Legal Responsibility

Conclusion:  The City of Galveston is not legally responsible for the geo textile tube at Beachside Village Beach (Facility).

Background

On September 13, 2008, heavy rain, wind, and storm surge from Hurricane Ike damaged beaches in the City of Galveston (Applicant).  Afterwards, the Applicant sought FEMA Public Assistance funding to repair punctured and deflated beach geotextile tubes and eroded sand dunes. 

FEMA representatives prepared several Project Worksheets (PWs) for the repair of the Applicant’s damaged facilities, including several geotextile tubes.  However, FEMA did not prepare a PW for the geotextile tube at Beachside Village Beach (Facility).  FEMA determined that the Facility was ineligible because the City of Galveston was not legally responsible for this portion of the geotextile tube. 

After later learning that a PW could be prepared to cover omitted damages, the Applicant began to aggregate documentation to prove its ownership of the Facility through easement[1] ownership of the property upon which it was placed.  On March 22, 2012, the Applicant sent a letter to the Grantee requesting a new project worksheet be written for the work performed to repair the Facility.  The Grantee forwarded this request to FEMA on May 1, 2012.  On July 3, 2012, FEMA denied the Applicant’s request, asserting that the documentation provided “clearly” demonstrated that the Beachside Village Home Owners Association (HOA), not the Applicant, had legal responsibility for the Facility.

First Appeal

On September 11, 2012, the Applicant submitted its first appeal to the Texas Division of Emergency Management (Grantee).  The Applicant asserted that the basis of FEMA’s denial was that the Applicant did not produce documentation to establish that it owned the Facility nor had it incurred costs for the repair of the Facility.  The Applicant provided the Agreement Regarding City of Galveston Shoreline Protection Project for West Galveston Island – Beachside Village (Agreement) to demonstrate ownership which explains that, upon completion, the HOA would donate the Facility to the Applicant.[2]  Additionally, the Applicant submitted invoices from the HOA to the Applicant for the work done to repair the Facility. 

On November 20, 2012, the Region VI Recovery Division Director sent a request for information to the Applicant, through the Grantee, requesting that the Applicant provide (1) conclusive evidence that the City of Galveston had legal responsibility for the repairs and (2) canceled checks or other appropriate documentation, substantiating that the City of Galveston paid for the repairs.  In response, the Applicant pointed to the Agreement and asserted that it had not yet processed the invoices for payment.

On July 11, 2013, the FEMA Region VI Regional Administrator (RA) denied the appeal.  The RA determined that the Applicant did not have the requisite legal responsibility for the facility because the Agreement states that legal responsibility remains with the HOA in event of storm or disaster, as the HOA will reimburse the City of Galveston for any costs that exceed FEMA or state reimbursement.  Additionally, the RA noted that the Applicant proposed to own the project, but provided no documentation demonstrating that it does own it, and that the easement merely grants access to landowner’s property for construction of the project, not legal responsibility.  Further, the RA indicated that the easement has an automatic termination clause in the event that a storm or disaster destroys the Project.

Second Appeal

In the Applicant’s second appeal, dated October 23, 2013, the Applicant submits additional information in support of its claim that it has legal responsibility for the Facility.  The Applicant claims the cost of repair to the Facility to its pre-disaster condition to be $393,961.70.  The Applicant provides two letters from then Director of Planning for the City of Galveston, a November 19, 2003, letter stating that the Applicant is sponsor of the installation of the subject geotextile tube shoreline protection project, and a November 10, 2010, letter, stating that the Beachfront Construction Permit Application for repair of the partially damaged tube is based in part on the City of Galveston giving reaffirmation by the City to Texas General Land Office of its “acknowledgement that [the] sponsor of the project originally permitted in 2004 are (sic) responsible for the ongoing maintenance of the project and, if necessary, the removal of the project.”  Also, the Applicant notes that failure to repair the existing geotextile tube will cause unreasonable flood hazard to habitable structures because flood waters will be channeled to structures through gaps in the existing geotextile tube.  

Discussion

Title 44 of the Code of Federal Regulations (C.F.R.) § 206.223(a)(3) specifies, to be eligible for financial assistance, a project or item of work must be the legal responsibility of an eligible applicant at the time of the disaster.[3]  Based on the documentation provided by the Applicant, it did not have the legal responsibility for the repairs to the Facility at the time of the disaster.  Specifically, the Agreement states the Applicant has “no obligation to enhance, maintain, repair or replace” the Facility.[4]  In addition, the Agreement provides that if the Facility is destroyed by a storm or other natural disaster, the Applicant had no obligation to seek funds from FEMA or from private contributions to repair or replace the Facility.[5]  Further, as indicated in the RA’s first appeal decision, the easement governing this appeal merely grants access on the individual land owner’s property for the purpose of construction on the project and has a termination clause in the event a disaster destroys the project.[6]   On June 27, 2014, FEMA hosted an appeal meeting with the Applicant.  During this meeting, the Applicant indicated it had not reimbursed the HOA for work to repair the damage to the Facility nor had the Applicant established a timeline for when it would.  Moreover, the Applicant acknowledged that reimbursing the HOA was discretionary, rather than a mandatory legal responsibility as required by 44 C.F.R. § 206.223(a)(3).[7]  Lastly, FEMA finds neither the November 19, 2003, nor November 10, 2010, letters as persuasive evidence of legal responsibility because they do not defeat the terms of Sections 4 and 5 of the Agreement.