Result of Declared Incident

Appeal Brief

Summary Paragraph

During the incident period, September 7-29, 2018, Hurricane Florence produced torrential rains, which flooded several buildings including one that housed a basement boiler system that the Flora MacDonald Education Foundation (Applicant) stated was damaged by the disaster. FEMA prepared Grants Manager Project 172623 to capture damages and work to address the damages and costs. The Applicant submitted a proposal, which included previously unidentified pipe damage with total estimate for replacement and relocation of the boiler system and replacing pipes for $1,145,966.55. FEMA issued a Determination Memorandum on November 9, 2021, denying the total estimated project costs for replacing and relocating the boiler system. FEMA noted that the age of the building, non-compliance with building codes for the boiler system, and deterioration of various components all contributed to the condition of the boiler system. The Applicant submitted its first appeal, requesting the $1,145,966.55 denied for the replacement and relocation of the boiler system. The Applicant provided 25 documents to support that it maintained the boiler system and that it is necessary to relocate and replace the boiler system. The FEMA Region 4 Regional Administrator denied the Applicant’s first appeal, finding that the claimed damage was the result of pre-existing deteriorated conditions, inaction in preventing previously identified flood risk, and aged components. The Applicant filed a second appeal reiterating first appeal arguments.

Authorities

• Stafford Act § 406(a)(1)(B).
• 44 C.F.R. § 206.223(a)(1).
• PAPPG, at 19, 118, 133.
• The Ethician Foundation, FEMA-4332-DR-TX, at 2.

Headnotes

• FEMA does not provide PA funding for repair of damage caused by deterioration, deferred maintenance, or failure to take measures to protect a facility from further damage. 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.
  • Here, the Applicant has not substantiated through documentation that claimed damages are the direct result of the declared incident. Rather, the documentation demonstrates significant deterioration and damages existed to the system prior to the declared incident.

Conclusion

FEMA finds that the Applicant has not demonstrated that the claimed work was required as a result of the declared incident. Therefore, this appeal is denied.

Appeal Letter

Appeal Analysis

Background

During the incident period, September 7-29, 2018, Hurricane Florence produced torrential rains that flooded several facilities belonging to the Flora MacDonald Educational Foundation (Applicant).[1] The Applicant’s administrative building housed a basement boiler system, which the Applicant stated was damaged by floodwaters. FEMA conducted two site inspections, the first on January 24, 2019, and the second on March 22, 2019, capturing the claimed boiler damages.[2] At the time, the Applicant identified damage to the boiler, boiler blower, motor, and control valves. The Applicant submitted an initial proposal in October 2019 to replace and elevate the boiler system at a total estimated cost of $196,923.00. The Applicant later submitted a revised proposal, which also included replacing heating piping for the entire administrative building, for an estimated cost of $1,145,966.55. FEMA prepared Grants Manager Project 172623 to document the project.

FEMA issued a Request for Information on August 24, 2021, requesting documentation to clarify: the costs of the new boiler system, specifics of the new installation, description of the piping, and whether the work to replace the entire building piping system was required to address damage caused by the incident. The Applicant responded with photographs of the boiler name plate for identification, work proposal documentation, and statements regarding the overall condition of the administrative building. 

FEMA issued a Determination Memorandum on November 9, 2021, denying the all requested costs, including those related to the initial request to replace and elevate the boiler system. FEMA found that damage to the piping of the heating system was caused by deterioration, rather than directly by the declared incident. FEMA noted that the age of the building, non-compliance with building codes for the boiler system, and deterioration of various boiler components all contributed to the condition of the boiler system. 

First Appeal 

The Applicant submitted its first appeal, requesting $1,145,966.55 for the replacement and relocation of the boiler system, and new piping. The Applicant stated that substantial repairs and maintenance were done to the boiler between November 2016 and December 2017 by its heating, ventilation and air conditioning contractor. The Applicant asserted that this substantiates that the boiler system was in good working order prior to the disaster. The Applicant explained that following the disaster, the boiler was submerged in standing water, which caused the aged boiler to deteriorate to the point that it became unusable. The Applicant submitted 25 exhibits in support of its appeal, including the repair invoices from 2016 and 2017 and correspondence from the Applicant’s engineering contractor recommending replacement of the boiler system. The North Carolina Emergency Management (Recipient) forwarded the first appeal to FEMA on 

February 28, 2022, in support of the Applicant’s position.

The FEMA Region 4 Regional Administrator denied the first appeal on May 2, 2023, finding that the Applicant had not established that the damage to the boiler was the direct result of the disaster. FEMA noted that after Hurricane Matthew in 2016, the Applicant repaired the boiler instead of replacing it. FEMA stated that the Applicant’s engineer, Stature Engineering, recommended at the time that the Applicant should install flood proofing measures to alleviate future water damage.[3] FEMA noted that the Applicant did not show that it took such measures and therefore, subsequent damage to the system may have occurred due to deferred maintenance. FEMA observed that the documentation pointed to repeated flooding both before and after the incident and found that the Applicant not taking steps to address this resulted in the deteriorated state of the boiler and piping systems. FEMA cited to correspondence from the Bass Air Conditioning Company dated February 15, 2022, which stated that the basement area was continuously exposed to flooding and moisture conditions following the disaster, causing additional damage to the steam heating components. FEMA therefore found that the Applicant had not demonstrated that the damages occurred as a direct result of the incident, rather than from pre-existing deficiencies.

Second Appeal

The Applicant filed a second appeal reiterating first appeal claims that FEMA is responsible for replacing the boiler system and the piping as the damages were the direct result of the disaster. The Applicant also states that due to significant costs to the building resulting from prior damages, it could not implement the flood proofing measures recommended by its engineer after the prior storm in 2016. The Recipient forwarded the appeal in a letter dated August 17, 2023, supporting the Applicant’s position.

Discussion

FEMA provides Public Assistance (PA) funding to a state or local government for the repair, restoration, reconstruction, or replacement of a facility damaged or destroyed by a major disaster.^[4] To be eligible for PA funding, an item of work must be required as a result of the disaster, and the applicant must demonstrate the damage was caused directly by the declared incident.^[5] FEMA does not provide PA funding for repair of damage caused by deterioration, deferred maintenance, or the applicant’s failure to take measures to protect a facility from further damage.^[6] For buildings and building systems, distinguishing between damage caused by the incident and pre-existing damage may be difficult.[7] 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, such as water damage from a leaky roof; and the severity and impacts of the incident.[8] 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.^[9]

Here, the Applicant states that flooding from the disaster caused significant damage requiring not only replacement and relocation of the boiler system, but also the replacement of the building’s piping system. The Applicant includes documentation to show that it took measures to repair or replace certain components of the boiler system in 2016 and 2017. However, the documentation submitted on appeal demonstrates significant predisaster issues with the boiler system. The basement in which the boiler system is located was flooded multiple times prior to this disaster, resulting in damage to the boiler system and recommendations for flood protections measures that the Applicant did not implement.[10] In addition, multiple post-disaster inspections conducted by the Applicant’s contractors, both Stature Engineering and Bass Air, identified standing water within the pipe trench area and boiler system in the basement.[11] This standing water and increased moisture, which lingered for months following the disaster, and resulted in rapid deterioration of the piping and other components.[12] The Applicant’s contractors identified multiple issues with the piping when conducting tests due to significant deterioration, and additionally, the contractors signified that the pipe was not in good working condition.[13] Overall the Applicant has not substantiated the work required to repair the boiler system and piping system was required as a result of the declared disaster and not the result of the deteriorated condition of the components. Though FEMA may fund work to repair a facility to its predisaster condition, the Applicant has not provided documentation that could assist FEMA in distinguishing between pre-existing damage, post-disaster deterioration, and disaster-related damage. Consequently, the Applicant has not substantiated the work to replace the boiler and piping were required as a direct result of the disaster.

Conclusion

FEMA finds that the Applicant has not demonstrated that the work to replace its boiler and piping was required as a result of the declared incident. Therefore, this appeal is denied.