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94 Synopsis of Issue Debris operations and monitoring can be costly. The impact of major or catastrophic emer- gencies can quickly exceed local financial resources. Several federal agencies have reimburse- ment programs in place to provide some compensation to eligible entities for specific categories of expenses in disaster recovery efforts. Much of the time, this compensation will be on a cost share basis. For example, FEMA may reimburse 75 percent of eligible disaster-related expendi- tures. Other agencies may have different cost sharing programs. Target Audience â¢ Finance personnel. â¢ Debris managers. â¢ Debris monitors. â¢ Debris contractors. What Does Reimbursement Involve? After a disaster strikes, communities are left with debris that usually impedes transpor- tation and emergency routes, posing a threat to public safety. Local governing entities are then forced to spend their communityâs funds on debris management activities. The affected communities often need the assistance of the state and federal governments to recover from the event. Each federal agency that oversees reimbursement for debris removal has different eligibility requirements. Local and state agencies planning to seek reimbursement must be able to dem- onstrate that they are eligible to apply, that damage occurred to a qualifying facility, that the work performed is appropriate for reimbursement according to program requirements, and that the costs are reasonable. Generally, eligible work must also be completed within certain timeframes and, if a contractor is used to accomplish any or all of the work, the contracting methods used must conform to federal regulations. Additional information regarding contracting can be found in Chapter 5. The reimbursement programs each require a grant application to be completed. The applica- tion format varies based on the program, but generally requires a description of the scope of work required, estimated or actual costs to complete the work, and documentation to substanti- ate the request. C H A P T E R 1 2 Reimbursement
Reimbursement 95 Documentation is essential to the reimbursement process. An agency applying for a federal reimbursement grant must be able to substantiate labor, equipment, and contractor costs associated with performing eligible work. Depending on the parameters of the reimburse- ment program, labor costs might include regular and allowable overtime hours associated with performing eligible work, and hourly rates plus fringe benefits. Timesheets for each individual performing eligible work should characterize the task and break it down by regu- lar and overtime hours. Equipment costs could also specify the time equipment was in use (i.e., not idle) performing eligible work as well as hourly equipment usage rates, which typi- cally include operation, insurance, maintenance, fuel, and depreciation. Equipment logs that document when and how certain equipment was used can also document equipment costs. Contractor costs should be substantiated based on the contractual agreement, which typi- cally is based on the volume or weight of debris removed. Truck measurements and/or scale calibration, debris load tickets, and a load ticket database are typically used to document contractor costs. Photographs can also be useful, to document equipment used for debris operations, trucks used for hauling, and quantities and types of debris piles. Why Is Reimbursement So Important? Debris removal is a time-consuming and costly operation that often results in a great expense to the affected communities and private nonprofit institutions, who then seek financial aid from federal and state agencies. Debris removal costs typically can be anywhere from 25 to 85 percent of the total cost of a disaster. FEMAâs Debris Management Guide (25) published in 2007 states that, âOver the last five years, debris removal operations accounted for approximately 27 percent of the disaster recovery costs.â These costs could cripple a local economy if the community had to bear the full expense of debris operations. Federal programs such as the FHWAâs Emergency Relief program and FEMAâs PA program will reimburse eligible applicants for eligible work at the rate of 75 to 100 percent of the total cost, depending on the program and the terms of the disaster declaration. While the applicant is still responsible for the non-funded portion of the cost, it is significantly less than it would be otherwise. The following examples demonstrate how expensive debris removal operations can be for a community: â¢ Hurricane AndrewâAn initial estimate of debris after the storm was 20 million CYâenough to fill a football field a mile high. Removal took 6 months at an approximate cost of $585 million. â¢ World Trade CenterâApproximately 1.6 million tons of debris were removed at a total esti- mated cost of $1.7 billion, which includes $695 million for debris removal plus $1 billion in liability insurance coverage. (32) â¢ 2003 Southern California firesâApproximately 64,000 tons, and $13.2 million. (33) â¢ San Simeon EarthquakeâApproximately $400,000 spent on debris removal. The quake had a magnitude of M6.5 when it struck in 2003. (33) â¢ Hurricane KatrinaâWhen the demolition of damaged property in the New Orleans metro- politan area is complete, Hurricane Katrina will have generated more than 100 million CY of disaster debris. Estimates of costs associated with removing and disposing of debris from the disaster range from $2.5 billion to $4.1 billion. To date, disaster debris totals from Katrina are estimated at: â 3.4 million CY in Alabama, â 45.8 million CY in Mississippi, and â 64.3 million CY in Louisiana (this total includes debris from Hurricane Rita (34).
96 A Debris Management Handbook for State and Local DOTs and Departments of Public Works When Does Reimbursement Occur? Most programs provide reimbursement based on actual costs, and therefore require docu- mentation of all expenses. Most also require that a final inspection take place to verify the work is complete, and that it was accomplished in accordance with program requirements and the agreed upon scope of work. Once the final inspection is finished, the funds are released by the federal agency to reimburse the local or state agency for the work. Many of the programs have provisions that allow some funds to be disbursed prior to project completion; typically this option may be exercised in response to larger disasters where damage is widespread. Who Reimburses These Costs? The federal government provides reimbursement programs through several agencies for debris operations expenses. While FHWA and FEMA are the two primary federal agencies that provide funding to DOTs and DPWs for debris removal, other agencies such as NRCS and USACE also have programs that are relevant to certain debris removal actions. FHWA Emergency Relief Program Eligibility Requirements The FHWA Emergency Relief Manual, Chapter II, defines eligible timber and debris removal such as trees, tree limbs, other woody materials, rocks, gravel, sand, silt, etc. In general, debris eligible for funding by the FHWA ER program must be the result of a disaster, and its removal must minimize damage, protect facilities, or restore essential traffic. The limits of debris removal are to the outside edge of the shoulders (See Figure 7.9, in Chapter 7, Removal) and can include the removal of debris that is considered to be a safety hazard (fixed objects) within the limits of the clear zone. FHWA Emergency Relief Program Funding On July 6, 2012, Moving Ahead for Progress in the 21st Century (MAP-21) was signed into law. This legislation maintains the total level of funding for the ER program at $100 million per fiscal year. The federal portion of eligible debris removal can be reimbursed at 100 percent of cost for the first 180 days after the disaster occurs, with Day 1 starting on the date the event occurs. Debris removal outside the specified limits during the first 180 days and beyond is at the normal pro rata share for the affected federal-aid highway. MAP-21 Impacts on FHWA Emergency Relief Program Application Process MAP-21 limits the amount of time that state DOTs have to submit an application to FHWA for funding through the ER program. Applications must be submitted within 2 calendar years of the date of the disaster. The application must include a comprehensive list of all eligible project sites and repair costs. Because debris removal activities are to be completed within the first 180 days after the disaster occurs, this requirement to submit the application to FHWA within 2 years after the disaster occurs should not impact funding for eligible debris removal activities under the program unless the extent of the disaster is such that debris removal activities are still ongoing 2 years after the disaster occurs. In this case, the state DOT should follow FHWA ER program procedures for requesting a time extension through the FHWA Division Administrator. A copy of the FHWAâs ER Questions & Answers related to MAP-21âs impacts on the application process and debris removal eligibility can be found on the FHWA website.
Reimbursement 97 FEMA Public Assistance Program If a federal disaster declaration is in effect and debris removal work is eligible under the decla- ration, then FEMAâs debris removal eligibility policies, under 44 CFR Â§206-222, Â§206-223(a) and (c) and Â§206-224, respectively, will be applicable to debris located in federal-aid roadways as well as other publicly-maintained roadways. In general, debris removal from the roadways must be complete within 6 months of the date of the declaration. The federal cost share will be the per- centage that is in effect for the particular disaster, and will not be less than 75 percent. To be con- sidered as a viable participant, the applicant must submit a Request for Public Assistance (RPA) to the Regional Administrator within 30 days after the designation of the area where the damage occurred. Applications for grant reimbursement through the PA program must be submitted by an eligible applicant performing the debris removal work through the FEMA PA process. The grant application is in the form of a Project Worksheet, which is prepared either by the applicant or FEMA, depending on the size and scope of the project and the applicantâs preference. The state and local DOTs and DPWs must determine which federal agency provides reim- bursement for what damages. An applicant may not receive funding from two sources for the same work item and the Stafford Act prohibits such a duplication of benefits. (See FEMA Policy 9525.3, Duplication of Benefits.) A state disaster assistance program is not considered a duplica- tion of federal funding. There are several other agencies discussed below that provide reimburse- ment or repairs to stipulated disaster-related damaged facilities. It is important to note for FHWA and/or FEMA funding, if both a federal disaster declaration and a governorâs emergency declaration are in effect, but the governorâs declaration includes more counties than the federal declaration, then the counties included in the governorâs decla- ration but excluded from the federal declaration are not eligible for FEMA PA funding but are eligible for FHWA ER program funding. U.S. Army Corps of Engineers The U.S. Army Corps of Engineers (USACE) has ongoing authority to conduct emergency repair and permanent restoration of damaged flood control works, which are those facilities constructed for the purpose of eliminating or reducing the threat of flooding. These include levees, floodwalls, flood control channels, and dams, among others. Under the Rehabilitation and Inspection Program (RIP), repairs to damaged flood control works that are regularly main- tained and in active status at the time the damage occurs can be funded for reimbursement. Locally constructed projects are funded at 80-percent federal share and 20-percent levee owner share. Federally constructed projects are funded at 100 percent of the repair cost. For the repairs to be eligible for funding, the USACE must determine that the benefit-cost ratio is favorable. (35) Natural Resources and Conservation ServiceâEmergency Watershed Protection Program The Natural Resources Conservation Service (NRCS) can provide assistance to areas that have been recently damaged by natural disasters through the Emergency Watershed Protection (EWP) program. The NRCS has the authority to remove debris from stream channels and implement conservation practices to mitigate excessive stormwater runoff and prevent excessive soil erosion. The NRCS EWP program does not require a state or federal disaster declaration; it is established and funded by Congress. In most cases, the NRCS EWP program will pay up to 75 percent of the cost of a project, with the remaining costs coming from local sources, and can be made in cash or in-kind services. In areas with limited resources as identified by U.S. census data, the program will pay up to 90 percent of the cost.
98 A Debris Management Handbook for State and Local DOTs and Departments of Public Works Department of the InteriorâBureau of Indian Affairs The Bureau of Indian Affairs may help tribal recovery after a disaster by providing resources, such as road maintenance grants. These must be coordinated with the FHWA and FEMA grant programs. How Does an Applicant Get Reimbursed? Government agencies and jurisdictions can better prepare for debris-generating events by implementing steps or best practices that would make the reimbursement process easier to com- plete. A few examples include: 1. Set up separate accounting codes for disaster-related work. This will help to separate emergency-related work from all other types of work. 2. Keep track of equipment usage time with the respective equipment operator. 3. Create a separate file that includes all documents that would be used in the reimbursement program such as timesheets, equipment sheets, receipts, cost estimates, bids, and other records. Appendix K provides a sample checklist that can be useful for tracking debris-related costs and documentation requirements for reimbursement. When submitting for reimbursement, almost all funding sources will require detailed docu- mentation, as discussed previously. For debris operations, this includes timesheets; labor, fringe benefit, and equipment rates; equipment usage; awarded contracts; debris load tickets; debris operations reports; photographs; and other records. The detailed backup documentation is used to support development of the grant application. Depending on the program, the grant applica- tion may be completed based on estimates and then amended once final costs are known, or it may be submitted only after a final inspection has been completed and final costs have been tallied. In most federal grant programs, the applicant submits their completed grant application to the state. The state reviews the application for compliance with program requirements, and then forwards the completed applications to the federal agency for processing. When the federal agency processes the request, it releases the funds to the state, which acts as the administrator by disbursing and monitoring the grants awarded to the applicant under the program. If the federal agency rejects the grant application, the applicant has the right to appeal the rejection. Each agency and program has its own appeal process, and appeals must be made in a timely manner according to the requirements of the particular program. â¢ FEMAâThe Grantee (state) first makes the appeal to the FEMA Regional Administrator within 60 days of receipt of notice of the action or decision being appealed. If the FEMA Regional Administrators uphold the rejection, the Grantee can make a second appeal to the FEMA Assistant Administrator at the Agencyâs Headquarters. This appeal must also be filed within 60 days following notice of the action or decision being appealed. â¢ FHWAâAppeals must be submitted in writing to the Division Administrator within 30 days of the initial finding of ineligibility. â¢ NRCSâAppeals are made to different committees or people depending on the type of pro- gram (Title XII or non-Title XII). If an agreement is not reached, mediation is an option. Finally, an appeal to the National Appeals Division can be made. Understanding the options for getting reimbursement from the various funding sources could mean the difference between 100 percent reimbursement and 0 percent reimbursement. If tracked and done correctly a jurisdiction could recoup the majority of its costs after a debris- generating event; however, even the smallest mistake could jeopardize the entire reimbursement.
Reimbursement 99 The example below, pulled from FEMAâs appeals database, outlines a situation in which a juris- diction applied for both FEMA and FHWA reimbursements (prior to MAP-21). Example: Hurricane Katrina (36) Following Hurricane Katrina, the city of Waveland, MS, issued a noncompetitive contract for non-hazardous debris removal. FEMA prepared two project worksheets for the debris removal work that was accomplished, one for the original contract period from September 2005 through June 2006, and another for a contract extension period from July 2006 through June 2007. The total of the two project worksheets was in excess of $14.2 million. During final inspection, FEMA de-obligated over $2.5 million for work determined to be under the author- ity of the FHWA ER program as well as for contract costs determined to be unreasonable. In their appeal to FEMA, the city was able to substantiate that its costs were reasonable and that they were eligible for reimbursement from FEMA for work performed on federal-aid roads after the first pass. The city recouped over $1.6 million of the de-obligated funds, but they had to apply to FHWA for the work they performed that was covered by the ER program. This example and others like it suggest that understanding the different programs and require- ments is important if a jurisdiction hopes to recoup costs and recover from an event.