to the scope of work for the project due to codes and standards requirements; FEMA placed the request on hold.  The Applicant completed construction in 2014, and the Florida Division of Emergency Management submitted a closeout request reflecting an actual cost overrun of $1,734,885.72.  FEMA designated PW 6102 as an improved project, primarily due to the Applicant’s decision to replace the original, one-story Facility with a larger two-story structure.  FEMA capped funding at the amount of the cost estimate.  The Applicant submitted a first appeal dated August 7, 2017, arguing that FEMA’s cost estimate did not account for applicable codes and standards changes to the Facility, and requesting funding for the amount of the cost overrun.  FEMA issued a Request for Information (RFI) related to the codes and standards that applied to the Facility.  In response, the Applicant provided local codes that required it to replace the Facility with a two-story structure on a smaller footprint.  On October 31, 2019, the FEMA Region IV Regional Administrator partially granted the appeal for $181,347.00, based on a revision to part of the original cost estimate.  However, FEMA determined that the other parts of the original estimate accounted for eligible costs.  The Applicant’s second appeal, dated December 23, 2019, disputes the improved project designation and requests PA funding totaling $1,553,538.72, the remaining amount of the cost overrun.  FEMA issued a second RFI, requesting justification for the replacement Facility’s increased capacity.  In response, the Applicant provided code requirements derived from the Americans with Disabilities Act (ADA).

Authorities and Second Appeals

• Stafford Act § 406(e).
• 44 C.F.R. §§ 206.201(g), 206.226.
• PA Guide, at 27.

Headnotes

• FEMA may reimburse the costs of codes or standards that change the predisaster design of a facility, if the codes or standards meet the five eligibility criteria found at 44 C.F.R. § 206.226(d).  A code or standard must meet all five criteria to be eligible for PA funding.
  • The Applicant provided local building codes, which prohibited it from rebuilding the Facility according to the original design and restricted the size of the structure’s footprint.
  • It also provided information demonstrating that ADA requirements resulted in an increase to the square footage capacity in the replacement Facility.
  • The code requirements at issue meet all five eligibility criteria at 44 C.F.R. § 206.226(d).

Conclusion

The Applicant has demonstrated that changes to the predisaster design of the Facility were required by applicable codes and standards.  Actual costs totaling $1,553,538.72 are eligible for PA funding.  Therefore, this appeal is granted.

 

Appeal Letter

Appeal Analysis

Background

From October 23 to November 18, 2005, strong winds from Hurricane Wilma damaged several school buildings owned and maintained by the Toras Emes Academy of Greater Miami (Applicant), a Private Nonprofit.  This included damage to the roof of the Main Academy Building (Facility).  FEMA developed Project Worksheet (PW) 6102 to document permanent work to restore the Applicant’s buildings, including work to replace the Facility’s roof.  However, FEMA subsequently determined that the disaster caused asbestos material within the Facility to become friable, and allowed mold to develop.

On November 14, 2006, FEMA prepared an estimate of costs totaling $3,469,721.00 to replace the Facility.  The estimate included a base construction cost of $1,529,192.98, which was prepared according to the Facility’s predisaster design.  FEMA subsequently determined that the estimated costs to repair the Facility[1] exceeded 50 percent of the estimated replacement costs, and obligated Public Assistance (PA) funding to completely replace the Facility.  The obligation totaled $3,922,706.30, and included the estimated costs to replace the Facility as well as costs for repairs to the Applicant’s other buildings, mold remediation, and a hazard mitigation proposal.

Following discussions with City of North Miami Beach (City) development officials, the Applicant submitted a request to increase the estimated costs reflected in the PW 6102 scope of work (SOW).  The Applicant justified the request by stating that FEMA had not properly accounted for codes and standards upgrades in the original estimate, and as a result the costs to replace the Facility would be higher than anticipated.  The Florida Division of Emergency Management (Grantee) supported the SOW change request, transmitting it to FEMA in a letter dated June 12, 2009.  FEMA responded the following day, placing the SOW change request “on hold” and requesting the Applicant itemize the specific costs and associated code upgrade requirements.[2]

The Applicant requested and received approval for several time extensions to complete the project.  It completed construction of the replacement Facility in 2014.  The Grantee prepared a Final Reconciliation Report for PW 6102 that calculated actual costs for the project at $5,657,592.02, resulting in a cost overrun of $1,734,885.72.  The Grantee provided invoices and contract documents with the report to support the claimed costs.  In a draft amended PW submitted with the report, the Grantee noted the Applicant’s explanation that the overrun was due to costs associated with code compliance.  The Grantee submitted the Final Reconciliation Report to FEMA in a large project closeout request on February 23, 2016.

Based on discussions with the Grantee and FEMA, the Applicant requested an improved project designation for PW 6102 via letter dated July 29, 2016.  The Applicant stated that, due to local building codes, it replaced the original one-story, 16,000 square foot (SF) Facility with a two-story structure of the same capacity (8,000 SF on each floor).  However, the Applicant asserted that this and other design changes were necessary for compliance with local codes and standards, and should not be considered improvements.  The Applicant stated it “has very little information regarding what exact work FEMA intends to classify as [ineligible improvements],”[3] and noted several items it believed were of concern to FEMA.  The Applicant asserted that the original cost estimate FEMA prepared in November 2006 was inadequate, and requested FEMA revise the Cost Estimating Format (CEF) worksheet used to produce the estimate.

In a March 22, 2017 closeout amendment to PW 6102, FEMA noted the Applicant’s request for an improved project and listed several improvements, the most significant of which was the addition of a two-story building with a larger square footage capacity.  FEMA designated PW 6102 as an improved project and capped PA funding at the previously obligated amount of $3,922,706.30.  On July 6, 2017, the Grantee notified the Applicant of FEMA’s decision to close the project with a zero-dollar variance (i.e., no change to the previously obligated amount).

 

First Appeal

The Applicant submitted its first appeal in a letter dated August 7, 2017, requesting reimbursement for the difference between the approved obligation and its actual costs, an overrun of $1,734,885.72.  It again asserted that the original cost estimate did not adequately account for the costs of the codes and standards applicable to the project, and thus the amount of PA funding approved under the funding cap was not sufficient to replace the Facility.  The Applicant stated it had previously disputed the cost estimate, but was repeatedly informed that reconciliation would occur at project closeout, and would be based on actual costs.

The Applicant attached a revised CEF worksheet, which it argued contained a more accurate total project estimate of $5,863,109.00.  Notably, the Applicant argued that FEMA’s estimate of the Facility’s base construction (CEF Part A) cost equated to just $95.57 per square foot, which was unreasonable.  Instead, its revised CEF worksheet included a Part A cost reflecting an average of $140.00 per square foot, which the Applicant stated was based on an analysis of R.S. Means data, industry data, and other, similar estimates.  The Applicant provided a lengthy examination of the non-construction costs (Parts B-H) in the original CEF worksheet, arguing FEMA had not followed the guidance available in the CEF for Large Projects Instructional Guide when preparing the original estimate.  The Applicant offered evidence for increasing specific costs, which it reflected in the revised CEF worksheet.

Finally, the Applicant reiterated statements from its July 2016 improved project request, again asserting that upgrades to the Facility were required by local, state, and federal codes.  It cited FEMA policy for improved projects,[4] arguing that “FEMA should not attempt to allocate … between expenses incurred for eligible restoration [and] expenses incurred for [improvements].”[5]  The Applicant noted that FEMA provides funding for an improved project based on the lesser of the estimated or actual costs, including the costs of applicable codes and standards.  Therefore, since its documented actual costs were less than the estimated costs calculated in its revised CEF worksheet, the Applicant requested that FEMA reimburse its actual costs.  In a transmittal letter dated August 22, 2017, the Grantee expressed support for the appeal.

FEMA issued a Request for Information (RFI), asking for any additional information or documentation related to the codes and standards the Applicant applied to “the original design and function of the [F]acility,” including a “line-item breakdown” of the associated costs.[6]  FEMA also requested explanations for specific entries in the Applicant’s revised CEF worksheet.

In response, the Applicant stated it was required to comply with state building codes adopted by the City and Miami-Dade County, as well as local codes incorporating federal requirements under the Americans with Disabilities Act (ADA).  The Applicant provided the titles of the applicable codes and their dates of adoption in local ordinances.  However, the Applicant noted that the original one-story structure was completely replaced by the two-story Facility.  Therefore, there was no project plan reflecting the original structure, from which it could discern code-required modifications in the replacement structure.  Instead, such modifications were numerous and “woven-through” the entirety of the new Facility.[7]  The Applicant stated it could not provide the “line-item breakdown” of costs based on the original structure that FEMA requested; moreover, it argued that itemization was not required by FEMA policy.

Regarding the revised CEF worksheet, the Applicant again offered a lengthy explanation of specific CEF parts.  It attached a second revised CEF worksheet, using some of the lower values FEMA proposed in the RFI.  The Applicant asserted that even if the lower values were used, the estimate would still result in a total amount that was higher than the documented actual costs for the project.

On October 31, 2019, the FEMA Region IV Regional Administrator partially granted the appeal, awarding an additional $181,347.00, based on a revision to Part F (Plan Review and Construction Permit Fees) in the original CEF worksheet.  However, FEMA determined that the Applicant’s assertions regarding the original CEF worksheet were incorrect, as it calculated the average of $95.57 per square foot using only the Part A cost.  Furthermore, using R.S. Means to derive a lump-sum estimate for Part A costs, as the Applicant suggested, “would be inaccurate and duplicative,” since “the cost-per-square-foot estimate provided by RSMeans [sic] … includes both hard costs (Part A) and soft costs (Parts B-H).”[8]  FEMA found that the original CEF worksheet sufficiently accounted for “soft costs;” further, the total cost estimate reflected an average of $216.86 per square foot for the Facility, which accurately reflected local market conditions and accorded with the Applicant’s first appeal claims.

Second Appeal

The Applicant submitted a second appeal via letter dated December 23, 2019, requesting reimbursement of PA funding for $1,553,538.72, the amount remaining of its claimed cost overrun.  The Applicant asserts that the Facility “should be funded as a standard replacement project, as any so-called ‘improvements’ were the result of application of eligible codes and standards.”[9]  The Applicant again discusses code requirements and the complexity of the project, and argues that recent amendments to the Robert T. Stafford Disaster Relief and Emergency Assistance (Stafford) Act require that the estimated costs reflect the cost of code compliance at the time of the Facility’s construction.[10]

The Applicant reasserts its argument that the Part A cost in the original CEF worksheet was based on an average of $95.57 per square foot, and that there was no indication FEMA accounted for the costs of code requirements in the estimate.  It presents two alternate methods for developing the overall estimate, including one that accepts FEMA’s Part A costs from the original CEF worksheet.  The Applicant asserts that even though these alternate methods do not fully capture the costs of code compliance, they still result in a higher, more accurate overall project estimate that demonstrates the inadequacy of the original.[11]  In a transmittal letter dated February 13, 2020, the Grantee expresses support for the appeal.

FEMA issued a second RFI via letter dated July 24, 2020, expressing concern that the available documentation did not support the Applicant’s assertion that changes to the predisaster design of the Facility were required by applicable codes and standards.  Specifically, FEMA observed that a November 6, 2014 certificate of occupancy[12] submitted with the administrative record documented a potential increase in the square footage of the replacement Facility.  FEMA requested additional information to establish: (1) the occupancy of the original Facility; (2) the total square footage of the original Facility; and (3) the applicable codes and standards that led to an increase in the replacement Facility’s capacity.

The Applicant responded via letter dated August 21, 2020, stating that it was unable to locate any records documenting the occupancy or square footage of the original Facility.  However, the Applicant states that any increase in square footage for the replacement Facility was required by the 2012 Florida Accessibility Code for Building Construction (2012 Florida Accessibility Code),[13] which was itself based on ADA standards.  In this light, it discusses increases to the replacement Facility’s square footage resulting from the addition of elevators, accessible bathrooms, and wider hallways.  The Applicant notes that these features were not present in the original Facility, which was constructed prior to the implementation of ADA requirements.  The Applicant cites specific sections of the 2012 Florida Accessibility Code associated with each addition, and in each case states that the increased square footage did not result in an increased occupancy load.

 

Discussion

FEMA provides PA funding for work to restore eligible facilities on the basis of the design of such facilities as they existed immediately prior to the disaster and in accordance with applicable codes or standards.[14]  FEMA may reimburse the costs of codes or standards that change the predisaster design of a facility, if the codes or standards: (1) apply to the type of repair or restoration required; (2) are appropriate to the predisaster use of the facility; (3) are found reasonable, in writing, and formally adopted and implemented by the state or local government on or before the disaster declaration date or are a legal federal requirement applicable to the type of restoration; (4) apply uniformly to all similar types of facilities within the jurisdiction of the owner of the facility; and (5) were enforced during the time the standards were in effect.[15]  A code or standard must meet all five criteria to be eligible for PA funding.[16]

FEMA capped funding for PW 6102 as an improved project based on changes the Applicant made to the predisaster design of the Facility.  At issue is the Applicant’s decision to replace the original, one-story Facility with a larger capacity, two-story structure.  FEMA finds that the Applicant has successfully demonstrated that the changes at issue were necessary for compliance with applicable codes and standards.  FEMA bases this finding on the following determinations:

First, the Applicant claims that the City’s building code requirements, including setbacks, required it to replace the Facility with a two-story structure on a much smaller footprint.  In support, it cited Sections 24-34 and 24-55 of the City’s Zoning and Land Development Code,[17] and provided a letter from the City confirming the setback requirements.[18]  FEMA agrees that the cited code requirements prohibited the Applicant from rebuilding the Facility according to the original design, and imposed restrictions on the size of the replacement structure’s footprint.  Consequently, in order to maintain the Facility’s predisaster capacity, the Applicant designed a replacement Facility that had two stories.

Second, the Applicant acknowledged an increase to the replacement Facility’s total square footage capacity, but claims that it was the result of ADA-derived accessibility code requirements for an elevator, larger bathrooms, and more hallway space.  In support, it cited specific sections in the 2012 Florida Accessibility Code pertaining to each of these features.  The codes the Applicant cited were not in effect at the time of the disaster; however, similar requirements in Title 28 Code of Federal Regulations (28 C.F.R.) were in effect.  Specifically, FEMA determines that requirements in Appendix A to 28 C.F.R. Part 36, i.e., the ADA Accessibility Guidelines for Buildings and Facilities (ADA Accessibility Guidelines)[19] were in effect and are equivalent to the codes the Applicant cited.[20]  Thus, FEMA agrees that the increase to square footage capacity in the replacement Facility was the result of accessibility code requirements.

Finally, the changes the Applicant made pursuant to the Zoning and Land Development Code and the ADA Accessibility Guidelines are eligible for PA funding, in that the requirements: (1) applied to new construction; (2) were appropriate to the Facility’s predisaster use as a school building; (3) were formally adopted and implemented by the City prior to the disaster, in the case of the Zoning and Land Development Code,[21] or were a legal federal requirement, in the case of the ADA Accessibility Guidelines; (4) applied uniformly to similar non-conforming structures and/or community or commercial facilities regardless of cause; and (5) were enforced prior to the disaster in a manner that did not allow for discretion by the enforcing authority, i.e., the City’s permitting requirements do not allow for discretionary application of the code.  In other words, the codes and standards at issue in the present appeal meet all five of the eligibility criteria found in Title 44 Code of Federal Regulations.[22]

Therefore, the Applicant has demonstrated that it was required by applicable codes and standards to replace the Facility with a larger two-story structure on a reduced footprint.  Consequently, the cap on project funding based on the November 2006 estimate of costs does not apply, and the Applicant’s remaining actual costs are eligible for PA funding.

 

Conclusion

The Applicant has demonstrated that changes to the predisaster design of the Facility were required by applicable codes and standards.  Actual costs totaling $1,553,538.72 are eligible for PA funding.  Therefore, this appeal is granted.

 

[1] Estimated costs for repairs totaled $1,201,836.92.

[2] Letter from Pub. Assistance Special Projects Section, Fla. Recovery Office, FEMA Region IV, to Lead Dep. Pub. Assistance Officer, State of Fla., at 1 (July 13, 2009).  The scanned copy of FEMA’s response to the SOW change request, available in the administrative record, indicates that the Grantee received it on July 15, 2009.  On appeal, the Applicant stated that it never received a response to the SOW change request from FEMA.

[3] Letter from Exec. Dir., Toras Emes Academy, to Reg’l Adm’r, FEMA Region IV, at 2 (July 29, 2016).

[4] Public Assistance Policy Digest, FEMA 321, at 66 (Oct. 2001) (“[f]or the most part, these are projects in which the funding for approved work cannot be tracked within the improved project because of physical changes or contracting arrangements”).

[5] Letter from Exec. Dir., Toras Emes Academy and Special Counsel to Toras Emes Academy, to Reg’l Adm’r, FEMA Region IV, at 7 (Aug. 7, 2017).

[6] Letter from Dir., Recovery Div., FEMA Region IV, to Dir., Fla. Div. of Emergency Mgmt. and Exec. Dir., Toras Emes Academy, at 2 (June 29, 2018).

[7] Letter from Exec. Dir., Toras Emes Academy and Special Counsel to Toras Emes Academy, to Dir., Recovery Div., FEMA Region IV, at 11 (July 27, 2018).

[8] FEMA First Appeal Analysis, Toras Emes Academy of Greater Miami, FEMA-1609-DR-FL, at 3-4.

[9] Letter from Exec. Dir., Toras Emes Academy and Special Counsel to Toras Emes Academy, to Assistant Adm’r, Recovery, FEMA, at 5-6 (Dec. 23, 2019).

[10] Id. at 7-8.  The Applicant notes that Section 1235(b) of the Disaster Recovery Reform Act (DRRA) of 2018 amended Section 406(e) of the Stafford Act “for any project for which the finalized cost estimate is on appeal.”  As this is the case in the present appeal, the Applicant asserts that the amended Section 406(e) thus requires that the estimate of eligible costs to replace the Facility “be made ‘in conformity with the latest published editions or relevant consensus-based codes, specifications, and standards.’”  In making the reference to DRRA, the Applicant initially asserts codes “at the time of construction” must apply; elsewhere it refers to “costs related to complying with all current codes and standards” (emphasis added).  However, the Applicant’s argument is without merit.  FEMA’s interim policy for the application of consensus-based codes and standards under the PA program states that such standards must be drawn from “[t]he latest published edition … at the time of the disaster declaration;” Recovery Interim Policy, FP 104-009-11 (Version 2), Consensus-Based Codes, Specifications, and Standards for Public Assistance, at Appendix A (Dec. 20, 2019).  Other requirements also apply, e.g., an applicant must submit a written request to FEMA to “opt-in” a project under the guidelines of the interim policy.

[11] The Applicant attaches two additional CEF worksheets that it asserts were prepared in accordance with the alternate methods it describes in its second appeal letter.

[12] Cmty. Dev. Dep’t, City of North Miami Beach, Certificate of Occupancy (Nov. 6, 2014).

[13] State of Fla., 2012 Fla. Accessibility Code for Building Construction (2012) [hereinafter 2012 Florida Accessibility Code].  The Applicant submitted the 2012 Florida Accessibility Code with its response.

[14] Robert T. Stafford Disaster Relief and Emergency Assistance Act § 406(e), 42 U.S.C. § 5172 (2000); Title 44 Code of Federal Regulations (44 C.F.R.) §§ 206.201(g), 206.226 (2005).

[15] 44 C.F.R. § 206.226(d).

[16] Public Assistance Guide, FEMA 322, at 27 (Oct. 1999).

[17] City of North Miami Beach, Zoning and Land Development Code (Apr. 13, 2006) [hereinafter Zoning and Land Development Code].  The Applicant submitted the Zoning and Land Development Code with its appeal.  Regarding the code-mandated prohibition on rebuilding the original structure, the Applicant cited section 24-34, paragraph E.6.  Regarding code-mandated setback requirements for the replacement Facility, the Applicant cited section 24-55.

[18] Letter from City Planner, Cmty. Dev. Dep’t, City of North Miami Beach (Mar. 11, 2011).

[19] Title 28 Code of Federal Regulations, Part 36, at Appendix A (2005) [hereinafter ADA Accessibility Guidelines].

[20] The Applicant cited the following sections of the 2012 Florida Accessibility Code in its response to the second RFI: section 201.1, for the elevator; sections 304, 603.2, 604.3.1, 604.8.1, and 604.8.1.1, for larger bathroom spaces; and section 403.5.3, for larger hallway spaces.  Equivalent requirements in the ADA Accessibility Guidelines can be found at: section 4.1.3, for the elevator; sections 4.2.3, 4.16.2, 4.17.1, 4.17.3, and 4.22.3, for larger bathroom spaces; and section 4.3.4, for larger hallway spaces.

[21] Zoning and Land Development Code, at 1 (recording that the codes contained therein were adopted into the City’s ordinances on November 20, 1990).

[22] Supra note 15.