Direct Result of Disaster – Support Documentation

Appeal Brief

Summary Paragraph

On May 22, 2011, the City of Joplin (Applicant) was stuck by an E-5 tornado, which caused extensive damage to the community and throughout the state of Missouri.  To address the damage FEMA prepared Project Worksheets (PWs) 1018, 1521, and 1016 to inspect and repair the Applicant’s sewer lines.  The scope of work (SOW) for PW 1016 included identifying damages, locating debris, and locating affected lateral lines through the use of CCTV.  In response to the Applicant’s close out request for PW 1016, FEMA issued a determination memo (DM) stating that the Applicant’s use of CCTV was not an eligible cost.  The DM stated that FEMA previously issued a first appeal decision on PW 1521 denying all costs for permanent work repairs on the sewer mains because the Applicant had not demonstrated that the damage was a direct result of the disaster.  As a result of the PW 1521 decision, the PW 1016 DM claimed that the work under PW 1016 could not be tied to disaster related damages as required by FEMA regulation and policy and was therefore ineligible.  The Applicant appealed stating that the use of CCTV was the most efficient and cost effective manner of identifying any uncapped lateral lines and damage to the sewer mains.  The Regional Administrator (RA) partially granted the appeal.  The RA granted $1,250.00 in costs for the CCTV identification of five uncapped lateral lines noting that this work was eligible because it could be directly tied to the eligible work under PW 1018.  The RA denied the rest of the costs because the Applicant did not demonstrate that the use of CCTV for the sewer mains or the use of the GARMIN cameras was directly tied to any eligible work.  On second appeal, the Applicant reasserts its claim that CCTV was the most efficient and cost effective method to complete the work. 

Authorities and Second Appeals

• Public Assistance Guide, FEMA 322 at 40, 55-56 (June 2007).
• Title 44 Code of Federal Regulations (44 C.F.R.) §§ 206.206, 206.223 (2010).
• The Opportunity Center¸ FEMA-1539-DR-FL, at 6 (Dec. 22, 2016).
• Village of Waterford, FEMA-4020-DR-NY, at 4 (Sep. 4, 2014).
• City of Joplin, FEMA-1980-DR-MO (Mar. 26, 2018).
• City of Duquesne, FEMA-1980-DR-MO (May 1, 2017).

Headnotes

• The Public Assistance Guide allows FEMA to fund inspections when the structure is inaccessible to determine the extent of damage, however, FEMA can only reimburse costs for the portion of damage found.
  • The Applicant demonstrated no disaster-related damage to the sewer mains through the use of CCTV and therefore, FEMA cannot fund the CCTV costs.
• 44 C.F.R. § 206.223 requires that for work to be eligible for Public Assistance funding, it must be disaster related.
  • The Applicant did not identify disaster-related damage to the sewer mains through the use of CCTV.
• 44 C.F.R. § 206.206 requires applicants to provide documented justification to support the arguments made and instruction on how FEMA should interpret those documents.
  • The Applicant did not provide documented justification to show that the use of CCTV in the sewer mains or the GARMIN cameras were associated with eligible work.

Conclusion

The Applicant’s use of CCTV to identify uncapped lateral lines is eligible because it is tied to eligible work under PW 1018.  Because the other inspections cannot be tied to eligible work, the associated costs are not eligible for reimbursement.  Therefore, the Applicant’s appeal is denied. 

Appeal Letter

Appeal Analysis

Background

On May 22, 2011, the City of Joplin (Applicant) was struck by an E-5 tornado, which caused extensive damage to the community and throughout the state of Missouri.  FEMA prepared Project Worksheets (PWs) 1018, 1521, and 1016 to inspect and repair the Applicant’s sewer lines.  The scope of work (SOW) for PW 1016 included identifying damages, locating debris, and locating affected lateral lines with Closed Circuit TV (CCTV).  The SOW for PW 1018 was to temporarily repair/cap lateral sewer lines.  These two PWs were created as emergency work projects, while the SOW for PW 1521 was permanent work repair of damage to the sewer lines.

Within the SOW Notes for PW 1016, the Applicant was required to identify damage, per linear foot, incurred as a result of the disaster.[1]  The Notes make clear that, “reimbursement is contingent upon actual damages substantiated” and the Applicant was required to submit all documentation to substantiate disaster-related damage requiring repair “before the obligation of funds from the state.”[2]  

On June 8, 2017, the Applicant requested closeout of PW 1016, the subject of this appeal.  In response, on December 19, 2017, FEMA issued a determination memorandum stating that the Applicant’s use of CCTV was not an eligible cost.  While not addressed specifically, this also included the denial of costs for the use of two GARMIN cameras used in the CCTV process.  The determination memorandum stated that FEMA previously issued a first appeal determination on PW 1521 denying all costs for permanent work repairs on the sewers because the Applicant had not demonstrated that the damage was a direct result of the disaster.  As a result of the PW 1521 determination, the PW 1016 determination memorandum claimed that the work under PW 1016 could not be tied to disaster related sewer damages as required by FEMA regulation and policy.  The determination memorandum also cited to a November 2, 2016, letter from the Applicant which stated that the majority of the laterals had been located using construction records and visible clues, while an additional 50 of the laterals had been located using a lateral launch system with a locator head.[3]  The determination memorandum ultimately concluded that CCTV was not used to identify service laterals and all work was therefore ineligible.  

First Appeal

On January 12, 2018, the Applicant filed its first appeal with the Missouri State Emergency Management Agency (Grantee) to challenge FEMA’s denial of $205,453.60 in costs associated with the use of CCTV.  The Applicant argued that CCTV was the most economical and efficient method of identifying the sewer damage in order to perform the work of temporarily capping lateral lines and the permanent repairs to the sewer lines.[4]  Further, while the Applicant acknowledged that it located many of the lines using construction records and visible clues, it also contended that it was unable to locate all lateral lines in this manner and therefore required use of CCTV.  The Applicant provided a project summary of the sewer system project dated as of September 25, 2015.[5]  In the summary, of the $205,453.60 requested, $201,403.60 was associated with CCTV sewer lines, $1,250.00, with locating service laterals by lateral launch system, and $2,800.00, with two Garmin geotagging cameras. [6]  On January 18, 2018, the Grantee forwarded the Applicant’s appeal to FEMA Region VII supporting the appeal but without any additional analysis.  

On March 26, 2018, FEMA issued the second appeal determination for PW 1521.[7]  In this determination, FEMA denied all costs for permanent work on the sewers because the Applicant had “not demonstrated that the claimed sewer damages are a direct result of the disaster.”[8]

On April 17, 2018, the FEMA Region VII issued an RFI for PW 1016, requesting responses to several questions. [9]  First, the Region asked if the Applicant, in light of the second appeal determination for PW 1521, still wished to proceed with its appeal.  Additionally, the Region asked the Applicant whether there were any changes that it wanted to make, including a clarification of the amount of the appeal in connection with eligible work.  The Region also requested information regarding:

1. Confirmation that a change order reduced the number of lateral lines that needed to be located from 50 to 5, and that the corresponding cost of $1,250.00 for locating those 5 lines was accurate;
2. An explanation of the line item ‘GARMIN model geotagging camera’ and what work it was used in conjunction with; and
3. Confirmation that certain line items from the Project Summary worksheet were connected to work listed under PW 1521, and if not, an explanation for the items and the eligible work they were connected to.

In its response, the Applicant stated that it would like to continue with the appeal despite the second appeal determination on PW 1521; and attached a new first appeal letter with no substantive changes.[10]  The Applicant also provided answers to the Region’s questions stating that the reduction from 50 lateral lines to 5 was correct.[11]  Additionally, the Applicant noted that the GARMIN camera was used in the CCTV process to enable it to geotag the location of damaged sewer sites and provide photographs of the damaged sites.[12]  Finally, the Applicant responded saying that the line items in the Project Summary related to identifying damage, debris, and affected lateral lines which resulted in repairs made under PW 1521.[13]

On July 5, 2018, the Regional Administrator (RA) partially granted the appeal.[14]  The RA found that the use of CCTV to locate the uncapped service laterals connected to the eligible work under PW 1018 for the temporary capping of lateral sewer lines would be considered eligible.  The RA granted $1,250.00 in costs associated with locating service laterals.  The RA denied the remaining $201,403.60 in claimed costs associated with the use of CCTV in the sewer mains because there was no eligible work to which the CCTV connected.  For the same reason, the RA denied $2,800.00 in costs for the GARMIN cameras.  In total, the RA denied $204,203.60 in costs.

Second Appeal

In its second appeal dated August 29, 2018, the Applicant reiterates its position that the use of CCTV should be eligible because it was the most cost effective and efficient method.[15]  The Applicant further notes that CCTV was the only way to ensure that it identified the previously unidentified open lateral lines.  The Grantee transmitted the Applicant’s appeal to FEMA on the same day but does not provide any additional analysis.  

Discussion

Cost Eligibility

Video inspections of sewer lines to survey for damage are not eligible work.[16]  However, in some instances where damage to an inaccessible structure is evident based on other observations, FEMA may pay for inspections to determine the extent of damage and method of repair, but only inspection of damaged sections of the structure is eligible for reimbursement.[17]  Additionally, the use of video in sewer lines may otherwise be eligible as a necessary and cost effective part of an approved emergency protective measure, independent of the need to inspect for the extent of damage and determine a method of repair.[18]  In either case, the costs eligible for reimbursement are those “costs that can be directly tied to the performance of eligible work.”[19]  Title 44 of the Code of Federal Regulations (44 C.F.R.) § 206.223 provides that to be eligible for public assistance the work must be required as a result of the emergency or disaster.[20]  

Finally, appeals must contain documented justification supporting an applicant’s position.[21]  As such, FEMA relies upon the administrative record, which includes documentation submitted by the Applicant.  The burden to fully substantiate appeals hinges upon the Applicant's ability to produce not only its own records but to clearly explain how those records should be interpreted as relevant to supporting the appeal.[22]

CCTV – Lateral Lines Eligibility

In this case, the Applicant needed to cap the lateral lines before additional debris could infiltrate them and cause further damage.  This was an approved emergency protective measure in PW 1018.  The Applicant was able to locate and confirm damage to most lateral lines through means other than CCTV.  However, the Applicant required the use of CCTV to locate five unidentified lateral lines that were uncapped.  According to the project cost summary, the Applicant claimed only $1,250 of the $205,453.60 for the cost of locating these lateral lines.  As the use of CCTV to locate the five uncapped lateral lines was a necessary and cost-effective part of the approved emergency protective measure, rather than a general survey for damage or an inspection to determine the extent of damage, the RA properly awarded $1,250 in corresponding costs.

CCTV – Sewer Mains Eligibility 

As above, the Applicant was able to observe damage to the sewer main but was unable to fully access those facilities to determine damage.  Therefore, the use of CCTV to assess the sewer mains was warranted.

The Applicant used CCTV in the sewer mains to determine whether there was damage that required permanent repairs; this differs from the emergency protective measures to cap the lateral lines.  The damage eligible for reimbursement in this instance would have been damage to sewer mains requiring repair under PW 1521.  Yet, because FEMA determined that the Applicant had not demonstrated the damage to the sewer mains was disaster-related, all the work under PW 1521 was ineligible.  Therefore, the CCTV work could not have found any disaster-related damage in the sewer mains, which means there is no eligible work that the use of CCTV for sewer mains can be tied to.  As such, FEMA cannot fund the related costs for the CCTV.  

Additionally, this policy was set out explicitly in the PW itself.  Discussing the use of CCTV, the PW states that, “reimbursement is contingent upon actual damages substantiated.”[23]  Further, the PW notes that, “the Applicant will be required to submit all documentation to substantiate damages incurred and resulting repairs needed before the obligation of funds.”[24]  The inclusion of this language in the PW provided upfront notice to the Applicant that FEMA would only reimburse costs associated with substantiated damages.  Additionally, the Applicant submitted no documentation to substantiate its claim that the use of CCTV in the sewer mains was in furtherance of identifying additional uncapped lateral lines.  The Applicant’s documentation purposefully differentiated the work for its contracting between the lateral lines and the sewer main and limited costs for locating lateral lines to the $1,250.00 that the RA awarded.[25]  

Because the Applicant was unable to substantiate disaster-related damage to the sewer lines in PW 1521, and did not tie the use of CCTV in the sewer mains to any approved emergency protective measure required as a direct result of the disaster, the Applicant’s request is denied.[26]

GARMIN Cameras Eligibility

The Applicant claimed that the cameras were necessary to pinpoint the exact location of the damaged sites along with providing photographs of the damage.[27]  As above, in light of the determination of PW 1521, the Applicant was unable to tie the costs for the GARMIN cameras to eligible work.  Therefore, FEMA cannot fund those costs.

Additionally, the Applicant failed to provide documented justification to support its position that the cameras were necessary for the project.  Moreover, the Applicant provided no explanation of how FEMA should interpret the usage of the cameras.  Therefore, the Applicant did not carry its burden of providing documented justification for its position or explaining how FEMA should interpret what the Applicant did provide.[28]  

Conclusion

The Applicant’s use of CCTV to identify uncapped lateral lines was eligible as part of the emergency protective measures under PW 1018.  Because none of the other inspections can be tied to eligible work, costs associated with those inspections are not eligible for reimbursement.  Therefore, the Applicant’s appeal is denied.