Washington County weighing appeal after FEMA seeks to de-obligate about $55 million for road mitigation

WASHINGTON COUNTY — Washington County officials said FEMA has issued a determination memo that would de‑obligate about $55–56 million from the mitigation portion of previously approved road‑repair funding tied to the Hurricane Michael recovery program, and county leaders are preparing an administrative appeal while weighing arbitration and parallel funding options.

At a workshop meeting to discuss agenda item 2.1, county staff described the de‑obligation as applying only to the mitigation portion of an earlier $160,409,000 package for road projects, not to funds already spent. County staff reported roughly $85–87 million of work has been approved or paid to date and that about $2 million remains in validation and roughly $3 million is in payables awaiting finance processing.

The determination memo, staff said, reflects FEMA’s position that paving previously unpaved roads “does not directly reduce the potential for future similar damages” and therefore should not have been approved as hazard mitigation under FEMA policy (the memo cites Appendix J). County staff and legal advisers dispute that reading and said parts of FEMA’s analysis appear to be in error.

Why it matters: The de‑obligation affects future funding Washington County expected to use to finish a set of road projects that are in various stages of completion. Board members said about 19 roads remain in incomplete condition, with an estimated $15 million needed to finish those unfinished sections. County leaders warned that, whether or not the appeal succeeds, the county may still need to fund repairs and long‑term maintenance for roughly 80 miles of newly paved roads and additional unfinished segments.

Next steps and deadlines: County staff told the board the county must file a first‑level administrative appeal with FEMA’s Region 4 within roughly 60 days of receiving the determination memo (staff cited April 13 as the internal deadline). Staff recommended retaining Baker Donelson (attorney Wendy Huff) to assist with the appeal and to provide a cost estimate covering the initial appeal and the more resource‑intensive arbitration stage if needed. Staff said Baker Donelson and the county’s consultant team have already begun drafting appeal materials and that the state has a draft letter ready to support the county.

State involvement and parallel avenues: State representatives on the call said they would provide a recommendation letter for an appeal and assist through arbitration if the county pursues it. State staff also reiterated that hazard‑mitigation funds remain tied to completed work: to retain certain mitigation dollars the county must complete the associated work or capture it under a different project classification (an “improved project” under FEMA policy), which staff said is one of the options currently under discussion.

County options and risks: County officials outlined three broad paths: (1) file the first‑level appeal and pursue arbitration if necessary; (2) decline to appeal and work with FEMA/state to identify alternate grant solutions to finish unfinished roads; or (3) pursue a negotiated, parallel funding route while the appeal is pending. Staff noted the first‑level appeal is relatively low‑cost and preserves the county’s ability to move to arbitration, but arbitration would likely incur substantial legal fees. County leaders said they would request an estimate of attorney fees and intended to have that information before the next regular board meeting so the board could decide whether to retain outside counsel.

Board concerns and technical issues: Commissioners raised concerns about the original road designs — drainage, width, and base preparation — saying some recently paved roads show drainage or subsurface spring problems that the county must now maintain. Several commissioners emphasized that the projects had been developed with FEMA input earlier in the recovery process and that current FEMA staff now say the paving element should not have been approved as mitigation.

Staff follow‑ups: County staff agreed to provide a detailed list of unfinished roads and an itemized status for each (percent complete; presence of filter fabric, silt fence, rock, or paving). Staff said they could deliver that breakdown within one to two days for board review. The county also confirmed it has drawn on a line of credit to pay contractors while reimbursement was paused and expects to be close to repaying that line of credit by summer, subject to change.

What was not decided: The board made no formal decision at the workshop. Staff advised the board that a formal decision to retain outside counsel or to file an appeal would require a future open meeting agenda item and a vote. For now, staff recommended moving forward with preparing appeal materials and obtaining firm cost estimates so the board can act within the FEMA filing window.

Ending: County staff and state representatives said discussions with FEMA and the state will continue in parallel with any appeal, and staff said they will return to the board with cost estimates and a detailed unfinished‑roads inventory ahead of the next board meeting.