Environmental Compliance

Appeal Brief

Appeal Letter

Appeal Analysis

Background

From April 28 – May 11, 2017, severe storms flooded Phelps County, Missouri (Applicant).  The storms caused damage to a reinforced concrete pipe culvert (Facility) under County Road 1280, a low water crossing at the Bourbeuse River.  The Applicant replaced the Facility with a corrugated metal pipe (CMP) that was encapsulated with reinforced concrete, completing the work by June 2017.  During a July 11, 2017 Scoping Meeting, FEMA advised the Applicant of U.S. Army Corps of Engineers’ (USACE) permitting requirements.  

On July 17, 2017, FEMA’s Environmental and Historic Preservation (EHP) representatives conducted a site inspection to verify compliance with a USACE Nationwide Permit (NWP).  The Site Inspection Memorandum acknowledged the Applicant had a USACE NWP allowing work in the river.  However, it noted that the Applicant did not document that its conditions were met, especially in regard to concrete pour.  In addition, FEMA stated the Applicant needed to provide documentation it obtained a USACE minor dredging permit and met that permit’s conditions. 

On October 6, 2017, FEMA informed the Applicant that it needed to provide proof that it complied with the Clean Water Act (CWA) by satisfying USACE permitting requirements.  The Applicant responded the same day, stating the work was covered by the NWP.  In a follow-up letter dated November 1, 2017, the Applicant reiterated that Facility repairs were authorized under the NWP, and noted it was in the process of obtaining a letter of authorization from USACE.  Further, the Applicant stated it submitted a permit application to USACE on October 23, 2017.  FEMA notified the Applicant that the project would be moved to FEMA’s next level of review.  However, FEMA again noted that the Applicant needed to provide USACE’s permit documentation to the Agency upon receipt.

FEMA obligated Project Worksheet (PW) 20 on January 4, 2018, approving total costs of $59,048.67 for the project, the actual costs incurred to complete the installation of the CMP and associated work.  The scope of work (SOW) allowed for the installation of the CMP as it was the least cost alternative repair option.  The PW stated that failure to obtain required environmental permits may jeopardize funding and included a requirement for the Applicant to “demonstrate that the repair[s] were performed in compliance with applicable CWA regulatory provisions.” [1]  The Missouri State Emergency Management Agency (Grantee) drew down the funding obligated for the project on January 18, 2018. 

On January 24, 2018, USACE emailed FEMA, the Grantee, and the Applicant, indicating it could not verify compliance with the NWP.  USACE stated the work did not appear to meet multiple NWP general conditions and there were concerns regarding compliance with certain NWP regional conditions.  All conditions pertained to water-related work.  Further, USACE noted the project was already complete when the Applicant submitted its October 2017 application.  Since USACE determined it would have needed to consult other agencies prior to the start of construction, which was no longer an option, it declined to verify an after-the-fact permit for the project.  This resulted in FEMA issuing a determination memorandum, which was transmitted to the Applicant on May 14, 2018.  FEMA determined the Applicant had not provided documentation demonstrating compliance with the CWA and appeared not to have complied with USACE permitting requirements.  FEMA therefore found the project was not eligible for funding.

First Appeal

The Applicant appealed by letter dated June 19, 2018.  The Applicant disputed USACE’s determination and put forth detailed arguments to support the assertion it was fully compliant with NWP general and regional conditions, as well as the CWA and Endangered Species Act.  Regarding FEMA’s post-construction site inspection, the Applicant stated the Agency’s EHP specialists had informed the Applicant the NWP was sufficient, and neither mentioned any special conditions needed to be met nor advised the Applicant it needed to contact USACE.  The Applicant states its reliance on the NWP alone was reasonable because it essentially restored the Facility to predisaster condition – the only difference being the installation of a CMP encased in concrete rather than a concrete box culvert.  In addition to the assertion the work was environmentally compliant, the Applicant also stressed it was necessary to complete the work in a timely manner as school and emergency personnel needed to use the crossing to avoid a 45-minute alternative route delay.  Further, the Applicant stated USACE had not provided documentation substantiating an objective basis for its determination.  The Grantee forwarded the appeal via a support letter dated August 8, 2018.

On August 16, 2018, USACE responded to a Congressional inquiry.  Based on its onsite visit, USACE determined the work appeared to violate the CWA and did not qualify for a NWP; however, as enforcement is discretionary, USACE decided not to pursue further action and administratively closed the file.

On October 30, 2018, FEMA issued a request for information.  FEMA requested, among other things, proof of USACE authorization, or any authority in law, regulation or policy that would allow FEMA to overrule or act contrary to USACE’s determination or award a grant absent the proper environmental permits.  The Applicant did not respond.

FEMA denied the first appeal on March 4, 2019.  The FEMA Region VII Regional Administrator (RA) noted FEMA is not tasked with permitting or determining compliance with CWA; therefore the bulk of the Applicant’s arguments that the work was compliant is outside FEMA’s purview.  The RA cited to the PW, the Recovery Scoping Meeting advisement, and the EHP Site Inspection Memorandum, all of which showed the Applicant was apprised of the need to satisfy USACE permitting requirements.  USACE determined the Applicant’s work did not appear to meet NWP permitting conditions and declined to issue an after-the-fact permit.  Therefore, the RA denied funding, as the Applicant did not have the proper environmental permits for the work completed, which was a term and condition of the grant.  The RA also indicated that, per a prior second appeal decision, CA Reclamation District 800, FEMA-1628-DR-CA, (Mar. 15, 2016), denial of funding is an appropriate remedy when an applicant does not comply with a term or condition of the grant.

Second Appeal

The Applicant’s second appeal dated May 1, 2019 expands upon previous arguments.  The Applicant notes the RA’s analysis is based on the USACE determination set forth in the January 2018 email and that USACE did not explain how it failed to satisfy NWP conditions and, thus, how it violated the CWA.  The Applicant states the USACE’s determination was arbitrary and capricious and challenges the determination through its appeal with FEMA because USACE did not allow it to appeal the permit denial.  In addition, the Applicant argues a violation of the due process clause of the Fifth Amendment to the United States Constitution, because it was not informed why USACE denied its application and was not given an opportunity to respond to specific allegations.

Discussion

Environmental Compliance

The CWA makes it unlawful to discharge any pollutant into navigable waters without the appropriate CWA permits.[2]  Section 404 of the CWA gives USACE authority to issue permits, including NWPs, for this type of activity.^[3]  USACE will consider any activity requiring authorization under the CWA to be unauthorized if it is under construction or completed, and does not comply with all the terms and conditions of an NWP or other applicable permit.[4] 

The National Environmental Policy Act and federal regulations require federal agencies to consider the environmental impact of proposed actions and to carry out their responsibilities in a manner consistent with national environmental laws and policies.[5]  FEMA’s Public Assistance Program and Policy Guide states FEMA must review each project to ensure the work complies with environmental laws and their implementing regulations.^[6] 

FEMA will only close out an Applicant’s small projects once it receives certification that the Applicant completed the approved SOWs for all of its small projects and complied with all EHP requirements.[7]  If an Applicant materially fails to comply with any term of an award, including environmental compliance requirements, FEMA may disallow all or part of the grant award.[8]  Denial of grant funding is a proper remedy when an Applicant does not comply with such requirements.[9]

As stated in PW 20, the Applicant was responsible for obtaining all permits and demonstrating compliance with the CWA.  USACE indicated in its January 24, 2018 email that it could not verify an after-the-fact permit for the project.  In its response to a Congressional inquiry, USACE stated the completed work appeared to violate the CWA.  In this appeal, USACE pointed out the work was already complete when the Applicant submitted its October 2017 application, and repeatedly mentioned that it did not appear the work complied with all conditions of the NWP.  FEMA is not responsible for permitting or determining compliance with the CWA; only USACE can do this.  Therefore, the RA properly found that FEMA funding is not eligible as the Applicant did not have the proper environmental permit for the work completed and did not demonstrate compliance with the CWA.

Due Process Rights

The Applicant argues it was not adequately informed why USACE denied its application and was not given an opportunity to respond to specific allegations, in violation of its Fifth Amendment due process rights.  FEMA’s responsibility involved reviewing the proposed work to ensure compliance with environmental laws, and to advise the Applicant of its responsibilities.  FEMA properly adhered to its regulations and policies to provide written notice that included the basis for FEMA’s denial (explanation and provisions of law, regulation, or policy that support the determination).  The Agency provided formal notification setting forth the Applicant’s appeal rights and allowed the Applicant the opportunity to respond to any questions regarding eligibility before issuing a decision.  Consequently, FEMA afforded the Applicant appropriate due process. 

Conclusion

USACE determined the Applicant performed work that did not appear to meet NWP conditions and declined to issue an after-the-fact permit.  As such, the RA appropriately determined the Applicant did not comply with all environmental requirements.  Therefore, the appeal is denied.