CURRENT ISSUES IN RECOVERY

Transcription

1 CURRENT ISSUES IN RECOVERY Evan Rosenberg/Cathy Day Bureau of Recovery CIEM 2014

2 INTRODUCTION What we will discuss in this session: Public Assistance thresholds Small PA Projects and Florida s new Transparency Act Effects of the case of SFWMD vs. FEMA Recap of the 2014 North Florida Severe Storms & Flooding event

3 FEMA THRESHOLDS

4 PA THRESHOLDS As always, we have a new set of thresholds to contend with for the federal fiscal year For PA, these thresholds determine what levels of eligible damage the county and the state must reach before we can expect: A federal PA declaration to be issued for the state Statewide threshold is based off of $1.41 per capita This is up from $1.39 per capita in (And ) For a county to be included within that federal PA declaration County threshold is based off of $3.56 per capita This is up from $3.50 per capita in

5 PA THRESHOLDS For the State of Florida, based off of our 2010 Census population of 18,801,310, this leads to a Statewide PA threshold of

6 PA THRESHOLDS County PA thresholds for federal fiscal year : County Pop. (2010 Census) County Threshold County Pop. (2010 census) County Threshold Alachua 247,336 $880, Franklin 11,549 $41, Baker 27,115 $96, Gadsden 46,389 $165, Bay 168,852 $601, Gilchrist 16,939 $60, Bradford 28,520 $101, Glades 12,884 $45, Brevard 543,376 $1,934, Gulf 15,863 $56, Broward 1,748,066 $6,223, Hamilton 14,799 $52, Calhoun 14,625 $52, Hardee 27,731 $98, Charlotte 159,978 $569, Hendry 39,140 $139, Citrus 141,236 $502, Hernando 172,778 $615, Clay 190,865 $679, Highlands 98,786 $351, Collier 321,520 $1,144, Hillsborough 1,229,226 $4,376, Columbia 67,531 $240, Holmes 19,927 $70, DeSoto 34,862 $124, Indian River 138,028 $491, Dixie 16,422 $58, Jackson 49,746 $177, Duval 864,263 $3,076, Jefferson 14,761 $52, Escambia 297,619 $1,059, Lafayette 8,870 $31, Flagler 95,696 $340, Lake 297,052 $1,057,505.12

7 PA THRESHOLDS County PA thresholds for federal fiscal year (ctd.): County Pop. (2010 Census) County Threshold County Pop. (2010 census) County Threshold Lee 618,754 $2,202, Pinellas $3,262, Leon 275,487 $980, Polk $2,143, Levy 40,801 $145, Putnam $264, Liberty 8,365 $29, St. Johns $676, Madison 19,224 $68, St. Lucie $988, Manatee 322,833 $1,149, Santa Rosa $538, Marion 331,298 $1,179, Sarasota $1,350, Martin 146,318 $520, Seminole $1,504, Miami-Dade 2,496,435 $8,887, Sumter $332, Monroe 73,090 $260, Suwannee $147, Nassau 73,314 $260, Taylor $80, Okaloosa 180,822 $643, Union $55, Okeechobee 39,996 $142, Volusia $1,760, Orange 1,145,956 $4,079, Wakulla $109, Osceola 268,685 $956, Walton $195, Palm Beach 1,320,134 $4,699, Washington $88, Pasco 464,697 $1,654,321.32

8 PA THRESHOLDS Other important PA thresholds for federal fiscal year : The small project maximum is raised to $121,600 (up from $120,000 which took effect as part of the Post-Sandy changes) The minimum amount that a project worksheet (PW) can be written for is raised to $3,040 (up from $3,000) (We will update FMAG thresholds in the December/January timeframe)

9 IA THRESHOLDS And there is one IA threshold change to note for federal fiscal year : The Individuals & Households Program (IHP) maximum grant has been raised to $32,900 (up from $32,400)

10 SMALL PA PROJECTS IN FLORIDA

11 SMALL PA PROJECTS IN FLORIDA FEMA has established small project procedures designed to expedite Public Assistance payments where the total for the project is less than {$120k in } Under the federal rules, PA Small Projects are paid on estimates and there is no cumbersome final reconciliation at the end of the project. The main piece of documentation under the federal rules is a statement verifying that the project has been completed Unfortunately that is inconsistent with Florida s new Transparency Act, which states that for projects where Federal or State money is paid out: A clearly defined scope of work is required The contract for the work must have deliverables and penalties for nonperformance Etc

12 SMALL PA PROJECTS IN FLORIDA DEM is working with DFS to try and develop a standard format for small project payment requests that meets the requirements of the new law while maintaining the benefits of the expedited federal process What we have come up with as of this writing (aka not yet carved in stone) is that DEM will put together a payment package with subgrantee input. The payment package will consist of: A Summary of Documentation, A copy of the obligated FEMA Project Worksheet, and A copy of the payment request and a DFS Contractual Services Form (the CSF is printed out of FACTS)

13 SMALL PA PROJECTS IN FLORIDA Summary of Documentation (one page, 4 columns) contains An applicant s reference to the type of document that could be looked up to verify the paid expenditure (warrant number, journal transfer id, etc ), The date range that expenditures fell within, Type of work performed/services obtained, which ties to the work on the Project Worksheet, and The eligible costs (must not exceed approved eligible amount on the PW) New Contractual Services Form Will be pulled from FACTS, and states the type of grant, deliverables and financial consequences DEM is working with DFS to implement standardized language

14 SFWMD VS. FEMA

15 SFWMD VS. FEMA History: South Florida Water Management District was hit with a $21 million deobligation, based off of a series of DHS-OIG audits back in 2011 FEMA accepted the recommendations of the DHS-OIG in 2012, and deobligated funds accordingly. The main point at issue triggering the deobligations was the eligibility of cleanup and repair work to the banks of SFWMD canals First appeal was made to FEMA R-IV and was denied in its entirity Second appeal was made to FEMA National HQ and returned almost $800k which did not fit the canal banks issue and should never have been included as an audit finding, but was otherwise denied SFWMD moved to file suit in Federal District Court

16 SFWMD VS. FEMA What was at issue (besides money): Section 705(c) of the Stafford Act establishes an affirmative defense (i.e. - even if the subgrantee is wrong, FEMA cannot take back the money) if the following three part test is met: If the payment was authorized by an approved agreement that specified the amounts, and If the costs were reasonable, and If the purpose of the grant was accomplished Then assuming that there was no fraud involved, FEMA/DHS cannot take the money back!

17 SFWMD VS. FEMA But All this applies only to funds paid out under the Stafford Act In the first appeal denial, FEMA claimed that since the work itself had not been eligible under the Stafford Act, the 705(c) good-faith exception (DEM s term) did not apply. This was affirmed by FEMA HQ on second appeal To this, both DEM and the subgrantee s counsel wondered out loud that if FEMA is correct on this point and the money was not given out under the Stafford Act, then under what authority was FEMA asking for it back? This rationale eviscerates the 705(c) affirmative defense, and is clearly against the intent of Congress but it was FEMA policy unless struck down by the courts

18 SFWMD VS. FEMA So what happened in court? Not to bore you with the legal details, but let s call this a clear win for states and subgrantees! The Judge rejected FEMA s rationale for denying the appeals, and determined that this was exactly the sort of set of events that Section 705(c) was designed to prevent Further, the Judge awarded the case to SFWMD as a result of summary judgment, which means that it did not make it to a trial. In the Judge s eyes, there was no dispute of what the plain meaning of Section 705(c) was, and there were no disputed facts at issue The entire amount in dispute was ordered returned to SFWMD!

19 SFWMD VS. FEMA Additionally: The Judge determined that while FEMA has discretion on whether to award funds at the start of a disaster, deobligations are not discretionary in the way that triggers Sovereign Immunity of the federal government Put another way while you can t sue FEMA if they do not award your entity PA funds even though you are in a PA declared county; if they do obligate PA funds to your entity and then later they deobligate those funds, you can sue them upon deobligation to get the funds back

20 SFWMD VS. FEMA So we will never have to pay anything back to FEMA?!? No, that is not the intent of the ruling. Remember that we at DEM call this the Good Faith Exception. This ruling does not apply to protect you if: The work was not completed, There was fraud in the application for funds, The costs of the project are determined to be unreasonable, or If there was a duplication of benefits Also, this case should not be seen as blocking FEMA from deobligating over-payments discovered in the final inspection process, as FEMA has the reasonableness defense to fall back on actual costs can be used by FEMA to show reasonableness. Over-payments still have to be returned to FEMA (exception: small projects and alternative procedures).

21 SFWMD VS. FEMA So, is this decision chiseled in stone? Not necessarily, as we do not currently know FEMA s intent to appeal to the 11 th Circuit Court of Appeals in Atlanta. But for now, subgrantees will certainly want to include Section 705(c) arguments in their appeals of deobligations whenever the three-part test seems to apply.

22 DR 4177 REHASH

23 DR 4177 REHASH Brief History of what happened: 4 weather systems impacted Florida During April 2014:

24 DR 4177 REHASH

25 DR 4177 REHASH

26 DR 4177 REHASH History (ctd.): The ultimate result of all of this rain was flooding throughout the Panhandle IDA s were proceeding in the Central Panhandle from the 2 nd and 3 rd events, when the 4 th rain event hit 20+ inches of rain Dam failure led to street washouts (big news coverage) Jail explosion (cause still TBD; also big news coverage) Huge clamor when Baldwin County, AL (next door to Escambia) received their Presidential declaration before FL did: FL is a much bigger state = higher thresholds!!! Rural counties get more consideration for an expedited declaration

27 DR 4177 REHASH History (ctd.) DR-4177 declared for IA in Escambia & Santa Rosa Counties on May 6 While the state had asked for all 4 rain events to be included in the incident period, the declared incident period covered the 4 th rain event only. FEMA never backed off of this stance, denying the State s appeal (the denial letter was signed by Craig Fugate himself) IA for Okaloosa and Walton counties added on May 12 PA for Escambia, Santa Rosa, Okaloosa & Walton on May 14 IA for Jackson County added on May 21 PA for Bay, Calhoun, Holmes, Jackson & Washington Counties added on June 13 IA for Gilchrist & Taylor Counties denied on June 30 PA for Dixie & Suwannee Counties denied on July 7

28 DR 4177 REHASH

29 DR 4177 REHASH Question 1 How is the incident period determined? Historically, the State has asked for a particular incident period, which when reasonable, has typically been granted. In this event, FEMA stuck to their guns that the 4 rain events were distinct, and were not caused by the same weather system, hence a limited incident period. This goes against precedent set as recently as 2009 (DR-1831 in the Panhandle). Question 2 Why did it take so long to get the central counties declared for PA? Once we saw that FEMA was not going to back off of the limited incident period, we started to strategize on ways to best get the eastern counties declared. At one point we considered asking for a second declaration, covering the central & eastern counties for PA only, due to the 2 nd and 3 rd rain events. After it became apparent that this strategy would not work, we moved to get the central counties into DR-4177

30 DR 4177 REHASH Question 3 But we met the PA thresholds in Dixie & Suwannee counties why didn t we get a declaration? FEMA made a determination that although the flooding actually occurred during the incident period, the floods themselves were due to rain events 2 & 3 (outside the incident period) Question 4 Ok my county was not declared, but we still were impacted. Is state money available? Currently, there is no state program that mimics the availability of Stafford Act funding and programs when Florida does not receive a declaration. DEM has a State Project framework that mimics the PA process on a state level (used during Deepwater Horizon), but funding would have to be secured from the Legislature. DEM is currently working with OPB in order to either secure funding, or an expedited funding process for implementing this framework

31 DR 4177 REHASH Question 5 Should local governments pursue funding directly through Congressional & Legislative delegations? Based on the number of phone calls we get when an incident is awaiting a declaration, most local entities do that anyway! (lol) Our advice is that political pressure can be a good thing when used effectively; which means towards FEMA, not DEM. While recovery is in the background compared to response efforts, that does not mean that nothing is happening Question 6 Did FEMA come to this event with their mind already made up as to what we would get? Possibly While that is a charge we can never prove, we asked for a number of programs for which we were eventually denied: Americorps Missions, Private Property Debris Removal, Disaster Case Management (appeal determination pending)

32 DR 4177 REHASH Question 7 We didn t get DCM? But we had over 10,000 IA registrations, with over 5,000 grants That is correct. Early on FEMA came into the impacted area for IA and performed an assessment (by themselves) that looked at the capacity of local governments and volunteer organizations. What they didn t take into account was that 90 days into the event those volunteer agencies would not be able to provide that same initial level of support (through no fault of their own) From this, we took away that as soon as we get an IA declaration we should be asking about DCM. In this event, FEMA did the assessment and the State and local entities had little to no visibility while it was being conducted We also learned to include many POC s on State-Federal-Local data sharing agreements!

33 DR 4177 REHASH Question 8 Did we learn anything else from this event? Yes we learned that getting a flood declared from a complex weather pattern may have gotten tougher than it was as recently as 5 years ago! To this end we have taken the following steps: When we approach a (riverine) flood situation, DEM meteorology is going to keep a daily repository of river level hydrographs. When it comes to writing an appeal for PA, Cat. B. Emergency Protective Measures performed in rational expectation of the then-current forecast will likely help our cause We are also monitoring declared severe storm & flooding events around the country, to try and find any caused by multiple rain systems. If we can find a similar situation that gets declared, we will ask FEMA to better explain what they are looking for

34 DR 4177 REHASH DR-4177 closing thoughts: PA: IA: By the time this is over, DR-4177 will likely be in the neighborhood of a $110 million event (closer to $200 million if the Escambia Co. Jail is deemed eligible) Central counties were essentially the same group of small counties that was impacted by DR-4138 in 2013, which adds a layer of complexity to both recoveries 12,509 survivors registered with FEMA, 6,964 were approved for IA payments 5,887 total visits to Disaster Recovery Centers $27.7 million approved under FEMA s housing assistance program $5.8 million approved under FEMA s other needs assistance program $38.8 million approved under SBA s low interest home loan program