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Mitigation Cost Benefit Analysis Emergency Management - PowerPoint

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					FEMA’S BENEFIT COST
     ANALYSIS

Roxanne Gray, Wisconsin State Hazard
           Mitigation Officer
                  and
Kristen Sailer, Minnesota State Hazard
           Mitigation Officer

2009 MnAFPM and WAFSCM Combined Annual
              Conference
            October 8, 2009
UNIFIED HAZARD MITIGATION
ASSISTANCE PROGRAM
• Hazard Mitigation Grant Program
• Pre-Disaster Mitigation Program
• Flood Mitigation Assistance Program (flood
  hazard only)
• Repetitive Flood Claims Program (flood
  hazard only)
• Severe Repetitive Loss Program (flood
  hazard only)
MITIGATION PROGAMS
• Project and Planning Grants
• 75/25% cost share
     – HMGP – WI & MN both provide 12.5% of the local
       match
     – PDM – 90/10% for small, impoverished
     – RFC – 100% funding
     – SRL – 90/10% with strategy in State Plan
•   State, local, and tribal organizations eligible applicants
     – HMGP – certain eligible private, non-profits
•   Approved Hazard Mitigation Plan required
     – Exception is RFC Program
FUNDING AVAILABILITY

• HMGP
 – Post-Disaster
 – 15% (20% with Enhanced Plan) of the total
   federal funds allocated for Public and
   Individual Assistance Programs for each
   disaster
FUNDING AVAILABILITY (cont.)

• FMA
  – Annual allocation; and national competition
  – # of flood insurance policies and repetitive
    loss properties in the state
  – Flood Mitigation only
  – Mitigation to NFIP insured structures
Funding Availability (cont.)

• PDM
 – State base amount of $500,000
 – Annual, national competition or is it?
 – Subgrants projects capped at $3 million
   federal share; Planning $800,000 for new
   plan, $400,000 plan update
 – $150 million – FFY10 (Earmarks once again)
 – Will sunset 9/2010 unless reauthorized
Funding Availability (cont.)

• RFC
  – Mitigation to NFIP insured structures
  – At least one paid flood insurance claim
  – Flood Mitigation Only
  – No plan requirement
  – Inability to manage subgrant or lack of 25%
    match
  – National Competition
Funding Availability (cont.)
• SRL
  – Mitigation to NFIP insured structures
  – Flood mitigation only
  – At least 4 NFIP claim payments over $5,000
    each, and cumulative exceeds $20,000; or 2
    payments exceeds the value of the structure
  – Allocations for target states; otherwise
    competition
ELIGIBLE PROJECTS
• Either on public or private
    property
•   Acquisition/Demolition of
    structures
•   Relocate structures
•   Elevation of structures
•   Retrofit Structures
•   Community Shelters
•   Residential Safe Rooms
•   Development of standards
•   Structural hazard control, i.e.,
    debris basins, floodwalls
•   Development/updates of All
    Hazards Mitigation Plans
Eligible Projects (cont.)

• FMA, RFC, SRL
  – Mitigation to NFIP insured structures
  – Flood mitigation only
REQUIREMENTS
•   Participating in the NFIP and in good standing
•   Cost-Beneficial
•   Environmentally Sound
•   Considered other alternatives
•   Best alternative
•   Solve the problem
•   Plan requirement (except RFC)
Mitigation eGrants

• HMA applications (PDM, FMA, RFC, and
 SRL) have to be submitted via FEMA’s
 eGrants system
      HMA 2010
  Guidance/Resources
http://www.fema.gov/government/
       grant/hma/index.shtm
BCA

• All projects must be cost-effective
• Benefits of the project must outweigh the
 cost of at least 1:1.
Required for BCA

• Detailed scope of work
• Cost Estimate
• Maintenance Cost
• Past Damages and Frequency of Event
Benefits of Mitigation

• Avoided damages to buildings and
  contents
• Avoided loss of function
• Avoided emergency management costs
• Avoided casualties
Calculating Benefits

• Before mitigation
• After mitigation
• Probabilities of the hazard
• Useful life of the project
• Time value of money
Damages before Mitigation

• The greater the frequency and depth of
  flooding for a given structure, the higher
  the annualized damages and losses.
• To the extent that a mitigation project
  reduces or eliminates these damages, the
  greater the potential benefits
Damages after Mitigation

• Benefits are calculated as the difference
  between annualized damages with and
  without undertaking the mitigation
  project.
• Annualized benefits are calculated as the
  difference in the annualized damages
  before and after mitigation.
Software Highlights
• Streamlined software to allow users to develop an inventory of
   structures and projects
• The ability to allow structures in multiple projects or to use multiple
   hazards
• Various defaults with the ability to override when providing
   justification and backup documentation
    – Provided wizards, drop-down menus, integrated calculations
    – Data sharing capability through import / export
    – Dynamic Help, including Job Aids, Checklists and Tool Tips
    – Integrated online help
    – An online toolkit
Multiple Structures, Multiple
Hazards
BCA Import
Structure Import
BCA Export
Structure Export
Backup/Restore
Using Integrated
Calculators
•Each data element that affects the BCA must be
documented
•Any deviation from the FEMA Standard Values
MUST be justified and documented
•Once documentation is uploaded into the BCA
software, and the software is then loaded into
eGrants, all documentation will follow to eGrants.
Using the Cost Estimator
Flood BCA Module – Key Inputs
• Mitigation Project Type
• Mitigation Project Cost
• Hazard-Specific Data
• Structure Information
  – General
  – Residential
  – Non-Residential
• Damages and Losses Avoided
• Depth-Damage Functions
Flood BCA Documentation:
General Guidance
                         Documentation should include
                         justification for the use of data in
Data used in place of    place of FEMA values.
FEMA standards or     • Hydrologic and hydraulic analyses
default values MUST • Building Replacement and Contents
be documented         Values
                         • Elevation Certificate(s)
                         • Federal, State, county, regional, and
All data must be           local government agencies
obtained
                         • Qualified professionals such as
from a credible
                           licensed architects, engineers, and
source
                           surveyors
Flood BCA Documentation:
Mitigation Project Cost
• Mitigation Project Cost
  – Estimating Costs and Benefits
     • Pre-construction
     • Construction
     • Ancillary
     • Annual Maintenance Costs
  – Sources:
     • Local historical cost data
     • Current contractor bids
     • Cost estimating software
Flood BCA Documentation:
Hazard-Specific Data
–FIS and/or Hydrology and Hydraulics (H&H)
 Study
  • Riverine: Flood Profile, Streambed Elevation,
     Discharges
   • Coastal: Stillwater Elevation (SWEL), BFE or 100-year
     elevation including wave action
–FIRM
  • Panel Number, Effective Date, Community ID Number
Flood BCA Documentation:
Structure Information
• Structure Information -
  General
Flood BCA Documentation:
Structure Information (continued)
Size of Building
  – Measured in square feet
  – Sources: appraisal, tax records, survey or homeowner
    estimates, measured drawings with photographs
Building Replacement Value
  – Cost per square foot to build a comparable structure
  – Sources: letter from local building inspector, contractor,
    architect or engineer; or information from standard cost
    estimating software. If tax records are used, source
    must be assessor
Flood BCA Documentation:
Residential Structure
–Foundation/Building Type, Number of Stories
  • Acceptable forms of documentation:
    photocopies of tax records, hard copy or
    electronic photos, appraisals and letters from
    homeowners
  • Sources: homeowner, local building inspector,
    local tax assessor's office, or title documents.
Flood BCA Documentation:
Non-residential Structure
–Primary Use of Building, Number of Stories
  • Sources: owner, local building inspector, local tax assessor’s
    office, or title documents on letterhead from a credible
    source
–Service Types by Facility (Value of Public Service),
 Annual Budget
  • Examples of Service Name: government, library, education,
    hospital, emergency medical service (EMS), safe room, fire,
    police, or Emergency Operations Center
  • Documentation is available from agency providing service or
    published annual report
Flood BCA Documentation:
Displacement/Loss of Rent
Displacement/Loss of Rent
 • Costs when occupants are displaced to temporary quarters
    while damage is repaired. Includes rent and other monthly
    costs, such as furniture rental and utilities, and one-time
    costs, such as moving and utility hook-up fees.
  • FEMA Standard Values
    – $1.44 square foot per month for residential
  • Loss of Rent are costs for rental properties only and do
   not include one-time costs.
Flood BCA Documentation:
Contents Value
        FEMA Standard Value: Contents
          • Residential and Default DDF (USACE)
            table: 100 percent of Building
            Replacement Value (BRV)
          • All Others: 50 percent of BRV
        If default is not used, sources include:
          • Insurance records
          • Appraisals
          • Receipts
          • Estimates based on current market prices
           for similar contents
Flood BCA Documentation:
Depth Damage Functions
–Depth Damage Functions
  •Choose from three options
     – Default – All information provided; no justification or
       documentation needed
     – Library – Similar to default, but is a secondary preference;
       justification AND documentation required ONLY if user
       overrides values
     – Custom – User-entered information; justification AND
       documentation MUST be provided
   •If FEMA Standard Value is not used, sources include:
    historical loss records and engineering judgments
Flood BCA Documentation:
Other Avoided Damages

• BCA Tool automatically estimates avoided
    losses/damages:
     – Building and Contents Damages
     – Displacement Costs
•   Other Avoided Damages Table allows user-entered
    benefit categories that may include:
     – Debris removal
     – Emergency Management Costs
     – Disruption of Life
Damage-Frequency Assessment
(DFA)
• Typically requires the most assumptions and
    engineering judgment
•   Provides the most accurate analysis if no hazard
    data or specific building data are available
•   Historical damage information is required
    (updated for inflation to present value)
•   Performs an analysis based on historical hazard
    frequency data, damage observations, and
    engineering judgment
Damage-Frequency Assessment
(continued)

• DFA calculates project benefits based on
  two or more historical damage events and
  the frequencies of the events
• Advantage of DFA module is its flexibility:
  it can be used for a wide range of hazards
  and project types
When to Use the DFA
 The DFA approach should be used when one or more of
 the following situations apply:

• Non-building projects (utilities, roads, infrastructure)
• Key structure information, such as the first floor elevation
 data for flood, is not available

• Hazard data used to determine the expected annual
 number of flood events is missing or out of date
DFA Requirements
1. Must have documented historical damages/losses from two or more
   hazard events of known frequencies based on:
   –   FEMA Project Worksheets/Damage Survey Reports,
   –   Insurance or repair records, or
   –   Newspaper articles citing other credible sources
2. Must have documented frequencies associated with each hazard
   event based on:
   –   Comparison of observed flood elevations or discharges to FIS,
       stream gauge or tide gauge data
   –   Documented data from a credible source to estimate
       frequencies
   –   The unknown frequency calculator with supporting
       documentation when the requirements are met
DFA Documentation
 The DFA Module requires documentation of the
 following key data:

• Value of Services (Roads/Utilities)
• Loss of Service Durations
• Historical Damages
• Loss Event Frequencies
• Residual Damages/Losses (Project Effectiveness)
Value of Services (Roads/Utilities)

Recommended documentation:
• Roads: traffic counts and detour time
  estimates with maps
• Utilities: local utility company data
  indicating number of impacted customers
• Buildings: annual budget
Historical Event Damages/Losses

Recommended documentation:
• FEMA Project Worksheets/Damage Survey
  Reports
• Insurance claims, BureauNet/Simple and Quick
  Assessment (SQA) Net information, damage
  repair records, or data from the State/local
  agency, local government
• Newspaper accounts citing credible sources
  (other than homeowner accounts)
Historical Event Frequencies
Recommended documentation:
• Frequencies linked to documented FIS data
• U.S. Geological Society (USGS) stream gauge
  data or National Oceanic and Atmospheric
  Administration (NOAA) tide gauge data
• Copies of engineering/technical expert reports
• Use the unknown frequency calculator with
  supporting documentation when requirements
  are met
Unknown Frequency Calculator:
Requirements
The unknown frequency calculator can only be used when the following
   requirements are met:
1. Minimum of three hazard events occurring in different years where
   either:
    –   The frequencies/RIs of all events are unknown, or
    –   The frequencies/RIs of up to two events are known and have
        total inflated values that exceed the total inflated values of all the
        other unknown frequency/RI events
2. Period of record based on the age of the structure or a minimum of
   10 years; whichever is greater
3. No other way to tie historical events to known frequencies/RIs
Unknown Frequency Calculator:
Documentation
Recommended documentation:
• Three historical events of unknown frequency
• Date of construction (needed for the period of
  record)
Sources of documentation may include:
• Insurance claims, damage repair records,
  technical reports, data from the State/local
  agency, local government, etc.
Project Effectiveness
Elements to documenting project effectiveness:
• Keep in mind that nearly all mitigation projects
   have some residual damages
• Some projects will not completely eliminate
   damages after mitigation, but will reduce
   damages by a certain percentage
• Consult with the mitigation project designer to
   determine the level of effectiveness
• Assume damages after mitigation occur once the
   level of effectiveness frequency is reached
Summary: Documenting DFA
Data
Methods to derive data from documented events:
• Interpolation between known data points (but not by
  extrapolating above or below known data points)
• Calculate estimates based on “typical values” such as:
       FEMA Depth-Damage functions for buildings,
        contents, and displacement costs

       Damage functions or relationships from other credible
        sources
• Examples of good and bad documentation for each of
  the key DFA inputs are provided on the slides that
  follow.
DFA Documentation: Value of
Services (Roads/Utilities)
    For FEMA standard values for services, refer to FEMA’s
     BCA Toolkit

Acceptable Documentation             Unacceptable Documentation
    DOT traffic counts and detour      “Ballpark” estimates of traffic
     time estimates with maps            counts/detour times without
     (roads)                             maps (roads)
    Local utility company data         Population/census data not
     indicating number of                correlated to utility service area
     impacted accounts (utilities)       (utilities)
DFA Documentation:
Historical Damage Event Costs/Losses
Acceptable Documentation             Unacceptable Documentation
   FEMA Project                        Extrapolated damages or
    Worksheets/DSRs                      service losses
   Insurance or damage repair          Road and utility maintenance
    records from DOT, DPW, utility       costs not tied to damage events
    company
                                        Newspaper articles that do not
   Damages estimated based on           cite credible sources (i.e., other
    FEMA standard values                 than homeowner accounts)
DFA Documentation: Historical
Damage Event Frequencies
Acceptable Documentation          Unacceptable Documentation
   Frequencies linked to            Assuming all recurring damages
    documented FIS data               occur at the 1-year frequency
   USGS stream gauge data or        Extrapolated event frequencies
    NOAA data
                                     Using the unknown frequency
   Copies of engineering/            calculator with no explanation or
    technical expert reports          supporting documentation
   Using the unknown frequency
    calculator with supporting
    documentation
DFA Documentation:
After-Mitigation Damages/Losses
 Remember most mitigation projects do not eliminate
  all future damages (except acquisition)
Acceptable Documentation             Unacceptable Documentation
   Engineering or technical            Assuming no damages occur
    report                               after mitigation for non-
                                         acquisition projects
   A detailed project scope that
    clearly indicates the level of      Poorly-defined project scopes
    effectiveness                        with no clear level of
                                         effectiveness
   Plans or specifications
Conclusion

   FEMA Damage-Frequency Assessment

• Remember: It is always about risk,
  regardless of the hazard
• Good mitigation projects address high-
  risk situations
• Poor mitigation projects address low-
  risk situations
Contact Information

• Roxanne Gray, Hazard Mitigation Officer
  Wisconsin Emergency Management, 608-
  242-3211, roxanne.gray@wisconsin.gov
• Kristen Sailer, Hazard Mitigation Officer,
  Minnesota Homeland Security and
  Emergency Management, 651-201-7423,
  kristen.sailer@state.mn.us

				
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