Result of Declared Incident

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster	4332
Applicant	Baptist Hospitals of Southeast Texas
Appeal Type	Second
PA ID#	000-UTFZB-00
PW ID#	GMP 11139
Date Signed	2021-12-09T17:00:00

Summary Paragraph

From August 23 to September 15, 2017, rainfall from Hurricane Harvey impacted the roof of the Baptist Hospitals of Southeast Texas’ (Applicant) Beaumont Main Hospital (Facility) in Beaumont, Texas.  A contractor hired by the Applicant assessed that rainfall from the disaster overwhelmed the drainage capacity of the Facility’s roof.  FEMA created Grants Manager Project 11139 to document the roof’s restoration, but denied Public Assistance (PA) funding for all but one roof section in a June 12, 2020 Determination Memorandum.  On July 22, 2020, the Applicant appealed, arguing that its roof assemblies were within their functional service lives and in good condition prior to the disaster.  Based on its contractor’s assessment, it asserted that unprecedented rainfall from the disaster damaged the Facility’s roof.  The FEMA Region VI Regional Administrator denied the appeal on May 6, 2021, finding that the available documentation did not support disaster-related damage to the Facility.  The Applicant submitted a second appeal dated June 10, 2021, reiterating its first appeal arguments, and again requesting PA funding to replace the Facility’s roof.

Authorities and Second Appeals

• Stafford Act § 406.
• 44 C.F.R. § 206.223(a)(1).
• PAPPG, at 19-20, 118.
• Conway Hosp., FEMA-4394-DR-SC, at 3.
• Republic Cty. Highway Dep’t, FEMA-4230-DR-KS, at 4.

Headnotes

• To be eligible for PA funding, an item of work must be required as a result of the disaster.
  • The documentation provided by the Applicant does not enable FEMA to verify the predisaster condition of the Facility’s roof.
  • Post-disaster assessments of the disaster’s impact conflict with the Applicant’s contractor’s assessment.
  • As a result, FEMA determines that the Applicant has not demonstrated the clear presence of disaster-related damage, nor has it demonstrated damage to such an extent that the roof required replacement.

Conclusion

The Applicant has not demonstrated that work to replace the Facility’s roof is required as a result of the disaster.  Such work is ineligible for PA funding.  Therefore, this appeal is denied.

Appeal Letter

Appeal Analysis

Background

From August 23 to September 15, 2017, wind-driven rain from Hurricane Harvey impacted the roof of the Beaumont Main Hospital (Facility) in Beaumont, Texas.  The Facility is owned and operated by Baptist Hospitals of Southeast Texas (Applicant), an eligible Private Nonprofit.

Following Hurricane Harvey, the Applicant hired Zero/Six Consulting (Zero/Six) to inspect and assess various properties, including the Facility.  Zero/Six released a report finding that rainfall from the disaster overwhelmed the Facility’s “building envelope systems … allowing for water infiltration beyond the building envelope.”[1]  Zero/Six recommended replacing much of the Facility’s roof.[2]

FEMA created Grants Manager Project (GMP) 11139 to document work to replace the Facility’s roof, and conducted a site inspection from March 12-14, 2018.  FEMA’s Site Inspectors (SI) observed that rainwater from the disaster overwhelmed drainage systems in some areas.[3]  For the remainder of the roof, the SIs were unable to verify any visible damage attributable to the disaster.[4]

The Applicant’s insurer, American International Group (AIG), hired Envista Forensics (Envista) to inspect and assess the roof assemblies on the Facility.  In an August 20, 2018 report of findings, Envista agreed that one section of the roof required replacement as a result of the disaster.[5]  However, for the remaining roof sections it assessed, Envista disagreed with the Zero/Six recommendations.  Generally, it found that roofing materials in some areas were dry, with isolated exceptions around drains or other constructed penetrations; in other areas, it noted a loss of adhesion in subsurface materials due to “historical and long-term moisture retention” that predated the disaster.[6]

At the Applicant’s request, FEMA conducted a second site inspection on October 9, 2019.  FEMA’s SI noted that there was no visible wind damage to the roof’s surface membrane, and drainage systems were generally sufficient to clear the rainfall that occurred during the disaster.[7]  Therefore, the SI expressed agreement with Envista’s finding that the replacement of the roof was not necessary as a result of the disaster.

FEMA issued a Determination Memorandum signed June 12, 2020, denying $7,639,180.86 in Public Assistance (PA) funding for the restoration of the majority of the Facility’s roof.  FEMA determined that the Applicant had not demonstrated the claimed replacement work was required as a direct result of the disaster.  However, FEMA agreed with the Zero/Six and Envista assessments that work to repair damage on one section of the roof was necessary as a result of the disaster, and approved funding in the amount of $265,217.60.

First Appeal

The Applicant submitted a first appeal dated July 22, 2020, requesting FEMA approve PA funding for costs totaling $4,369,888.64 to replace the Facility’s roof.[8]  The Applicant stated that the majority of the roof assemblies claimed were less than 20 years old and were within their useful service lives at the time of the disaster.  It asserted that there was no pre-existing damage in any area.  In support, it referenced a Facility assessment (COPE report) prepared in July 2015 by AIG.  The Applicant stated that AIG found the Facility’s roof was routinely maintained and in good condition, with no previous damage, prior to the disaster.  It noted that FEMA’s SI had recorded disaster-related damage in some areas, and faulted FEMA for disregarding this finding in the Determination Memorandum.  The Applicant stated that the Facility’s roof sustained subsurface damage during the disaster that could not be detected through visual observation.  It noted Zero/Six’s assessment that the disaster produced unprecedented rainfall, and asserted that the Facility’s roof held standing water for 96 hours during the disaster.[9]  In a July 31, 2020 transmittal letter, the Texas Division of Emergency Management (Grantee) expressed support for the appeal.

FEMA subsequently held a conference call with the Applicant and the Grantee to request additional information regarding the Facility’s roof.  The Applicant provided post-disaster reports documenting repairs, testing, and inspections performed by contractors hired to replace portions of the roof between 2018 and 2020.[10]

The FEMA Region VI Regional Administrator denied the appeal on May 6, 2021.  FEMA determined that the Applicant had not demonstrated that the damages claimed were a direct result of the disaster.  Additionally, FEMA found that the Applicant’s post-disaster contractor’s reports demonstrated “workmanship and design issues” that predated the disaster and led to water infiltration through the roof’s surface or the Facility’s walls.[11]  Finally, FEMA denied the funding it previously approved for one section of the roof, finding that information recorded during the site inspections conflicted with the Zero/Six and Envista reports.  Therefore, FEMA determined that “the evidence does not support eligibility of the work despite FEMA’s prior finding.”[12]

Second Appeal

The Applicant submitted a second appeal dated June 10, 2021, again requesting PA funding for costs totaling $4,369,888.64 to replace the Facility’s roof.  The Applicant reiterates its first appeal arguments and provides a risk assessment report prepared by Paragon Risk Engineering (Paragon) in August 2014.  It claims the Paragon report “supports that the roofs on the [hospital] campus were in good condition” prior to the disaster.[13]  In a July 9, 2021 transmittal letter to FEMA, the Grantee expresses support for the appeal.

 

Discussion

FEMA provides PA funding to eligible applicants for the repair, restoration, reconstruction, or replacement of facilities damaged or destroyed by disasters.[14]  To be eligible for PA funding, an item of work must be required as a result of the disaster.[15]  FEMA does not provide PA funding for repair of damage caused by deterioration, deferred maintenance, the applicant’s failure to take measures to protect a facility from further damage, or negligence.[16]  For buildings and building systems, distinguishing between damage caused by the incident and pre-existing damage may be difficult.[17]  Before making an eligibility determination, FEMA considers each of the following: the age of the building and building systems; evidence of regular maintenance or pre-existing issues; and the severity and impacts of the incident.[18]  It is the applicant’s responsibility to demonstrate that damage was caused directly by the declared incident, and where pre-existing damage exists, to distinguish that damage from the disaster-related damage.[19]

On second appeal, the Applicant requests PA funding for costs totaling $4,369,888.64 to replace the Facility’s roof.  The Applicant states that the roof assemblies at issue were less than 20 years old and within their useful service lives when the disaster began.  In its report, Zero/Six did not record the age of the roof assemblies on the Facility.  However, FEMA’s SI did record the dates of installation, either in the site inspection report or in the project’s damage description and dimensions.  Therefore, information in the record establishes that the associated roof assemblies were installed between 1998 and 2009, and were less than 20 years old at the time of the disaster.  Considering the approximate ages, it is reasonable to conclude that these roof assemblies were within their functional service lives when the incident period began.

The Applicant provides the Paragon report, the COPE report, and maintenance, inspection, and repair records to establish the predisaster condition of the Facility’s roofs.  The Paragon report, based on an inspection that occurred three years prior to the disaster, provides a one-word assessment (“good”) of roof conditions across the Facility;[20] however, it provides no further explanation or details.  The COPE report, based on an AIG inspection that occurred two years prior to the disaster, provides a similar one-word assessment (“good”) in its narrative.[21]  Elsewhere in the report, AIG assessed that roof coverings were “adequate,” with the exception of two areas the Applicant had identified for replacement.[22]

The Applicant’s maintenance and inspection records, dated closer to the incident period, confirm that the rooftops of all buildings on its Beaumont campus, including the Facility, were cleaned and inspected twice in the eight-month period prior to the disaster.  However, none of the maintenance work orders record the observed condition of the roof.  Finally, the Applicant provided contractor’s reports describing post-disaster repairs to portions of the roof.  The reports describe the contractor’s daily progress in making the repairs and contain numerous photographs of the work performed.  On first appeal, FEMA determined that the information provided demonstrated issues with the roof’s predisaster construction that enabled water intrusion.  However, the Applicant did not provide any explanations in response, and in fact did not reference the reports, in its second appeal letter.

Zero/Six did not assess the predisaster condition of the Facility’s roof in its report.  It nevertheless found that large areas of the roof were compromised by rainfall from the disaster, and recommended their complete replacement.  In support, post-disaster photographs in the Zero/Six report show water or moisture in subsurface materials in some locations.  Other imagery indicates locations in which Zero/Six found wet roof core samples, or areas where the roofing systems failed uplift testing.  However, post-disaster assessments, prepared by Envista and FEMA, conflict with Zero/Six’s findings as to the impact of the disaster.  Envista found that many areas of the roof were dry, with isolated exceptions around roof-mounted drains, or in areas with evidence of historical ponding or pre-existing deterioration.[23]  FEMA’s site inspection assessments also contradicted Zero/Six’s findings.  At both the June 2018 and October 2019 site inspections, FEMA was generally unable to attribute any damages to the disaster; at the latter inspection, the SI determined that the existing rooftop drainage features were sufficient to clear the rainwater that had fallen during the disaster.[24]

Work must be required as a result of the declared incident to be eligible and the Applicant has the burden to demonstrate that the requested work is necessary.[25]  The Applicant’s records do not enable FEMA to verify predisaster conditions, and post-disaster assessments of the disaster’s impact, prepared by Envista and FEMA, conflict with the Applicant’s assessment, prepared by Zero/Six.  Consequently, FEMA determines that the Applicant has not demonstrated disaster-related damage to the Facility’s roof to such an extent that it required replacement.  Therefore, the work the Applicant is claiming on appeal is ineligible for PA funding.[26]

 

Conclusion

The Applicant has not demonstrated that work to replace the Facility’s roof is required as a result of the disaster.  Such work is ineligible for PA funding.  Therefore, this appeal is denied.

 

[1] Zero/Six Consulting, Post Disaster Facility Evaluation of Baptist Hosps. of Se. Tex. (Main Hospital), at 8 (Apr. 10, 2018) [hereinafter Zero/Six Report (Main Hospital)].  Zero/Six released an initial report for all of the Applicant’s buildings on March 6, 2018; it issued a revised report for the Facility on April 10, 2018.

[2] Id. at 8-9.

[3] FEMA, Project Report (GMP 11139), at 3-5 (Undated) [hereinafter Project Report (GMP 11139)].

[4] Id. at 6-10.

[5] Envista Forensics, Report of Findings, Cmty. Hosp. Corp., Baptist Hosp. of Se. Tex., at 8 (Aug. 20, 2018) [hereinafter Envista Report].

[6] Id.

[7] FEMA’s SI could not assess wind damage from the disaster in two places on the roof, as the Applicant completed replacement work prior to the second inspection; see FEMA Region VI, Site Inspection Report, Beaumont Main Hospital Building, at 1, 8 (Undated) [hereinafter Site Inspection Report (October 2019)].

[8] The Applicant adjusted the amount in dispute to include actual costs for portions of the roof it replaced prior to submitting the first appeal, plus estimated costs for the remaining areas it claimed; Letter from Chief Exec. Officer, Baptist Hosps. of Se. Tex., to Reg’l Adm’r, FEMA Region VI, at 1, Attach. 1 (July 22, 2020).  Additionally, the Applicant included costs for the section of the Facility’s roof that FEMA approved in the Determination Memorandum, in the amount in dispute.

[9] The Applicant makes additional arguments regarding changes to AIG’s position on disaster-related damage; it also accuses FEMA of disregarding the Zero/Six assessment of damages, including the Applicant’s cost estimate; see Id. at 3-4.

[10] The Applicant submitted 255 reports, the majority of which were prepared by contractors (Price Consulting, Inc. and W.H. Coltzer International) to document the daily progress of roof repairs to the Day Surgery roof, the Surgery roof, and the Sabine Tower; see FEMA First Appeal Analysis, Baptist Hosps. of Se. Tex., FEMA-4332-DR-TX, at 7 (May 6, 2021).

[11] Id. at 12.

[12] Id. at 14.

[13] Letter from Chief Exec. Officer, Baptist Hosps. of Se. Tex., to Reg’l Adm’r, FEMA Region VI, at 3 (June 10, 2021).

[14] Robert T. Stafford Disaster Relief and Emergency Assistance Act § 406, Title 42, United States Code § 5172 (2012).

[15] Title 44 Code of Federal Regulations (44 C.F.R.) § 206.223(a)(1) (2016); Public Assistance Program and Policy Guide, FP 104-009-2, at 19 (Apr. 1, 2018) [hereinafter PAPPG].

[16] PAPPG, at 19-20.

[17] Id. at 118.

[18] Id.

[19] Id. at 19; FEMA Second Appeal Analysis, Conway Hosp., FEMA-4394-DR-SC, at 3 (July 7, 2021).

[20] Paragon Risk Eng’g, Prop. Risk Control Survey Report (Beaumont Hospital), at 4, 6 (Aug. 19, 2014).  Paragon also recorded an Applicant statement that there were “no recent roofing deficiencies or recommendations,” and noted that the Facility’s roof systems were “adequately designed to withstand the expected wind speeds (110 mph) and associated wind uplift pressures”; Id. at 6, 16.

[21] American Int’l Grp., Inc., VHA Sw. Cmty. Health Commercial Prop. COPE Report, at 12 (July 14, 2015).  AIG’s assessment of the Facility appears to be based on Paragon’s findings from the 2014 inspection, as AIG notes that “[n]arratives in this report are based in large part on the Paragon Risk Engineering – Property Risk Control Survey Report … [a]ll have been verified to still be accurate.”

[22] Id. at 13, 21.  AIG noted that the Applicant intended to replace the roof coverings on “the Central Plant and the north tower” in fiscal year 2016.

[23] Envista Report, at 7-8.

[24] See, e.g., Project Report (GMP 11139), at 6 (determining, for roof AR, that “FEMA was unable to locate and document any storm related roof-damages due to rain water ponding, wind born debris, or wind gusts [sic]”); Site Inspection Report (October 2019), at 11 (determining that “[r]oof AR exceeds the down drain requirement for a 60-minute 100-year event”).

[25] 44 C.F.R. § 206.223(a)(1); FEMA Second Appeal Analysis, Republic Cty. Highway Dep’t, FEMA-4230-DR-KS, at 4 (July 26, 2017).

[26] Finally, FEMA notes that it reviewed the Applicant’s cost estimate during the analysis of the second appeal.  However, the issue of costs for permanent work under GMP 11139 is moot, as the Applicant has not demonstrated the claimed items of work were required as a result of the disaster.