Improved Project, Codes and Standards

Appeal Brief

Summary

On August 29, 2005, Hurricane Katrina destroyed the baseball field, dirt parking lots, bleachers, baseball equipment, concession stand, locker room and storage/dugout, of a high school located in Slidell, Louisiana, operated by the St. Tammany Parish School Board (Applicant).  In December 2010, and January 2011, FEMA approved replacement of the destroyed facilities in Project Worksheet (PW) 19407 (replacing the baseball field, parking lots, bleachers, and equipment), and PW 19354 (replacing the concession stand, locker room, and storage/dugout buildings).  In June 2011, the Applicant requested the PWs be consolidated and obligated for actual project costs.  By November 2011, the Applicant completed the reconstruction, but also installed items that were not present in the facilities prior to the disaster and performed work not included in either PW.  For instance, it combined the previously separate buildings into one elevated facility, and installed concrete parking lots, a handicap lift, and various appliances/equipment in the concession area.  FEMA determined the Applicant constructed the facilities with improvements beyond those driven by codes and standards and denied actual costs for both projects, capping funding as an improved project.  The Applicant appealed FEMA’s initial determination, arguing that codes and ordinances required most of the improved elements.  The State of Louisiana Governor’s Office of Homeland Security and Emergency Preparedness (Grantee) argued FEMA agreed to fund an actual cost project and stated the majority of the improvements were code-driven.  The FEMA Region VI Regional Administrator (RA) denied the appeal, determining the work in dispute included improvements that (1) were not required as a direct result of the disaster; and (2) did not meet the requirements for standards that change the predisaster construction.  In its second appeal, the Applicant requests actual cost reimbursement, contending the design of the facilities is due to codes and asserting FEMA agreed to fund a consolidated, actual cost project while it was reviewing the entire high school construction project.  The Grantee concurs, arguing that the majority of the work and associated costs were required by statutes or ordinances. 

Authorities and Second Appeals

• Stafford Act § 406.
• 44 C.F.R. §§ 206.203(d)(1), 206.205(b)(2), 206.206, 206.223(a)(1), 206.226(d).
• PA Guide, at 27, 82, 85.
• Village of Waterford, FEMA-4020-DR-NY, at 4 (Sep. 4, 2014), City of Petaluma, FEMA-1628-DR-CA, at 5 (Aug. 13, 2012), Elsinore Valley Municipal Water Dist., FEMA-979-DR-CA, at 2-3 (June 12, 2000).
• RRP 9524.5, at 3.

Headnotes

• Pursuant to 44 C.F.R. § 206.203(d)(1) and the PA Guide, FEMA may determine a project to be improved if a damaged facility was restored to a different design than existed predisaster and the change was not required by codes, specifications, or standards.
  • As the Applicant implemented changes to the construction of the facilities that changed the predisaster design and were not required by codes, specifications, or standards, the RA properly determined both projects to be improved projects.
• Under 44 C.F.R. § 206.226(d), costs associated with work that changes the predisaster construction of a facility may be eligible for Public Assistance if the codes and standards meet all five prongs of 44 C.F.R. § 206.226(d). 

Most of the work in dispute fails to satisfy the five-prong test under 44 C.F.R. § 206.226(d).  However, the installation of the concrete parking lots, water heater, three compartment sink, hand wash sink, 90 percent outside-air conditioning unit, mini-split air conditioner, second staircase, and mechanical lift, are required by codes that satisfy 44 C.F.R. § 206.226(d) and consequently, are eligible code-driven improvements.

Appeal Letter

Appeal Analysis

Background

On August 29, 2005, Hurricane Katrina destroyed the baseball field, parking lots, bleachers, baseball equipment, concession stand, locker room and storage/dugout, of a high school located in Slidell, Louisiana, operated by the St. Tammany Parish School Board (Applicant).  In Project Worksheet (PW) 19407, FEMA approved replacement of the baseball field and ancillary facilities, i.e., bleachers, fencing, dugouts, bullpen, batting cage, scoreboard, foul poles, dirt parking lots, curbing, sidewalks, drainage system and irrigation system (Ancillary Facilities).[1]  Additionally, FEMA approved funding for the replacement of the baseball concession stand, locker room and storage/dugout buildings through PW 19354.[2]    

On June 2, 2011, the Applicant submitted a request to consolidate and obligate actual project costs for both PWs.[3]  By November 2011, the Applicant completed reconstruction of the Ancillary Facilities, as well as construction of one elevated building (Consolidated Facility), housing the previously separate concession stand, locker room, and storage/dugout buildings.  On June 5, 2013, FEMA conducted a codes and standards review and specifically questioned improved elements constructed to the facilities that did not exist prior to the disaster and were not included in the scope of work of either PW.[4]  The list included concrete parking lots, landscaping, a stairway, a handicap lift, concession stand appliances, air conditioning units, and a complex hot water system.

On September 9, 2013, FEMA transmitted a letter to the State of Louisiana Governor’s Office of Homeland Security and Emergency Preparedness (Grantee), determining that the Ancillary Facilities and Consolidated Facility were constructed with improvements beyond those driven by codes and standards.  As a result, FEMA denied actual costs for both projects and capped funding for the completed construction work as an improved project.  FEMA revised both PWs, implementing the improved project determination, and adjusted eligible costs accordingly.[5] 

First Appeal

In a letter dated November 14, 2013, the Applicant appealed FEMA’s determinations of ineligible improvements in Version 2 of both PWs, attaching letters from its architectural[6] and engineering[7] firms: (1) advocating for funding based on specific local ordinances, Federal law, best practices for consistency with other campus buildings, and standards set by State agencies; or (2) indicating “no response” on the eligibility of certain items. 

The Grantee transmitted the appeal in a January 10, 2014 letter and, in an accompanying Memorandum, argued FEMA and the Applicant agreed to fund a consolidated project and the reimbursement of actual costs.  Also, the Grantee argued the majority of the improvements were in response to statutes or ordinances which existed at the time of the disaster and were consistently enforced. 

On September 17, 2014, FEMA Region VI transmitted a Final Request for Information (RFI) to the Grantee, stating the facilities were replaced with improvements and enhancements that: (1) did not exist predisaster; and (2) did not meet the eligibility requirements for standards which change the pre-disaster construction.  FEMA requested any additional information concerning the two issues, or any other matters, that supported the Applicant’s appeal.  In a letter dated July 21, 2015, the Grantee forwarded a letter written by the Applicant’s architect, reasserting that certain items were required by codes.[8] 

In a letter dated January 11, 2016, the FEMA Region VI Regional Administrator (RA) denied the appeal.  The RA first noted that the Applicant cited no dispute with the determination that the items in question did not exist prior to the disaster.  The RA also declined to reverse the improved project determination.  Finally, the RA determined that the work in dispute included improvements that: (1) were not required as a direct result of the disaster; and (2) did not meet the requirements for standards that change the predisaster construction.

Second Appeal

By way of a letter dated March 23, 2016, the Applicant appeals the RA’s decision, requesting FEMA award actual costs in the amount of $2,146,887.71.[9]  The Applicant raises two distinct arguments.  First, it contends the design of the facilities is due to the codes in existence at the time of demolition and rebuild.  Alternatively, it asserts FEMA agreed to fund a consolidated, actual cost project while it was reviewing the entire high school construction project.  The Applicant submits as support, electronic communications between the Applicant and FEMA, which demonstrate the Applicant provided FEMA with its proposed plans, specifications, and drawings prior to the reconstruction.  The Grantee transmitted a supporting Memorandum, arguing that the majority of the work and associated costs were required by statutes or ordinances. 

The Applicant requests reimbursement of costs associated with the following items that were found ineligible in PW 19407 (Version 2):  (1) the large and small concrete parking lots built to the northwest and northeast of the baseball field;[10] (2) the concrete driveway between the football and baseball fields and the concrete sidewalk connecting the two parking lots with the pedestrian bridge;[11] (3) landscaping;[12] (4) an electrical conduit and pull boxes intended for future ball field lighting;[13] (5) an electrical panel for the ball field;[14] (6) data, phone, television, and security systems;[15] and (7) an additional 8,700 square feet (SF) of concrete installed around the bleachers and Consolidated Facility.[16]  Additionally, the Applicant seeks funding for the following items from PW 19354 (Version 2) that were deemed ineligible: (1) one stairway and mechanical handicap lift;[17] (2) the metal roofing;[18] (3) the pre-finished metal siding and brick veneer on the exterior of the building;[19] (4) a 100 percent outside-air, air conditioning unit for the locker room;[20] (5) additional locker room height;[21] (6) a plywood ceiling attached to form foam underneath the floor;[22] (7) a stainless steel coiling counter door for the concession area;[23] (8) the polymer base cabinets for the concession area;[24] (9) an ice-maker for the concession area;[25] (10) a stainless steel countertop for the concession area;[26] (11) a mini-split air conditioner for the concession area;[27] (12) a water heater for the concession area;[28] (13) a three compartment sink and hand sink for the concession area;[29] (14) a complex circulating pump, expansion tank, and thermostatic mixing valve for the concession area;[30] and (15) an additional 127 SF in the concession area.[31]

Discussion

Improved Project

FEMA provides PA funding for work to restore damaged eligible facilities on the basis of the design of such facilities as they existed immediately prior to the disaster and in conformity with current applicable codes, specifications, and standards.[32]  If applicants choose to make improvements not required by codes and standards, while still restoring the damaged facility to its predisaster function and capacity, Public Assistance (PA) funding for such improved projects is limited to the federal share of the estimated costs associated with repairing or replacing the damaged facility to its predisaster design. [33] 

Here, the Applicant’s modifications resulted in enhancements to the equipment and systems of the Ancillary Facilities and an expansion and reconfiguration of the physical layout of the interior space of the predisaster concession stand, locker room and storage/dugout structures.  For example, the Applicant installed an electrical conduit and pull boxes for future ball field lighting, an electrical panel for the ball field, and data, phone, television, and security systems as part of the Ancillary Facilities.  Prior to the disaster, the Applicant had none of these systems.  Similarly, the Applicant enhanced the predisaster concession stand, locker room and storage/dugout structures by reconstructing them as one building, the Consolidated Facility.  The Applicant posits no code, specification, or standard that required these modifications to the facilities. 

The Applicant argues FEMA agreed to fund a consolidated, actual cost project and provides as support, electronic communications between FEMA and the Applicant, ranging from June through December 2010, which show discussions of the Applicant’s proposed reconstruction plans.  Although the electronic communications demonstrate FEMA had knowledge of the Applicant’s requested improvements prior to the original obligated versions of either PW, none of the communications demonstrate FEMA approved either actual cost funding or all of the work contained in the proposal.  Lastly, the Applicant points out that it never agreed to a capped, improved project designation.  While this may be true, it is not relevant as FEMA determines if a project is an improved project, even if an applicant does not request or intend an improved project finding.[34]  Consequently, FEMA properly designated both as improved projects and PA funding is limited to the federal share of the estimated costs associated with restoring the damaged facility to its predisaster design. 

The Applicant also argues that it is owed additional funding from FEMA for code-driven work.  This argument is addressed below.

Codes and Standards

Costs associated with work that changes the predisaster construction of a facility may be eligible for PA funding if the codes or standards: (1) apply to the type of repair or restoration required (standards may be different for new construction and repair work); (2) are appropriate to the predisaster use of the facility; (3) are found reasonable, in writing, and formally adopted and implemented by the State or local government on or before the disaster declaration date, or be a legal Federal requirement applicable to the type of restoration; (4) apply uniformly to all similar types of facilities within the jurisdiction of the owner of the facility; and (5) for any standard in effect at the time of a disaster, it must have been enforced during the time it was in effect.[35]  All five prongs must be met in order to be eligible for PA funding.[36] 

1. Apply to the Type of Repair or Restoration Required

There must be a direct relationship between the upgrade work and the disaster damage.[37]  Here, the request for reimbursement to install a plywood ceiling for the crawlspace is not eligible because the crawlspace did not exist predisaster, so consequently no disaster damage was sustained that requires this work.  The installation of a plywood ceiling in a crawlspace is required by the International Building Code, but the Applicant does not provide documentation of a code/standard that required the crawlspace itself.  As the construction of the crawlspace is not a disaster-related repair, and the plywood ceiling would not be necessary if not for the crawlspace, the cost is ineligible under 44 C.F.R. § 206.226(d)(1).

1. Formally Adopted and Implemented

An applicant has the responsibility to substantiate its claims by submitting documented justification.[38]  When an applicant attempts to demonstrate compliance with 44 C.F.R. § 206.226(d)(3), generic guidance is not equivalent to a mandatory code or standard.[39] 

FEMA requested the Applicant to elaborate on the specific codes that required each work item, and for many of them, the Applicant and Grantee either: (1) provide reasons not related to code compliance; (2) provide inapplicable standards; or (3) fail to provide any explanation at all.  Specifically, the Applicant fails to provide the necessary documentation of specific codes, specifications, or standards, for the following items completed to the Ancillary Facilities: (1) the concrete driveway and sidewalk; (2) the electrical conduit and pull boxes; (3) the electrical panel; (4) the data, phone, television, and security systems; and (5) the additional 8,700 SF of concrete around the bleachers and the Consolidated Facility.  Moreover, the Applicant does not provide documentation to demonstrate the codes were formally adopted and implemented for the following work items in the Consolidated Facility: (1) the metal roofing and the pre-finished metal siding and brick veneer; (2) the additional locker room height; (3) the stainless steel coiling counter door, polymer base cabinets, ice-maker, stainless steel countertop, and complex circulating pump, expansion tank, and thermostatic mixing valve for the concession area; and (4) the addition of 127 SF to the concession area over what existed predisaster.  As the above items do not satisfy the requirement of 44 C.F.R. § 206.226(d)(3), they are ineligible for funding.

In contrast, the Applicant produces codes in effect at both the time of the disaster and reconstruction that relate to the remaining work items at issue in this appeal.  First, regarding the concrete parking lots and landscaping, the Applicant cites to City of Slidell, Louisiana ordinances that require: (1) one concrete or asphalt space for each five seats in a sports arena;[40] and (2) landscaping (trees and shrubbery) for parking lots and pedestrian access areas.[41]  The ordinances became effective five years before the disaster and they do not include mandatory language requiring immediate compliance.  Therefore, the parking lots were not in violation of the local ordinances at the time of the disaster.  As the ordinance was still in effect at the time of reconstruction, the concrete parking lots to the northwest and northeast of the baseball field are eligible code-driven improvements.  Conversely, the trees and shrubbery are not eligible for PA as FEMA does not fund the restoration of landscaping.[42]    

Next, regarding the Consolidated Facility, the Applicant cites to codes and standards relating to the following elements: (1) the water heater in the concession area;[43] (2) the three compartment sink and hand sink in the concession area; [44] (3) the 100 percent outside-air, air conditioning unit in the locker room[45] and mini-split air conditioner in the concession area;[46] and (4) the second stairway and handicap mechanical lift built in place of the handicap ramp.[47] 

First, regarding the hot water heater in the concession area, FEMA confirmed through its review of the appeal, that the Louisiana Administrative Code in effect at the time of the disaster and reconstruction required hot water systems in retail food establishments to sanitize food-contact surfaces of equipment and utensils.[48]  As the predisaster code did not require the Applicant to upgrade the building to meet this requirement until there was a substantial renovation of, or addition to, the building,[49] the Applicant was compliant with this code at the time of the disaster; it did not substantially renovate the facility until the 2011 construction of the Consolidated Facility.  As such, the water heater in the concession area is an eligible code-driven improvement. 

Second, the Applicant and Grantee contend that the Louisiana Administrative Code, promulgated by the Louisiana Department of Health and Hospitals, requires a three-compartment sink and hand wash sink in a food preparation facility.  Similar to the water heater, the code specifically required a three-compartment sink and hand wash sink at the time of the disaster and at the time of construction of the Consolidated Facility.[50]  Also similar to the water heater, the code did not require these upgrades until the Applicant performed substantial renovations to the building.  Consequently, the three-compartment sink and hand wash sink are eligible code-driven improvements.

Third, the Applicant argues the 100 percent outside-air and mini-split air conditioning units are required by codes and standards that mandate humidity control for habitable places, and cites to the International Mechanical Code (IMC) for support.[51]  Regarding the 100 percent outside-air unit in the locker room, the Applicant’s engineer argues this is the only way to generate the air conditioning required for humidity control without recirculating the air.  However, the IMC allows for up to 10 percent of air to be recirculated.[52]  Consequently, the improved project cost estimate should be adjusted to include the code-driven improvement of an air conditioning unit that recirculates 10 percent of air.  Similarly, the mini-split air conditioner for the concession area, providing humidity control without 100 percent exhaust, complies with the IMC and is therefore an eligible code-driven improvement.

Finally, the Applicant argues that because the Consolidated Facility was constructed as an elevated building, codes and standards require two accessible means of egress.  FEMA previously agreed with this argument, noting in PW 19354 (Version 2) that one stairway and one handicap ramp were code-driven requirements that would satisfy this obligation.[53]  However, the Applicant asserts it was more cost-effective to install a second stairway and a mechanical handicap lift in place of the ramp.  As such, it argues the costs for them are eligible because the work was the least expensive option among the required improvements for ADA and NFPA compliance.  FEMA independently evaluated this claim and agrees that the least expensive option, still required by codes and standards, was to install the stairway and mechanical lift in place of the handicap ramp, at a cost of $36,800.00.  As such, FEMA will increase the eligible capped funding to include these code-driven improvements.

Conclusion

The majority of the upgrades at issue in this appeal, which modified the predisaster design of both facilities, were not required by codes or standards.  As such, both projects are improved projects and subject to capped funding.  However, FEMA will adjust the capped funding estimate of both projects to include the following code-driven requirements: the concrete parking lots, documented in PW 19407, and the water heater, three compartment sink, hand wash sink, 90 percent outside-air conditioning unit, mini-split air conditioner, second staircase and mechanical lift, documented in PW 19354.  All other claimed costs are ineligible for PA reimbursement.