Private Nonprofit

Appeal Brief

Appeal Letter

Appeal Analysis

Background

The Duxbury Beach Reservation, Inc. (Applicant) is a private nonprofit (PNP) organization located in Duxbury, Massachusetts.  The purpose for which the Applicant was founded was to acquire Duxbury and Saquish beaches, to restore and preserve the beaches and to operate a public recreational beach and associated facilities.[1]  The Applicant owns and maintains sacrificial barrier beach dunes, a recreational beach and a roadway that spans the full length of the beach, connecting the beach and a private residential community to the Town of Duxbury and other local communities.  These three components collectively comprise the Applicant’s facility.[2]  There are no emergency response entities located on or immediately adjacent to the Applicant’s facility. 

From February 8 to 10, 2013, a severe winter storm damaged the facility.  Specific damages consisted of washout loss by tidal wave actions of structural materials that formed the roadway and the dunes.  The storm also deposited marine and vegetative debris at the facility.  The Applicant sought recovery assistance through the FEMA Public Assistance (PA) Program.  FEMA documented the damages and permanent restoration scope of work (SOW) in Project Worksheet (PW) 842 and estimated repair costs totaling $884,699.62.  However, funds were not obligated to the PW.[3]

FEMA later determined that the facility did not constitute a facility eligible under the PA Program, as defined by Federal regulations.[4]  Consequently, in its October 23, 2014 letter to the Massachusetts Emergency Management Agency (Grantee) and the Applicant, FEMA explained its denial of PA funding for the facility.[5]  FEMA noted that (1) the facility was primarily recreational in nature, (2) the facility did not provide services of a governmental nature, (3) the Applicant failed to apply for a Small Business Administration (SBA) loan, and (4) the facility restoration completion occurred before FEMA could perform environmental and historic preservation reviews.

First Appeal

Through a December 22, 2014 letter, the Applicant appealed FEMA’s determination that the facility is not eligible, and requested reimbursement for its total restoration expenditures of $1,052,269.62.[6]  The Applicant argued that its facility was not primarily recreational in nature as the recreational beach was only a small part of the facility and its primary services included maintaining and repairing the dunes and the roadway.  Second, the Applicant stated it was an eligible PNP because it provides essential safety services of a governmental nature since the roadway provided sole access to the peninsula communities of Gurnet-Saquish and that its dunes protected developed harbor-front areas of the Towns of Duxbury, Kingston, and Plymouth, from the potentially destructive effects of coastal storms.  Furthermore, the Applicant pointed to Ocean Grove Camp Meeting Association[7] (OGCMA), a second appeal decision in which FEMA found a PNP-owned boardwalk eligible due to it providing essential services of a governmental nature.  Focusing on the fact that the boardwalk was “available” 100 percent of the time for emergency services, the Applicant maintained that its road should be eligible under the same rationale.  In addition, the Applicant asserted that it provided other essential government services because it hosts educational programs administered by the Massachusetts Audubon Society and a local school system.

The Applicant indicated that it was not required to apply for an SBA loan because its roadway provided critical emergency services as the sole access to local communities.  The Applicant argued that even if FEMA determined that the roadway was not a facility that provided critical services, it was not required to apply for an SBA loan because the work performed were emergency protective measures, not permanent work.  The Applicant argued that its roadwork, dune restoration, snow fencing reconstruction, and dune stabilization, were all measures to protect lives and improved property.  Finally, the Applicant maintained that environmental and historic reviews did not preclude FEMA from providing grant assistance because a categorical exclusion applies for emergency work and there was an absence of any recognized historical site.

The FEMA Region I Regional Administrator (RA) denied the Applicant’s first appeal on January 20, 2016.  The RA explained that the Applicant’s facility did not meet the definition of an eligible PNP facility because it did not provide critical services pursuant to Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) § 406 or essential services of a governmental nature pursuant to Title 44 of the Code of Federal Regulations (44 C.F.R.) § 206.221(e)(7).  Elaborating further, the RA concluded that the Applicant’s facility was not an “educational facility” under the 44 C.F.R. § 206.221 definition[8] because hosting programs administered by other organziations did not establish that the facility as a “elementary or secondary school or an institution of higher learning.”  Moreover, the RA determined the facility not did not provide health and safety services of a governmental nature such as those enumerated in FEMA Disaster Assistance Policy (DAP) 9521.3, Private Nonprofit (PNP) Facility Eligibility.[9]  The RA distinguished the Applicant’s roadway from the boardwalk in OGCMA by explaining that the fact that the boardwalk was available 100 percent of the time for emergency services was not the dispositive factor when determining eligibility.  The RA explained that there was a unique history between the PNP and local government, the PNP was initially chartered by the state and authorized to provide governmental functions, the boardwalk was designated as a public thoroughfare by the state, and the PNP owned and operated a command center and special emergency vehicles used in emergency operations.  The RA concluded that none of those factors in OGCMA, which supported eligibility, were present in this case.  Finally, the RA identified the conditions for SBA loan application requirements, stating that as a non-critical services provider, such as the Applicant, was required to apply for an SBA loan—which it failed to do.

Second Appeal

In a March 21, 2016 letter, the Applicant appeals the first appeal decision incorporating, by reference, the arguments of its first appeal.  The Applicant’s primary argument is that it provides an essential governmental service by maintaining the roadway.  In support of this argument, the Applicant asserts that the Region I RA erred in refusing to apply the “availability” standard set forth in the OGCMA decision.  Finally, the Applicant states that it did not need to apply for an SBA loan prior to submitting its application for PA funding because the repair of the roadway and dunes constituted critical services under 44 C.F.R. § 206.221(e). 

Discussion

PNP applicant and facility eligibility determinations are intertwined, meaning (unlike local, state and tribal governments) a PNP is only an eligible applicant if it has an eligible facility.[10]  According to Stafford Act § 406, as implemented by 44 C.F.R. § 206.221(e), FEMA may reimburse costs associated with the repair, restoration, replacement, or reconstruction of an eligible PNP facility that provides critical services or non-critical services after certain conditions are met.[11]  Facilities must be primarily used for one of the services or facilities listed in 44 C.F.R. § 206.221(e).[12]  Facilities used primarily for religious, athletic, recreational or vocational purposes are not eligible under the PA program.[13] 

The facility described in PW 842 is comprised of a recreational beach, sacrificial barrier dunes, and a roadway connecting the recreational beach and a private residential community to neighboring local towns.  On second appeal, the Applicant’s primary argument concerns the roadway.[14]  As such, the eligibility of the roadway is the primary focus of this decision.  Noting such, the recreational beach[15] and sacrificial barrier dunes[16] do not meet the statutory or regulatory eligibility requirements for PNP-owned facilities.  

In its appeal, the Applicant appears to conflate “critical services” with “essential governmental services” in arguing the eligibility of its roadway.  However, under the Stafford Act and regulation, these classifications have different policy implications.[17]  The following subsections consider the roadway’s eligibility under each classification.

Eligibility of the Roadway as Providing Critical Services

The Stafford Act defines “critical services” as, “power, water, sewer, wastewater treatment, communications, education, and emergency medical care.”[18]  PNP facilities providing critical services do not require the owner or operator to apply for a SBA loan before seeking PA reimbursement.  FEMA policy further explains that emergency medical care facilities that provide direct patient care, fire and rescue companies or facilities providing fire protection, and facilities supporting facilities that provide critical services (e.g., hospital labs, storage, administration, and record areas) are considered to provide critical services.[19] 

When arguing that it was not required to apply for a SBA loan, the Applicant argues that repair to the roadway and dunes “constituted ‘critical services’ to provide emergency first responder access to the peninsula and [private residential community].”[20]  However, the Applicant does not own or operate facilities that actually provide emergency medical care services.  The roadway does not constitute a facility providing emergency medical care services simply by allowing local governments’ emergency, police and fire vehicles access to the recreational beach and private community.  It must primarily, actively and directly provide these services to be eligible under 44 C.F.R. § 206.221(e)(4).  This is reinforced by the fact that, unlike the Stafford Act definition of “public facility,”[21] roads or roadways are omitted from the definition of “private nonprofit facility.”  As such, PNP-owned roads/roadways are not eligible as stand-alone facilities.  Therefore, PNP-owned roads/roadways must support other eligible PNP facilities in order to be eligible for grant assistance.[22] 

Eligibility of the Roadway as an Essential Governmental Service Facility

Generally, FEMA may reimburse costs to repair, restore, replace or reconstruct PNP facilities that provide essential services of a governmental nature, such as museums, zoos, community centers, libraries, homeless shelters, rehabilitation facilities and facilities which provide health and safety services of a governmental nature, but only after the owner or operator has applied for and been denied an SBA loan.[23] 

The Applicant’s argument that the road provides health and safety services of a governmental nature is not compelling.  While non-exhaustive, FEMA policy provides a comprehensive list of eligible health and safety services of a governmental nature, including low-income housing, alcohol and drug treatment centers, residences and other facilities offering programs for battered spouses, facilities offering food programs for the needy, daycare centers for children or those with special needs, and animal control facilities directly related to public health and safety.[24]  The roadway does not provide or support any of these services.  Furthermore, FEMA cannot accept the Applicant’s argument that, by simply being available to emergency vehicles 100 percent of the time, the roadway provides an essential service of a governmental nature.  This interpretation would allow any private road to be eligible for PA funding because all roads are “available” access points for emergency vehicles, even those in gated communities.  As such, there would be no reason to exclude “roads” or “roadways” from the Stafford Act definition of “private nonprofit facility.”  However, as stated above, the Stafford Act clearly distinguishes eligibility criteria for public and non-public roads. 

Additionally, the Applicant’s roadway is distinguishable from the boardwalk that was the subject of the OGCMA decision because the boardwalk was not only utilized to perform emergency services, but supported other facilities owned and operated by the applicant that provided emergency rescue and other government-like services, specifically a command center and lightweight ambulances.  The Applicant does not own or operate the emergency vehicles or any other facility providing emergency services.  Additionally, in the second appeal for Neringa, Inc., FEMA held that even when an access point (in that case a bridge) is the Applicant’s only method for ingress or egress, it is not eligible if not ancillary to an eligible facility.[25]  Here, the roadway provides access to the Applicant’s recreational beach and a private residential community—neither of which are an eligible facility under the PA program. 

Finally, even if, arguendo, FEMA determined the Applicant’s roadway provided an essential governmental service, the Applicant has failed to apply for an SBA loan and would otherwise be ineligible for PA funding.  While the Applicant attempts to compare its facts to those of OGCMA to support eligibility, it fails to acknowledge that in that case, OGCMA had pursued an SBA loan.  This is another point that distinguishes the two appeals and supports different outcomes. 

Conclusion

The Applicant’s facility does not provide critical or essential services of a governmental nature as required by Stafford Act § 406 and 44 C.F.R. § 206.221(e).  Therefore it is not an eligible facility under the PA program.  Consequently, without an eligible facility, the Applicant is an ineligible applicant.