In the Matter of CITY OF BEAUMONT, TEXAS

January 12, 2022

CBCA 7222-FEMA

In the Matter of CITY OF BEAUMONT, TEXAS

Wendy Huff Ellard of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC,

Jackson, MS; and Jordan Corbitt of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC,

Houston, TX, counsel for Applicant; and Tim Ocnaschek, Emergency Management

Coordinator, City of Beaumont, Texas, Beaumont, TX appearing for Applicant.

Robin Taylor, General Counsel, The Texas A&M University System, College

Station, TX; and Suzannah Jones, Deputy Chief of Texas Division of Emergency

Management, Austin, TX, counsel for Recipient; and W. Nim Kidd, Division Chief,

Recovery, of Texas Division of Emergency Management, Austin, TX, appearing for

Recipient.

Christiana Cooley, Disaster Litigation and Arbitration, Federal Emergency

Management Agency, Department of Homeland Security, Washington, DC, counsel for

Federal Emergency Management Agency.

Before the Arbitration Panel consisting of Board Judges LESTER, ZISCHKAU, and

O’ROURKE.

The applicant, the City of Beaumont, Texas (City), seeks arbitration under 42 U.S.C.

§ 5189a(d) (2018) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act

(Stafford Act), claiming a revised amount of $8,108,468 in costs incurred to repair damages

to its water transmission line, canal, and levee system caused by Hurricane Harvey and to

restore the line and other items to their predisaster condition. The Federal Emergency

Management Agency (FEMA) denied the City’s public assistance request, determining that

the project was ineligible because the damage was not directly caused by Hurricane Harvey.

Consistent with section 5189a(a) of the Stafford Act and FEMA’s regulations at 44 CFR

206.206(c) (2020), the City submitted an appeal of that denial to the state recipient, the Texas

Division of Emergency Management (TDEM), within the sixty-day statutory deadline.

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Nevertheless, FEMA denied the City’s first-level appeal as untimely because TDEM

transmitted the appeal to FEMA seven days beyond a further sixty-day regulatory deadline.

We conclude that the appeal was timely submitted and that Hurricane Harvey caused damage

to the City’s water line, canal, and levee. Accordingly, we return the matter to FEMA to

work with the applicant in preparing a project worksheet to determine the value of repairs

for the damage caused by Hurricane Harvey.

Background

The City of Beaumont’s water system is a looped system fed by two water intake

sources. The first source is the Lawson line, which accounts for seventy to seventy-five

percent of the City’s water supplied by a conveyance system that pumps raw water from

sources including the Neches River to the City’s wastewater treatment plant. The second

source is the Loeb groundwater pump station, which acquires water from a series of wells,

supplying the remaining twenty-five to thirty percent of the City’s water needs. Initially, the

water going to the wastewater treatment plant flowed through a gravity feed above the

saltwater barrier of the Neches River and was pumped through a man-made open canal.

However, this system proved inefficient because the water was susceptible to contaminates

in the open canal requiring additional treatment.

In April 2003, the City hired Freese and Nichols, Inc. (FNI) to design a 2.3-mile raw

water transmission line to improve the water quality, reduce maintenance, and deliver more

water to the treatment plant. The water line was constructed with a high-density

polyethylene (HDPE) pipe and was placed at the bottom of the canal and secured with

concrete anchors. The HDPE pipe material is strong and resistant to corrosion with fused

joints to prevent leaks. The City and FNI chose HDPE because the pipe would require

minimal maintenance.

The pipe system was constructed to pump 40 million gallons of water per day (MGD).

The Texas Commission on Environmental Quality (TCEQ) required the City to treat and

provide a maximum of 44.2 MGD from all sources based on the number of water taps or end

point service connections. Combined with the Loeb groundwater system, which was capable

of a maximum flow rate of 11 MGD, the 40 MGD flow rate of the Lawson line was more

than enough for the City to meet TCEQ’s requirement. The only recommended maintenance

was periodically to flush the pipeline by pumping higher flow rates through the line. The

City performed this maintenance by flushing the line whenever there were surges in demand.

Additionally, the City regularly reviewed the water flow capacities for evidence of leaks.

In 2008, Hurricane Ike hit Texas, resulting in a massive flooding event that caused the

maximum flow rate of the Lawson line to drop by over 4 MGD. The City hired Schaumburg

and Polk, Inc. (SPI) in 2010 to survey the line and determine if there was any damage to the

line from Hurricane Ike. SPI conducted a pump test and found that the Lawson line was

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operating at a reduced flow rate. In 2012, SPI performed another survey, identifying thirtyfive high points within the line.

In April 2013, the City hired FNI to evaluate SPI’s survey data and to investigate

solutions to address the reduced flow rate. FNI reviewed the 2010 and 2012 SPI data and,

in a report for the City, determined that air pockets at the high points reduced the maximum

water flow capacity of the line from 40 MGD to 35.38 MGD, effectively reducing the

diameter in the pipeline for water to flow. FNI submitted to the City a project proposal to

add ten air release valves throughout the water line at a cost of approximately $900,000.

However, to install the valves, the City would have to shut down the line and cut off the

City’s water supply for an extended period of time. The City decided not to install the

proposed air valves because it could not justify the inherent safety and other risks with

shutting down the line to install the valves. The City determined that the capacity of the

Lawson line at 35.38 MGD, coupled with the Loeb groundwater supply of up to 11 MGD,

was still adequate to meet peak demands and its permit requirements.

Between 2012 and 2016, the City experienced nine other flood events. The Neches

River crested at a height of eight-and-a-half feet during one of these events, with the other

events in a range of about four to seven feet. Floods over ten feet are classified as a major

flood event. Thus, none of these events met the major flood classification. A winter storm

in January 2017 led to a surge in water demand throughout the City when frozen pipes broke

and residents continually ran water to prevent pipes from freezing. The City was able to

keep up with the surge demand with a consistent maximum flow rate of 35.38 MGD. Thus,

the line had not shown degraded flow rate capacity between 2010 and early 2017.

On August 25, 2017, seven months after the January 2017 winter storm, Hurricane

Harvey hit southeast Texas, causing unprecedented flooding. That same day, the President

declared a major disaster, DR-4332-TX. Over several days, the hurricane dumped fifty to

sixty inches of rain on Beaumont. On September 1, 2017, the Neches River crested at a

record height of 19.59 feet, over eight feet more than Hurricane Ike. The magnitude of the

storm caused the Lawson line canal to flood, and the water breached two sections of the east

levee, resulting in significant damage to the canal and the line. The force of the high velocity

cross currents and depth of the water entering the canal from the breached levee displaced

the line, creating air pockets in the line and causing the line to settle significantly into the

base of the canal in several locations by as much as one-and-a-half feet. The storm also

caused substantial amounts of sediment to be deposited in the line, which has acted to further

constrict the effective diameter of the line and restrict water flow. If not repaired, the eroded

sections of the canal likely would allow future flood waters to displace the line again.

Beyond the damage to the Lawson line, the Lawson pump station failed due to the

flooding of the pump control systems. Also, the other source of water for the City failed.

The Loeb pump station lost generator power and was unable to produce potable water from

the wells. By midnight on August 31, 2017, the City’s water supply was completely shut

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down, affecting the City’s residents and closing the local hospital and other facilities. A

week later, the City mitigated the water shutdown by installing an emergency intake that

pulled water directly from the nearby bayou and pumping this water to the water treatment

plant with temporary pumps to meet the City’s water needs. When the flood waters receded,

the City repaired the Lawson pump station, supported by FEMA public assistance funding.

Once pumping restarted, the City noticed that the pump’s maximum flow rate had been

further reduced by 4 MGD to a maximum flow rate of 31.61 MGD.

After the disaster, the City began working with FEMA to develop project worksheets

to repair the damages caused by the hurricane. The City and FEMA started working on

project #39169 to repair the Lawson line. The City hired SPI to conduct another survey of

the water line in May 2018. FNI was also consulted to inspect damages to the canal, to

evaluate the SPI survey, and then to develop an estimate of costs for the necessary repairs.

FNI prepared a technical memorandum of their investigation and recommended repairs to

both the canal and the line. In its report, FNI states that the Lawson line, by design, required

minimal maintenance, that the City had properly maintained the line with purging at high

demand points, and that the flow measurements received at the treatment plant indicated

proper operation before the hurricane. FNI also stated that there was no indication of

deterioration in the pipeline and no evidence of negligence on the part of the City in the

proper maintenance and operation of the line.

FNI concluded that the flow rate reduction in the line was most likely caused by a

combination of sediment deposits in the bottom of the pipe and air pockets in the line’s high

points. FNI recommended that the City repair the canal levees and install a bypass line to

provide an alternate source of water to the treatment plant while the water line is shut down

for cleaning and repairs. FNI initially estimated that the repairs would cost $10,020,394,

which included $1.7 million for the bypass line.

In response to a FEMA request for information, FNI submitted a second report. By

studying the SPI survey data from 2010, 2012, and 2018, FNI determined that after

Hurricane Harvey, the line had a total of forty-eight high points and several low points

caused by significant settling. FNI concluded that the air pockets accounted for

approximately two-thirds of the loss in MGD, and sediment in the bottom of the line

accounted for the other one-third loss.

After the City submitted the FNI analysis, it took FEMA over a year to issue a

determination memorandum. On November 18, 2020, FEMA rejected the City’s request for

public assistance in its entirety, determining that the project was ineligible because the City

had failed to demonstrate that the damage was directly caused by Hurricane Harvey, citing

44 CFR 206.223(a)(1) (2016) and FEMA’s Public Assistance Program and Policy Guide, FP

104-009-2 (Apr. 2018) at 19-20. FEMA informed the City of the right to appeal the

eligibility determination pursuant to 44 CFR 206.206.

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The City submitted its appeal of FEMA’s denial to TDEM on January 19, 2021,

alleging that FEMA did not properly consider the reasonableness of FNI’s October 28, 2019,

technical report. TDEM transmitted to FEMA the applicant’s appeal and TDEM’s

recommendation on March 29, 2021. On July 22, 2021, FEMA denied the City’s first-level

appeal as untimely, finding that TDEM had submitted the applicant’s appeal seven days after

the sixty-day time frame required by FEMA regulation.

On September 23, 2021, the City filed a request for arbitration with us, challenging

FEMA’s denial on timeliness and the underlying decision that the hurricane had not damaged

the line. On September 29, 2021, FEMA moved to dismiss the arbitration on the ground that

the City’s first-level appeal was untimely.

The panel conducted a hearing on November 8, 2021. At the hearing, the City

reduced its initial cost estimate from $10,020,394 to $8,113,718, stating that it has begun the

permanent bypass work and has removed that effort from the estimate. In addition to other

revisions, the City has also agreed to remove $5250 for aerators that were already funded by

FEMA in a separate project.

Discussion

FEMA contends that we must dismiss this arbitration because the underlying first

appeal was determined by FEMA to be untimely and an arbitration must “be dismissed as

untimely if FEMA says it is untimely.” In other words, FEMA suggests that the panel cannot

decide the question of timeliness. We do not agree. It is well-established that the arbitration

panel, “as the final executive branch decision-maker, is not bound by a deferential standard

of review.” Bay St. Louis-Waveland School District, CBCA 1739-FEMA, 10-1 BCA

¶ 34,335 (2009). The panel is not expected to defer to the decision making of lower level

FEMA officials, but instead exercises de novo review. Monroe County, Florida, CBCA

6716-FEMA, 20-1 BCA ¶ 37,688. The arbitration panel “must find facts and interpret the

law independently on behalf of the Executive Branch.” Livingston Parish Government,

CBCA 6513-FEMA, 19-1 BCA ¶ 37,436 (quoting 84 Fed. Reg. 7861, 7862 (Mar. 5, 2019)

(emphasis added)). Indeed, the panel can exercise its own discretion to consider not only the

record before FEMA but also new evidence, and it may request additional materials from the

parties and seek input from expert witnesses. Roman Catholic Church of the Archdiocese

of New Orleans, CBCA 5549-FEMA, 18-1 BCA ¶ 37,089.

As arbitrators, the panel makes decisions as FEMA would, by examining the facts in

the arbitration record and fairly and impartially applying the applicable law. Livingston

Parish Government; see Harris County, Texas, CBCA 6909-FEMA, 21-1 BCA ¶ 37,754

(2020) (rejecting FEMA’s argument that the panel should review FEMA’s underlying factual

findings under a clearly erroneous standard; rather, the panel made its own factual findings);

Bay St. Louis-Waveland School District (“the statutory and regulatory scheme envisions

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independent fact finding by the arbitration panel based upon a record compiled by the

arbitration panel”).

There is no basis for excluding the issue of timeliness from the arbitration proceeding,

and we have previously decided the issue of the timeliness of a first-level appeal to FEMA.

Village of Pinecrest, Florida, CBCA 7011-FEMA, 21-1 BCA ¶ 37,798 (holding that a firstlevel appeal filed on a Monday was timely where the sixtieth day fell on the preceding

Sunday). We have also considered timeliness of requests for arbitration and requests for

public assistance. City of Pine Bluff, Arkansas, CBCA 7102-FEMA, 21-1 BCA ¶ 37,883

(evaluating timeliness of arbitration request after the first-appeal decision was issued); Town

of Elizabethtown, CBCA 7064-FEMA, 21-1 BCA 37,842 (same); St. John’s River Utility,

Inc., CBCA 6903-FEMA, 20-1 BCA ¶ 37,723 (evaluating timeliness of original request for

public assistance). Our approach is consistent with interpretations of arbitrators’ authority

under the Federal Arbitration Act, 9 U.S.C. §§ 1-16, where it is generally recognized that

“the role of the arbitrator [is] to decide procedural issues that arise out of an arbitrable

dispute, including timeliness and credibility issues that affect or relate to timeliness.”

Wiregrass Metal Trades Council v. Shaw Environmental & Infrastructure, Inc., No. 1:13CV-84, 2013 WL 4496316, at *4 (M.D. Ala. Aug. 21, 2013); see Howsam v. Dean Witter

Reynolds, Inc., 537 U.S. 79, 85 (2002) (finding that procedural arbitrability prerequisites,

“such as time limits,” are matters “presumptively for the arbitrator”); Klay v. United

Healthgroup, Inc., 376 F.3d 1092, 1109 (11th Cir. 2004) (“Gateway arbitrability issues,” like

timeliness, “are generally for the arbitrators themselves to resolve.”); International

Brotherhood of Electrical Workers Local Union No. 2022 v. Teletype Corp. Little Rock,

Arkansas, 551 F. Supp. 676, 681 (E.D. Ark. 1982) (“Any underlying dispute of whether the

grievance was timely would . . . be a procedural dispute which the arbitrator should decide.”).

We now address the timeliness of the City’s first-level appeal of FEMA’s

November 18, 2020, determination memorandum which denied the City’s request for public

assistance. FEMA argues that the Stafford Act and its regulations bar any further review or

arbitration if the first-level appeal is submitted by the recipient to FEMA more than 120 days

after the applicant received the public assistance denial.

The Stafford Act provides applicants a right of a first-level appeal of a FEMA

decision:

Any decision regarding eligibility for, from, or amount of assistance under this

subchapter may be appealed within 60 days after the date on which the

applicant for such assistance is notified of the award or denial of award of such

assistance.

42 U.S.C. § 5189a(a). In its implementing regulations, FEMA expands the Stafford Act’s

sixty-day requirement with the following two-step process:

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(1)

Appellants must file appeals within 60 days after receipt of a notice of

the action that is being appealed.

(2)

The recipient will review and forward appeals from an applicant or

subrecipient, with a written recommendation, to the Regional Administrator

within 60 days of receipt.

44 CFR 206.206(c). FEMA further specifies the roles for the applicant and recipient/grantee:

(a)

Format and content. The applicant or subrecipient will make the appeal

in writing through the recipient to the Regional Administrator. The recipient

shall review and evaluate all subrecipient appeals before submission to the

Regional Administrator. The recipient may make recipient-related appeals to

the Regional Administrator. The appeal shall contain documented justification

supporting the appellant’s position, specifying the monetary figure in dispute

and the provisions in Federal law, regulation, or policy with which the

appellant believes the initial action was inconsistent.

44 CFR 206.206(a).

Thus, to appeal a FEMA decision denying public assistance funding, the applicant

submits its challenge to the recipient within sixty days after receiving FEMA’s decision. The

“recipient” is “the government to which a grant is awarded, and which is accountable for the

use of the funds provided.” 44 CFR 206.201(m). There is no question that the City timely

submitted its appeal to the entity designated by FEMA for receiving the appeal, namely, the

recipient, TDEM, within the required sixty-day period, in compliance with the Stafford Act.

The City received the determination memorandum denying funding by email on Wednesday,

November 18, 2020. On Tuesday, January 19, 2021, the City submitted its first-level appeal

of FEMA’s denial to TDEM. Although that date was sixty-two days after the City had

received FEMA’s determination memorandum, it was timely because the sixtieth day after

November 18, 2020, was a Sunday and the next day, a Monday, was a federal holiday. See

Village of Pinecrest, Florida, CBCA 7011-FEMA (holding that, “if the last day of a period

[to file an appeal under 44 CFR 206.206(c)] falls on a Sunday, the due date is the following

business day”).

FEMA tells us, however, that for the timely filing of an appeal, it is not enough for

the applicant to file its appeal with the recipient within sixty days. FEMA states that, after

the applicant files its appeal with the recipient within the sixty days as provided in the

Stafford Act, the recipient must then forward the appeal to FEMA within another sixty days

pursuant to 44 CFR 206.206(c)(2). If the recipient fails to forward to FEMA the timely-filed

appeal within that additional sixty-day period, FEMA deems the appeal untimely and the

applicant loses any right to challenge FEMA’s underlying decision. Thus, FEMA essentially

transforms the Stafford Act’s sixty-day filing deadline into a 120-day bifurcated deadline

with its regulation. There are two problems with FEMA’s approach.

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First, FEMA changes the statutory mechanism for the appeal process by injecting the

recipient into the process, leaving the applicant with no control over the recipient’s action

to forward the appeal to FEMA. The statute says nothing about any further requirement that,

for the appeal to be considered timely, the recipient would have to forward it on to FEMA

within the next sixty-day period. To the contrary, the statute gives the right to appeal to the

applicant, who perfects its appeal by filing it within sixty days after receiving notice of the

funding denial. The statute does not contemplate that, once the applicant files a timely

appeal within the sixty-day deadline contemplated by the statute, the appeal may

retroactively be deemed untimely because FEMA’s designated agent for accepting the

applicant’s appeal did not act appropriately in subsequently administering the timely-filed

appeal.

Second, FEMA argues that it lacks the authority to waive these deadlines if either

sixty-day submission is late. We do not agree. Statutory time limits are not jurisdictional

bars unless there is clear congressional intent to make them such. A court may look at the

plain language of the provision and the context of the time limit within the statute to

determine if a statutory time limit is jurisdictional. Henderson v. Shinseki, 562 U.S. 428,

438-41 (2011). In Henderson, the Court concluded that the 120-day appeal deadline for an

adverse veterans benefits determination in 38 U.S.C. § 7266(a) was not jurisdictional because

the statutory deadline lacked jurisdictional attributes and imposing a rigid jurisdictional bar

in the procedural context for benefits determinations for veterans would clash with the

remedial and non-adversarial scheme of the statute. As in Henderson, we do not find

jurisdictional attributes in the Stafford Act language. Treating the first appeal deadlines for

FEMA determinations as rigid jurisdictional bars would clash with the remedial and nonadversarial scheme of the Stafford Act for providing public assistance benefits. See id. at

440-41. Furthermore, under 42 U.S.C. § 5141, a related Stafford Act provision, Congress

authorizes FEMA to modify or waive administrative conditions when the disaster affects an

applicant’s ability to comply with such conditions. Further supporting that these sixty-day

deadlines are not jurisdictional but rather procedural is that FEMA itself has repeatedly

granted waivers and extensions of the appeal filing deadlines both retroactively and

prospectively over the years, most recently in response to the disruptions caused by the

pandemic. In the present matter, we find under the circumstances that TDEM’s seven-day

delay in forwarding the City’s appeal to FEMA was an administrative delay in processing

the otherwise timely-filed appeal. Accordingly, we find the City’s first-level appeal to be

timely submitted.

FEMA cites to a district court decision in City of Pembroke Pines v. Federal

Emergency Management Agency, 510 F. Supp. 3d 1126 (S.D. Fla. 2021), as holding that

FEMA was entitled to create by regulation an appeal system that required the applicant to

rely on the recipient to forward a timely-filed appeal to FEMA within an additional sixty-day

period not identified in the Stafford Act. With all due respect to the district court, given the

Stafford Act’s sixty-day appeal deadline and the right that the statute gives the applicant to

decide whether to submit an appeal, we disagree with the district court’s decision to the

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extent that it finds that the recipient’s failure to forward an applicant’s timely-filed appeal

(within the sixty-day period after the recipient receives it) renders the appeal untimely.

Further, we are an arbitration panel, not a district court reviewing agency action, and as

explained earlier, our arbitration decision replaces final action by FEMA. In Livingston

Parish Government, we stated: “As explained in the preamble to our arbitration rulemaking,

‘because an arbitration decision replaces final action by FEMA’ and a panel is not a

reviewing court, ‘the arbitrators must find facts and interpret the law independently on behalf

of the Executive Branch.’” CBCA 6513-FEMA, 19-1 BCA ¶ 37,436 (quoting 84 Fed. Reg.

7861, 7862); see also Howsam v. Dean Witter Reynolds, Inc., 573 U.S. 79, 85 (2002) (citing

the Revised Uniform Arbitration Act, which states that perquisites, such as time limits,

among others, “are for the arbitrators to decide”).

FEMA and the City have requested that we decide the merits of the public assistance

determination if we conclude that the City’s first-level appeal is timely. The parties have

submitted numerous documents for the panel’s review and an arbitration hearing was

conducted with both fact and expert witnesses. We find that the arbitration record is

adequate to resolve the threshold issues of eligibility and return the matter for FEMA to

conduct a valuation as required by the Stafford Act and its regulations.

The Stafford Act and its regulations provide that a facility damaged by a major

disaster may be eligible for public assistance funds. 42 U.S.C. § 5172(a)(1); 44 CFR

206.223(a). The Stafford Act provides that the President shall estimate the eligible cost of

repairing, restoring, reconstructing, or replacing a public facility “on the basis of the design

of the facility as the facility existed immediately before the major disaster.” Id.

5172(e)(1)(A)(i). We conclude that the record clearly supports finding that Hurricane

Harvey caused damage to the Lawson line, the canal, and the levee. The record contains

sufficient evidence of their condition immediately prior to and after the disaster. The

documentary record, and the testimony of the witnesses, including the City’s engineer and

the FNI engineer, show that the applicant appropriately maintained the line. We find their

testimony credible on the issue of maintenance and damage causation. Even FEMA’s

engineer agreed that the City’s maintenance was appropriate, although he felt that the City

should have installed ten air valves in the line in 2013. The record adequately supports

finding that the City’s decision not to install the air valves in 2013 (five years after Hurricane

Ike) was not unreasonable under the circumstances. In addition, based on the testimony from

the City’s witnesses and the FNI technical reports, we find that the damage caused by

Hurricane Harvey would have occurred regardless of the presence of the air valves proposed

in 2013. The substantial damage to the line resulted from the magnitude of Hurricane

Harvey’s flooding and the flood water forces that breached the levee, flooded and damaged

the canal, and forced the line to settle and shift.

Due to its ineligibility and timeliness determinations, FEMA never conducted a

valuation of the damage to restore the line, canal, and levee to their pre-disaster condition.

Providing public assistance to repair damage caused by Hurricane Harvey and return the line,

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canal, and levee to their pre-disaster condition is precisely what the Stafford Act provisions

were meant to accomplish. Funding repairs for such damage is not a “windfall” for the City.

We return the matter to FEMA to conduct the necessary analysis with the cooperation of the

applicant.

Jonathan D. Zischkau

JONATHAN D. ZISCHKAU

Board Judge

Kathleen J. O’Rourke

KATHLEEN J. O’ROURKE

Board Judge

LESTER, Board Judge, writing separately.

I concur with the arbitration panel’s decision that, under the authority granted to us

under section 5189a(d) of the Stafford Act, 42 U.S.C. § 5189a(d) (2018), we can review the

timeliness of the applicant’s appeal request. I believe that the language of section 5189a(d)

is broad enough to encompass decisions denying first-level appeals as untimely. For the

reasons that the panel explains, I disagree with FEMA’s position that an arbitration panel is

required to accept by rote FEMA’s representation that an appeal was untimely.

I further concur with the panel’s decision that the City’s first-level appeal was timely.

Section 5189a(a) of the Stafford Act provides that an applicant may file a first-level appeal

of a denial of a request for assistance within sixty days after being notified of that denial.

FEMA’s regulations implementing the Stafford Act direct applicants to submit their

first-level appeals to FEMA’s grant recipients within that sixty-day deadline. 44 CFR

206.201, .206(a), (c)(1) (2020). The City did just that. FEMA’s regulations create additional

deadlines for entities other than the applicant that are not found in the Stafford Act, but

nowhere in the regulations does FEMA state that a failure by an entity other than the

applicant to meet a regulatory deadline after an appeal is filed will somehow retroactively

render the appeal untimely. As an example, FEMA’s regulations state that FEMA will

decide a first-level appeal within ninety days after receiving it, id. 206.206(c)(3), a deadline

that FEMA severely failed to satisfy in this case, but it is impossible to believe that FEMA

would ever argue that its own failure to meet its own regulatory deadline could retroactively

render the applicant’s original appeal filing untimely. By that same logic, the fact that

FEMA has added a regulatory requirement that is not a part of the statute directing the

recipient to forward any timely-submitted appeal to FEMA within sixty days after receiving

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it, see id. 206.206(c)(2), should not affect the timeliness of the applicant’s original appeal

submission. In drafting its regulations, FEMA has essentially designated the recipient as its

receiving agent for purposes of the filing of the appeal. If the recipient is late in forwarding

the timely-submitted appeal to FEMA, that is not a delay that is attributable to the applicant.

The statute provides the applicant the right to appeal within a sixty-day window, and the City

met that deadline by delivering its appeal in the manner that FEMA has directed. Delays by

FEMA or its receiving agent in forwarding or deciding the appeal should not be viewed as

retroactively rendering the appeal untimely.

After deciding that the first-level appeal was timely filed, the panel then considers the

reasonableness of the City’s prior decision not to address earlier damage to its water line and

whether Hurricane Harvey damaged the City’s water line. I do not feel that we have a viable

basis for conducting such a review because of the seriously underdeveloped record in this

matter. Because FEMA rejected the first-level appeal as untimely, it did not develop an

evidentiary record on the merits. Almost all of the evidence before us about the history of

damage to the City’s water line from Hurricanes Ike and Harvey, the City’s decision not to

repair the line after Hurricane Ike despite its experts’ recommendations in 2013 to do so and

its post-Harvey decision to repair the line but to seek reimbursement from FEMA for the full

cost of repairs that will likely restore the water line to its original 40 MGD capacity was

presented through testimony. Little, if any, documentary support was submitted to the

Board.

Because the repairs that the City is seeking here will likely restore the water line to

its original 40 MGD capacity, I have concerns about whether FEMA reimbursement for

restoration costs will provide the City with a windfall following its 2013 decision to defer

any repair of its water line, when prior storms had reduced capacity from 40 MGD to 35.38

MGD. Generally, FEMA only restores facilities to their predisaster function, design, and

capacity, Roman Catholic Church of the Archdiocese of New Orleans, CBCA 5549-FEMA,

18-1 BCA ¶ 37,089; 44 CFR 206.226, which, in this case, would apparently mean that

FEMA should pay to restore the City’s line to a 35.38-MGD capacity. It appears from the

hearing, though, that, when repairs are made, the goal will plainly have to be to restore full

40-MGD capacity. To the extent that FEMA now funds restoration of the line to a 40-MGD

capacity level, it is unclear the extent to which the City will have shifted to FEMA repair

costs that its experts recommended it incur but that it avoided in 2013.1 If the City had

1

The City argued to the Board that it could not have made the repairs

recommended back in 2013 because, if it had, it would have had to shut down the water line

for an extended period of time – something that it could not have done because it had no

alternative way to deliver water to its citizens. It was only after Harvey hit that the City

decided to pay to install an emergency intake “bypass” line that it could use for temporary

water transport while the main water line was shut down. It is completely unclear from this

record why the City could not have paid to install that “bypass” line in 2013, when the City’s

CBCA 7222-FEMA

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repaired the line in 2013 to restore the 40-MGD capacity, would that repair have affected or

reduced the extent to which Harvey would have been able to damage that line? How did the

unrepaired damage seen in 2013 affect the stability of the line when Harvey hit? Is the City

effectively shifting its 2013 costs to FEMA, or would the same damage that occurred as a

result of Harvey have occurred even if the City had made repairs in 2013? We cannot know

because no sufficient investigation or review has occurred. Although the majority of the

panel “find[s] that the damage caused by Hurricane Harvey would have occurred regardless

of the presence of the air valves proposed in 2013,” I see no evidence in the record to support

that finding.

Although the Stafford Act provides that applicants are entitled to submit additional

evidence to the Board beyond that submitted in the first-level appeal, 42 U.S.C.

§ 5189a(d)(2), (d)(5)(B), I do not believe that the Board should be making factual findings

in an arbitration on such an underdeveloped record, particularly when many questions about

why the City deferred repair of its water line in 2013 and the effect of that decision on

current damages were left unanswered. I would remand this matter for development of a

first-level appeal decision.

Harold D. Lester, Jr.

HAROLD D. LESTER, JR.

Board Judge

experts originally recommended repairs to the water line. Although the panel finds that the

City’s 2013 decision not to make repairs following Ike was “reasonable,” nothing in the

record explains why the City was unable to install in 2013 the same emergency intake

“bypass” line that it has now installed and that now makes it possible to repair the water line.