Replacement of the Lake Tabor Dam

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster	FEMA-1134-DR
Applicant	Town of Tabor City
Appeal Type	Third
PA ID#	047-66520
PW ID#	26942
Date Signed	1998-06-30T04:00:00

PURPOSE: Respond to third appeal submitted by the Town of Tabor City concerning the denial of funding for the replacement of the Lake Tabor Dam.

DISCUSSION: Heavy rainfall from Hurricane Fran undermined and destroyed the Lake Tabor Dam. At the site inspection, the FEMA inspector learned that the facility was owned by a group of private stockholders and leased to the Town of Tabor City (subgrantee). The FEMA inspector determined that, because replacement of the facility was not the legal responsibility of the subgrantee, the subgrantee was not eligible for Federal assistance. Accordingly, DSR 29642 was prepared for $0. The subgrantee appealed this determination on the basis that the lease passed legal responsibility for maintenance and repairs to the facility to the subgrantee. The Regional Director determined that repairs to the damaged facility were the legal responsibility of the stockholders. Accordingly, the appeal was denied. The Regional Director's determination was upheld during second appeal. The State forwarded the subgrantee's third appeal with a letter dated February 3, 1998. The subgrantee reiterates that they are responsible for maintenance and repair of the facility as documented by their lease and history of providing employees and equipment for past maintenance and repair activities. I have determined that the lease does not pass legal responsibility for maintenance and repair to the subgrantee. Furthermore, replacement of the facility exceeds the authority passed to the subgrantee through the lease. Pursuant to 44 CFR 206.223(a)(3), the appeal is denied.

RECOMMENDED ACTION: Sign the letter informing the GAR of the decision to deny the third appeal.

Appeal Letter

Appeal Analysis

BACKGROUND
During Hurricane Fran, rainfall intensity for the area of Lake Tabor, located in the County of Columbus, North Carolina, surpassed 100-year storm levels several times. The spillway for the Lake Tabor Dam was inadequate to discharge the ensuing high flows. Subsequently, the Lake Tabor Dam was undermined and destroyed. At the time of the disaster, the Lake Tabor Dam site was owned by the Tabor City Recreation Commission, Inc. (TCRC), a group of local stock holders who leased the facility to the Town of Tabor City for one dollar a year. Representatives from the Federal Emergency Management Agency (FEMA), the North Carolina Department of Emergency Management (State), and the Town of Tabor City (subgrantee) performed a site inspection to document disaster related damages on January 22, 1997. The FEMA inspector determined that, because the facility was owned by the TCRC, the Town of Tabor City was not eligible to apply to FEMA for repairs. Accordingly, Damage Survey Report (DSR) 26942 was prepared for $0.

First Appeal
The State forwarded the subgrantee's first appeal of this determination with a transmittal letter dated May 16, 1997. The subgrantee stated that, although the Town of Tabor City does not hold title to the dam, the Town is responsible for maintenance and repairs of the dam as per their lease. With their appeal, the subgrantee included a copy of the lease and affidavits from Town officials to establish that the Town had been providing maintenance and repairs to the dam for over thirty years. The subgrantee also contended that repairs should be eligible for Federal assistance because the dam provides flood protection for the Town of Tabor City at large and the Grissett Swamp wetland area, as well as a Town recreation park located below Lake Tabor and a County Senior Citizen Center just below Lake Tabor.

FEMA responded to the first appeal in a letter dated June 17, 1997. The Regional Director stated that although the subgrantee has performed essentially all past maintenance and repairs to the dam, they are not the legal owners of the facility and do not have the legal responsibility to replace the dam according to the lease. Therefore, the Regional Director denied the appeal pursuant to Title 44 of the Code of Federal Regulations (CFR), section 206.223(a)(1), which states that to be eligible for Public Assistance funding, an applicant must be legally responsible for the proposed scope of work.

Second Appeal
The State forwarded the subgrantee's second appeal with a transmittal letter dated September 15, 1997. The subgrantee reiterated their first appeal contention that the Town is responsible for maintenance and repair of the Lake Tabor Dam as documented by their lease and history of maintaining the dam for over thirty years. The subgrantee did not provide any additional information with the second appeal.

The Executive Associate Director upheld the Regional Director's first appeal determination of ineligibility in a letter dated December 8, 1997. The letter stated that although the lease specifically transferred repair and maintenance responsibilities from the TCRC to the subgrantee, it did not authorize the subgrantee with replacement authority.

Third Appeal
The subgrantee submitted a third appeal dated January 2, 1998. No additional documentation was provided with the third appeal. In addition to their previous contention that the Lake Tabor Dam provides flood control for the Town of Tabor City as well as for the Grissett Swamp, the Tabor Dam recreation area, and adjacent senior citizens' center, the State argues that in the past, FEMA has made eligible the cost of replacing dam structures that support otherwise eligible public facilities.

DISCUSSION
The subgrantee contends that the Contract and Lease Agreement with the TCRC passed legal responsibility for maintenance and repair of the subject facility to the Town of Tabor City. The State specifically cited Paragraph 4 of the lease, which states, "It is specifically understood and agreed to that LESSEE accepts said premises in the physical condition in which the same now are, and that the LESSOR shall be under no obligation whatsoever to make any improvements to said premises during the term of this lease." The subgrantee also opines that their legal responsibility is evidenced by the Town's history of providing employees and equipment for maintenance and repair of the facility over the past thirty to forty years.

Paragraph 4 of the lease documents that the owners of the facility (TCRC) are not responsible for any improvements to the site. This does not specifically establish the subgrantee as the responsible party for maintenance and repair, nor does it provide replacement authority. Improvements to a facility would entail work that enhances or betters the existing function and/or condition of the Lake Tabor site at the time of the lease signing. Conversely, maintenance and repair entails work to upkeep or return the site to the existing conditions at the time of the lease signing. Therefore, the subgrantee's contention that the lease passes legal responsibility for maintenance and repairs of the Lake Tabor Dam and surrounding area is incorrect. Furthermore, replacement of the dam exceeds the authority passed to the subgrantee through the lease.

The subgrantee attempts to establish maintenance and repair responsibility based on a history of providing employees and equipment for such work since the early 1960's. Along with affidavits from local officials documenting past work performed by the Town, the subgrantee also enclosed financial records submitted by the TCRC to demonstrate that the TCRC has never had the financial capabilities to undertake significant maintenance of the dam on its own. Although the subgrantee has established a history of providing labor and equipment for dam maintenance and repair, these undertakings have been willingly provided by the subgrantee. The subgrantee had no legal obligation to provide such services.

Pursuant to 44 CFR 206.223(a), to be eligible for financial assistance, an item of work must be the legal responsibility of an eligible applicant. Review of the documentation provided in the third appeal indicates that the contract leasing the Lake Tabor Dam to the Town of Tabor City does not establish the subgrantee as the legally responsible party for replacement or maintenance and repair of the dam. As such, the scope of work for which funding is requested is not the legal responsibility of the applicant.

Additionally, in support of their position that replacement of the Lake Tabor Dam should be eligible for reimbursement, the State asserts that FEMA approved funding for private entities following Tropical Storm Alberto in 1994 in Georgia, apparently in response to requests concerning alleged immediate threats to improved property. FEMA did provide certain assistance to Houston and Taylor Counties in Georgia after Tropical Storm Alberto (FEMA-1033) for work related to privately owned dams. However, review of those files indicate that the situations are not the same in that the dams, in all instances, are incorporated within other eligible facilities, including either County utility systems or roads that were eligible for repair. The private structures were only repaired to the extent necessary to restore the eligible facility. There is no eligible facility associated with the Lake Tabor Dam.

CONCLUSION
Maintenance and repair of the damaged facility is the legal responsibility of the TCRC, not the subgrantee. Pursuant to 44 CFR 206.223(a), the work is not eligible for Federal assistance. Accordingly, the appeal is denied.