Result of Declared Incident

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster	4339
Applicant	PR Retirement and Adjudication System
Appeal Type	Second
PA ID#	000-U1SC5-00
PW ID#	DI 423939
Date Signed	2022-08-31T16:00:00

Summary Paragraph

From September 17 to November 15, 2017, Hurricane Maria caused severe damage to a 16-story reinforced concrete building and adjacent parking structure (Facility) located in San Juan, Puerto Rico.  The Facility is owned and maintained by the Puerto Rico Retirement and Adjudication System (Applicant).  FEMA awarded $6,895,216.68 in Public Assistance (PA) funding for the restoration of the Facility.  However, FEMA could not validate the eligibility of the Applicant’s claim for the Facility’s contents.  To proceed with the restoration, FEMA separated the contents from the main project and placed them under Damage Inventory number 423939.  In a Determination Memorandum, FEMA denied $1,833,000.00 in estimated costs for the disputed items, finding that the Applicant had not provided documentation demonstrating the items were present in the Facility and damaged by the disaster.  The Applicant submitted a first appeal.  It attached predisaster documentation, which it claimed showed the acquisition of the disputed items, as well as post-disaster photographs depicting damage to the Facility’s interior spaces.  In response to a Request for Information (RFI), the Applicant provided additional documentation it asserted was related to the post-disaster disposition of the disputed items.  The FEMA Region II Acting Regional Administrator denied the appeal.  FEMA found that the Applicant had not submitted supporting documentation demonstrating the claimed damages were caused by the disaster.  The Applicant submitted a second appeal, reiterating arguments from its RFI response.

Authorities and Second Appeals

• Stafford Act § 406(e)(1)(A).
• 44 C.F.R. §§ 206.223(a)(1), 206.226.
• PAPPG, at 19, 118, 133, 203.

Headnotes

• To be eligible, work must be required as a result of the declared incident.  Work to replace destroyed building contents with items similar in age, condition, and capacity is eligible.  The applicant is responsible for providing documentation to support its claim as eligible and show that work is required to address damage caused by the disaster.
  • The additional documentation provided with the Applicant’s response to the RFI does not demonstrate the location of the disputed items prior to or during the disaster, the presence of disaster-related damage, or the property’s ultimate disposition.
  • FEMA notes discrepancies in the identification of the disputed items being claimed, their value, and their condition following the disaster.  The Applicant has not addressed these discrepancies in its appeal letter or supporting documentation.

Conclusion

The Applicant has not provided information enabling the verification of disaster-related damage to the Facility’s contents.  FEMA is unable to provide PA funding for the Applicant’s claim.  Therefore, this appeal is denied.

Appeal Letter

Appeal Analysis

Background

From September 17 to November 15, 2017, Hurricane Maria caused severe damage throughout Puerto Rico.[1]  Strong winds and wind-driven debris damaged a 16-story reinforced concrete building and adjacent parking structure (Facility) located in San Juan.  The Facility is owned and maintained by the Puerto Rico Retirement and Adjudication System (Applicant).

The Applicant requested Public Assistance (PA) funding for the restoration of the Facility and its contents.  On July 31, 2019, FEMA inspected the Facility and subsequently developed Project Worksheet (PW) 6574 to document the restoration.  FEMA awarded $6,895,216.68 in PA funding for the project.  However, FEMA could not validate the eligibility of the Applicant’s claim for the Facility’s contents, comprising more than 1,600 individual items, including office furniture, computer equipment, electronics, and others.  In order to proceed with the restoration of the Facility, FEMA separated the contents from PW 6574 and placed them under Damage Inventory (DI) number 423939.

In a Determination Memorandum dated April 13, 2021, FEMA denied PA funding for estimated costs totaling $1,833,000.00 for DI 423939.  FEMA determined that the Applicant had not provided documentation “demonstrating that the claimed contents and equipment were present in the Facility at the time of the disaster and/or … were damaged as a result of the disaster.”[2]  FEMA noted that it had discussed the disputed items with the Applicant on several occasions, most recently on December 21, 2020, but that the Applicant had not submitted additional documentation that would support eligibility.

First Appeal

The Applicant submitted a first appeal via letter dated June 14, 2021.  It requested FEMA reconsider its earlier determination and approve PA funding totaling $1,833,000.00 for the disputed items.  The Applicant attached numerous predisaster purchase orders, invoices, and receipts to the appeal, which it claimed demonstrated the acquisition of the disputed items and their presence in the Facility during the disaster.  It provided a consolidated list of the disputed items with associated costs and attached numerous post-disaster photographs of the Facility depicting significant damage to interior spaces.  In an August 13, 2021, transmittal letter, the Puerto Rico Central Office for Recovery, Reconstruction, and Resiliency (Recipient) expressed support for the appeal.  In addition to the documentation noted by the Applicant, the Recipient asserted that a post-disaster inspection report and a statement by the Applicant’s Director of Administrative Services was further proof that the disputed items were damaged by the disaster.

FEMA issued a Request for Information (RFI) regarding the removal and disposal of the disputed items from the Facility.  FEMA also requested an explanation of remarks from the post-disaster inspection report that depicted some of the disputed items as “Seized, Pending Seizure, or Transferred Equipment.”[3]  In response, the Applicant provided information it claimed was related to the post-disaster disposition of many of the disputed items.  The Applicant provided “Declarations of Exceeded Property” documents (Declarations), which it claimed demonstrated “the removal and disposal of destroyed office furniture and equipment,” including the items referred to as “Seized property” in the RFI.[4]  It also provided “Amendments to Fixed Assets Reports” (Amendments), which it claimed showed “all the furniture and office equipment that was present at the [Facility] and was transferred to other agencies.”[5]  Lastly, the Applicant stated that the disputed items not listed in the documentation it provided were still located in the Facility awaiting disposal.

On February 1, 2022, the FEMA Region II Acting Regional Administrator denied the appeal.  FEMA found that the Applicant’s predisaster purchase orders, invoices, and receipts did not show that the disputed items were present in the Facility at the time of the disaster.  It also found that the post-disaster photographs of the Facility’s interior “cannot be used to confirm or quantify specific damaged contents.”[6]  Therefore, FEMA determined that the Applicant had not submitted supporting documentation demonstrating that the claimed damages were caused by the disaster.[7]

Second Appeal

The Applicant submitted a second appeal via letter dated April 1, 2022.  It again requested FEMA reconsider its earlier eligibility determination and approve PA funding for estimated costs totaling $1,833,000.00 for the disputed items.  The Applicant again provides the Declarations and Amendments and asserts that these documents demonstrate that the disputed items were present in the Facility before the disaster.  It faults FEMA’s determinations as “contradictory,” arguing that FEMA determined that the Facility itself was eligible for PA funding, but nevertheless found that the Applicant had “not provided enough evidence to prove there was office furniture and equipment [in the Facility] at the time of the event.”[8]

In a June 2, 2022, transmittal letter, the Recipient expressed support for the appeal.  It asserts that the post-disaster photographs demonstrate significant damage, such that “it would be impossible to specifically identify each piece of property” within the Facility.[9]  The Recipient argues that the Applicant has provided all of the documentation it was required by territorial law to maintain, and that “[t]here appears to be little more which the Applicant can present.”[10]

 

Discussion

FEMA is authorized to provide PA funding for estimated costs to restore a facility on the basis of the design of the facility as it existed immediately before the major disaster.[11]  To be eligible, work must be required as a result of the declared incident.[12]  If a building’s contents are damaged beyond repair, work to replace the destroyed building contents with items similar in age, condition, and capacity is eligible.[13]  The applicant is responsible for providing documentation to support its claim as eligible and show that work is required to address damage caused by the disaster.[14]

The Applicant requests estimated PA funding totaling $1,833,000.00 to replace the disputed content items.  In addition to the documentation considered by FEMA on first appeal, it provides the Declarations and Amendments as evidence that the disputed items were present in the Facility during the disaster.  The Declarations list surplus office furniture, computer components, and electronics, among many other items.  The Applicant states that the Declaration documents were used “to regulate the transfer and disposal” of disputed items.[15]  The Amendments show the transfer of office furniture, electronics, etc. to various agencies, e.g., the Musical Arts Corporation, the Miguel Such Vocational School, and others.  The Applicant acknowledges this purpose on second appeal.[16]  However, though this documentation shows the transfer of the listed items from the Applicant to another entity, neither the Declarations nor the Amendments demonstrate the location of the items prior to or during the disaster, the presence of disaster-related damage, or the property’s ultimate disposition.  FEMA cannot determine, based only on the Applicant’s assurances, that the listed property was present in the Facility, was damaged by the disaster, and was then turned in and disposed of.

Moreover, FEMA is not able to find that the listed items were damaged beyond repair as the Applicant claims.  Each Declaration form is marked “Capitalizable,”[17] indicating that the property had salvage value at the time it was declared surplus.  Regarding the Amendments, the available information does not indicate why the transfer of the items to agencies such as a vocational school or an organization dedicated to the performing arts was necessary for its disposal.  Indeed, it is not clear why agencies whose notional purpose has nothing to do with property disposal were willing to receive the items listed, unless the items retained some value.

Further examination of the available documentation brings to light other discrepancies.  It is not clear which of the items listed in the Declarations and Amendments are the items claimed under DI 423939.[18]  Perhaps more importantly, the Applicant has not presented a single, definitive list of the 1,600-plus disputed items.  The administrative record contains several spreadsheets purporting to serve this purpose, including the inspection report noted by the Recipient.[19]  However, the lists vary significantly, in terms of both total dollar value and the details of the individual items listed.[20]  These discrepancies are not addressed in the Applicant’s appeal letter or in the supporting documentation.

The Applicant’s Director of Administrative Services stated that, despite the Applicant’s best efforts, much of the Facility’s contents “could not be identified and/or located behind the huge mountains of rubble that made it impossible to search and identify.”[21]  FEMA acknowledges that the Applicant’s post-disaster photographs demonstrate loss to the Facility’s contents.  However, the photographs do not enable the verification of eligible damage to specific items[22] and, given the issues above, FEMA is unable to substantiate the Applicant’s claim of eligible damage to disputed content items using the other available documentation.

 

Conclusion

The Applicant has not provided information enabling the verification of disaster-related damage to the Facility’s contents.  FEMA is unable to provide PA funding for the Applicant’s claim.  Therefore, this appeal is denied.

 

[1] The President issued a major disaster declaration on September 20, 2017.

[2] FEMA Region II, Eligibility Determination Memorandum, PR Ret. and Adjudication Sys., Damage Inventory No. 423939, at 3 (Apr. 13, 2019).

[3] Letter from Branch Chief, Policy Implementation, Recovery Div., FEMA Region II, to Governor’s Authorized Representative, P.R. Cent. Office for Recovery, Reconstruction, and Resiliency (COR3) and Exec. Dir., P.R. Ret. and Adjudication Sys., at 1 (Nov. 4, 2021).

[4] Letter from Exec. Dir., P.R. Ret. and Adjudication Sys., to Governor’s Authorized Representative, P.R. COR3, at 1 (Dec. 3, 2021).

[5] Id.

[6] FEMA First Appeal Analysis, PR Ret. and Adjudication Sys., FEMA-4339-DR-PR, at 2 (Feb. 1, 2022) [hereinafter First Appeal Determination].

[7] FEMA did not consider the Applicant’s RFI response on first appeal; see id. at 2.  The Recipient explained that the Applicant attached the RFI response to the same email in which it submitted the second appeal for Damage Inventory (DI) number 423914 (a separate matter related to the Facility), and “therefore [the RFI response] got mixed up with the documentation for such appeal”; Email from Closeout Dep. Dir./Appeals Lead, COR3, to FEMA Region II, at 1 (Jan. 11, 2022, 1502 EST).

[8] Letter from Exec. Dir., P.R. Ret. and Adjudication Sys., to Governor’s Authorized Representative, P.R. COR3, at 3 (Apr. 1, 2022) [hereinafter Applicant Second Appeal].

[9] Letter from Chief Legal Counsel, P.R. COR3, to Assistant Adm’r, Recovery Directorate, FEMA, at 4 (June 2, 2022) [hereinafter Recipient Second Appeal].

[10] Id. at 5.

[11] Robert T. Stafford Disaster Relief and Emergency Assistance Act § 406(e)(1)(A), 42 United States Code § 

5172(e)(1)(A) (2012); Title 44 Code of Federal Regulations (44 C.F.R.) § 206.226 (2016).

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

[13] 44 C.F.R. § 206.226(h); PAPPG, at 118, 203.

[14] PAPPG, at 19, 133.

[15] Applicant Second Appeal, at 3.

[16] Id. (stating that the Amendments were “evidence of all the furniture and office equipment that was present … and transferred to other agencies”).

[17] E.g., P.R. Ret. and Adjudication Sys., Declaration of Exceeded Property No. 2020-02633-001, at 1 (Nov. 13, 2019).

[18] I.e., the total dollar value of all property listed in the Declarations and Amendments exceeds $2.4 million; in contrast, the Applicant claims $1.8 million to replace the disputed items, while acknowledging that not all the items claimed are captured in the Declarations and Amendments; see Applicant Second Appeal, at 3 (“[a]s for the property not included in said lists, it’s still at [the Applicant’s] facilities pending disposal”).

[19] Letter from Chief Legal Counsel, P.R. COR3 and Appeal Lead, P.R. COR3, to Reg’l Adm’r, FEMA Region II, at 4 (Aug. 13, 2021) [hereinafter Recipient First Appeal] (“[the Applicant] presented an inspection report demonstrating that the Disputed Line Items were damaged by disaster 4339 … [t]his report has a description of the Disputed Items and its cost [sic]”); see also Recipient Second Appeal, at 4.

[20] The total value of all items in the inspection report is $1,930,304.47; see Recipient First Appeal, at Exhibit D.  The total value of all items in a separate list provided with the administrative record is $1,833,312.11; see P.R. Retirement and Adjudication Sys., ASR- List of Equipment - English Translation (Aug. 1, 2018).  Further, a comparison of individual items showed considerable differences between the two lists, e.g., the inspection report recorded the item with property number 10565 as a calculator valued at $129.00; the other list recorded the same item as an air conditioner valued at $9,310.00.  FEMA noted numerous similar discrepancies between the two lists.

[21] Dir., Office of Admin. Servs., P.R. Ret. and Adjudication Sys., Certification, at 1 (Aug. 10, 2021).

[22] First Appeal Determination, at 2; cf., Recipient Second Appeal, at 4 (“[b]ased upon the photos … it becomes clear that it would be impossible to specifically identify each piece of property comprising the contents and equipment of the Facility”).