In the Matter of COUNTY OF SANTA CRUZ, CALIFORNIA

November 18, 2022

CBCA 7408-FEMA

In the Matter of COUNTY OF SANTA CRUZ, CALIFORNIA

Justin A. Graham of Office of the County Counsel, County of Santa Cruz, Santa Cruz,

CA, counsel for Applicant.

Jennifer Bollinger, Jon Ivy, and Carl DeNigris, Governor’s Office of Emergency

Services, Mather, CA, counsel for Grantee; and Ryan Buras, Deputy Director for Recovery,

Recovery Infrastructure Branch, Governor’s Office of Emergency Services, Mather, CA,

appearing for Grantee.

Ramoncito DeBorja, Office of Chief Counsel, Federal Emergency Management

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

Emergency Management Agency.

Before the Arbitration Panel consisting of Board Judges BEARDSLEY (Chair),

KULLBERG, and O’ROURKE.

The applicant, the County of Santa Cruz (County), sought arbitration of the denial by

the Federal Emergency Management Agency (FEMA) of public assistance (PA) funding for

post-disaster road repairs allegedly caused by a third-party contractor. The parties elected

to have a paper hearing pursuant to CBCA Rule 611 (48 CFR 6106.611 (2021)). Based on

our review of the record, we find the County to be an eligible applicant and the County’s

request to amend the damage inventory to be timely. We return the application to FEMA to

determine what road repairs and costs are eligible for PA funding.

Background

Wildfires caused widespread damage throughout the State of California between

August 14 and September 26, 2020 (the “incident period”). On August 22, 2020, the

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President issued a major disaster declaration (FEMA-4558-DR-CA) which authorized FEMA

to distribute PA disaster funds for certain areas impacted by the fires.

The California Governor’s Office of Emergency Services (Cal OES) serves as the

coordinating entity for disaster response and recovery for the State of California and the

grantee/recipient here. After the incident period, Cal OES tasked the State of California

Department of Resources, Recycling and Recovery (CalRecycle) with managing and

conducting debris removal operations. CalRecycle contracted with Anvil Builders, Inc.

(Anvil) to perform debris clean-up work and hazardous tree removal (Anvil Contract) within

the County. The County was not a party to the Anvil Contract.

FEMA provided funding for public property debris removal (PPDR) operations under

the Anvil Contract to CalRecycle through Cal OES. The Anvil Contract stated that “[r]oad

and shoulder repair expenses resulting from extraordinary usage will be the responsibility of

[Anvil].” It went on to say that “[d]amage to private or public property for which [Anvil] or

a subcontractor is responsible, as part of the Operation, will be repaired by the Contractor at

no cost to the State.”

The County took steps to recover funds to repair the road damages. The County

apprised Cal OES and CalRecycle of the damages, sought direction as to the path for

recovery, and provided pictures, video, and other documentation to Cal OES.1 In addition,

with regard to a private road allegedly damaged by Anvil, the County involved members of

Congress, along with State and local legislators, in order to try to recover from Anvil, but

Anvil offered only to pay $75,000 of the $2.7 million estimated to repair the private road.

As such, the County sought recovery through a FEMA damage inventory (DI) line item.

FEMA set a deadline of December 29, 2020, for inclusion of any additional DI line

items. On April 21, 2021, the County sent a letter, photographs, and an estimated cost of

repair to Cal OES for submission to FEMA as a DI line item. FEMA denied the inclusion

of the additional DI line item based on the fact that the claim was submitted after the

deadline and that “the damages should be paid by the State’s debris removal contractor.”

In a letter dated August 19, 2021, to Cal OES, the County requested an appeal of

FEMA’s determination, noting that the State, not the County, had the ability to obtain

restitution from Anvil for road repair. The County further indicated that it would “make a

good faith effort to prevent and report any possibility of duplication of funding.” Cal OES

forwarded the first appeal to FEMA, supporting the County’s request. The first appeal

1

In July 2021, the County provided Cal OES and CalRecycle with two years of

road maintenance records.

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included a summary of pavement damage attributed to the debris removal operations,

including an inventory of reported damage, a proposed repair cost of $4,417,000 based on

estimates, and over 450 pages of pre- and post-incident photos of the roads. FEMA denied

the appeal, and the County sought arbitration before the Board. FEMA challenges the

County’s application for three reasons. First, the County’s request to amend the DI was

untimely. Second, the County is not an eligible applicant, and third, PA funding given to the

county would be a duplication of benefits.

Discussion

Timeliness

Although FEMA set a deadline of December 29, 2020, for amendments to the DI, the

County had no reason to believe that in December 2020 the debris removal would result in

extensive damage to its roads since the debris removal work did not begin in the County until

February 2021. As the County submitted its request to amend the DI on April 21, 2021,

when less then 50% of the work was complete and only some damage apparent, we find that

the County has satisfied the requirement to prove extenuating circumstances beyond its

control for late inclusion of a DI line item, and the delay was therefore justified under 44

CFR 206.202(f)(2).

Eligibility

To be eligible, work must meet each of the following criteria: (1) required as a result

of the declared incident; (2) located within the designated area; and (3) the legal

responsibility of an eligible applicant. See FEMA Public Assistance and Program Policy

Guide (PAPPG) (June 2020) at 51; 44 CFR 206.223(a). It is uncontested that the County

roads are located within the designated area of the declared incident, and the County is an

eligible applicant as it is a local government. See PAPPG at 42 (“The following types of

local governments are eligible [a]pplicants: Counties.”); 42 U.S.C. § 5122(8)(A) (2018)

(defining a county as a local government); 44 CFR 206.2(a)(16)(i) (same). FEMA argues

that since CalRecycle contracted for the debris removal work that allegedly caused the

damage to the roads, the County is not eligible to seek PA funds for restoration of the roads.

We find this argument unpersuasive. CalRecycle may be another eligible applicant but that

does not make the County of Santa Cruz ineligible.

As for legal responsibility, FEMA evaluates whether the applicant “claiming the costs

[for permanent work] had the legal responsibility for disaster-related restoration of the

facility at the time of the incident based on ownership and the terms of any written

agreements (such as for facilities under construction, leased facilities, and facilities owned

by a Federal agency).” See PAPPG at 52-54. The County had ownership of and

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responsibility for the roads at the time of the incident and thereafter, regardless of who

removed the debris or who funds the road repairs. See Cal. Streets and Highway Code § 941;

County of Kern v. Edgemont Development Corp., 222 Cal. App. 2d 874, 879 (2015) (finding

that once county roads are accepted by a county, the responsibility and liability for their

maintenance lies with the county); see also Coppinger v. Rawlins, 239 Cal. App. 4th 608,

615 (2015). The Anvil Contract did not shift legal responsibility to Anvil from the County

primarily because the Anvil Contract did not exist at the time of the incident. Moreover,

third party “written agreements” for debris removal are not the types of documents that shift

legal responsibility for county roads. Unlike here, the third party “written agreements”

referenced in the PAPPG as shifting legal responsibility grant a possessory interest or

exclusive control of a facility, such as deeds, titles, lease agreements, and contracts for

facilities under construction.2 PAPPG at 53.

Turning to whether the work is required as a result of the declared incident, the repair

of damage caused while conducting debris removal operations may be considered eligible

as part of the respective emergency work project,3 see PAPPG at 138-39, if the damage was:

(1) due to the severe conditions resulting from the incident; (2) unavoidable; and (3) not due

to improper or excessive use. See PAPPG at 139. Additionally, the damage cannot be the

result of deferred maintenance, negligence, or natural deterioration of the roads and must

have been caused by the debris removal trucks and not other vehicles. PAPPG at 52.

It remains “the applicant’s burden to support its application for PA funding.” Jackson

County, Florida, CBCA 7279-FEMA, 22-1 BCA ¶ 38,075, at 184,907 (citing City of

Hattiesburg, Mississippi, CBCA 7228-FEMA, 22-1 BCA ¶ 38,029, at 184,686). Although

the County has provided documentation of the pre- and post- debris removal conditions of

the roads, maintenance records, and cost estimates, FEMA has not yet assessed the roads or

documentation to determine if the damages meet the eligibility criteria. There is nothing in

the record to suggest that FEMA has determined whether the damages were incurred as a

result of eligible emergency work, were incident-related, unavoidable, or not due to improper

or excessive use. FEMA has also not determined the eligibility of the claimed costs. See

PAPPG at 63-65. Without FEMA’s assessment and additional information, the Panel is not

2

If the costs claimed are considered to be for “emergency work,” as the County

suggests, “FEMA evaluates whether the [a]pplicant requesting the assistance either had

jurisdiction over the area or the legal authority to conduct the work related to the request at

the time of the incident.” PAPPG at 52. The County retained jurisdiction over the roads at

the time of the incident.

3

“Although the repairs may be Permanent Work, FEMA includes it on the

Emergency Work project as damage resulting from the emergency work.” PAPPG at 139

n.257.

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willing or able to determine whether the damage to the roads and costs to repair are eligible

for PA funding.

Prohibition on Duplication — 42 U.S.C. § 5155

FEMA misreads the applicable statute when advancing its prohibition on duplication

argument. The statute, 42 U.S.C. § 5155(a), does provide for a general prohibition against

duplicative funding; however, it goes on to state that:

[t]his section shall not prohibit the provision of Federal assistance to a

person who is or may be entitled to receive benefits for the same

purposes from another source if such person has not received such

benefits by the time of application for Federal assistance and if such

person agrees to repay all duplicative assistance to the agency

providing Federal assistance.

44 U.S.C § 5155(b)(1). “Together, the subsections of § 5155 . . . allow a disaster victim to

receive FEMA relief if it is eligible for, but has not yet received, duplicative relief.” Hawaii

ex rel. Attorney General v. Federal Emergency Management Agency, 294 F.3d 1152 (9th Cir.

2002). As the County has yet to receive any recovery pursuant to the Anvil Contract and has

agreed to repay FEMA any duplicative assistance, 44 U.S.C. § 5155 does not bar the County

from receiving PA funding for the eligible work.

“A person receiving Federal assistance for a major disaster or emergency shall be

liable to the United States to the extent that such assistance duplicates benefits available to

the person for the same purpose from another source.” 44 U.S.C § 5155(c). The Anvil

benefits, however, are not “available” to the County since it was not in privity of contract

with Anvil.

FEMA asserts that the County’s efforts to obtain repair costs from Anvil were not

commercially reasonable. “When a third party causes damage (e.g., an oil spill) or increases

the cost of repair or cleanup and the [a]pplicant requests FEMA funding for the costs, FEMA

requires the [a]pplicant to make reasonable efforts to pursue claims to recover costs it is

entitled to receive from the third party.” PAPPG at 95. The County did make reasonable

efforts to recover costs, given its lack of privity of contract with Anvil. The County “sought

meetings with the State [Cal OES and CalRecycle] and even Anvil, exchanged numerous

correspondence, e-mails, and supporting documentation and went so far as to secure the

direct involvement of elected officials at the federal, state and local levels.” Applicant’s SurReply at 4. “The statute requires disaster victims to seek out benefits with the perseverance

and risk averseness that a party acting in a commercially reasonable manner would; however,

the “commercially reasonable standard does not require a party to do whatever it takes to

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acquire benefits.” Hawaii, 294 F.3d at 1164-65. The County acted in a commercially

reasonable manner to avoid the duplication of benefits.

Decision

The panel finds that the County’s request to amend the DI was timely, the County is

an eligible applicant, and 44 U.S.C. § 5155 does not bar the County’s eligibility for PA

funding. It remains to be determined what road repairs and costs are eligible for PA funding.

Erica S. Beardsley

ERICA S. BEARDSLEY

Board Judge

H. Chuck Kullberg

H. CHUCK KULLBERG

Board Judge

Kathleen J. O’Rourke

KATHLEEN J. O’ROURKE

Board Judge