The $80 million word: Shumlin administration, contractor misread FEMA requirements

Secretary of Administration Jeb Spaulding. VTD/Josh Larkin

Secretary of Administration Jeb Spaulding. VTD/Josh Larkin

A single word is at the root of FEMA’s initial rejection of a plan for the replacement of the Vermont State Hospital and the Waterbury State Office Complex, both of which were damaged by Tropical Storm Irene nearly a year ago.

Jeb Spaulding, the secretary of the Agency of Administration, said that a contractor used the word “damaged” instead of “destroyed” in a set of recommendations the state filed with the Federal Emergency Management Agency.

Timothy Brunette, a contractor for FEMA who was working closely with in the Vermont Department of Buildings and Grounds, used fact sheets and public policy digests instead of the federal code as the basis for drafting key language in the state’s request for assistance to FEMA, according to Spaulding. Brunette used the term “damaged” in the “Decision Analysis,” which outlined his recommendations for the state’s submission to the federal agency. All of the buildings at the state office complex are still standing. Most sustained flood damage.

On June 28, FEMA officials gave a Powerpoint presentation to Shumlin administration officials. Spaulding said they told the administration “we shouldn’t have said damaged, it should be destroyed.”

Brunette used a “permanent location” fact sheet, and a Public Assistance Policy Digest (p. 111) to draft the analysis, according to Spaulding. The administration used the recommendation as the basis for its FEMA request and did not catch the semantic slip up.

The federal code, 44 CFR 206.226, says FEMA can approve funding for restoration of a destroyed facility at a new location when:

(i) The facility is and will be subject to repetitive heavy damage;

(ii) The approval is not barred by other provisions of Title 44 CFR; and

(iii) The overall project, including all costs, is cost effective.

Brunette “messed up,” Spaulding said, but the information FEMA provided was confusing because “there it says destroyed but then they use the word damage for the rest of the discussion.” The current fact sheet he says uses the words “damaged or destroyed.”

Spaulding said that FEMA led the administration “down this road” and the “materials are ambiguous — at least they’re contradictory to each other.”

Spaulding said FEMA hadn’t given the administration a “no,” but he also said it wasn’t clear whether the state hospital and some of the buildings at the complex would be eligible for public assistance. FEMA has agreed to give the state a 90 percent match for projects that qualify for public assistance. Vermont has received more than $100 million in public assistance for other projects so far.

On July 20, the Shumlin administration told lawmakers FEMA’s previous reassurances that it would provide some level of funding were “for all intents and purposes disavowed.” Michael Clasen, deputy secretary of the Agency of Administration, told lawmakers that the state hospital is not eligible for FEMA funds and assurances that rebuilding the office complex would be eligible for reimbursement are also uncertain, including such key elements as moving the heating plant out of the floodplain before the complex is reconstructed.

Spaulding hasn’t given up on the original plan, which includes a new building for the state hospital in a new location and funding for renovations at local hospitals for psychiatric wards, along with replacement of the heating plant, the agricultural laboratory, a sewage system, demolition of damaged buildings and floodproofing.

The administration has asked its consultants, Witt and Associates (James Lee Witt was head of FEMA under President Bill Clinton), to shepherd through the state’s original plan. The firm was hired shortly after the flood last fall to help the state with its FEMA application. The consultants, Spaulding said, seem to think they might be able to “win on the damaged or destroyed” language.

“We haven’t said we’re not going to try to push that in Washington, D.C., if the alternative route we’re working on now doesn’t bear sufficient fruit,” Spaulding said.

When asked what level of funding would be sufficient, Spaulding said: “I don’t know, we’ll know it when we see it. On the upper end we hoped we had in the high 80s. Somewhere between zero and $80 million. Honestly, I don’t think I thought we’d get to $88 million.”

Vermont’s congressional delegation met with FEMA chief Craig Fugate on Wednesday at Sen. Patrick Leahy’s office on Capitol Hill to discuss Vermont’s “recovery needs.” In a statement from Leahy’s office, there was no mention of the current breakdown in communication between FEMA and the Shumlin administration. Leahy, Rep. Peter Welch, D-Vt., and Sen. Bernie Sanders, I-Vt., said they convened the meeting “as part of our ongoing communication with FEMA and other federal agencies about Vermont’s recovery needs.”

“We had a constructive discussion with FEMA Administrator Craig Fugate that included updates from FEMA’s perspective and from ours, focusing on the bigger picture as well as on the details of various recovery matters,” the delegation reported. “Administrator Fugate agreed on the need for steady progress on all remaining fronts and also to deploy additional staffing resources to Vermont if needed. We and our offices will build on this discussion in our continuing work with the state and with FEMA, USDA and other front-line agencies.”

Meanwhile, state officials are working on an alternative plan. Spaulding said the state is writing up project worksheets for every building for the costs for flood proofing, restoring damage, and bring buildings up to code “as if we were going to do it and see what that adds up to, then take the money and do what we want with it.”

“At this stage it’s trust, but verify,” Spaulding said. “We’re starting to do a little homework in case the alternative plan doesn’t work out.”

“I do think sometimes I can be naive, but I do think they (FEMA officials) are trying to help us,” Spaulding said.

Sen. Joe Benning, R-Caledonia, an attorney and a member of the Senate Institutions Committee, says someone “dropped the legal ball.”

“Those buildings are still standing,” Benning said. “We did everything we could to stabilize those buildings as the first priority. They were cleaned and heated and stabilized, so now you have the question, are they damaged or destroyed. I think the feds would have a powerful argument they aren’t destroyed they’re still there.”

Nick Russo, assistant director-FCO operations at Federal Emergency Management Agency, has not returned repeated requests for comment. FEMA is expected to reveal how much it is willing to reimburse the state in the next few weeks.

The state made Brunette’s three-page analysis available to VTDigger.org as part of nearly 500 pages of records. The Shumlin administration made the correspondence between the state and FEMA available on Friday afternoon.

Anne Galloway

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