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Agenda 01/24/2023 Item #16A12 (To help recoup FEMA reimbursement for the construction of emergency sand berms following Hurricane Irma)01/24/2023 EXECUTIVE SUMMARY Recommendation to authorize the County Attorney to retain outside counsel to work with the County Attorney, staff and outside consultants, to commence a FEMA arbitration panel with respect to the Hurricane Irma Federal Emergency Management Agency (“FEMA”) First Appeal Denial of Grants Manager Project 48791/Project Worksheet 5856. OBJECTIVE: To help recoup FEMA reimbursement for the construction of emergency sand berms following Hurricane Irma. CONSIDERATIONS: Hurricane Irma skirted the Collier County coast and damaged Collier County beaches. An emergency declaration issued by the President and Collier County proceeded to assess damage and develop a documented funding request through FEMA. Working with a FEMA hurricane specialist Collier County submitted a funding request for $1,340,321, in damages to the beach berms. In November 2022, Collier County received notification that the funding request was denied. The issue on appeal is whether Collier County complied with applicable Environmental and Historic Preservation requirements (“EHP”). Collier County was required to make every effort to afford FEMA the opportunity to perform an EHP assessment prior to construction. Performance of the beach and dune restoration did not procee d until November 2021, and unfortunately, FEMA had not completed its EHP analysis, some four years post Hurricane Irma. County staff contends that the denial letter references natural beaches, of which the beaches in question are not. Engineered beaches are not addressed in the denial letter. An EHP evaluation is not necessary because this is addressed and permitted in the existing engineered beach renourishment permits. The emergency berm was constructed in the same footprint as the pre-existing facility, which contained the necessary EHP reviews. If the County wishes to pursue either a second appeal or seek arbitration pursuant to Section 423 of the Stafford Act, as amended by Section 1219 of the Disaster Recovery Act, notification must be sent within 60 days of the denial, which is the end of January 2023. (See attached November 30, 2022, Denial Letter) Staff has researched second appeals over the last two years and have discovered that few, if any, have been granted by FEMA. However, arbitration during the same time frame has resulted in an approximately 50% success rate. Staff anticipates defense for an appeal or arbitration to be approximately $30,000, based on the review of this legal issue on briefs; but could go higher if a formal hearing is held. Based on this research, staff is recommending the County proceed with arbitration in this matter. Staff and the County Attorney’s Office has also conferred with its existing FEMA outside counsel who concurs that the FEMA arbitration process brings the greater likelihood of success, costs approximately the same as a standard appeal, and usually results in much quicker decisions. The arbitration process involves the appointment of three FEMA knowledgeable attorneys who review the issue on appeal and render a decision. The County has long engaged Ernest B. Abbott, who previously served as General Counsel to the Federal Emergency Management Agency as its general counsel. Mr. Abbott is presently with the law firm of Baker, Donelson, Bearman, Caldw ell & Berkowitz, P.C. with whom the County already has a retainer agreement in place and can quickly proceed to issue a purchase order for this service. FISCAL IMPACT: The County Attorney recommends that the cost of hiring outside counsel and experts be capped at $30,000, with any additional funding requiring Board approval. Funding for this request is available within the Stormwater CIP Fund (325), Hurricane Irma Project (50154). GROWTH MANAGEMENT IMPACT: None. LEGAL CONSIDERATIONS: This item is approved as to form and legality, and requires majority vote for Board approval.-SRT 16.A.12 Packet Pg. 550 01/24/2023 RECOMMENDATION: That the Board authorize the County Attorney to retain outside counsel to work with the County Attorney, staff and outside consultants, with respect to the Hurricane Irma Federal Emergency Management Agency (“FEMA”) First Appeal Denial of Grants Manager Project 48791/Project Worksheet 5856. Prepared by: Gary McAlpin, Project Manager III, Transportation Management Services Department ATTACHMENT(S) 1. 20221130 4337-FL Collier Co GMP 48791 FAR (002) (PDF) 16.A.12 Packet Pg. 551 01/24/2023 COLLIER COUNTY Board of County Commissioners Item Number: 16.A.12 Doc ID: 24427 Item Summary: Recommendation to authorize the County Attorney to retain outside counsel to work with the County Attorney, staff and outside consultants, to commence a FEMA arbitration panel with respect to the Hurricane Irma Federal Emergency Management Agency (“FEMA”) First Appeal Denial of Grants Manager Project 48791/Project Worksheet 5856. Meeting Date: 01/24/2023 Prepared by: Title: Deputy Department Head – Growth Management Department Name: Trinity Scott 01/18/2023 9:52 AM Submitted by: Title: Deputy Department Head – Growth Management Department Name: Trinity Scott 01/18/2023 9:52 AM Approved By: Review: Growth Management Department Jeanne Marcella Transportation Management Services Department Completed 01/18/2023 9:54 AM Growth Management Operations Support Tara Castillo Additional Reviewer Completed 01/18/2023 10:03 AM Growth Management Department Trinity Scott Transportation Completed 01/18/2023 10:03 AM Grants Erica Robinson Level 2 Grants Review Completed 01/18/2023 10:04 AM County Attorney's Office Scott Teach Level 2 Attorney Review Completed 01/18/2023 10:11 AM County Attorney's Office Jeffrey A. Klatzkow Level 3 County Attorney's Office Review Completed 01/18/2023 10:15 AM Office of Management and Budget Debra Windsor Level 3 OMB Gatekeeper Review Completed 01/18/2023 10:15 AM Grants Therese Stanley Additional Reviewer Completed 01/18/2023 10:35 AM Office of Management and Budget Susan Usher Additional Reviewer Completed 01/18/2023 10:37 AM County Manager's Office Ed Finn CMO Completed 01/18/2023 3:34 PM County Manager's Office Ed Finn Level 4 County Manager Review Completed 01/18/2023 4:54 PM Board of County Commissioners Geoffrey Willig Meeting Pending 01/24/2023 9:00 AM 16.A.12 Packet Pg. 552 U. S. Department of Homeland Security Region 4 3005 Chamblee Tucker Road Atlanta, Georgia 30341 www.fema.gov Kevin Guthrie Therese Stanley Director Grants Compliance Manager Florida Division of Emergency Management Collier County 2555 Shumard Oak Boulevard 3299 Tamiami Trail East, Suite 201 Tallahassee, Florida 32399-2100 Naples, Florida 34112 Reference: FEMA-4337-DR-FL Collier County PA ID: 021-99021-00 First Appeal, Grants Manager Project 48791/Project Worksheet 5856 Dear Director Guthrie and Therese Stanley: This is in response to a letter from the Florida Division of Emergency Management (Recipient) dated June 7, 2022, which transmitted the referenced first appeal on behalf of Collier County (Applicant). The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of funding in the amount of $1,340,321.00 on Grants Manager Project (GMP) 48791 for the construction of emergency sand berms on beaches impacted by Hurricane Irma. The appeal is denied as explained below and in the enclosed analysis. The Applicant began construction on the natural beach prior to receiving FEMA approval and without affording FEMA the opportunity to conduct the necessary environmental and historic preservation (EHP) compliance reviews. Thus, FEMA cannot ensure that the Applicant complied with applicable EHP requirements. This letter constitutes the official notification of this determination to the Applicant. Under the Robert T. Stafford Disaster Relief and Emergency Assistance (Stafford) Act and applicable regulations, the Applicant is entitled to appeal this decision.1 If the Applicant elects to submit a second appeal, it must: 1) contain documented justification supporting the Applicant’s position; 2) specify the monetary figure in dispute; and 3) cite the provisions in federal law, regulation, or policy with which the Applicant believes the initial action was inconsistent. The Applicant may submit the appeal electronically via the FEMA Grants Manager Portal (GM). The Applicant must submit the second appeal to the Recipient within 60 days of receipt of this letter. The Recipient’s transmittal of that appeal, with recommendation, is required to be submitted to my office within 60 days of receipt of the Applicant’s appeal. My office will transmit the second appeal to FEMA Headquarters. 1 See Robert T. Stafford Disaster Relief and Emergency Assistance Act, as amended, § 423, 42 U.S.C. § 5189a (2021); Title 44 Code of Federal Regulations § 206.206 (2021). November 30, 2022 16.A.12.a Packet Pg. 553 Attachment: 20221130 4337-FL Collier Co GMP 48791 FAR (002) (24427 : Recommendation to authorize the County Attorney to retain outside 2 If the appeal is submitted electronically in GM, the Applicant should select all relevant supporting documentation associated with this Project, Damage Inventory, or Applicant Profile and upload any additional supporting documentation not already in GM. If the Applicant chooses not to submit its appeal through GM, it must submit all relevant supporting information with its appeal. For reference, a current index of documents relevant to this determination is enclosed. Alternatively, the Applicant may seek arbitration pursuant to Section 423 of the Stafford Act, as amended by Section 1219 of the Disaster Recovery Reform Act. To determine eligibility for arbitration, see Title 44 Code of Federal Regulations (44 C.F.R.) § 206.206, Appeals. The Applicant must submit its request for arbitration simultaneously to the Recipient, the FEMA Regional Administrator, and the Civilian Board of Contract Appeals (CBCA). Requests for arbitration cannot be submitted through GM. The CBCA’s rules of procedure for Section 423 arbitrations can be found at 48 C.F.R. Part 6106 and on the CBCA’s website at www.cbca.gov. If you have questions about FEMA’s arbitration process, please contact Paul Wilson, Acting Region 4 Public Assistance Branch Chief. If the Applicant elects not to submit a second appeal request or request for arbitration within 60 days from the issuance of the first appeal decision, this is the final agency determination on the matter, and the Applicant will no longer be able to appeal or arbitrate the decision. If you have questions or need additional information, please contact Saidat O. Thomas, Director, Recovery Division, at (770) 220-5300. Sincerely, Gracia B. Szczech Regional Administrator Enclosures: Appeal Analysis: FEMA-4337-DR-FL, Collier County, GMP 48791/PW 5856 Administrative Record Index 16.A.12.a Packet Pg. 554 Attachment: 20221130 4337-FL Collier Co GMP 48791 FAR (002) (24427 : Recommendation to authorize the County Attorney to retain outside 1 FIRST APPEAL ANALYSIS FEMA-4337-DR-FL Collier County, PA ID: 021-99021-00 Grants Manager Project 48791/Project Worksheet 5856 EHP and Other Compliance Background Hurricane Irma made landfall in the Florida Keys on September 10, 2017, and tracked up and across Florida’s peninsula, severely damaging communities along both the west and east coasts with strong winds, heavy rain, and storm surge. The President declared the event a major disaster (FEMA-4337-DR-FL) on September 10, 2017, with an incident period extending from September 4 to October 18, 2017. As a result of the disaster, Collier County (Applicant) sustained natural beach and dune erosion that occurred from monument markers R-22+300 to R-79, which includes four beach reaches: Vanderbilt Beach, Pelican Bay Beach, Park Shore Beach, and Naples Beach.1 Following Hurricane Irma, FEMA prepared Grants Manager Project (GMP) 48791 to provide funding in the amount of $1,340,321.00 to bring the dune system to a height that would protect the area against the threat of damage from a five-year flood event. In a Determination Memorandum (DM) dated February 21, 2020,2 FEMA denied funding for GMP 48791 because federal regulations and FEMA policies mandate that Public Assistance (PA) projects are completed within specific deadlines, subject to approved extensions, to receive funding for eligible work. FEMA noted that the Applicant had not requested a deadline extension, nor had it provided sufficient justification to substantiate the delay in construction.3 Moreover, FEMA found that the Applicant had not taken action to construct the emergency berms to eliminate or lessen the threat of future damage for more than three years after the major disaster declaration. On April 1, 2020, the Applicant submitted a first appeal of GMP 48791 to the Florida Division of Emergency Management (Recipient)4 asserting that the delay in construction of the sand berms was predicated on several factors: 1) turtle nesting season; 2) complications with upland sand re-nourishment operations; 3) timeliness associated with bidding and awarding the contract; and 4) negotiations with FEMA.5 The Recipient forwarded the Applicant’s first appeal to FEMA with a letter of recommendation on May 26, 2020.6 On August 16, 2021, FEMA issued a first appeal response approving the Applicant’s appeal with the following statement and conditions: 1 Determination Memorandum from Public Assistance (PA) Management, Region 4, FEMA, to Collier County (Feb. 21, 2020). 2 Id. 3 Id. 4 First Appeal Letter from Applicant Agent, Collier County, to Executive Director, Florida Division of Emergency Management (FDEM) (Apr. 1, 2020). 5 Id., at 3. 6 Recipient Letter from Executive Director, FDEM, to Regional Administrator, Region 4, FEMA (May 26, 2020). 16.A.12.a Packet Pg. 555 Attachment: 20221130 4337-FL Collier Co GMP 48791 FAR (002) (24427 : Recommendation to authorize the County Attorney to retain outside 2 The Subrecipient exceeded the regulatory deadline for completion of the work. As a result, FEMA properly issued a [DM] denying GMP 48791. Further, the Subrecipient’s delays obviated the expedited EHP and permitting procedures available for the construction of emergency beach berms. As a result of the project denial, the full EHP review and permitting process, already in process, was suspended. However, based on the extenuating circumstances outlined by the Applicant in its appeal, FEMA conditionally grants the Subrecipient’s appeal and provides a time extension through April 30, 2022. However, it should be noted that almost four years has elapsed from the damage sustained during Hurricane Irma. The current state of the beach’s profile is unclear; therefore, this appeal is conditionally granted based on the premise that costs may only be reimbursed on GMP 48791 upon the Subrecipient’s compliance with the following conditions: 1) All beach nourishment work relative to dune restoration from Hurricane Irma must be completed in conjunction with any additional beach renourishment projects between R-22+300 to R- 79 to reduce environmental impacts; and 2) All conditions outlined in FEMA’s Finding of No Significant Impact (FONSI) for the finalized Supplemental Environmental Assessment (SEA) must be followed. The Subrecipient must justify any future time extensions in accordance with the requirements of Title 44 Code of Federal Regulations (44 C.F.R.) § 206.204(d) and such time extension requests must be based upon extenuating circumstances or unusual project requirements beyond the control of the Subrecipient.7 FEMA contacted the Applicant’s engineer on November 3, 2021, to schedule a conference call to discuss the status of outstanding Environmental and Historic Preservation (EHP) requirements.8 During the conference call, the Applicant stated that it had started construction on November 1, 2021, with an anticipated completion date of January 15, 2022.9 FEMA EHP notified the Applicant that the project was not in compliance with the National Environmental Policy Act (NEPA), as consultation with interested Tribes under Section 106 of the National Historic Preservation Act (NHPA) and the public comment period for NEPA and Executive Order (EO) 11988 must be complete prior to work completion. FEMA EHP initially gave the Applicant the option to cease work until after the SEA was finalized, published, and the public comment period had ended; however, the Applicant found that it was not feasible to halt the entire project.10 7 First Appeal Response, FEMA-4337-DR-FL, Collier County, Grants Manager Project (GMP) 48791, at 5-6 (Aug. 16, 2021) 8 Email from Project Specialist, FEMA, to Applicant Agent, Collier County (Nov. 3, 2021, 1148 EST). 9 Email from Environmental Specialist, FEMA, to Project Specialist, FEMA (Nov. 9, 2021, 1405 EST). 10 Email from Project Specialist, FEMA, to Applicant Agent, Collier County (Nov. 12, 2021, 1022 EST). 16.A.12.a Packet Pg. 556 Attachment: 20221130 4337-FL Collier Co GMP 48791 FAR (002) (24427 : Recommendation to authorize the County Attorney to retain outside 3 In a subsequent DM dated February 24, 2022,11 FEMA denied GMP 48791, as the Applicant failed to adhere to EHP regulations requiring completion of the SEA prior to commencing construction. Accordingly, FEMA removed a total of $1,340,321.00 in PA funding for a second time. First Appeal On April 12, 2022, the Applicant submitted a subsequent first appeal of GMP 48791 to the Recipient requesting PA reimbursement in the amount of $1,340,321.00.12 On appeal, the Applicant contends that Condition 2 in the first appeal response implied that a FONSI was already in place and that the SEA had been finalized; therefore, it proceeded in advancing toward construction to start at the end of sea turtle nesting season on November 1, 2021. Additionally, the Applicant attributes the delay in obtaining a first appeal response from FEMA and the relating subsequent delay in resuming and completing the EHP review, as factors resulting in its loss of eligibility for reimbursement. Lastly, the Applicant questions the necessity of a full EHP review and SEA procedure, as similar work has been performed under existing United States Army Corps of Engineers (USACE) and Florida Department of Environmental Protection (FDEP) permits since 1996. The Recipient transmitted the Applicant’s appeal to FEMA with a letter recommending approval on June 7, 2022.13 Discussion Environmental and Historic Preservation Compliance Several statutes, EOs, and regulations establish requirements to protect the environment and preserve the Nation’s historic and archaeological resources, and FEMA must ensure compliance with them prior to funding work. As part of FEMA’s EHP review, Section 106 of the NHPA outlines a process that requires federal agencies to identify and assess the effects their actions may have on historic properties.14 The Section 106 process seeks to balance historic preservation concerns with the needs of federal undertakings through consultation with the agency official and other parties with an interest in the effects of the undertaking on historic properties, commencing at the early stages of project planning.15 The goal of consultation is to identify historic properties potentially affected by the undertaking, assess its effects, and seek ways to avoid, minimize, or mitigate any adverse effects on historic properties.16 11 Determination Memorandum from PA Management, Region 4, FEMA, to Collier County (Feb. 24, 2022). 12 Applicant First Appeal Letter from Applicant Agent, Collier County, to Executive Director, FDEM (Apr. 12, 2022) [hereinafter Applicant’s First Appeal Letter]. 13 Recipient First Appeal Letter from Executive Director, FDEM, to Regional Administrator, FEMA Region 4 (June 7, 2022). 14 The National Historic Preservation Act of 1966, Pub. L. No. 89-665, § 106 (codified as amended at 54 U.S.C. § 306108) (2014). 15 See generally Title 36 Code of Federal Regulations (36 C.F.R.) § 800.3 (2020). 16 36 C.F.R. § 800.1(a). 16.A.12.a Packet Pg. 557 Attachment: 20221130 4337-FL Collier Co GMP 48791 FAR (002) (24427 : Recommendation to authorize the County Attorney to retain outside 4 The Public Assistance Program and Policy Guide states that for all permanent work,17 especially work that alters the predisaster design of a facility, applicants need to make every effort to afford FEMA the opportunity to perform EHP reviews prior to the start of construction.18 A project’s Scope of Work (SOW) may potentially impact EHP resources; therefore, FEMA EHP staff must review the SOW to determine if modifications could reduce potential impacts. If an applicant begins permanent construction before FEMA completes its EHP review, the applicant will jeopardize funding for that project.19 FEMA generally cannot conduct consultation with resource agencies after an applicant initiates work on a project because those agencies lose the ability to consider alternatives that would avoid, minimize, or mitigate adverse effects to the environment or historic properties.20 In this case, an SEA is necessary, as USACE and FDEP permits do not equate to a review under NEPA, which serves as an umbrella law with numerous EHP laws and EOs necessitating individual review. For example, it is the federal agency’s responsibility under the NHPA to consult with interested parties, including Tribes, on projects that may have potential to affect historic properties. A USACE permit, especially one from 1996, would not cover these consultation requirements; however, it would help satisfy Clean Water Act requirements. Likewise, the FDEP permit would only help satisfy Coastal Zone Management Act requirements. It is important to note that the Applicant had bi-weekly phone calls with FEMA regarding the SEA process prior to the initial denial on February 21, 2020, and suspension of the SEA process.21 The Applicant actively participated in the EHP compliance process and was aware of the importance of completing EHP requirements prior to construction. Further, FEMA’s first appeal response conditioned the approval to include that the FONSI conditions in the finalized SEA must be followed. This statement indicates that there would be subsequent conditions to the project as outlined in the FONSI, implying that the Applicant would need to obtain a copy of the finalized FONSI to ensure compliance with conditions. The Applicant had no follow-up with FEMA regarding a finalized FONSI and instead carried through with construction planning and advertising for bids after receiving notification of FEMA’s first appeal response and project conditions on August 16, 2021.22 It is the Applicant’s responsibility to comply with all conditions of the grant, including EHP requirements. Lastly, FEMA provided an option for the Applicant to cease construction until after consultation under Section 106 of the NHPA could take place, and after the public comment periods and SEA were finalized. However, the Applicant declined this option for the following reasons: the 17 Although GMP 48791 was written as a Category B, Emergency Protective Measure, for EHP compliance purposes, this project is considered permanent work, as dune restoration is an extended effort that significantly alters the surrounding landscape and ecosystem. Additionally, the area subject to this project was purposefully excluded during a planned renourishment (i.e., ‘permanent work’) that occurred in 2019, compounding the Applicant’s inability to claim this project as ‘emergency work’ (see Email from Environmental Specialist, FEMA, to Infrastructure Branch Director, FEMA (Oct. 3, 2019, 1054 EST)). 18 Public Assistance Program and Policy Guide, FP 104-009-2, at 85 (Apr. 2018). 19 Id; See also FEMA Second Appeal Analysis, Town of Killington, FEMA-4022-DR-VT (Oct. 22, 2019). 20 Robert T. Stafford Disaster Relief and Emergency Assistance Act, as amended, § 316, 41 U.S.C. § 5159; 44 C.F.R. Part 10, Environmental Considerations. See also 36 C.F.R. § 800.9(b). 21 EHP meeting notes (Jan. 9, 2020). 22 First Appeal Response Transmittal Email from Public Assistance Appeals, FEMA, to Applicant Agent, Collier County (Aug. 16, 2021, 1609 EST); Applicant’s First Appeal Letter. 16.A.12.a Packet Pg. 558 Attachment: 20221130 4337-FL Collier Co GMP 48791 FAR (002) (24427 : Recommendation to authorize the County Attorney to retain outside 5 likelihood of contractor claims due to work stoppage; delays and remobilization; the sand mine would have to stop production; hired staff would have been idle or temporarily laid off without pay; and truck hauls would have been intrusive to beachgoers during peak tourist demand.23 Therefore, the Applicant’s actions foreclosed on the opportunity for any meaningful consultation among interested parties, including public involvement, to mitigate potential negative impacts to the surrounding environment, thereby leaving FEMA in a position of noncompliance with NEPA, EO 11988, and the NHPA, if it were to fund the endeavor.24 Conclusion FEMA must ensure compliance with federal environmental laws, regulations, and EOs prior to funding work. The Applicant completed sand dune construction prior to receiving FEMA approval and without affording FEMA the opportunity to conduct the necessary EHP compliance reviews. Therefore, the Applicant’s appeal is denied. 23 Applicant’s First Appeal Letter. 24 36 C.F.R. § 800.14(f). 16.A.12.a Packet Pg. 559 Attachment: 20221130 4337-FL Collier Co GMP 48791 FAR (002) (24427 : Recommendation to authorize the County Attorney to retain outside 1 ADMINISTRATIVE RECORD INDEX FEMA-4337-DR-FL Collier County, PA ID: 021-99021-00 Grants Manager Project 48791/Project Worksheet 5856 Doc # No. of Pages Project Document Date Document Type From To Document Description/ Subject 1 2 48791 5/26/20 Letter Recipient FEMA 1st Appeal Transmittal 2 3 48791 4/1/20 Letter Applicant Recipient 1st Appeal Letter 3 9 48791 2/21/20 Letter FEMA Applicant Determination Memorandum 4 2 48791 6/7/22 Letter Recipient FEMA Second 1st Appeal Transmittal 5 72 48791 4/12/22 Letter Applicant Recipient Second 1st Appeal Letter and Attachments 6 10 48791 2/28/22 Letter Applicant FEMA Second Determination Memorandum 7 2 48791 8/16/21 Email FEMA Applicant First Appeal Response Transmittal 8 2 48791 11/3/21 Email FEMA Applicant GM Attachment: EHP Meeting Request 9 2 48791 11/9/21 Email FEMA FEMA GM Attachment: EHP Follow Up 10 2 48791 11/12/21 Email FEMA FEMA/Ap plicant GM Attachment: EHP Compliance Concerns 11 2 48791 10/3/19 Email FEMA FEMA Appeal Folder: EHP notification to PA End of Record 16.A.12.a Packet Pg. 560 Attachment: 20221130 4337-FL Collier Co GMP 48791 FAR (002) (24427 : Recommendation to authorize the County Attorney to retain outside