Ineligible Costs

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster	4394
Applicant	Disabilities Board - Charleston
Appeal Type	Second
PA ID#	019-05FF6-00
PW ID#	PW 248
Date Signed	2021-05-03T16:00:00

Summary Paragraph

From September 8, through October 8, 2018, Hurricane Florence caused damage to Charleston County, South Carolina.  In response to the Governor’s executive order, the Disabilities Board - Charleston (Applicant) evacuated its residents, who required specialized care, to in-network facilities from September 11 to September 16, 2018.  The Applicant requested reimbursement for evacuation as well as force account labor overtime, meals, and supplies for evacuees once they were at the shelter in the amount of $288,852.92.  FEMA denied $279,017.75 in Public Assistance (PA) funding finding the costs outside of evacuation were increased operating costs.  The Applicant appealed the determination stating that given the specialized care required for the evacuated residents, the costs claimed were necessary due to the emergency.  FEMA Region IV denied the Applicant’s first appeal as the costs incurred for operating the temporary facility are ineligible increased operating expenses.  The Applicant filed a second appeal reiterating extraordinary circumstances tied to the costs. 

 

Authorities and Second Appeals

• Stafford Act § 403
• 44 C.F.R. § 206.226(a)(3)(i)-(ii)
• PAPPG, at 42, 61, 66-69
• Mem’l Hosp. at Gulfport, FEMA-4081-DR-MS at 2-3; S.C. Dep’t of Disabilities & Special Needs, FEMA-4241-DR-SC; La. Dep’t of Pub. Safety & Corrections, FEMA-4277-DR-LA, at 3; York (Town of), FEMA-4367-DR-ME; Georgetown Hosp. Sys., FEMA-4394-DR-SC, at 4.

Headnotes

• Increased costs of operating a facility or providing a service are generally ineligible, even when directly related to the incident.  For all applicants, ineligible operating costs include, but are not limited to, costs for: patient care (with limited exceptions); administrative activities; provision of food (with limited exceptions); and obtaining electrical power or water from an alternate source.
  • Here the Applicant incurred costs for providing meals and supplies for evacuees at a temporary facility, incurring overtime for staff providing patient care.  These costs are considered increased operating costs related to operating a facility which is not eligible for PA funding.

Conclusion

The costs claimed by the Applicant outside of evacuation are increased operating costs and are not eligible for PA funding.  This appeal is denied.

Appeal Letter

Appeal Analysis

Background

From September 8 to October 8, 2018, Hurricane Florence created an immediate threat to the health and safety of the public in Charleston County, South Carolina.[1]  On September 10, 2018, by South Carolina Executive Order 2018-29, the Governor ordered a mandatory medical evacuation.  The Disabilities Board of Charleston County (Applicant)[2] on September 11, 2018, per the South Carolina Department of Disabilities and Special Needs standard emergency evacuation plan, relocated to other in-network, pre-identified facilities owned by the Babcock Center, Inc.[3]  The Applicant evacuated 179 individuals receiving custodial care services and 131 staff members to the Babcock Center facilities and leased hotel rooms for residents with additional complications.  All staff and residents returned to the Applicant’s facility on September 16, 2018. 

FEMA prepared Project Worksheet (PW) 248 to document the Applicant’s claimed costs related to emergency protective measures including reimbursement for evacuation costs, as well as costs the Applicant paid to Babcock Center, Inc. for housing at the Babcock facilities, hotel lodging, staff labor, and meals and commodities for relocated residents.

On August 22, 2019, FEMA issued a Determination Memorandum (DM) denying $279,017.75 in Public Assistance (PA) funding.  FEMA explained that while the evacuation costs and costs to return were eligible emergency protective measure expenses, the costs incurred at the relocated facility are increased operating costs that are ineligible for PA funding.[4]    

 

First Appeal

The Applicant appealed in a letter dated October 22, 2019, disputing the reasons FEMA gave for denying reimbursement.  It stated that due to the unique needs and continuity of care necessary for the patients, constant care in the evacuation and temporary sheltering was required.  In addition, the relocation of this population creates increased safety concerns for the residents and others they encounter because of behavioral changes when residents are removed from familiar surroundings.  Therefore, according to the Applicant, the costs incurred were not “normal operating costs” and should be reconsidered as necessary due to the extraordinary circumstances created by the event.  The Grantee supported the appeal in a letter dated December 20, 2019 and stated that in prior disasters FEMA reimbursed similar costs in the PA program.[5]

In the first appeal determination dated November 24, 2020, the FEMA Region IV Regional Administrator denied the costs for labor, housing staff and patients, meals and supplies for patients as ineligible increased operating expenses. 

 

Second Appeal

The Applicant filed a second appeal in a letter dated January 23, 2021 reiterating first appeal arguments on the extraordinary circumstances tied to the costs.  Additionally, the Applicant claims its costs are eligible pursuant to PA policy for emergency congregate sheltering as well as associated costs for care of survivors with disabilities or functional needs.[6]

The Grantee forwarded the appeal, in a letter dated March 19, 2021, in support of the Applicant’s position and reiterating prior first appeal arguments.  Furthermore, the Grantee reiterates that in prior disasters FEMA reimbursed similar costs.[7]

 

Discussion

Eligible emergency work includes emergency protective measures that are necessary to save lives and protect property or public health and safety.[8]  Work to implement such emergency protective measures may be eligible if it eliminates or lessens immediate threats to life, public health or safety, or improved property.[9]  Increased costs of operating a facility or providing a service are generally ineligible, even when directly related to the incident.[10]  For all applicants, ineligible operating costs include, but are not limited to, costs for: patient care (with limited exceptions); administrative activities; provision of food (with limited exceptions); and obtaining electrical power or water from an alternate source.[11]

Here the Applicant responded to an evacuation order by relocating its staff and residents to a pre-identified facility within the same network under a mutual agreement.  The evacuation and return costs were eligible expenses incurred to respond to an immediate threat to the health and safety of the residents and staff, in accordance with FEMA policy.[12]  In its appeal, the Applicant requests reimbursement for costs related to housing for staff and residents, meals, and commodities at the relocated facilities, which the Applicant and Grantee claim stem from emergency actions to save lives or protect public health and safety.

However, once residents and staff were evacuated to the alternate facility, the costs to care for the evacuees, including meals, supplies and the provision of additional hotel lodging, were increased operating expenses related to providing custodial care to this population.  Therefore, the costs related to patient care, housing, meals, and commodities are not eligible as emergency measures necessary to eliminate or lessen an immediate threat.[13]

 

Conclusion

The costs claimed by the Applicant outside of evacuation are increased operating costs and are not eligible for PA funding.  Therefore, this appeal is denied.

 

 

[1] The President declared a major disaster for the state on September 16, 2018 under FEMA-4394-DR-SC. 

[2] The Applicant is a state incorporated non-profit organization that provides specialized care to individuals with severe intellectual and cognitive disabilities, brain and spinal cord injuries, cerebral palsy, autism, epilepsy, and other disabilities.  Furthermore, on first appeal the Applicant’s Public Assistance ID number is listed as 015-058D7-00, this is an unintentional oversight and the ID is correctly shown in the header of the second appeal response.

[3] The Disabilities Board of Charleston County (Applicant) and the Babcock Center, Inc. activated a Memorandum of Agreement on June 1, 2018.  The record does not specify which facilities were utilized.    

[4] The DM also noted that the Applicant is an instrumentality of a local government, which renders to the Applicant the same eligibility for PA funding as a “local government” under FEMA’s legal authorities.

[5] In both of its appeals, the Applicant cites FEMA Disaster Assistance Policy (DAP) 9523.15, Eligible Costs Related to Evacuations and Sheltering (Apr. 6, 2007).  This has been superseded as of January 1, 2016.  Id. at 1. 

[6] See Public Assistance Program and Policy Guide, FP 104-009-2, at 66-69 (Apr. 2018) [hereinafter PAPPG]. 

[7] On this matter, FEMA notes that each project is evaluated on a case-by-case basis.  Eligibility decisions under separate declarations, if made in error, have no impact on the eligibility of funding discussed in the present appeal.  See FEMA Second Appeal Analysis, York (Town of), FEMA-4367-DR-ME, at 3 n.12 (Aug. 18, 2020). 

[8] Robert T. Stafford Disaster Relief and Emergency Assistance (Stafford) Act § 403, Title 42, United States Code (42 U.S.C.) § 5170b (2018).

[9] Title 44 Codes of Federal Regulations (44 C.F.R.) § 206.225(a)(3)(i)-(ii) (2018). 

[10] PAPPG, at 42; see also FEMA Second Appeal Analysis, Mem’l Hosp. at Gulfport, FEMA-4081-DR-MS, at 2-3 (May 11, 2015) (finding that costs associated with overtime and meals for employees were increased operating expenses even though there was an imposed curfew). 

[11] PAPPG, at 61.

[12] PAPPG, at 65-66.

[13] See FEMA Second Appeal Analysis, S.C. Dep’t of Disabilities & Special Needs, FEMA-4241-DR-SC, at 2 (Jan. 11, 2018).