Temporary Facilities

Appeal Brief

Summary Paragraph 
From September 7 – 29, 2018, Hurricane Florence destroyed the administrative office building belonging to the Housing Authority of the City of New Bern (Applicant), a Private Nonprofit (PNP) organization that owns and manages apartments and housing developments for low-income residents. The Applicant relocated to the common area of an unaffected housing facility but was forced to relocate a second time, signing a two-year lease and requesting reimbursement for the first year of the lease. FEMA denied the request, finding that the Applicant did not provide an essential community service. On appeal the Applicant noted that it provided an essential low-income housing service that saved lives, secured the safety of property, and allowed for the healthy function of the community, and requested three years of leasing cost. FEMA denied the appeal, finding public housing is not an essential community service eligible for relocation and the Applicant did not demonstrate that relocation was necessary or the most cost-effective and practical option. On second appeal the Applicant states as a PNP, the public housing service it provides is a health and safety service of a governmental nature that meets the requirements for temporary relocation. 

Authorities and Second Appeals

• Stafford Act § 403(a)(3)(d).
• 2 C.F.R. §§ 200.403(a), 200.404; 44 C.F.R § 206.223(a)(1).
• PAPPG, at 76-79.
• AFYA Foundation of America, Inc., FEMA-4480-DR-NY, at 3; DeSales Media Group Inc., FEMA-4480-DR-NY, at 3.

Headnotes

• Services provided in eligible PNP administration buildings, essential to the operation of essential community services may be eligible for temporary relocation, provided it is the most cost-effective and practical option. The time limitation for temporary relocation may be extended by FEMA if the applicant needs additional time beyond 12 months, but the applicant must submit a written time extension request that includes the status of work and a timeline for completion.
  • The Applicant is a PNP that owns and operates apartments and housing developments for low-income residents. Low-income housing services are considered an essential community service. As such, the Applicant’s administration building, is eligible for temporary relocation. 
  • The Applicant demonstrated that it chose the most practical and cost-effective option for temporary relocation and submitted and received time extensions through September 2022, with a pending time extension request submitted to FEMA, which included the project’s status of work and a timeline for completion.

Conclusion

The Applicant is a PNP that provides low-income housing, an essential community service and its administrative office is eligible for temporary relocation. In addition, the Applicant has demonstrated that temporary relocation to its leased facility was the most cost-effective and practical option. Therefore, the cost of the lease through September 14, 2022 is granted.

Appeal Letter

Appeal Analysis

Background

From September 7 – 29, 2018, Hurricane Florence impacted North Carolina.[1] Flood waters and storm surge from the disaster destroyed theadministrative office building of the Housing Authority of the City of New Bern (Applicant), a Private Nonprofit (PNP) organization that owns and manages apartments and housing developments for low-income residents. On September 14, 2018, the Applicant temporarily relocated to a common area of a non-affected housing facility, but then relocated a second time due to limited space, equipment, and privacy concerns. The Applicant signed a two-year lease beginning August 1, 2019 at the new location. The Applicant requested Public Assistance (PA) funding for the first year of the lease in the amount of $30,000.00. FEMA prepared Grants Manager Project (GMP) 85488 to document the request. On September 24, 2021, FEMA issued a Determination Memorandum denying the request as FEMA found public housing is not listed in PA policy as an essential community service and the temporary relocation was not necessary to save lives, protect property and the public, and preserve the proper function and health of the community at large. 

First Appeal

The Applicant appealed on October 22, 2021, stating that it provided essential services of a governmental nature necessary to save lives, protect property and the public, and preserve the proper function and health of the community at large. The Applicant requested an additional $60,000.00 to assist with the expense of maintaining a temporary office location. The Applicant listed the functions it must carry out under Title 24 of the Code of Federal Regulations (24 C.F.R.) and stated a centralized office location was necessary to provide the essential services of affordable housing and property maintenance to families to prevent homelessness. The Applicant stated the Department of Housing and Urban Development (HUD) requires it provide a location for residents and the public to access information. North Carolina Emergency Management (Recipient) transmitted and supported the appeal on November 3, 2021.

The FEMA Region 4 Regional Administrator (RA) denied the appeal on November 10, 2022. Citing information provided by the Applicant in its appeal, FEMA stated duties performed by the Applicant did not demonstrate that the Applicant provided an essential community service necessary to save lives, protect property and the public, or preserve the proper function and health of the community at large. FEMA noted the Applicant managed ongoing business in the facility it already owned for more than 10 months before relocating to a leased facility. Finally, FEMA stated its policy did not identify the provision of public housing as an essential community service eligible for relocation, and the Applicant did not demonstrate relocation from its functioning temporary office was necessary or the most cost-effective and practical option.

Second Appeal

The Applicant’s January 4, 2023 second appeal restates previous arguments, and notes as a PNP, under Chapter 157, Subsection 2(b) of the North Carolina General Statutes, it provides public housing services that meet the eligibility requirements for temporary relocation under FEMA policy, which also allows for relocation of services provided in administrative offices. The Applicant provides a copy of its Articles of Incorporation that declare amelioration of increases in and spread of disease and crime caused by the lack of affordable and safe dwellings is a public purpose. The Applicant also explains that fiscal limitations prevented it from more quickly finding a suitable office location. The Applicant stated that it used common space to conduct business for several months in a facility it owned for expediency’s sake. The space lacked an area in which it could have private conversations that dealt with personally identifiable information (PII), and it lacked security features for long-term record storage. This caused the Applicant to be out of compliance with State and Federal requirements regarding the handling of PII and was only acceptable as a temporary measure, which was prolonged by the fiscal limitations. Finally, the Applicant argues the costs are reasonable under factors listed in Title 2 of the Code of Federal Regulations § 200.404. The Recipient’s February 20, 2023 transmittal supports the appeal.

FEMA sent the Applicant and Recipient a Request for Information (RFI) on August 10, 2023.  In it, FEMA requested information regarding the Recipient’s approval(s) for the Applicant’s time extension requests to complete the Applicant’s permanent work project of restoring its disaster-destroyed administrative office building.  The Applicant replied on August 25, 2023, confirming that the Recipient approved the time extension to September 14, 2022, and that another time extension was submitted to FEMA in March 2023 for the period past which the Recipient can approve. This request is still pending.

Discussion

Temporary Relocation

            i. PNP Eligibility

If an applicant provides essential community services at a facility that is unsafe, inaccessible, or destroyed as a result of an incident, temporary relocation of these services to another facility is eligible.^[2] This includes certain essential community services provided by PNPs, provided the PNP owns and operates the facility in which the services are provided.[3] PNP services eligible for relocation include facilities that provide public health and safety services of a governmental nature.[4] Services provided in support facilities, such as administration buildings, essential to the operation of such facilities may also be eligible for relocation.^[5]

The Applicant is a PNP that owns and operates apartments and housing developments for low-income residents. Low-income housing services are considered an essential community service that provide public health and safety services of a governmental nature.[6] The Applicant also owned and operated the accompanying administrative office building destroyed by the disaster, and which is essential to the operation of the Applicant’s low-income housing facilities. Therefore, relocation of the administration facility essential to providing essential community services may potentially be eligible for PA funding.

            ii. Temporary Relocation Costs

While an applicant may lease, purchase, or construct a temporary facility, the applicant needs to make the decision to rent or purchase space and equipment based on the most cost-effective and practical option.^[7] Accordingly, the applicant must provide FEMA with a cost analysis, which should include at least three proposals with cost estimates based on the timeline to restore the original facility.^[8] FEMA does not mandate that the applicant pursue a specific option for a temporary facility, but FEMA only provides PA funding for the most cost-effective option.[9] If an applicant relocates a service from a facility it owns, the lease costs of a temporary facility are eligible provided that leasing is the most cost-effective option.[10]

Here, the Applicant first temporarily relocated due to the disaster, to an undamaged facility it owns. However, it has stated that the space was inadequate[11] and inappropriate for its needs, and that subsequent relocations were due to State and Federal requirements regarding the handling of PII. The Applicant provided cost comparisons of potential leasing solutions and indicated that the space it leased was one of only two available that were in walking distance of its low-income housing, which housed a population who, according to the Applicant are challenged with transportation limitations.[12] The Applicant explained that the option it chose was not the lowest cost option for a lease, but required a less extensive retrofit than the other potential leasing option and was very near the average for office space in its community.[13] The Applicant also provided comparison quotes for other potential solutions: a rental trailer parked on the Applicant’s property that would cost approximately $140,000.00 to rent for three years and building modular office units on the Applicant’s property that would cost about $200,000.00 to purchase.[14] By comparison, the Applicant’s rent of $30,000.00 per year is a cost-effective choice for its temporary facility, based on the needs of the Applicant. Accordingly, the Applicant provided at least three quotes for possible alternatives and demonstrated it selected the most cost-effective and practical option.

            iii. Time Limitations

The time limitation for temporary facilities is 6 months from the declaration date, and FEMA must approve any extensions to the project deadline.[15] FEMA considers the timeframe necessary to restore the damaged facility when evaluating time extensions for temporary facilities and may approve an extension up to 12 months.[16] If the Applicant needs additional time beyond 12 months, it must submit a written time extension request that includes the status of work and a timeline for completion.[17] FEMA only grants additional time if the Applicant begins construction on the damaged facility within 12 months of the declaration date, unless circumstances beyond the Applicant’s control prevented the start of construction within the 12 months.[18]

The Applicant’s response to the RFI explained that the Recipient approved its time extension request through September 14, 2022 for the Applicant’s underlying permanent work project, and that an additional time extension request submitted to FEMA including the status of the work and a timeline for completion was pending approval. Accordingly, FEMA approves the costs associated with the Applicant’s temporary facility through September 14, 2022, and upon disposition of the Applicant’s additional time extension request, FEMA will review the costs associated with the lease of the temporary facility at that time.[19]

Conclusion

The Applicant is a PNP that provides low-income housing, an essential community service and its administrative office is eligible for temporary relocation. In addition, the Applicant has demonstrated that temporary relocation to its leased facility was the most cost-effective and practical option. Therefore, $90,000 for the cost of the lease through September 14, 2022 is granted.