Force Account Labor & Equipment/Immediate Threat

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster	4485
Applicant	City of Pasadena
Appeal Type	Second
PA ID#	201-56000-00
PW ID#	PW 116/GMP 155674
Date Signed	2022-08-10T16:00:00

Summary Paragraph

The City of Pasadena (Applicant) requested Public Assistance (PA) funding for costs totaling $21,409,275.90, associated with FAL overtime for budgeted employees conducting the Applicant’s operations during COVID-19, and for supplies and materials.  FEMA issued a Determination Memorandum denying most of the costs.  The Applicant appealed, contending that the FAL for budgeted employees and the purchase of materials and rentals were necessary to eliminate or lessen immediate threats, and that the costs are directly related to emergency protective measures.  FEMA sent two requests for information; the Applicant responded and also adjusted its claimed amount for rental and materials reimbursement.  In addition, the Applicant provided details of grants received from other agencies for FAL and materials and police payroll.  The FEMA Region VI Regional Administrator partially granted the appeal, finding $4,408.04 in rental costs and $26,462.09 in materials costs were eligible.  FEMA denied the Applicant’s FAL costs because they were directly related to performing the same work it would have performed prior to COVID-19.  The Applicant submits its second appeal and reiterates its first appeal arguments.  On second appeal, the Applicant has clarified that rental costs were $2,204.38.

Authorities and Second Appeals

• Stafford Act §§ 403, 502.
• 44 C.F.R. §§ 206.223(a)(1), 206.225(a)(3)(i).
• PAPPG, at 19, 24-25, 57-58, 133.
• FP 104-21-0003, at 4-5. 
• Deer Park, FEMA-4485-DR-TX, at 3.

Headnotes

• FEMA is authorized to provide funding for emergency protective measures to save lives and protect public health and safety.  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.
  • The Applicant did not show the work was required due to an immediate threat resulting from the declared incident.

Conclusion

FEMA finds that the Applicant has not provided information to demonstrate that the claimed work is an emergency protective measure required due to an immediate threat and has not provided information to support granting additional funding for material costs.  On second appeal, the Applicant has clarified that rental costs were $2,204.38.  Therefore, FEMA denies the appeal, and reduces funding for eligible rental costs from $4,408.04 to $2,204.38.

Appeal Letter

Appeal Analysis

Background

On March 25, 2020, the President declared a major disaster declaration for the State of Texas in response to the coronavirus (COVID-19) pandemic, FEMA-4485-DR-TX, for the incident period of January 20, 2020, and continuing.

The City of Pasadena (Applicant) requested reimbursement under the Federal Emergency Management Agency’s (FEMA) Public Assistance (PA) program.  FEMA prepared Grants Manager Project 155674/Project Worksheet 116 documenting costs totaling $21,409,275.90, associated with the purchase and distribution of Personal Protective Equipment (PPE) to budgeted employees responding to COVID-19, cleaning and sanitizing in facilities where emergency work was performed, force account labor (FAL) for budgeted employees responding to COVID-19, FAL for budgeted employees conducting the Applicant’s normal business operations, miscellaneous supplies, and other materials to implement social distancing and other community mitigation approaches.

On January 5, 2021, FEMA issued a Determination Memorandum denying eligibility for most of the costs but approving $128,965.85 for the purchase and distribution of PPE to budgeted employees responding to COVID-19, for cleaning and sanitizing in facilities where emergency work was performed, and for reimbursement of eligible FAL for budgeted employees responding to COVID-19.  It denied the remaining costs associated with FAL for budgeted employees conducting city operations and for supplies and other materials to implement social distancing and community mitigation approaches.

First Appeal

On March 1, 2021, the Applicant appealed FEMA’s denial of its request for reimbursement of FAL overtime, materials, and rental equipment.  The Applicant asserted that payroll/material expenses which, prior to the COVID-19 emergency, were normal operating costs, became allowable reimbursable costs when the Applicant suspended normal business operations from March 24 through May 10, 2020, and again on June 29 through August 9, 2020.  The Applicant stated that the essential workers who were allowed to work during the suspension of normal operations were “necessary to maintain essential operations, including but not limited to police services, purchases, finance, maintenance, janitorial, legal, utility, warehouse, fleet, public works, sanitation, street and bridge, traffic and health.”[1]  The Applicant adjusted its disputed claimed amount to $21,297,704.71.[2]   On March 25, 2021, the Texas Division of Emergency Management (Grantee) transmitted the appeal to FEMA, with its letter supporting the Applicant’s right to appeal.

On August 11, 2021, FEMA sent a Request for Information (RFI) seeking a more detailed description of the emergency protective measures performed by the employees receiving overtime rate pay, and a detailed description of certain supplies, services, and rentals.[3]  On August 26, 2021, the Applicant responded to the RFI with the requested information.  The Applicant responded with a spreadsheet including a narrative of the work perfomed by its departments.  The Applicant stated that during the periods in which the Applicant suspended normal business operations, a limited number of employees from various departments were permitted to work because they were deemed critical infrastructure workers.  The Applicant stated that these departments performed functions that were deemed necessary to ensure that the municipal government was able to continue operations in a limited capacity due to the COVID-19 emergency, or ensured all citizens adhered to the state and county COVID-19 mandates, policies, and procedures.  The Applicant did not provide details about the specific work performed.  The Applicant also stated it had miscoded the generator invoices to the wrong account and adjusted its claim accordingly.[4] 

On October 27, 2021, FEMA sent a second RFI seeking details of COVID-19 grants received, of costs for contact tracing, and costs of employees assisting emergency medical service (EMS) and Fire Department personnel when responding to COVID persons under investigation (PUI) or persons under monitoring (PUM) calls.[5]  On November 16, 2021, the Applicant responded, providing details of grants received from the U.S. Department of the Treasury – Harris County COVID-19 Small Cities Assistant Program (HCSCAP), noting that its police officers responded to COVID PUM/PUI calls, and also provided the total cost of contract tracing, and a narrative of the Applicant’s Police Department’s rationale of payroll expenditures.[6] 

On February 24, 2022, FEMA partially granted the appeal, finding $4,408.04 for the message board rentals and $26,462.09 in materials costs were eligible for reimbursement due to the issuance of FEMA Policy Coronavirus (COVID-19) Pandemic: Safe Opening and Operating Work Eligibility for Public Assistance.[7]  However, FEMA determined the claimed FAL costs were increased costs of operating a facility or providing a routine service, and, thus, were ineligible.

Second Appeal

On April 25, 2022, the Applicant submitted its second appeal, disputing the denial of FAL for overtime labor,[8] and reiterating its first appeal arguments.  The Applicant states that its double overtime costs were related to its Emergency Operations Center (EOC), security, and law enforcement (including patrolling and barricading), and that this work responded to the immediate threat of COVID-19.  The Applicant also seeks funding for materials and rental costs.[9]  With regard to the rental costs, the Applicant explains that it derived a new, reduced amount for the rental costs based on the elimination of the three miscoded generators and the HSCAP reimbursement, reducing its rental claim from $4,408.04 to $2,024.38.[10]  On second appeal, the Applicant provided a FAL summary, FAL pay codes, and a labor materials worksheet.  On May 17, 2022, the Grantee transmitted the Applicant’s appeal to FEMA, with its letter supporting the appeal.

 

Discussion

FEMA is authorized to provide funding for emergency protective measures to save lives and protect public health and safety.[11]  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.[12]  Only costs tied to the performance of eligible work are eligible.[13]  It is the Applicant’s responsibility to substantiate its claim as eligible.[14]  If the Applicant does not provide sufficient documentation to support its claim as eligible, FEMA cannot provide PA funding for the work.[15]  Safe opening and operation work eligible for PA must also be done in accordance with Center of Disease Control guidance, or that of an appropriate health official, at the time the work was completed.[16]     

The payroll hours and associated payroll codes the Applicant submits on second appeal demonstrate that the work the employees performed consisted of typical municipal functions.[17]  The Applicant lists overtime payroll hours for payroll codes including the city controller’s office, the impound storage department, warehouse, municipal court security, firefighting, and water distribution, but does not list any payroll hours specifically related to performing eligible emergency protective measures in response to the declared incident, the COVID-19 pandemic.[18]  While the work was related to essential functions according to the Applicant, the Applicant does not show the work is associated with any eligible activities undertaken at the direction or guidance of a public health official, or any comparable activity that eliminates or lessens an immediate threat from COVID-19.  As such, the Applicant’s associated FAL overtime costs are not associated with emergency protective measures and therefore are ineligible for PA funding.

The Applicant seeks additional funding for materials, but does not provide documentation to establish the eligibility of any additional materials.  Consequently, FEMA is unable to identify any additional eligible material costs.  The Applicant also seeks $2,024.38 for rental costs.  Although the rental costs the Applicant seeks on second appeal are eligible for PA funding, FEMA has already awarded reimbursement for the rental costs for the solar message boards in the amount of $4,408.04 on first appeal.  Accordingly, FEMA will reduce the prior award for rental costs to $2,024.38.

 

Conclusion

FEMA finds that the Applicant has not provided information to demonstrate that the claimed work is an emergency protective measure required due to an immediate threat and has not provided information to support granting additional funding for materials costs.  On second appeal, the Applicant has clarified that rental costs were $2,204.38.  Therefore, FEMA denies the appeal, and reduces funding for eligible rental costs from $4,408.04 to $2,204.38.

 

[1] Letter from Ass’t City Controller, City of Pasadena (Applicant) to Chief, Texas Div. of Emergency Mgmt. (TDEM), at 3 (March 1, 2022) [hereinafter Applicant’s First Appeal Letter].  The Applicant also states it used the Essential Critical Infrastructure Workforce guidance, issued by the U.S. Department of Homeland Security, Cybersecurity & Infrastructure Security Agency (CISA), to determine which staff were necessary to essential operations.  However, the CISA list is advisory and does not define employees or activities that meet FEMA PA eligibility requirements for emergency work, including the requirement that the work address an immediate threat resulting from the declared incident.  See FEMA Second Appeal Analysis, Deer Park, FEMA-4485-DR-TX, at 3 (June 22, 2022).  The Applicant also states it complied with various state and local COVID-19 executive orders and proclamations during the declared incident but, like the CISA, those do not identify employees or activities that meet PA eligibility requirements for emergency work, including the requirement that the work address an immediate threat resulting from the declared incident.

[2] The adjusted amount included $21,196,453.99 for force account labor (FAL), $91,716.07 for materials, and $9,534.65 for rental costs, which included costs for three generators at $5,126.61 and costs for two solar messaging signs totaling $4,408.04.

[3] With regard to FAL, FEMA requested the Applicant provide: (1) a description of the following payroll codes: 822-FEMA Reg Not Worked and 825-FEMA 2.0-OT Worked; (2) a monetary breakdown by pay code; (3) a list of all department names; (4) a description of the emergency protective measures performed by each department during the suspended normal business dates and how these duties are directly related to emergency conditions; and (5) evidence the pre-disaster written labor policy is applied uniformly regardless of a Presidential declaration.

[4] The Applicant requested the removal of $5,126.61 for the generators from its claim for rental costs. 

The remaining claim for the solar rental message boards was adjusted to $4,408.04.

[5] The second Request for Information sought supplementary information regarding tasks performed by the employees receiving double pay, the cost of the employee contact tracing tasks performed, and the cost of employees assisting Emergency Management Services and Fire Department personnel when responding to COVID calls.

[6] The Applicant stated it received grants from HCSCAP of $5,352,318.95 for FAL and materials and $3,074,726.05 for police payroll. See Letter from City Controller, Applicant, Attachment 2 (Nov. 16, 2021).

[7] FEMA Policy FP 104-21-0003, Coronavirus (COVID-19) Pandemic: Safe Opening and Operation Work Eligible for Public Assistance (Interim) (Version 2) (Sept. 8, 2021) [hereinafter O&O Policy].

[8] On second appeal, the Applicant removed approximately $5.3 million from its request because it had received that same amount in HCSCAP funding.  The Applicant is appealing $15,959,657.75 in denied FAL overtime costs.

[9] The Applicant seeks $88,530.90 for materials and $2,024.38 for rental costs.  Although the rental costs the Applicant seeks on second appeal ($2,024.38) are eligible for PA funding, FEMA has already awarded reimbursement for the rental costs for the solar message boards in the amount of $4,408.04 on first appeal.  Accordingly, FEMA will reduce the prior award for rental costs to $2,024.38.  With regard to materials, on first appeal, FEMA awarded $26,462.09 for supplies and materials after subtracting $32,433.40 for HSCAP grant monies the Applicant received.  FEMA also found $0.30 in unaccounted ineligible costs.  On second appeal, the Applicant does not provide documentation to establish the eligibility of any additional materials.  Consequently, FEMA is unable to identify any additional eligible materials costs.

[10] Letter from City Controller, Applicant to Chief, TDEM, at 3 (April 25, 2022) [hereinafter Applicant’s Second Appeal Letter], (“The City also calculates . . . rental costs of $9,534.65 less HCSCAP (25%) reimbursement . . . less adjustment of $5,126.61 equals $2,024.38.”).

[11] Robert T. Stafford Disaster Relief and Emergency Assistance (Stafford) Act §§ 403, 502, Title 42, United States Code §§ 5170b, 5192 (2018); Title 44 Code of Federal Regulations (44 C.F.R.) § 206.225(a) (2019).

[12] 44 C.F.R. §§ 206.223(a)(1), 206.225(a)(3)(i); Public Assistance Program and Policy Guide, FP 104-009-2, at 19, 57 (Apr. 1, 2018) [hereinafter PAPPG].

[13] PAPPG, at 24.

[14] PAPPG, at 133.

[15] Id., O&O Policy, at 4.

[16] O&O Policy, at 4-5.

[17] Applicant’s Second Appeal Letter, Exhibit 4. 

[18] Id.