Force Account Labor & Equipment Costs, Immediate Threat

Appeal Brief

Appeal Letter

Appeal Analysis

Background

The coronavirus (COVID-19) pandemic resulted in a major disaster declaration for the state of Alabama on March 29, 2020, with an incident period from January 20, 2020, to May 11, 2023. Russellville Water and Sewer (Applicant), a local government entity, requested Public Assistance (PA) funding for costs associated work completed in response to COVID-19 from March 23, 2020, to September 15, 2021. The’s Applicant’s requested funding included costs associated with providing personal protective equipment (PPE) for staff, cleaning and disinfecting its primary office, a generator for the office, customer service operations, and hazard pay provided to its utility clerks and office manager who performed billing, processed payments, and facilitated the continuation of other operations (e.g., water leak and wastewater issues). Regarding the customer service-related costs, these related to installing a drive-thru lane and waiving certain processing fees. The Applicant requested costs associated with constructing an additional drive-thru lane at its office to facilitate social distancing between customers and staff by installing concrete pillars[1] and a pneumatic tube system and purchasing a generator to power the system. The remaining customer service-related costs pertained to the Applicant absorbing credit/debit card processing fees for customers’ online utility payments to encourage customers making online rather than in-person payments. FEMA developed Grants Manager Project 659658 to document Applicant’s claimed work and costs. 

FEMA issued a Request for Information, seeking a breakdown of all requested costs and the Applicant’s predisaster pay policy. The Applicant provided the requested costs’ breakdown, an undated pay policy, and minutes from an April 14, 2020 board meeting, during which the Applicant’s board approved a one-time hazard pay compensation for office staff.

FEMA issued a Determination Memorandum on November 2, 2022, granting $18,891.50 in PA funding for PPE and cleaning and disinfecting costs. FEMA denied the remaining requested costs, finding the Applicant did not demonstrate they were tied to the performance of eligible emergency protective measures.[2]              

First Appeal 

The Applicant filed a first appeal through an undated letter. The Applicant stated that the costs were tied to the performance of eligible emergency protective measures to prevent the spread of COVID-19. Regarding the drive-thru lanes’ costs, the Applicant stated it had to close its lobby to the public due to state health orders and, thus, required the modification to the existing lane and installation of the additional lane to be able to accommodate the surge in customers using the drive-thru option. Next, the Applicant requested reimbursement of credit/debit card processing fees, which it had waived for customers and temporarily absorbed while its office was closed. It stated this was done to promote the use of online utility payments to protect the public and its employees from COVID-19 exposure. The Applicant explained that prior to the disaster, customers paid these fees. Concerning the requested hazard pay, the Applicant stated that it provided a one-time hazard pay compensation payment to its staff due to inconsistent work schedules and excessive workloads. The Alabama Emergency Management Agency (Recipient) forwarded the appeal to FEMA on November 21, 2022.

The FEMA Region 4 Regional Administrator, in a letter dated October 2, 2023, denied the Applicant’s first appeal. FEMA found that the Applicant did not demonstrate that the claimed costs were related to eligible emergency protective measures and furthermore, that the Applicant did not provide a pay policy in effect prior to the disaster.

Second Appeal

The Applicant filed a second appeal in a letter dated December 1, 2023, reiterating its first appeal arguments, and requesting $93,686.27.[3] The Applicant also provided guidelines for safeguarding businesses from the Food and Drug Administration and the Centers for Disease Control and Prevention (CDC). The Recipient, in a letter dated December 1, 2023, forwarded the appeal to FEMA for consideration.

Discussion

Immediate Threat

FEMA is authorized to provide assistance for emergency protective measures to save lives and protect public health and safety.[4] For emergency protective measures to be eligible, the applicant is responsible for showing the work is required due to an immediate threat resulting from the declared incident.[5] FEMA may provide assistance for measures implemented to facilitate the safe opening and operation of all eligible facilities in response to COVID-19, including the purchase and installation of temporary physical barriers, such as plexiglass barriers and screens/dividers, and signage to support social distancing, such as floor decals.[6] Safe opening and operation work must be done in accordance with CDC guidance or that of an appropriate public health official available at the time the work was completed.[7]To be eligible, costs must be directly tied to the performance of eligible work.[8] Increased costs of operating a facility or providing a service are generally not eligible, even when directly related to the incident, unless they are short-term increased costs that are directly related to accomplishing specific emergency health and safety tasks as part of emergency protective measures.[9]

Here, the Applicant requests PA funding for costs it incurred by: (1) constructing an additional drive-thru lane; and (2) absorbing credit/debit card processing fees that it waived for customers, to support social distancing and prevent the spread of COVID-19 between the public and its staff. However, the Applicant has neither demonstrated that the costs qualify as temporary physical barriers under the applicable COVID-19 policy cited above nor that the costs are associated with any eligible activities in FEMA’s COVID-19 policies, or any comparable activity that eliminates or lessens an immediate threat resulting from the declared incident.[10] As the costs are not directly tied to any eligible emergency protective measures, the Applicant’s increased costs associated with operating the office and providing the administrative services such as bill and payment processing, are not eligible for PA funding.[11]

Force Account Labor & Equipment Costs

Extraordinary costs (such as hazardous duty pay) for essential employees who are called back to duty during administrative leave to perform eligible emergency work may be eligible if costs are paid in accordance with an applicant’s predisaster written labor policy that meets certain requirements.[12] To be eligible, costs must be directly tied to the performance of eligible work.[13]

In support of its request for reimbursement of hazard pay, the Applicant provides an undated pay policy and minutes from board meeting held three months after the start of the disaster’s incident period. Therefore, the Applicant has not demonstrated it paid hazard pay in accordance with a predisaster written labor policy. Additionally, similar to the above finding, the Applicant has not demonstrated that the hazard pay it provided to employees who were performing routine bill and payment-related functions, was directly tied to the performance of eligible emergency protective measures.

Conclusion

The Applicant has not demonstrated that the claimed costs associated with the drive-thru lane and credit/debit card processing fees are directly tied to the performance of emergency protective measures. Additionally, the Applicant has neither demonstrated it paid hazard pay in accordance with a predisaster labor policy, nor that the hazard pay is directly tied to the performance of emergency protective measures. Therefore, this appeal is denied.