Eligible Facility, Direct Result of Disaster, Duplication of Benefits

Appeal Brief

Appeal Letter

Appeal Analysis

Background

As a result of Hurricane Rita in 2005 and Hurricane Ike in 2008, the West Calcasieu Port Commission (Applicant) requested assistance for certain work and costs associated with the removal and disposal of disaster-related sediment and debris from the East Barge Basin (EBB) and West Barge Basin (WBB).  In 2009, the Applicant contracted to complete the work for both disasters in conjunction with non-disaster-related maintenance dredging and improvements.  The Applicant also received a $1.5 million Port Priority Fund grant from the Louisiana Department of Transportation and Development (DOTD) for the same project.

For Hurricane Rita-related sediment, FEMA prepared Project Worksheet (PW) 4026 to restore the EBB and WBB.  This included costs to remove sediment from the EBB and costs to remove 46,000 cubic yards (CY) of sediment from the WBB.  The PW included funding to increase the height of containment levees surrounding a nearby soil disposal area (SDA) to accommodate the amount of sediment disposed of there.  For Hurricane Ike-related sediment, FEMA prepared PW 616 to remove and dispose of 26,000 CY of sediment from the WBB.  The approved amount also included costs to increase the height of the SDA levees to accommodate the volume of Hurricane Ike sediment placed in the SDA.  In 2009, FEMA initially approved PW 616 for $294,460.50 in total project costs.  In 2010, total project costs were amended to $238,435.88, then subsequently reduced by $215,053.76 based on the DOTD grant, thereby approving a final amount of $23,382.12.

On December 12, 2014, the Applicant requested an amendment to PW 616 for an additional $359,467.17 in costs to restore lost capacity to the SDA.[1]  It stated it had incurred these costs to increase the height of the SDA containment levees as part of a 2012 WBB maintenance and expansion project.  FEMA issued a Public Assistance (PA) Determination Memorandum on October 20, 2016 denying the request,[2] finding that the SDA was not an eligible facility under the PA grant program.  FEMA considered the SDA to be a natural feature used to receive dredged silt by creating berms around the perimeter as needed.  The Applicant’s normal practice was to leave the area unmaintained until needed as a disposal site, at which time it would clear the area and build containment levees as needed to create a retention basin.  No additional capacity was created for future use.  The process was repeated when dredging was required.  This practice was confirmed by the contract bid requirements.  As such, FEMA determined the SDA was not an improved and maintained natural feature, and therefore, not an eligible facility.  FEMA also determined it was not damaged by the disaster, and subsequently reduced the obligation for the project to zero dollars.

First Appeal

The Applicant filed an appeal in an undated letter noting its disagreement with FEMA’s determination regarding the status of the facility and DOTD grant reductions.^[3]  The Applicant provided comments and Google Earth images that it asserted showed the levees were specially designed, maintained, and qualified as a facility.

The Applicant then filed another first appeal on January 18, 2017, opposing FEMA’s reduction of PW 616.  The Applicant asserted that Version 2 should have been approved for $77,059.58 (a 90 percent federal cost share of $85,621.75, which the Applicant stated was the actual cost to restore Hurricane Ike-related capacity in the SDA).  The Grantee forwarded the Applicant’s appeal in a letter dated March 24, 2017 requesting $77,059.58 for work to restore SDA capacity and $80,035.88 to revise a previously applied DOTD reduction, a total request of $157,095.46.  The Grantee asserted that FEMA should have found the SDA to be an eligible facility, and should have made the DOTD reduction based on the percentage of adjusted contract costs.

FEMA issued a Request for Information (RFI) on August 7, 2017, seeking information concerning the timeliness of the appeals, design and construction documents for the SDA, and documentation and details of a maintenance plan for the SDA.  The Applicant responded in a letter dated August 29, 2017, providing for consideration: topographical graphs of the SDA, copies of design documents for the SDA from 1998-1999, engineer explanations of lost capacity to the SDA, planning documents for a 2006 maintenance dredging project and the 2009 SDA expansion project, and again, the Google Earth images displaying the SDA area beginning in 1998.

FEMA issued a Final RFI on March 22, 2018 requesting copies of design and construction documents detailing actual dimensions, quantities, and specified performance or design criteria, documentation and details of a maintenance plan, and evidence of disaster-related damage for the dredged material placement area.  The Applicant responded via letter on April 17, 2018 with similar arguments as stated in the first appeal and first RFI response.  The Applicant submitted no new documentation.

The FEMA Region VI Regional Administrator (RA) denied the Applicant’s first appeal on December 18, 2018, stating that the funding originally approved in PW 616 had addressed the costs of sediment disposal.  The RA determined that the Applicant was awarded funding for disposal of sediment following both disasters as well as funding to increase the height of the existing SDA containment levees to accommodate the disaster-related sediment placed there.  Therefore, the Applicant’s additional claims for costs to heighten the levees during its 2012 WBB maintenance and expansion project were beyond the scope of the work required by the disaster.

The RA also found no basis to amend the DOTD grant-related reduction.  The RA found that FEMA’s methodology properly accounted for the quantity of dreged sediment attributable to Hurricane Ike.  This reduction was made to avoid a duplication of benefits.

Second Appeal

The Applicant filed a second appeal by letter dated February 11, 2019.  The Applicant states that while FEMA awarded costs for sediment disposal, it did not award costs to restore the capacity available in the SDA prior to the disaster.  The Applicant believes that the PA program allows for funding to restore a facility back to predisaster capacity and expanding the SDA’s capacity would accomplish full restoration.

The Applicant also states that FEMA’s methodology in calculating the reduction of $215,053.76 for the DOTD grant was inappropriate and instead, the proper reduction should be $158,469.00, not $215,054.00—a difference of $56,585.00.  The Applicant maintains that FEMA should have reduced the funding for the DOTD grant only by the portion of the eligible contract costs attributable to Hurricane Ike, instead of taking a percentage of the DOTD grant amount proportionate to the amount of Hurricane Ike-related sedimentation. 

The Grantee forwarded the Applicant’s second appeal in a letter dated April 3, 2019, amending the disputed amount to $133,644.58, which includes the costs for the lost disposal area and the DOTD offset allocation difference, but not for funds FEMA already approved and obligated.  The Grantee also maintains that FEMA has not yet addressed the Applicant’s claim for funding to restore capacity back to the SDA.  

Discussion

Facility Eligibility

Restoration of certain improved and maintained natural features, including the carrying or storage capacity of engineered channels and debris basins, may be eligible for disaster assistance, but an applicant must demonstrate that the feature was maintained on a regular schedule to ensure that the improved feature performs as designed.[4]  

In its second appeal, the Applicant misinterpreted what the PA Guide has described as engineered channels and debris basins in relation to its SDA.  The Applicant’s SDA is not an engineered channel, debris basin, or any other improved and maintained facility of the type referred to in the PA Guide.  The water control facilities contemplated by the PA Guide include water control facilities that regulate the flow and filtration of sediment in water bodies, not permanent disposal areas for dredged sediment and other debris.  The Applicant’s SDA was adapted as a dry land, “permanent storage [space for] dredged material.”^[5]  It is a natural feature used for deposition of dredged material and spoils from the barge basin.  The Applicant utilizes the space created within that spoils area when needed, to dispose of waste materials collected as a result of dredging or expansion projects.  It is not a water control facility, nor any other type of potentially eligible facility actively maintained on a regular schedule, and is therefore not an eligible facility.

Direct Result of the Disaster

Federal regulations provide that for work to be eligible, it must be required as the result of a declared disaster.[6]  Work is eligible if it relates to damage that occurred during the incident period, or is the direct result of events that occurred during the incident period.[7] 

FEMA awarded the Applicant funding to dredge and permanently dispose of material from the EBB and WBB, both eligible facilities, and those activities completed the scope of work necessary to restore the Applicant’s facilities to their predisaster condition.  FEMA considers disposal an eligible component of sediment removal, and FEMA’s funding in PW 616 included disposal costs as well as costs to increase the height of the levees surrounding the SDA.  Any funding to raise the levees again in support of a 2012 dredging and expansion project are outside the scope of work required for this disaster and are not eligible.

Duplication of Benefits

Section 312 of the Stafford Act, as amended states that no entity will receive assistance for any loss for which financial assistance has already been received from any other program, from insurance, or from any other source.^[8]   Grants and cash donations from non-Federal sources designated for the same purpose as Federal disaster funds generally are considered a duplication of benefit.[9]  In the case of a duplication of benefit, FEMA headquarters will provide the methodology for calculating the adjusted project cost.[10]

The Applicant concedes that it received funding from the DOTD to support the disaster-related dredging and disposal project, but argues that FEMA incorrectly reduced the amount of funding from PW 616.  To prevent a duplication of benefits from the DOTD grant in PW 616, FEMA divided the total amount of dredged material from the 2009 project that included pre-Hurricane Rita sediment, Hurricane Rita sediment, and Hurricane Ike sediment.  FEMA determined that out of 181,350 CY of sediment, 62,350 CY (34.38%) existed prior to Hurricane Rita, 93,000 CY (51.28%) were caused by Hurricane Rita, and 26,000 CY (14.34%) were caused by Hurricane Ike.  Based on the percentage of sediment attributable to Hurricane Ike, FEMA properly calculated and reduced $215,053.76 (14.34%) from the $1.5 million DOTD grant amount.

The Applicant argued that FEMA should have made reductions based on the contract costs, and not based on the proportion of sediment attributed to the disasters.  However, FEMA’s chosen methodology in calculating the adjusted project costs was reasonable and appropriate given the information and documentation provided.  The Applicant’s proposed methodology is not rooted in any statutory or regulatory requirements.  Therefore, FEMA finds no basis to overturn the current reductions.

Conclusion

The Applicant’s SDA is a location for the deposition of dredged material and spoils from the barge basin, and is not an engineered channel, debris basin, or any other improved and maintained facility that would be eligible for PA funding.  Therefore, it is not considered an eligible facility, and the Applicant’s request for additional costs to increase the height of the levees is denied.  Additionally, the work to raise the height of the levees in support of a 2012 dredging and expansion project were not required as a direct result of the disaster.  Finally, FEMA finds that the reductions for the DOTD grant were reasonable and appropriate, therefore the request to amend grant reductions is denied.