City Announces Arbitration Agreement
Nearly five years ago, back in October 2016, Hurricane Matthew passed by Amelia Island about 50 miles off shore. While not a direct hit here, the hurricane caused severe damage to the Fernandina Harbor Marina along the city’s riverfront downtown.
Years passed by as the city and mariners awaited completion of re-constructing marina facilities to bring it back to life — a long, frustrating saga. (A few marina photos from the past five years are shown below).
Adding insult to injury was a funding dispute that arose with FEMA over “repairing” vs. “replacing” key marina infrastructure. Bottom line was how much of the multi-million dollar bill FEMA would foot versus the city government and its taxpayers.
It wasn’t until this year in May 2021 that the fuel pumps, located in the northern basin, were finally restored to operation so boaters could once again fill tanks. Thus, the city lost this main source of marina revenue from October 2016 through mid-May 2021. The new fuel dock area is pictured below).
The Federal Emergency Management Agency (FEMA), the Florida Division of Emergency Management and the city of Fernandina Beach entered into an arbitration agreement on August 31, 2021. The mayor of Fernandina Beach, Mike Lednovich, made an announcement about the agreement on Facebook (read in full, published below).
City Announcement (9-1-2021):
“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 Arbitration Agreement calls for the City to present all documentation of actual costs to Florida Division of Emergency Management (FDEM) withinfourteen 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 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 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.”Mayor Mike Lednovich, Fernandina Beach 9-1-2021 (Facebook announcement)
With millions of dollars at stake, one has to imagine sighs of relief were exhaled at city hall. Especially by city manager, Dale Martin, in the job since late fall of 2015. New to town at that time, he had arrived from Connecticut to fill the position after former city manager, Joe Gerrity, had resigned. Thus, Martin’s been at the helm since before the marina was damaged, through its re-construction, and the ensuing stormy seas during this legal dispute with FEMA.
The city’s announcement indicates it could take around around two and a half months more until FEMA reviews the city’s “actual cost” documents. Considering all that’s transpired over the years, perhaps some fingers remain crossed that another monkey doesn’t throw a wrench before FEMA funds are actually dispersed to the city.
The three-page Arbitration Agreement entered into on
August 31, 2021 between FEMA (Federal Emergency Management Agency), the Florida Division of Emergency Management and the city of Fernandina Beach, Florida can be reviewed online.
Amelia Island Living article published when city marina reopened its southern basin back in January 2020:
Amelia Island Living article published in February 2019: