EHP and Other Compliance, Improved Property/Natural Features, Landslides and Slopes Stabilization, Section 705

Appeal Brief

Summary Paragraph

From October 4-15, 2016, Hurricane Matthew eroded the embankment at the Abercorn Creek Municipal Water System Intake (Facility). The City of Savannah (Applicant) requested Public Assistance (PA) funding for work to restore the embankment. FEMA created Grants Manager Project 781 and awarded $195,048.63. However, the Applicant was unable to obtain the required permits. It redesigned the project and submitted time extension and scope of work (SOW) change requests, with additional costs of $4,804,951.37. FEMA denied the requests and deobligated $188,697.00 in funding, finding that the embankment was not an eligible facility. The Applicant submitted a first appeal for $4,993,648.37, asserting that the embankment was an eligible natural feature, and restoration was also eligible as integral ground. The Applicant questioned the deobligation of funding under section 705(c) of the Robert T. Stafford Disaster Relief and Emergency Assistance (Stafford) Act. FEMA denied the appeal, finding that the Applicant had not demonstrated the embankment was an eligible facility, nor did it constitute integral ground; also, the Applicant did not allow for an environmental and historic preservation (EHP) review. The Applicant submitted a second appeal reiterating its earlier positions.

Authorities

• Stafford Act §§ 406(a)(1)(A), 705(c), 42 U.S.C. §§ 5172(a)(1)(A), 5205(c).
• 44 C.F.R. §§ 206.201(c), 206.223(a)(1).
• PAPPG, at 7, 14-15, 19, 82, 121, 130-131.
• FP 205-081-2, at 4-5.
• Boyd Cnty., FEMA-4595-DR-KY, at 3.

Headnotes

• Eligible facilities include improved and maintained natural features. If an eligible facility is located on a slope and is damaged as a result of slope instability triggered by the incident, FEMA may approve PA funding to restore the integral ground that supports the facility.
  • The Applicant has not demonstrated regular maintenance of the embankment, and did not claim damage to the Facility resulting from slope instability caused by the disaster.
• Proceeding with permanent work before FEMA completes EHP reviews jeopardizes PA funding for the project.
  • On second appeal, the Applicant acknowledges that work began before FEMA could complete an EHP compliance review for the proposed SOW change.
• If an applicant fails to comply with a post-award term or condition of the award, section 705(c) does not apply, and FEMA may take action to recover payments.
  • The Applicant did not accomplish the purpose of the grant; therefore, section 705(c) does not apply and FEMA was not prohibited from recouping PA funding for the project.

Conclusion

The Applicant did not demonstrate that the embankment is itself an eligible facility, and did not establish damage to the Facility resulting from slope instability caused by the disaster. Therefore, work to stabilize the embankment is not eligible for PA funding. Furthermore, the Applicant did not provide FEMA with the opportunity to complete an EHP review of the proposed SOW change prior to beginning work. Finally, section 705(c) of the Stafford Act does not prohibit FEMA from recouping previously obligated funding for the project.

Appeal Letter

Appeal Analysis

Background

From October 4 through 15, 2016, Hurricane Matthew impacted southeastern Georgia.[1] Heavy rainfall and high velocity waterflow from the disaster eroded the embankment on Abercorn Creek in the immediate vicinity of the Abercorn Creek Municipal Water System Intake (Facility).[2] The disaster also damaged the Facility’s perimeter fence and the roof of a metal storage shed. The City of Savannah (Applicant) requested Public Assistance (PA) to repair various disaster-related damages, including repairs to the embankment and the Facility’s fence and storage shed. FEMA inspected the Facility on January 18, 2017. The Site Inspector (SI) recorded erosion damage to 320 linear feet of the embankment, including the loss of rip rap, and observed that a 300 square foot (SF) section of the embankment had failed and was slipping into Abercorn Creek.[3] The SI also recorded a missing roof panel on the storage shed and damage to two sections of the chain link perimeter fence.

An engineering firm (Collins) hired by the Applicant developed a scope of work (SOW) to repair the embankment by replacing lost fill material and emplacing rip rap. FEMA created Grants Manager Project 781 to document work and costs for repairs, using the SOW developed by Collins and adding items of work to repair the fence and storage shed roof. FEMA noted that the 300 SF area of the embankment was unstable and stated that there was “a possibility of future damage by [the] ground slipping into the creek.”[4] On May 9, 2017, FEMA awarded $195,048.63 for the project under Project Worksheet (PW) 392.

Collins subsequently reassessed the project. In a letter to the Applicant dated October 31, 2017, it stated that replacing lost fill material in the manner previously recommended would not stabilize the embankment, and that “if the bank is not stabilized, additional losses will occur during future storm events,” including risk of damage to the Facility.[5] Further, Collins stated that the Georgia Department of Natural Resources (DNR) would not allow the recommended repair method and had rejected an alternate method using a rip rap revetment.[6] Therefore, Collins recommended constructing a sheet pile wall with tiebacks to stabilize the embankment. It stated that a sheet pile wall “is the only method that can provide the structural stability required for the bank and the intake building and is the only method that will be permitted by [Georgia] DNR and [the U.S. Army Corps of Engineers (USACE)].”[7]

In quarterly reports to the Georgia Emergency Management and Homeland Security Agency (Recipient), the Applicant stated that it was experiencing delays and cost overruns as it worked with Georgia DNR to finalize design plans and permitting for the sheet pile wall project. The Recipient approved two time extensions for the project.[8] On August 7, 2018, USACE issued a Nationwide Permit (NWP) authorizing the Applicant to construct a sheet pile wall to stabilize the embankment, and on July 9, 2019, Georgia DNR granted the Applicant a revocable license to construct the sheet pile wall. Georgia DNR required the Applicant to complete the project within three years of the date of issuance of the revocable license.

In a letter dated August 27, 2020, the Applicant requested a third time extension, through October 1, 2022. It stated that the approval of new design plans and the contract bidding process led to delays in completing the project. The Applicant also noted the discovery of underground utility lines in the area of the embankment, which it stated would need to be relocated. It estimated total project costs of $5,000,000.00. In a letter dated December 22, 2020, the Recipient submitted a SOW change request to FEMA, adding an additional $4,804,951.37 to the total project cost.[9] The SOW change included costs to develop updated project design plans, relocate the underground utility lines, and construct a sheet pile wall to stabilize the embankment.

In a Determination Memorandum dated February 9, 2022, FEMA denied the request to change the project’s SOW. FEMA determined that the damaged sections of the embankment were natural features that were neither improved nor maintained prior to the disaster. As such, FEMA found that the embankment was not an eligible facility. FEMA denied the Applicant’s request for $4,804,951.37 and stated that because work to repair the embankment was ineligible, the Applicant’s third time extension request was also denied. Further, FEMA deobligated $188,697.00 in funding that was previously awarded for embankment stabilization work.[10] FEMA stated that because the project had not been completed as approved, the deobligation of funding was not prohibited under section 705(c) of the Robert T. Stafford Disaster Relief and Emergency Assistance (Stafford) Act. Finally, FEMA noted that, “if the [F]acility is later determined to be eligible through the appeals process, FEMA would need to perform an Environmental [and] Historic Preservation (EHP) review for the underlying work before funding could be obligated.”[11]

First Appeal

In a letter dated April 6, 2022, the Applicant submitted a first appeal of FEMA’s denial of $4,798,599.74 for the embankment stabilization project. The Applicant asserted that the embankment met the criteria under FEMA’s policy for eligible improved and maintained natural features.[12] First, it noted that FEMA’s SI recorded the presence of pre-existing rip rap and underlying erosion control fabric; thus, it asserted that the embankment was improved prior to the disaster. Second, it stated that the improvements enhanced the function of the embankment, as evidenced by continued erosion in the aftermath of the disaster. Third, the Applicant stated that it performed regular predisaster maintenance of the embankment. In support, it stated that it had a permanent employee responsible for maintaining Facility grounds, including the stream banks, and that this was depicted in post-disaster photographs. Additionally, the Applicant stated that the 300 SF area of unstable embankment was “currently threatening … improved property” and unless it was repaired, “the slope deterioration will soon compromise integral ground for the [F]acility.”[13] Thus, the Applicant asserted that stabilization of the embankment was also eligible as integral ground.

The Applicant questioned FEMA’s deobligation of the $188,697.00 in previously awarded funding, citing section 705(c) of the Stafford Act. Though the Applicant acknowledged that the deobligation was “consistent with FEMA written policy,” it stated that case law had established section 705(c) prohibitions “cannot be disregarded simply because FEMA now claims that it erred.”[14] Finally, the Applicant appealed the denial of the third time extension request. It asserted that permitting issues and other delays constituted events beyond its control, which led to an extended project timeline. It stated that the work was completed between September 30 and December 31, 2021. In a transmittal letter dated May 5, 2022, the Recipient expressed support for the appeal. The Recipient clarified that the amount in dispute totaled $4,993,648.37.

FEMA issued a Request for Information on May 31, 2023, expressing concern that the available information did not support the eligibility of the Applicant’s SOW change or time extension requests. Specifically, FEMA stated that it appeared the Applicant: (1) completed the work at issue prior to FEMA’s response to the time extension request; (2) did not allow FEMA time to review the SOW change request; and (3) did not allow FEMA to complete an EHP review prior to commencing work. FEMA requested additional information and/or documentation demonstrating disaster-related damage to the underground utility lines; any consultations with USACE, the U.S. Fish and Wildlife Service (USFWS), and/or the Georgia State Historic Preservation Office (SHPO) related to EHP compliance; and any EHP reviews completed prior to the commencement of repairs to the Facility.

In its response dated June 23, 2023, the Applicant stated that following the disaster, the Facility “was in great peril of complete loss” and, in consultation with the Recipient, it “had no choice but to move forward with the repairs prior to full approval from FEMA.”[15] The Applicant stated that its contractor discovered the underground utility lines only after commencing work on the project. Regarding coordination with USACE, USFWS, and the Georgia SHPO, the Applicant provided copies of an NWP and a permit modification for the project, issued by USACE. It noted that information in the USACE permitting package indicated there were no cultural resources on or near the area of the project, and there were no requests for additional information or studies during the permitting process. Finally, regarding any additional EHP reviews, the Applicant noted that a request to repair the embankment using only rip rap had been rejected by Georgia DNR.

On December 14, 2023, the FEMA Region 4 Regional Administrator denied the appeal. FEMA found that, although the embankment was improved prior to the disaster (through the installation of rip rap), the Applicant had not shown “it maintained the embankment (rather than simply inspecting it) on a schedule.”[16] Thus, FEMA determined the Applicant had not established that the embankment was an eligible improved and maintained natural feature. Further, FEMA found that the work at issue “[wa]s not related to … restoring the structural integrity of an eligible facility,” as the Applicant had not provided documentation showing the underground utility lines were damaged by the disaster. Finally, FEMA determined that the Applicant did not provide the opportunity for an EHP compliance review prior to completing the work at issue and had not otherwise established its compliance with EHP requirements.

Second Appeal

In a letter dated February 9, 2024, the Applicant submitted a second appeal of FEMA’s denial of $4,798,599.74 for the embankment stabilization project. The Applicant incorporates all statements made in its first appeal. The Applicant asserts that it adequately maintained the embankment prior to the disaster, and that it exceeded the “minimum threshold” for demonstrating maintenance, as it “had someone [i.e., the maintenance employee] onsite at all times.”[17] Alternatively, the Applicant notes that the utility lines are considered components of the Facility; it asserts that the claimed work could thus be eligible under FEMA’s policy, as continued erosion of the embankment threatens their structural integrity.[18] The Applicant also asserts that stabilization of the embankment is eligible as integral ground for the Facility.

The Applicant acknowledges its lack of compliance with EHP review requirements but asserts that this should not be a basis for denial. It references a previous second appeal decision, in which it asserts that FEMA found “advance permission” from the state DNR, a USACE permit, and “a retroactive favorable Endangered Species Analysis” met the EHP review requirement.[19] The Applicant states that, if the project at issue is otherwise found eligible, it would request a retroactive EHP review. Finally, the Applicant reiterates its first appeal position on the applicability of section 705(c) of the Stafford Act. In a transmittal letter dated April 3, 2024, the Recipient requests FEMA consider the supporting documentation and explanations provided by the Applicant. The Recipient again clarifies that the amount in dispute totals $4,993,648.37.

Discussion

Improved Property/Natural Features, Landslides and Slopes Stabilization

FEMA may provide PA funding to a local government for the restoration of a public facility damaged by a major disaster.[20] Eligible facilities include improved and maintained natural features.[21] A natural feature is improved and maintained if: (1) it has a designed and constructed improvement to its natural characteristics; (2) the constructed improvement enhances the function of the unimproved natural feature; and (3) the applicant maintains the improvement on a regular schedule to ensure the improvement performs as designed.[22] If an eligible facility is located on a slope and is damaged as a result of a landslide or slope instability triggered by the incident, FEMA may approve PA funding to restore the integral ground that supports the facility.[23]

Here, the Applicant demonstrated the presence of designed and constructed improvements (i.e., rip rap) that enhance the function of the embankment.[24] On second appeal, the Applicant asserts that the continuous presence of an employee at the Facility meets the last requirement of maintaining the improvements to the embankment. In support, it provides leases for a residence located at the Facility.[25] The leases demonstrate that the Applicant’s employee resided on Facility grounds, but do not contain information indicating the types of maintenance the employee performed. The Applicant has not provided other documentation (e.g., maintenance schedules or work orders) showing it maintained the improvements on a regular schedule to ensure the improvements performed as designed.

Additionally, the Applicant asserts that work to stabilize the embankment is eligible as integral ground for the Facility, as the failed portion of the embankment “is currently threatening” the Facility.[26] As stated above, in order for stabilization of integral ground to be eligible, the associated facility must be damaged by a landslide or slope instability resulting from the disaster. The Applicant has not claimed such damage, either to the underground utility lines or to any other element of the Facility; rather, it points to the potential for damage resulting from future erosion not caused by the disaster.[27] Therefore, the work to stabilize the embankment is not eligible as integral ground for the Facility, nor is it related to structural instability in the underground utility lines that resulted from the disaster.

EHP and Other Compliance

FEMA must review each PA project to ensure the work complies with applicable federal EHP laws, their implementing regulations, and applicable Executive Orders.[28] Applicants must make every effort to afford FEMA the opportunity to perform EHP reviews prior to the start of construction for any permanent work project.[29] Proceeding with permanent work before FEMA completes EHP reviews jeopardizes PA funding for the project.[30]

The Applicant previously acknowledged completing the work at issue prior to receiving approval from FEMA, though it stated that this was “[d]ue to the exigent nature of the damage,” and on the advice of the Recipient.[31] On second appeal, the Applicant states further that it began work “primarily due to the insistence of [the Recipient] … to complete the project as quickly as possible, and that EHP issues could be worked out later in the process.”[32] Nevertheless, it acknowledges that work began before FEMA could complete an EHP compliance review for the proposed SOW.[33]

Given these acknowledgements, FEMA determines that the Applicant did not provide FEMA with the opportunity to complete an EHP review of the proposed SOW change, prior to beginning work on the project. Moreover, because stabilization of the embankment is not eligible for PA funding, the issue of completing a retroactive EHP review for the project is moot.

Section 705

Section 705(c) of the Stafford Act provides that a state or local government is not liable for reimbursement or any other penalty for any payment made pursuant to the Stafford Act if: (1) the payment was authorized by an approved agreement specifying the costs; (2) the costs were reasonable; and (3) the purpose of the grant was accomplished.[34] The purpose of the grant is accomplished when the applicant completes the SOW as described in the obligated PW and supporting documentation; and has demonstrated compliance with post-award terms and conditions, including applicable requirements for EHP compliance.[35] If the applicant fails to comply with a post-award term or condition of the award, section 705(c) does not apply, and FEMA may take all appropriate actions to recover payments.[36]

FEMA approved, and obligated funding for a SOW to restore the embankment by replacing lost fill material and rip rap. FEMA documented the approved SOW in PW 392. However, the Applicant completed a SOW to stabilize the embankment with a sheet pile wall. FEMA had neither approved the SOW change nor documented it in PW 392 when the Applicant completed the work in December 2021. The Applicant did not complete the SOW as described in the obligated PW; consequently, it did not accomplish the purpose of the grant. Therefore, section 705(c) of the Stafford Act does not apply and FEMA is not prohibited from recouping PA funding for the project.

Conclusion

The Applicant did not demonstrate that the embankment is itself an eligible facility, and did not establish damage to the Facility resulting from slope instability caused by the disaster. Therefore, work to stabilize the embankment is not eligible for PA funding. Furthermore, the Applicant did not provide FEMA with the opportunity to complete an EHP review of the proposed SOW change prior to beginning work. Finally, section 705(c) of the Stafford Act does not prohibit FEMA from recouping previously obligated funding for the project. Therefore, this appeal is denied.