Immediate Threat, Increased Operating Costs

Appeal Brief

Summary Paragraph

From December 10-11, 2021, severe storms, straight-line winds, and tornados impacted areas in Tennessee. The Nashville Electric Service (Applicant) requested Public Assistance (PA) funding for overtime force account labor (FAL) and meal expenses totaling $50,010.43 associated with staffing a call center during the disaster. FEMA created Grants Manager Project 667365 to document the Applicant’s claim, but subsequently denied all funding for the project. FEMA found that the available documentation did not contain detailed information demonstrating the claimed overtime hours were tied to eligible emergency work. The Applicant submitted a first appeal, stating that its call center staff worked in concert with field personnel to restore power as rapidly as possible, and that meal expenses were provided in accordance with its predisaster pay policy. The FEMA Region 4 Regional Administrator denied the appeal. FEMA found that the Applicant had not provided information demonstrating the work at issue was disaster-specific, and that the FAL costs were ineligible. Consequently, FEMA found that the associated meal costs were also ineligible. The Applicant submitted a second appeal, asserting that its call center employees performed eligible emergency work, including coordination of the response to the disaster with residents and emergency personnel. The Applicant submits a call log, which it states lists specific details about each call received at the call center.

Authorities

• Stafford Act § 403, 42 U.S.C. § 5170.
• 44 C.F.R. §§ 206.223(a)(1), 206.225(a), 206.228(a)(2).
• PAPPG, at 51, 69, 96, 110, 113, 117.
• Hardin Cnty., FEMA-4586-DR-TX, at 2, n. 4

Headnotes

• Additional costs of operating a facility or providing a service are only eligible if: (1) the services are specifically related to eligible emergency actions to save lives or protect public health and safety or improved property; (2) the costs are for a limited timeframe based on the emergency or exigency of the circumstances; and (3) the applicant tracks and documents the additional costs.
  • Information in the Applicant’s call log demonstrates that call center services during the period in question were specifically related to emergency actions to protect public health and safety resulting from the disaster.
  • Additionally, the Applicant only claimed costs incurred over a limited time frame based on the circumstances of the disaster and submitted documentation tracking its costs.
  • Therefore, the Applicant has met the three criteria required for increased costs related to operating a facility or providing a service to be eligible under FEMA policy.
  • Regarding meal costs, the Applicant’s predisaster labor policy includes provisions for a meal allowance as part of each employee’s overtime compensation.

Conclusion

The Applicant demonstrated its costs for overtime FAL, including meal allowances, are eligible for PA funding. Therefore, this appeal is granted in the amount of $50,010.43.

Appeal Letter

Appeal Analysis

Background

From December 10-11, 2021, severe storms, straight-line winds, and tornados impacted areas in Tennessee.[1] The Nashville Electric Service (Applicant), a local government entity, requested Public Assistance (PA) funding for overtime force account labor (FAL) and meal expenses associated with staffing a call center. The Applicant’s claimed costs totaled $50,010.43.[2] In an April 7, 2022 letter provided to FEMA, the Applicant described the work performed in the call center, which included receiving reports of outages and hazardous conditions, directing repair efforts, coordinating supplies for field personnel, and dispatching repair crews. It asserted that staffing the call center was necessary to quickly stabilize electrical power services and protect public safety. FEMA created Grants Manager Project (GMP) 667365 to document the Applicant’s claim as emergency protective measures.

FEMA issued a Request for Information (RFI), requesting documentation (daily logs or activity reports) and payroll information (employee names, titles, pay rates, days and hours worked, etc.) to support the eligibility of the Applicant’s FAL claim. FEMA also requested invoices for the Applicant’s meal expenses. In response, the Applicant provided a document totaling the number of calls its employees received during and after the disaster and a report summarizing customer power outages. It also provided its predisaster pay policy, payroll information, and meal invoices. The Applicant stated that its employees “[we]re not required … to maintain personal activity logs.”[3]

In a Determination Memorandum dated December 5, 2022, FEMA denied all requested funding for GMP 667365. FEMA found that the available documentation “lack[ed] detailed information that would permit FEMA to verify the claimed overtime hours were tied to the performance of eligible emergency work.”[4] Therefore, FEMA determined that the claimed overtime FAL and meal costs were ineligible.

First Appeal

On February 2, 2023, the Applicant submitted a first appeal requesting $50,010.43 for GMP 667365. The Applicant stated that 107,344 customers within its service area experienced power outages during the disaster, and that its call center staff worked in concert with its field personnel to restore power as rapidly as possible. It stated that all claimed work occurred between December 10-15, 2021. The Applicant noted that its call center was normally open during business hours, six days per week, but that during the disaster “due to the volume and nature of the calls [received], we determined that overtime was warranted.”[5] The Applicant provided the documentation previously submitted with its response to the RFI; it also submitted a spreadsheet listing the number and length of calls each employee received between December 10-14, 2021. Regarding its claimed meal expenses, the Applicant stated that it provided meal allowances to employees working overtime, in accordance with its predisaster pay policy. In a transmittal letter dated February 2, 2023, the Tennessee Emergency Management Agency (Recipient) requested FEMA consider the information provided with the appeal.

On October 10, 2023, the FEMA Region 4 Regional Administrator denied the appeal. FEMA found that the Applicant had not provided information detailing the work at issue, and thus had “not shown that the type of work claimed … consisted of disaster-specific tasks that exceeded the normal duties of its call center staff.”[6] Therefore, FEMA determined that the Applicant’s overtime FAL costs were ineligible increased operating costs. FEMA also determined that because the call center employees were not performing eligible emergency work, the claimed meal expenses were also ineligible.

Second Appeal

On December 1, 2023, the Applicant submitted a second appeal, again requesting $50,010.43 in PA funding. The Applicant asserts that the work performed by its employees was directly related to the disaster. It states that the purpose of the call center was to assist in restoring electrical power as quickly as possible, and to provide “the coordination of communications … to protect residents and first responders from dangerous conditions.”[7] Thus, the Applicant asserts that its call center employees performed eligible emergency work, and the costs for overtime hours are eligible for PA funding. In support, it attaches a call log (Trouble Report),[8] which it states lists specific details about each call received from December 10-15, 2021. Finally, the Applicant states that because the work at issue was eligible emergency work, the claimed meal expenses are also eligible under FEMA policy, as they were incurred based on a predisaster pay policy for overtime work. In a transmittal letter dated January 3, 2024, the Recipient expresses support for the appeal.

Discussion

FEMA is authorized to provide assistance for emergency protective measures conducted before, during, and after an incident to save lives or to protect public health and safety.[9] 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.[10] Overtime FAL costs for budgeted employees performing emergency work may be eligible based on the applicant’s predisaster written labor policy.[11] Increased costs of operating a facility or providing a service are generally not eligible, even when directly related to the incident.[12] However, short-term increased costs directly related to accomplishing specific emergency health and safety tasks as part of emergency protective measures may also be eligible.[13] These additional costs are only eligible if: (1) the services are specifically related to eligible emergency actions to save lives or protect public health and safety or improved property; (2) the costs are for a limited timeframe based on the emergency or exigency of the circumstances; and (3) the applicant tracks and documents the additional costs.[14]

The Applicant’s Trouble Report, submitted for the first time on second appeal, lists thousands of calls received by the call center between December 10-15, 2021.[15] Each call entry indicates the date, time, and purpose of the call, among other information. Call entries describe customer reports of fallen trees affecting power lines, downed power lines across roads and residences, and other damage (e.g., downed transformers) and hazardous conditions.[16] Other entries appear to be calls received from the local Office of Emergency Management (OEM), an Emergency Operations Center (EOC), and the local fire department, reporting similar damage and in some cases requesting the Applicant’s assistance.[17] Several entries describe customers with medical conditions, including those requiring electrical power to sustain their medical treatment.[18]

FEMA notes the Applicant’s statement on second appeal that one of the purposes for the call center was coordination “to protect residents and first responders from dangerous conditions” resulting from the disaster, and to respond to “requests to cut power when needed for emergency response activities.”[19] As above, the Trouble Report substantiates the Applicant’s claim that call center employees received requests for assistance from emergency responders (the fire department, OEM, and EOC) due to hazardous conditions resulting from the disaster. Further, the Applicant states, and it is reasonable to conclude, that the call center employees acted on these requests, dispatching work crews to respond to and resolve hazards from “wires down, low hanging wires, broken poles, poles on fire, transformers blown or knocked off their base, trees on power lines, and partial power problems.”[20] The Applicant’s call center employees thus assisted with the coordination of the local emergency response to the disaster.[21]

The Applicant stated that its call center normally operates during business hours, six days per week, but that during the disaster it “determined that overtime was warranted to address the volume of calls coming in.”[22] Thus, the Applicant incurred the costs at issue as the result of an increased demand for the call center’s services, concurrent with the disaster. As such, FEMA properly categorized them as increased operating costs in its previous eligibility decisions. However, with the Trouble Report, the Applicant has shown that call center services during the period in question were specifically related to emergency actions to protect public health and safety resulting from the disaster. Moreover, the Applicant only claims costs incurred over a limited timeframe, based on the circumstances of the disaster,[23] and submits documentation tracking the overtime costs.[24] Therefore, the Applicant has met the three criteria required for increased costs related to operating a facility or providing a service to be eligible under FEMA policy.[25] As a result, the claimed overtime FAL costs are eligible for PA funding.

Regarding meal costs, the Applicant provides its predisaster Policy Manual, which includes provisions for a meal allowance paid to employees working emergency overtime hours.[26] As such, the Applicant did not directly provide meals to its employees.[27] Rather, the meal allowance is part of each employee’s associated overtime costs and is eligible in accordance with the other overtime costs claimed.

Conclusion

The Applicant demonstrated its costs for overtime FAL, including meal allowances, are eligible for PA funding. Therefore, this appeal is granted in the amount of $50,010.43.