The user manual calls for the storm surge raster to be in NAVD88. However, I already have my DEM in MTL, so I am not using a datum correction for the DEM elevation. I assume that the surge should be in the same datum as the DEM, but the manual gives me pause since it calls for NAVD. I just wanted to make sure there isn't some additional behind-the-scenes datum conversion going on for the surge (beyond what you might input in the VDATUM file or MTL-NAVD conversion factor)
Yes, if you have no correction factor for NAVD88 then using the MTL datum would be correct. This is because, while the model will try to convert data from NAVD88 (which has been the format we generally received data in) it would use the zero conversion factor, so there would be no change.