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FEMA Concedes to City Arbitration Request
The City of Fernandina Beach and the Federal Emergency Management Agency (FEMA) have resolved their dispute regarding the costs to replace portions of the City Marina destroyed by Hurricane Matthew. The City sought arbitration relief from the United States Civilian Board of Contract Appeals (CBCA) when FEMA failed to respond in a timely manner to the City’s appeal regarding Hurricane Matthew damages to the City Marina.
The dispute arose after FEMA officials on two separate occasions indicated the Marina components destroyed by Hurricane Matthew were eligible for replacement and subsequent reimbursement through Public Assistance funding under the Robert T. Stafford Disaster Relief and Emergency Assistance Act. The City proceeded with the replacement, and when the work was nearly completed, FEMA officials contended that the facility qualified only for repair, not replacement. FEMA’s revised decision reduced the costs eligible for reimbursement for the southern dock from approximately $6.5 million to only $650,000.
The City, with support from the State of Florida Division of Emergency Management (FDEM), appealed FEMA’s decision in October, 2020. When FEMA failed to respond within the statutorily required 180 days, the City filed a Request for Arbitration. Following the City’s filing, and prior to a formal hearing before the CBCA, FEMA agreed that the facility was eligible for replacement. FEMA agreed to fund the actual, reasonable costs incurred to replace the facility as well as the financing costs incurred to complete the work. “It was an honor to work with the City to show FEMA that the Marina’s attenuator system and fuel dock are eligible for replacement,” said Erin Greten of Baker Donelson, the City’s counsel hired to arbitrate the case before the CBCA. “We were pleased that the City’s Request for Arbitration convinced FEMA to approve the cost of replacement without needing a hearing.”
The Arbitration Agreement calls for the City to present all documentation of actual costs to FDEM within fourteen days and for FDEM to provide those documents to FEMA within five days. FEMA will then have sixty days to review the documentation and obligate funding, which will total 75% of the costs (FDEM will provide additional reimbursement of 12.5% of the project costs).
The Fernandina Beach City Commission has previously directed that all reimbursement funds will be used for debt service costs associated with the Marina. The City recently re-financed approximately $10.6 million of Marina debt.
The Arbitration Agreement has been uploaded to the City website: https://www.fbfl.us/DocumentCenter/View/22741/08302021---CBCA-7167---Arbitration-Agreement