After twice deciding it would penalize the Haines Borough by withholding $1.4 million, the Federal Emergency Management Authority (FEMA) has now reversed course and will reimburse the borough for repairs to Porcupine Trail Road.
The successful appeal was the second time the borough had challenged the agency’s decision to withhold the funding. It’s a boon for borough finances, and at least an official resolution to an issue that has caused much strife in the past two years.
The saga first started after winter storms in early 2021 when the borough requested FEMA funding to repair parts of the Porcupine Trail Road — a seven-mile gravel road branching off the Porcupine Bridge at 26 Mile Haines Highway — that they said had been damaged in Dec. 2020 storms.
FEMA approved funding for the project, and work proceeded until late summer and early fall of 2023 when a local organization, Takshanuk Watershed Council, reported observing work outside the project’s official scope and “placement of fill into wetlands and salmon streams” to FEMA.
Three months later, after a site inspection by FEMA officials, the agency found the borough had violated the terms of the funding and said it would not pay the $1.4 million that had been granted to fund the first phase of the project. FEMA upheld that decision in July 2024 following a first borough appeal.
In those two past decisions, FEMA officials described the decision to take back their funding promise — sometimes referred to as “de-obligating” the money — as the result of two borough missteps.
First was the alleged widening of the road beyond the original plans for the project. Under the terms of the FEMA funding, the road work was meant to stay within the pre-storm footprint of the road.
In a December 2023 memo, FEMA Region 10 official Anna Daggett said the site visit showed the road widened beyond the plans submitted to FEMA. According to the memo, the site visit estimated the total road area 2.28 acres larger than had improved. That assessment included the shoulder of the road, Daggett wrote, which was on average four feet wide on both sides.
The second issue was work on nearby stretches of the same road, authorized by the borough, but paid for by mining firm Constantine Metals. At the time, Constantine owned the Palmer Project, a mineral exploration venture accessed using Porcupine Trail Road.
The borough has argued that road maintenance has long been funded by private road users like Constantine, as allowed by borough code.
FEMA was not notified about the Constantine work, which according to the agency was a violation of funding terms. In previous decisions, FEMA described the Constantine work as a “connected action” to the FEMA-funded project. As a “connected action,” the work would’ve been required to follow the full FEMA approval process, including review of various work impacts and consultation with tribal governments.
Indeed, Chilkat Indian Village vice-president Jones Hotch reported at the time that traditional soapberry harvesting areas were destroyed by the construction.
“Per the Village,” wrote FEMA official Laura Herriott in a 2023 memo, “completed project actions impacted historic and ongoing ancestral areas of interest to the Chilkat Alaska Native Village before FEMA had an opportunity to consult with the interested party.”
Now, after twice finding that the borough had broken the terms of the funding on these two issues, FEMA has reversed course.
Under agency regulations, entities receiving FEMA public assistance funding, like the Haines Borough, are entitled to a maximum of two appeals. The decision on the first appeal is made by the FEMA regional administrator. The second appeal moves up a step, the decision coming from an administrator at FEMA’s national headquarters — in this case FEMA public assistance director Robert Pesapane. Pesapane has held that role since August 2023.
It doesn’t appear that Pesapane had new evidence from site inspections or from the borough that led him to overturn the agency’s previous decision.
In the appeals decision this week, Pesapane wrote that the borough’s second appeal “reiterated its first appeal arguments.”
Instead of new information, FEMA seems to have accepted the argument the borough has been making through the appeals process about the Constantine work and also alleged road widening in the FEMA-funded work.
On the Constantine Work, Pesapane
On that second issue, the agency’s recent decision says pre-construction documents “show road surface 22 ft. wide road excluding shoulders and ditches.” And in the post-construction site visit, Pesepane writes that FEMA staff found the road exceeded the planned 22-foot width only when including the road shoulder in the calculation.
According to Pesapane’s decision, the shoulders themselves were separately approved work. “As such, what was previously found to be 2.28 acres of additional ground disturbance was work within the approved Phase I scope of work when including the shoulders and ditch restoration,” Pesapane writes.
And on the issue of the Constantine work, Pesapane argues it was not connected because it was in response to 2022 flooding, whereas the FEMA funded work was in response to 2020 damage.
FEMA’s regional and national offices did not respond to requests this week for further clarification on the rationale behind the appeal decision.
Without a doubt, the $1.4 million that looks to be coming in the door will help the cash-strapped borough.
The way the borough accounting has worked, the FEMA reimbursement was never taken off the books, even after the agency pulled back the funds. Finance director Jila Stuart said the plan was to consider the $1.4 million from FEMA still on the table until all the appeals process was finished.
That means the borough won’t have a fresh $1.4 million, and the operating deficit will stay the same. But it will prevent the assembly from having to widen the deficit further, which would have been the case had the final appeal been unsuccessful. In that scenario, the FEMA funding would have been taken off the books, and the borough assembly would have had to appropriate new funding to replace it.