Force Account Labor & Equipment Costs, Immediate Threat

Appeal Brief

Summary Paragraph

The coronavirus (COVID-19) pandemic resulted in a major disaster declaration for the state of Texas. The City of Pearland (Applicant) requested Public Assistance (PA) for force account labor overtime and straight time costs and employee meal expenses. FEMA created Grants Manager Project 701203 to document the Applicant’s claim but denied $1,272,188.42 in labor costs and $10,716.14 for meal expenses. FEMA found that the Applicant had not demonstrated the labor and meal costs were associated with eligible emergency work or were otherwise eligible under PA policy. The Applicant submitted a first appeal. It asserted that the claimed costs were eligible, as: (1) the overtime labor costs were associated with emergency medical services related to COVID-19; (2) straight time pay costs were incurred by employees reassigned from their normal duties; and (3) its employees were provided meals as they were not permitted to leave their work sites. The FEMA Region 6 Regional Administrator denied the appeal. FEMA found that the Applicant had not demonstrated the labor costs at issue were directly tied to eligible emergency work or were otherwise eligible under PA policy. Regarding meal expenses, FEMA found that the Applicant had not submitted documentation demonstrating that the employees were unable to leave their work sites. The Applicant submits a second appeal reiterating its previous positions and providing additional explanations.

Authorities

• Stafford Act § 403(a)(3).
• 44 C.F.R. §§ 206.223(a)(1), 206.225(a)(1), (a)(3)(i), 206.228(a)(2)(iii).
• PAPPG, at 19, 24, 57, 63.
• Medical Care Policy (Mar. 15, 2021), at 3-4; Medical Care Policy (May 9, 2020), at 3.
• City of Pearland, FEMA-4485-DR-TX, at 3; City of Miami, FEMA-4486-DR-FL, at 2-3.

Headnotes

• In response to COVID-19, eligible work may include emergency and inpatient treatment for both confirmed and suspected cases of COVID-19.
  • Supporting documentation provided by the Applicant does not tie any of the claimed overtime labor costs to potentially eligible COVID-19 work.
• Straight time of a permanent employee funded from an external source is eligible if the employee is reassigned to perform emergency work that the external source does not fund.
  • The Applicant acknowledged that routine labor costs for the employees at issue are funded internally; therefore, the claimed straight time labor costs are ineligible.
• The provision of meals for employees engaged in eligible emergency work is eligible provided certain conditions apply.
  • The Applicant did not provide information demonstrating that its claimed employee meal expenses meet eligibility conditions found in PA policy.

Conclusion

The Applicant did not demonstrate that the claimed overtime labor costs were directly tied to the performance of eligible emergency work, or that straight-time labor costs and employee meal expenses are eligible for PA funding. Therefore, this appeal is denied.

Appeal Letter

Appeal Analysis

Background

The coronavirus (COVID-19) pandemic resulted in a major disaster declaration for the state of Texas on March 25, 2020, with an incident period of January 20, 2020, to May 11, 2023. The City of Pearland (Applicant) requested Public Assistance (PA) for emergency protective measures implemented in response to the pandemic. The claimed costs included force account labor and material, supply, and meal expenses. The Applicant stated that it incurred the costs while operating a temporary point of distribution (POD) facility for delivering COVID-19 vaccinations, and for other emergency response and recovery activities.[1] The Applicant incurred all costs between January 20, 2020, and July 1, 2022. FEMA created Grants Manager Project 701203 to document the Applicant’s claim.

In a Determination Memorandum issued on February 29, 2024, FEMA denied $1,272,188.42 in claimed labor costs and $10,716.14 for employee meal expenses.[2] FEMA noted that the labor costs included overtime pay for firefighters responding to emergency medical service (EMS) calls and straight-time pay for staff working in a call center and at the POD. FEMA found that the Applicant had not provided documentation demonstrating the firefighters performed work associated with eligible emergency actions taken in response to COVID-19. Further, it determined that straight-time costs for permanent employees working at the call center and POD were ineligible under PA policy. Finally, FEMA found that the claimed meal expenses were ineligible increased operating costs.

First Appeal

On April 29, 2024, the Applicant submitted a first appeal requesting FEMA approve funding for the labor and meal expenses. Regarding the labor costs for firefighters, the Applicant stated that its policy was to treat each EMS call as if it involved COVID-19, and thus “it was not practical to maintain records of which response activities were directly related to COVID-19.”[3] The Applicant provided supporting documentation including employee payroll records and a log of EMS calls received between March 2020 and August 2021. The Applicant also provided graphs overlaying overtime hours worked with reported daily COVID-19 cases. It asserted that increased labor hours correlated with increased COVID-19 cases, and thus the claimed labor costs were related to the pandemic. The Applicant asserted that the labor costs for call center and POD employees were eligible under PA policy as the employees had been reassigned to perform temporary duties.[4] Finally, the Applicant asserted that the claimed meal costs were necessary to address an immediate threat to public health, as employees were not permitted to leave the POD to obtain their own meals. It pointed to daily activity logs, which it stated showed the employees did not leave the POD after signing in. In a transmittal letter dated May 23, 2024, the Texas Division of Emergency Management (Recipient) expressed support for the appeal.

FEMA requested information clarifying whether labor costs for the employees reassigned to the POD were funded by an internal or external source. In response, the Applicant stated that it funded the labor costs internally, but that it disagreed with FEMA’s policy that considers permanent employees to be budgeted employees.[5]

On September 18, 2024, the FEMA Region 6 Regional Administrator denied the appeal. FEMA stated that the EMS call log did not differentiate between work related to COVID-19 care and routine services. Therefore, it found that the Applicant had not demonstrated the overtime costs for firefighters were directly tied to eligible emergency work. Similarly, FEMA noted that the call center and POD employees were budgeted employees and the Applicant had not demonstrated the employees were called in from administrative leave to perform their duties. For these reasons, FEMA determined that straight-time costs for the call center and POD employees were ineligible. Finally, FEMA determined that the Applicant had not submitted documentation demonstrating that the call center and POD employees were unable to leave work sites to obtain their own meals; therefore, it could not determine whether the claimed meal costs were eligible under PA policy.

Second Appeal

On November 18, 2024, the Applicant submitted a second appeal reiterating its previous arguments and requesting FEMA approve $1,272,188.42 for labor costs and $10,716.14 for employee meals. The Applicant states that it reviewed the EMS call log provided with the first appeal, and after cross-referencing each call entry with fire department schedules and employee timesheets was able to verify eligible overtime labor costs of $260,172.00. The Applicant provides a second EMS call log for the period of December 2021 to July 2022, and states that it screened each call entry for COVID-19. Estimating that the response to each call took approximately 30 minutes, the Applicant states that it verified additional labor costs of $3,447.00.[6] Finally, regarding meal costs for call center and POD employees, the Applicant states that there is no provision in PA policy requiring documentation showing its employees could not leave their work sites, but that the daily activity logs provide sufficient documentation. In a transmittal letter dated December 17, 2024, the Recipient expressed support for the appeal. 

Discussion

Eligible emergency work includes emergency protective measures necessary to save lives and protect public health and safety.[7] For emergency protective measures to be eligible, the applicant is responsible for showing the work is required due to an immediate threat resulting from the declared incident.[8] 

Overtime Labor Costs for Firefighters Responding to EMS Calls

In response to COVID-19, eligible work may include emergency and inpatient treatment for both confirmed and suspected cases of COVID-19, including emergency medical transport related to COVID-19.[9] Certain labor costs associated with medical staff providing treatment to COVID-19 patients may also be eligible, including overtime for budgeted medical staff.[10]

The Applicant asserts that its policy was to treat all EMS calls as related to COVID-19 exposure, and therefore overtime costs for firefighters responding to EMS calls are eligible. In support, it provides two call logs. The first log records EMS calls received from March 2020 to August 2021; the second log records calls received from December 2021 to July 2022. Both logs record EMS calls with generic response descriptions such as “EMS call, excluding vehicle accident with injury” and “sick person – no [prior] symptoms” but contain no record (e.g., a work code or other description) indicating any relation to a confirmed or suspected COVID-19 case.[11] Further, though the Applicant asserts that the second call log was “screened for COVID-19,” it did not explain its process for screening COVID-19 calls from other service calls, or why it did not apply this process for all of the work at issue.[12] 

Other supporting documentation (fire department schedules, payroll records, and COVID-19 case data) does not directly tie any of the work or associated costs to potentially eligible COVID-19 work. Therefore, overtime labor costs incurred by the Applicant’s firefighters are not eligible.[13]

Straight-time Labor Costs for Call Center and POD Employees

For emergency work, generally only overtime labor costs for budgeted employees are eligible.[14] The Applicant may assign an employee to perform work that is not part of the employee’s normal job.[15] FEMA provides PA funding based on the reassigned employee’s normal pay rate, not the pay level appropriate to the work, because the Applicant’s incurred cost is the employee’s normal pay rate.[16] Straight time of a permanent employee funded from an external source is eligible if the employee is reassigned to perform eligible emergency work that the external source does not fund.[17]

The Applicant asserts that straight-time labor for permanent employees working at the call center and POD is eligible under PA policy because the employees were reassigned from their normal duties. However, straight-time costs for reassigned permanent employees are only eligible where those employees’ normal duties are funded by an external source. Here, the Applicant acknowledged that routine labor costs for the employees at issue are funded internally;[18] therefore, the straight-time labor costs are not eligible.

Call Center and POD Employee Meal Expenses

The provision of meals for employees engaged in eligible emergency work is eligible provided the individuals are not receiving per diem and one of the following conditions apply: (1) a qualifying labor policy or written agreement requires provision of meals; (2) conditions are sufficiently severe as to require employees to work abnormal, extended work hours without a reasonable amount of time to provide for their own meals; or (3) food and water is not reasonably available for employees to purchase.[19] FEMA only reimburses the cost of meals that are brought to the work location and purchased in a cost-effective manner, such as bulk meals.[20]

The Applicant states that costs for meals provided to the call center and POD employees are eligible as the employees were unable to leave their place of duty to procure their own meals. It asserts that daily activity logs demonstrate that the employees did not leave their place of duty. However, the daily activity logs included in the administrative record do not demonstrate severity of conditions at either site such that employees were required to work abnormal hours or were otherwise unable to leave their work locations to obtain their own meals.[21] Further, the Applicant did not provide a written agreement requiring the provision of employee meals, or information showing that food was not reasonably available in the local area at the time of the purchases. Therefore, the claimed meal costs are ineligible.[22]

Conclusion

The Applicant did not demonstrate that the claimed overtime labor costs were directly tied to the performance of eligible emergency work, or that straight-time labor costs and employee meal expenses are eligible for PA funding. Therefore, this appeal is denied.