Direct Result of Disaster

Appeal Brief

Appeal Letter

Appeal Analysis

Background

Between August 27 and September 2, 2011, Tropical Storm Irene brought heavy rain, floodwaters, and storm water run-off that severely damaged the Vermont Fish and Wildlife Department’s (Applicant) Roxbury Fish Culture Station (Facility).  The Facility is an open pond fish rearing system that raises cold water species to stock select Vermont bodies of water.  The Facility discharges effluent into the Third Branch of the White River.  The Facility’s five rearing ponds, two raceways, and two tanks were destroyed by the declared event.[1]

The Facility’s effluent discharge is subject to the authority of the United States Environmental Protection Agency (EPA), which, together with its state environmental agency partners, administers and implements the Clean Water Act (CWA).  The CWA establishes the National Pollutant Discharge Elimination System (NPDES), which is a permit process that regulates point source discharges of pollutants into waters of the U.S.[2]  EPA regulation specifically excludes facilities that produce less than 20,000 pounds of aquatic animals per year from the requirement to obtain a NPDES permit.[3] 

The EPA authorizes the Vermont Department of Environmental Conservation (DEC) to issue NPDES individual permits on its behalf.  Those permits establish specific design and water quality standards applicable to an individual facility.  The DEC first determines the technology based effluent limitations available to control pollutant discharges.  Next, when a numeric effluent limitation has not been established under the Vermont Water Quality Standards (VWQS) or there is a potential for the discharge to cause or contribute to a violation of the VWQS, the DEC sets a water quality based effluent limitation for the facility.[4] 

On October 20, 2006, the DEC issued an Amended Discharge Permit (ADP) authorizing the Facility to discharge waste into the Third Branch of the White River in accordance with effluent limitations, monitoring requirements, and other conditions set forth in the permit.  The ADP required compliance with the Vermont Water Pollution Control Act, the Vermont Water Pollution Control Permit Regulations, and the VWQS but did not require full compliance with the NPDES because the Applicant intended to produce less than 20,000 pounds of aquatic animals per year.  The ADP required that “any anticipated facility expansions, production increases, or process modifications which will result in new, different or increased discharges of pollutants must be reported by submission of a new permit application or, if such changes will not violate the effluent limitations specified in this permit, by notice to the permit issuing authority of such changes.”  The permit was valid until March 31, 2011 and required the Facility to reapply at least 180 days before expiration, September 30, 2010.[5]

The Facility commenced operation under the ADP in 2006, producing 18,500 pounds of yearling brook trout.  In 2007 and 2008 the Facility produced 11,746 and 18,611 pounds of fish respectively.  Then, in 2009, the Facility increased its cold-water fish species production to 24,223 pounds, and in 2010 production increased to 30,984 pounds.[6]  For both 2009 and 2010, the Facility exceeded the permissible amount, 20,000 pounds, allowed by EPA’s regulatory exclusion.[7]                                                                                                                        

On March 31, 2011, the ADP expired.  At that time, the Applicant had properly filed a renewal application and continued fish production.  The DEC allowed the Facility to continue operation until an NPDES permit could be issued.[8]  Tropical Storm Irene hit over four months later, in late August 2011.

After the tropical storm, the Applicant hired a qualified engineering firm, which considered the more stringent NPDES and VWQS requirements for the facility design.  Based upon the higher production levels, the engineering firm determined that five of the open ponds needed to be replaced with 12 closed system tanks and a sludge storage and clarifier tank.[9] 

FEMA initially prepared Project Worksheet (PW) 2738 to document the Applicant’s architecture and engineering design costs in the amount of $357,750.00.[10]  On August 2, 2012, FEMA amended the PW to increase funding to $583,391.68 to restore the Facility to predisaster condition.[11]  The PW included a statement that work to comply with the effluent limitations was not eligible because Tropical Storm Irene did not trigger the need for an upgraded system.[12]

On January 30, 2013, the Applicant requested a scope change to replace the open pond system with an estimated $4,622,000.00 tank based system.[13]  FEMA initially denied the Applicant’s scope change request in July 2013.[14]  After further consideration, FEMA issued a letter dated March 17, 2014, with a supporting memorandum[15] that determined the NPDES program, as implemented by the DEC, does not meet the criteria set forth at 44 C.F.R. § 206.226(d).[16]  Specifically, FEMA determined in the document that the Vermont NPDES permit program does not apply to the type of restoration required because the new effluent limitations were not triggered by the damage caused by Tropical Storm Irene but rather from the five-year permit renewal process and changed environmental and biological conditions downstream from the Facility; the Vermont NPDES permit program is not reasonable, in writing, or formally adopted and implemented because none of the implementing laws actually set the effluent limitations for the Facility; the Vermont NPDES permit program does not apply uniformly to all similar types of facilities because effluent limitations are set through a process that gives the DEC discretion to set effluent limits on a case-by-case basis; and due to the discretionary nature of the Vermont NPDES permit program, it is impossible to determine whether the DEC was enforcing reasonable requirements prior to the disaster.

On April 3, 2013, the DEC issued a draft Monitoring, Assessment, and Planning Program Evaluation (MAPP) for the Facility to establish preliminary effluent limitations for the pending permit.  The evaluation noted that biomonitoring data from 2009 evidenced increased nutrient concentrations and a reduction in biological integrity from “very good” to “good-fair” from upstream to downstream.  The evaluation recommended the permit be conditioned such that downstream biological and chemical conditions are maintained at no lower than current conditions and include the standard NPDES effluent limitations for phosphorus, nitrogen and formalin.[17]

First Appeal

The Applicant submitted its first appeal to the Vermont Division of Emergency Management and Homeland Security (Grantee) in a letter dated May 15, 2014.[18]  In a memorandum of support, submitted with the first appeal, the Applicant contended that the Facility is critical to the State’s fishing and ecotourism industries and is eligible for replacement under the Public Assistance (PA) program.  The Applicant stressed the point that FEMA is denying PA funding for work that satisfies an environmental requirement mandated by Congress and the Vermont State Legislature.[19]

The Applicant then discussed how the CWA and VWQS satisfy each of the five criteria set forth at 44 C.F.R. § 206.226(d).  The Applicant proffered the following arguments for the five criteria: (1) the VWQS apply to the repair and restoration required at the Facility because all effluent discharges must comply with the mandatory requirements; (2) the use of the Facility is appropriate to the predisaster use of the facility because the Facility will be restored to predisaster capacity and the upgrades will not change the use; (3) the CWA and VWQS are reasonable, in writing, and were formally adopted prior to Tropical Storm Irene; (4) even though no two Vermont hatchery’s discharges are the same, all facilities must comply with the uniformly applied VWQS; and (5) the CWA and VWQS were enforced at the time of Tropical Storm Irene as demonstrated by the DEC’s response to the EPA’s objections to issuance of a wastewater treatment facility permit.

Within the Applicant’s supporting memorandum, the Applicant makes the factual statement that the “[Facility] triggered NPDES permitting in 2009 & 2010, when cold-water fish species rose above 20,000 [pounds].”[20]  The Applicant elaborates that:

The [Facility] became subject to federal CWA jurisdiction and oversight in years 2009 and 2010, when fish production at the facility increased over previous levels...  A NPDES permit is required for concentrated aquatic animal production facilities which discharge fish station effluent at least 30 days a year, and produce more than 20,000 pounds of cold water fish....  In 2006, when the [DEC] issued the final amended discharge permit #3-0362, the [Facility] was producing less than 20,000 pounds of fish.  However, in 2009 the [Facility] exceeded 20,000 pounds of cold-water fish production.  As a consequence, the [Facility] became subject to the requirements of the federal CWA in addition to [state requirements].[21]

Finally, the Applicant argued that the costs to upgrade the Facility to a tank based system are reasonable by providing cost estimates for other recently constructed facilities and professional opinions.[22]

The Grantee transmitted the first appeal to FEMA in a letter dated May 30, 2014.[23]  The Grantee accused FEMA of improperly construing section 406(e)(1)(A)(ii) of the The Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988 (Stafford Act) and 44 C.F.R. § 206.226(d), and requested that FEMA Region I reverse the prior eligibility decision and fully fund the Applicant’s upgrade work.[24]

On July 23, 2014, FEMA Region I requested additional information from the Applicant to establish the eligibility of the Facility upgrades under 44 C.F.R. § 206.226(d).  Although the Applicant and Grantee responded on August 5, 2014, no new substantive information was provided.[25]  

On September 12, 2014, FEMA Region I Regional Administrator (RA) denied the Applicant’s first appeal.[26]  The RA found the Applicant’s contention that the Facility is critical to Vermont’s economy to be irrelevant to determining PA eligibility.[27]  However, of particular importance, he found no direct relationship between the requested upgrade work and the disaster damage.  Instead, based on the Applicant’s submission, he concluded the threshold trigger for the upgrade work was the Facility’s increased fish production beyond 20,000 pounds, which make it subject to the CWA and VWQS years before Tropical Storm Irene.[28]  He also determined that neither the VWQS nor NPDES require all restored hatcheries to use a tank based system.  Therefore, the VWQS and NPDES permit program are guidelines rather than building requirements.[29]  The RA agreed that the planned use of the Facility is appropriate to the predisaster use of the facility, but that it would be unreasonable to expect FEMA to fund a tank based system that costs nearly seven times more than the cost to repair the open pond system.[30]  In conclusion, the RA determined that the VWQS and NPDES permit program are not codes and standards and the Facility’s upgrades were not triggered by the disaster event.  

Second Appeal

The Applicant submitted its second appeal to the Grantee in a letter dated October 30, 2014, requesting FEMA fully fund the $4,435,543.00 tank based system.  The appeal includes a memorandum of support with arguments substantially similar to the arguments included in the Applicant’s first appeal memorandum of support.[31]  The Grantee transmitted the second appeal to FEMA in a letter of support dated December 5, 2014.

Discussion

Work Must be Required as a Result of the Disaster

Pursuant to section 406 of the Stafford Act, FEMA may provide PA funding to an eligible applicant to restore an eligible damaged or destroyed facility.[32]  Foundational, for an applicant’s restoration work to be eligible for PA funding, the item of work must “be required as the result” of the disaster.[33]

The work necessary to replace the Facility with a tank based system is not required as a result of Tropical Storm Irene.  Rather, it is required as a result of two other non-disaster related activities. 

First, the new more stringent effluent limitations necessitating replacement of the Facility with a tank based system resulted from the Applicant’s increased fish production two years prior to the damage caused by Tropical Storm Irene.  In 2006, when the Applicant was issued the ADP, the Facility was only required to comply with Vermont water quality laws because the facility was producing less than 20,000 pounds of aquatic animals per year; and therefore, the Facility was excluded by EPA regulation from complying with NPDES permitting requirements.[34]  In both of the Applicant’s supporting memoranda submitted on first[35] and second[36] appeal, the Applicant admits that in 2009 and 2010, it increased fish production above the 20,000 pound exclusionary limit, and as “a consequence, the Facility became subject to the requirements of the [F]ederal CWA in addition to [state requirements].”[37]  The Applicant’s increased fish production also triggered the ADP requirement to submit a new permit application to the DEC.  The Applicant waited until six months prior to the ADP’s expiration in 2011 to submit a new permit application to come into full compliance with NPDES requirements.[38]  As such, the work to replace the Facility with a tank based system is required by the Applicant’s increased fish production and not the result of the disaster.

Second, the tank based system is required to meet more stringent effluent limitations, which resulted from degradation to downstream biological and chemical conditions, not Tropical Storm Irene.  In the draft MAPP, dated April 3, 2013, the DEC determined that biomonitoring data from 2009 evidenced increased nutrient concentrations and a reduction in biological integrity from “very good” to “good-fair” from upstream to downstream.  The DEC established more stringent effluent limitations based on the 2009 data in order to maintain downstream water quality conditions.[39]  The evaluation did not state the cause of the downstream degradation; but given the fact that the biomonitoring data was from 2009, there is no possible connection between the more stringent effluent limitations and impacts caused by Tropical Storm Irene two years later.  This conclusion is supported by a June 13, 2013 letter from the DEC in which its Commissioner states that, “Irene or no Irene, a repermitted [Facility] would have been held to the same limitations” articulated in the April 3, 2013 draft MAPP.[40]  Thus, the work to replace the Facility with a tank based system is required as a result of more stringent effluent limitations based upon downstream degradation that occurred two years prior to Tropical Storm Irene.

In conclusion, the Applicant has not established that the work to replace the Facility with a tank based system is “required as the result” of Tropical Storm Irene.

Codes and Standards

Given that the replacement work is not required a result of the disaster, an evaluation of whether the NPDES program and implementing Vermont laws contain codes and standards eligible for PA funding is moot.  As such, a review of the RA’s first appeal determination that the VWQS and NPDES permit program do not satisfy the five criteria set forth at 44 C.F.R. § 206.226(d) is unnecessary.

Conclusion

The work to replace the Applicant’s Facility with a tank based system is required as a result of the Applicant’s increased fish production and the more stringent effluent limitations based on downstream degradation.  The Applicant has not established that the work is “required as the result” of Tropical Storm Irene.