Result of Declared Incident, Hazard Mitigation

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 11179
Date Signed	2021-05-11T16:00:00

Summary Paragraph

From August 23 to September 15, 2017, rainfall from Hurricane Harvey impacted the roof of the Business Office/IT Building (Facility), owned by Baptist Hospitals of Southeast Texas (Applicant).  A contractor hired by the Applicant assessed that rain from the disaster overwhelmed the roofing system, recommended replacing the roof, and prepared a hazard mitigation proposal (HMP).  FEMA created Grants Manager Project 11179 to document the restoration, but denied funding in a May 21, 2019 Determination Memorandum.  On June 17, 2019, the Applicant appealed, arguing that documented predisaster inspections demonstrated the roof was maintained and in good condition prior to the disaster.  The FEMA Region VI Regional Administrator denied the appeal on January 29, 2020, finding that the available documentation did not support disaster-related damage to the Facility, and thus the Applicant’s HMP was also ineligible.  The Applicant submitted a second appeal dated February 20, 2020, reiterating its first appeal arguments and requesting $979,604.29 to replace the Facility’s roof, restore interior spaces, and implement hazard mitigation measures.

Authorities and Second Appeals

• Stafford Act § 406.
• 44 C.F.R. §§ 206.223(a)(1), 206.226(e).
• PAPPG v3.1, at 19-20, 97, 99, 118.
• El Paso Cty., FEMA-4229-DR-CO, at 8.
• Republic Cty. Highway Dep’t, FEMA-4230-DR-KS, at 4.

Headnotes

• To be eligible for Public Assistance (PA) funding, an item of work must be required as a direct result of the disaster.
  • Predisaster records do not demonstrate the condition of the Facility’s roof at the time of the disaster.  Further, assessments of the roof indicate a potentially significant predisaster issue with the function of the roof’s surface membrane.  Therefore, the Applicant has not demonstrated the disaster caused the claimed damage to the Facility’s roof.
• FEMA has the authority to provide PA funding for cost-effective hazard mitigation measures for facilities damaged by the incident.
  • The hazard mitigation measures proposed by the Applicant are not associated with disaster-related damages.  Further, FEMA is unable to determine whether or how the proposed mitigation measures would protect the Facility from future damage.

Conclusion

The Applicant has not demonstrated that work to replace the Facility’s roof or restore interior spaces is required as a direct result of the disaster, rather than the result of predisaster conditions or deferred maintenance.  Such work is ineligible for PA funding.  Consequently, the Applicant’s hazard mitigation proposal is also ineligible.  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 Business Office/IT Building (Facility) at the Behavioral Health complex, located in Beaumont, Texas.  The Facility is owned and maintained by Baptist Hospitals of Southeast Texas (Applicant), a Private Nonprofit.  The Facility’s roof has a total surface area of 14,941 square feet and is divided into three sections.

The Applicant hired Zero/Six Consulting (Zero/Six) to inspect and assess various properties, including the Facility.  On March 5, 2018, Zero/Six published a report finding that rainfall from the disaster overwhelmed the Facility’s “building envelope systems … allowing for water infiltration beyond the building envelope, damaging both building systems and the building interior.”[1]  Zero/Six found that the entire roof system had been compromised by water infiltration related to the disaster and recommended completely replacing the roof because repairs were not practical.  It also recommended replacing metal roof flashings and remediating and repairing interior areas damaged by water infiltration.  It recommended hazard mitigation measures to add new sealants and coatings to walls and resealing or replacing the Facility’s windows.  Zero/Six prepared scopes of work (SOWs) with estimated costs totaling $979,604.29.[2]

On March 19 and June 4, 2018, FEMA conducted site inspections of the Facility.  The Site Inspector (SI) noted that the Facility was built in 1967.[3]  The SI documented signs of aging, soft spots, bubbling, delamination, and subsurface cracks throughout the roof, as well as patching over the years.[4]  The SI did not find any damage to the roof attributable to the disaster.  However, regarding interior spaces, the SI noted disaster-damaged ceiling and floor tiles.  FEMA created Grants Manager Project (GMP) 11179 to document permanent work to restore the Facility.      

The Applicant’s insurer[5] hired Envista Forensics (Envista) to inspect and assess various properties, including the Facility.  Envista issued a report of findings dated August 20, 2018.  In general, Envista found evidence of predisaster deterioration in roof assemblies, and reasoned that these conditions had allowed for water intrusion, accumulation, and retention.  Consequently, Envista determined that, for many of the Applicant’s properties, “where moisture is currently present in the affected roof assemblies, some of that moisture has been present since before [the disaster] and their respective contributions cannot be quantified.”[6]  Specific to the Facility, Envista disagreed with the Zero/Six recommendation that the Facility’s roof required replacement.  Instead, Envista found that, with “a few isolated exceptions … around roof drains,” the subsurface of the roof was dry, but that some areas exhibited evidence of historical ponding which could contribute to reduced wind resistance.[7]  

The Applicant’s insurer also hired In-Line Forensics, Inc. (In-Line) to estimate disaster-related repair costs for the Applicant’s properties.  On August 24, 2018, In-Line issued a report detailing the estimated costs of repair, based on Envista’s determinations.  In-Line noted Zero/Six’s recommendation to replace the Facility’s roof and restore interior spaces at the Facility.  However, as Envista did not substantiate disaster-related damages to the Facility’s roof, In-Line did not include any estimated costs for the Facility in its report.

On September 11, 2018, FEMA issued a critical infrastructure analysis comparing the Zero/Six, Envista, and In-Line assessments of the Applicant’s properties.[8]  Based on their “general age, condition, and pliability,” FEMA reasoned that the Applicant had “attempted to extend the roofs beyond the manufactures [sic] useful life.”[9]  Further, FEMA found that a comparison of the various assessments demonstrated that water infiltration and accumulation in roofing surfaces was due to pre-existing damage and deferred maintenance.

In a Determination Memorandum dated May 21, 2019, FEMA denied Public Assistance (PA) funding for the project.  FEMA noted that the SI did not find visible storm-related damage to the roof or exterior of the Facility, and observed signs of aging, soft spots, bubbling, delamination, and cracks in the roof’s subsurface.  FEMA determined that information presented in the Envista report and the critical infrastructure analysis demonstrated an issue with predisaster deterioration in the Facility’s roof.  Moreover, FEMA found that Zero/Six did not account for the Facility’s age or pre-existing damage when assessing the cause of any roof damage.  Therefore, the Applicant had not supported its claim for disaster-related damage. 

 

First Appeal

The Applicant submitted a first appeal dated June 17, 2019, requesting FEMA approve PA funding totaling $979,604.29, in accordance with the SOWs and cost estimates prepared by Zero/Six.  The Applicant stated that it previously provided a predisaster Facility assessment (COPE report), prepared in July 2015 by American International Group, Inc. (AIG), which FEMA had not considered in the initial eligibility determination.  The Applicant asserted that the COPE report, the Zero/Six report, and its predisaster maintenance records demonstrated that the Facility’s roof was routinely maintained and in good condition, with no previous damage, prior to the disaster.  Additionally, it argued that both the predisaster COPE report and the post-disaster Envista report were prepared by or for AIG; therefore, conflicting assessments between the two reports demonstrate that Envista’s findings were “without basis and are invalid.”[10]

Finally, the Applicant noted Zero/Six’s assessment that the disaster produced an unprecedented amount of rainfall, which overwhelmed the roof and allowed water to infiltrate the Facility.  It stated that the Facility’s roof held standing water for 96 hours during the disaster, and pointed to post-disaster photographs taken by Zero/Six[11] showing water at inner-plies and at the deck of the roof.  The Applicant also noted that the Facility’s roof drainage was not subject to current code mandated design criteria when the Facility was engineered and constructed in 1967, and therefore would not have been capable of resisting higher levels of rainfall.  The Applicant quoted a roofing industry article attached to the Zero/Six report,[12] and argued that if the roof had been subject to ongoing water infiltration prior to the disaster, the roof “would have had a history of leaks and the texture of beach sand.”[13]  In a transmittal letter dated June 19, 2019, the Texas Division of Emergency Management (Grantee) expressed support for the first appeal.

At the Applicant’s request, FEMA conducted an additional inspection of the Facility on October 8, 2019.  FEMA found that there was “no visible evidence of wind damage to the roof from the event,” and determined that the “roof condition showed evidence of ponding historically and age.”[14]  FEMA concurred with the Envista report and critical infrastructure analysis, finding that work to replace the roof was not necessary as a result of the disaster.  Additionally, FEMA examined the drainage systems present in each roof section, comparing them to industry requirements and hourly rainfall data recorded in the local area.  The data showed two separate hour-long periods wherein rainfall from the disaster exceeded industry requirements for drainage.  FEMA found that the existing drainage capacity of the roof was sufficient to meet industry requirements for all but these two periods.

On January 29, 2020, the FEMA Region VI Regional Administrator denied the appeal, finding that the available documentation did not support disaster-related damage to the Facility.  FEMA determined that nothing in the Zero/Six report or other available information established any “visible damage … such as tears, detachment, or deformation” caused by the disaster.[15]  Further, the COPE report categorized the roof’s covering as “adequate” two years prior to the incident period, but did not rely on a visual inspection of the roof for that assertion.[16]  In contrast, the Envista report, critical infrastructure analysis, and FEMA site inspections noted that complete replacement of the roof was unnecessary as a result of the disaster.  Therefore, FEMA found that the Applicant had not demonstrated disaster-related damage to the Facility.  Finally, FEMA found that in the absence of eligible disaster-related damage, any funding the Applicant requested for mitigation measures was ineligible.

 

Second Appeal

The Applicant submitted a second appeal via letter dated February 20, 2020, again requesting FEMA provide PA funding totaling $979,604.29.  The Applicant reiterates its first appeal arguments regarding the roof’s predisaster condition, supported by the COPE report and its predisaster maintenance records.  Further, it notes that FEMA acknowledged that the roof membrane had patches placed throughout the roof system over the years, which the Applicant cites as evidence of an active and robust maintenance program.[17]

Finally, the Applicant disputes the findings in the Envista and site inspection reports.  It asserts that FEMA’s inspectors were not roofing experts, and that the inspectors only recorded the roof’s visible condition without performing testing or core sampling.  The Applicant states that Envista was unaware of the COPE report and had no knowledge of the roof’s predisaster condition.  Consequently, when informed of the COPE report during insurance settlement arbitration, the Applicant’s insurer changed its position on the presence of disaster-related damage.[18]  In a transmittal letter dated March 10, 2020, the Grantee expressed support for the second appeal.

 

Discussion

Result of Declared Incident

FEMA provides PA funding to eligible applicants for the repair, restoration, reconstruction, or replacement of facilities damaged or destroyed by disasters.[19]  To be eligible for PA funding, an item of work must be required as a direct result of the disaster.[20]  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.[21]  For buildings and building systems, distinguishing between damage caused by the incident and pre-existing damage may be difficult.[22]  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.[23]  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.[24]

 

   i. Roof

In its report, Zero/Six indicated that the Facility dates to 1967;[25] this was confirmed by FEMA’s SI at the first site inspection.  The SI also noted signs of aging in roofing materials.  However, there is nothing further in the record that indicates the precise age of the Facility’s roof.

The Applicant provides the COPE report and maintenance and inspection records to establish the predisaster condition of the Facility’s roof.  The COPE report, based on a Facility inspection that occurred on July 14, 2015, provided an indication of predisaster conditions, stating that the roof coverings on the Behavioral Health complex were in “adequate condition,” without providing further details or explanation specific to the Facility.[26]  The Applicant’s work log and inspection record, dated closer to the incident period, do not provide details as to the observed condition of roofing surfaces at the time of the inspection (e.g., the condition of the surface membrane at the March 2017 inspection).

As above, Zero/Six assessed that the Facility’s entire roof was compromised by rainfall during the disaster.  Post-disaster photographs in the Zero/Six report show subsurface moisture in one location, but indicate a dry core sample in another.[27]  Envista found that the roof’s subsurface was generally dry, based on core samples taken from the roof.  Additionally, FEMA’s SI noted evidence of significant pre-existing deterioration due to aging of the surface membrane.  Photographs from the first site inspection depict damage to the roof’s surface membrane.  The photographs show cracking and disintegration of the sealant between seams in the membrane, standing water, and widespread discoloration or deterioration in surface areas, including around rooftop air-conditioning units.[28]

Eligible work must be required as a result of the declared event and the Applicant has the burden to demonstrate that the work claimed is necessary.[29]  Here, the Applicant relies on its predisaster records; however, the Applicant’s records do not indicate the predisaster condition of the Facility’s roof.  The contrary assessments, particularly FEMA’s findings at its site assessments, indicate a potentially significant predisaster issue with the function of the roof’s surface membrane.  Therefore, the Applicant has not demonstrated that the work to restore the Facility’s roof was required as a result of disaster-caused damages.  Consequently, work to replace the roof is ineligible for PA funding.

 

     ii. Interior Damage

Zero/Six found that approximately five percent of the Facility’s interior finishes were damaged by water infiltration during the disaster, and included work for interior remediation and repair in in its recommendations.  FEMA’s SI confirmed damage to ceiling and floor tiles.  The recovery SOW attached to the Zero/Six report included items of work associated with interior repairs (i.e., repairs to drywall, ceiling tiles, and carpeting, among other items).  However, as above, the available information does not enable FEMA to determine whether work to restore the Facility’s roof was required as a result of the disaster or a pre-existing issue, and work to restore the roof is not eligible.  Consequently, items of work to repair interior damage that resulted from water infiltration through the roofing system are also ineligible for PA funding.

Zero/Six also found that both the walls and windows of the Facility were a source of water infiltration into the interior spaces.  However, it noted specifically that neither the walls nor the windows had been damaged by the disaster.[30]  In the Request For Information attached to the Envista report, the Applicant indicated that “uncontrolled” rainwater from the disaster caused damage to the interior when “[t]he wall system was not able to manage the amount of water that migrated beyond the face of the masonry walls.”[31]  However, the Applicant did not explain how this “migration” occurred.  The Applicant has not demonstrated how water infiltration through the walls or windows occurred in the absence of disaster-caused damage to those features.  Therefore, the claim for permanent work to restore any interior damages from water infiltration through the walls and windows is likewise ineligible for PA funding.

 

Hazard Mitigation

FEMA has the authority to provide PA funding for cost-effective hazard mitigation measures for facilities damaged by the incident.[32]  Generally, eligible mitigation measures are those the applicant performs on the damaged portion(s) of the facility.[33]  If the applicant proposes mitigation measures that are distinct and separate from the damaged portion(s) of the facility, FEMA evaluates the proposal and determines eligibility on a case-by-case basis considering how the mitigation measure protects the damaged portion(s) of the facility and whether the mitigation measure is reasonable based on the extent of the damage.[34]

Zero/Six recommended adding new sealants and coatings to the Facility’s walls and re-sealing or replacing windows.  It developed an itemized SOW based on these recommendations, including work to completely replace the Facility’s windows.  However, as above, Zero/Six found that while both the walls and windows of the Facility were a source of water infiltration into the interior spaces, the infiltration was not caused by disaster-related damages to the walls or the windows.  Therefore, the Applicant’s hazard mitigation proposal is not associated with disaster-related damages.  Given this, and in light of the analysis in the preceding section, FEMA is unable to determine whether or how the proposed mitigation measures would protect the Facility’s interior from future damage.  FEMA therefore finds that the Applicant’s hazard mitigation request is ineligible for PA funding.
 

Conclusion

The Applicant has not demonstrated that work to replace the Facility’s roof or restore interior spaces is required as a direct result of the disaster, rather than the result of predisaster conditions or deferred maintenance.  Such work is ineligible for PA funding.  Consequently, the Applicant’s hazard mitigation proposal is also ineligible.  Therefore, this appeal is denied.

 

[1] Zero/Six Consulting, Post-Disaster Facility Evaluation of Baptist Hospitals of Southeast Texas, Beaumont, Orange, and Silsbee Campuses, at 56 (Mar. 5, 2018) [hereinafter Zero/Six Report (All Campuses)].

[2] Id. at 56, 128-29, 152.  Zero/Six estimated $804,852.57 for recovery costs and $174,751.72 for hazard mitigation costs, and developed an itemized scope of work (SOW) for each.

[3] FEMA Region VI, Site Inspection Report, Damage # 119921, 124149, 124151, MOB 840, Office/IT, Human Resource, at 4 (Mar. 19, 2018); FEMA Region VI, Site Inspection Report, Damage #21964, Business Office/IT, at 1 (June 4, 2018) [hereinafter Site Inspection Report].

[4] FEMA Region VI, Damage #21964, Business Office/IT, Damage Description and Dimensions (DDD) (June 4, 2018) [hereinafter Site Inspection DDD].

[5] The Applicant’s insurer, American Home Assurance Company, Inc. is a subsidiary of American International Group, Inc. (AIG); see Am. Home Assurance Co., Commercial Property Policy Declarations, Community Hospital Corp., at 1 (Nov. 15, 2016).

[6] Envista Forensics, Report of Findings, Community Hospital Corporation, Baptist Hospital [sic] of Southeast Texas, at 5 (Aug. 20, 2018) [hereinafter Envista Report].

[7] Id. at 10.

[8] In its analysis, FEMA refers generally to the various properties owned by the Applicant, but does not specifically reference the Facility; see FEMA Region VI, Critical Infrastructure – Comparative Analysis, Baptist Hospital (BHSET), at 3 (Sept. 11, 2018).

[9] Id.

[10] Letter from Chief Exec. Officer, Baptist Hosps. of Se. Tex., to Infrastructure Branch Dir., FEMA Region VI, at 2 (June 17, 2019) [hereinafter Applicant First Appeal].

[11] Zero/Six Report (All Campuses), at 59.

[12] Id. at 202.  The Applicant quoted a passage from the article that “[l]ong-term exposure to entrapped water will reduce [lightweight insulating concrete] to beach sand.”

[13] Applicant First Appeal, at 2.

[14] FEMA Region VI, Project 11179 Business Office Site Inspection Summary, at 1 (Oct. 8, 2019).

[15] FEMA First Appeal Analysis, Baptist Hosps. of Se. Tex. (GMP 11179), FEMA-4332-DR-TX, at 4.

[16] Id. at 4-5 & n.34 (citing AIG, VHA Southwest Community Health Commercial Property COPE Report, at 8 (July 14, 2015) [hereinafter COPE Report]).  The COPE Report states that “[a]cess to the roof was not available” for the Behavioral Health buildings.

[17] Letter from Chief Exec. Officer, Baptist Hosps. of Se. Tex., to FEMA Headquarters, through Tex. Dep’t of Emergency Mgmt., at 1-2 (Feb. 20, 2020).

[18] Id. at 2 (claiming “the insurance company changed their earlier stance that relied heavily on the Envista report to the statement in the settlement document that ‘WHEREAS, it is [the insurer’s] position that there is no covered property damage resulting from [the disaster] that exceeds [the] applicable deductible’”); see also Am. Home Assurance Co., Inc., Confidential Settlement Agreement and Mutual Release, at 1 (Mar. 27, 2019).

[19] Robert T. Stafford Disaster Relief and Emergency Assistance (Stafford) Act § 406, 42 U.S.C. § 5172 (2012).

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

[21] PAPPG, at 19-20.

[22] Id. at 118.

[23] Id.

[24] Id. at 19; FEMA Second Appeal Analysis, El Paso Cty., FEMA-4229-DR-CO, at 8 (Apr. 4, 2019).

[25] Zero/Six Report (All Campuses), at 56.

[26] COPE Report, at 13-14.  AIG also noted that “[a] complete roof maintenance … and replacement program is established.”

[27] Zero/Six Report (All Campuses), at 59.

[28] FEMA Region VI, Site Inspection Photo Page, Baptist Hosps. of Se. Tex., Damage No. 21964 (June 4, 2018).

[29] FEMA Second Appeal Analysis, Republic Cty. Highway Dep’t, FEMA-4230-DR-KS, at 4 (July 26, 2017).

[30] Zero/Six Report (All Campuses), at 56 (noting “walls were not damaged by [the disaster], although they were a source of water infiltration,” and “[a]luminum windows were not damaged by [the disaster], although they were a source of water infiltration”).

[31] Envista Report, at Attachment F.

[32] Stafford Act § 406(e); 44 C.F.R. § 206.226(e); PAPPG, at 97.

[33] PAPPG, at 99.

[34] Id.