Resolution No. 4814 - Laserfiche WebLink

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Benefit-cost analysis software, technical manuals and a wide range of guidance documents are available from FEMA at no cost to communities. A Benefit-Cost Analysis Toolkit CD which contains all of the FEMA benefit-cost materials is available from FEMA. The publication What is a Benefit? Draft Guidance for Benefit~Cost Analysis is particularly recommended as a general reference for benefit-cost analysis of hazard mitigation projects. This publication includes categories of benefits to count for mitigation projects for various types of buildings, critical facilities, and infrastructure and has simple, standard methods to quantity the full range of benefits for most types of mitigation projects. t.7 Principles of Benefit-Cost Analysis Benefit-cost analysis is the tool that provides answers to a central question for hazard mitigation projects: "is it worth it?" If hazard mitigation were free, individuals and communities would undertake mitigation with robust enthusiasm and the risks from hazards would soon be greatly reduced. Unfortunately, mitigation is not free, but often rather expensive. For a given situation, is the investment in mitigation justified? Is the owner (public or private) better off economically to accept the risk or invest now in mitigation to reduce future damages? These are hard questions to answer! Benefit- cost analysis can help a community answer these difficult questions. In the complicated real world of mitigation projects, there are many factors which determine whether or not a mitigation project is worth doing or which of two or more mitigation projects should have the highest priority. Consider a town which has two flood prone neighborhoods and each neighborhood desires a mitigation project. The two neighborhoods have different numbers of houses, different value of houses, different frequencies and severity of flooding. The first neighborhood proposes storm water drainage improvements at a cost of $3.0 million. The second neighborhood wants to elevate houses at a cost of $3.0 million. Which of these projects should be completed? Both? One or the Other? Neither? Which project should be completed first if there is only funding for one? Are there alternative mitigation projects which are more sensible or more cost-effective than the proposed projects? Such complex socio-politicakeconomic-engineering questions are heady impossible to answer without completing the type of quantitative flood risk assessment and benefit- cost analysis discussed below. in determining whether or not a given mitigation project is worth doing, the level of risk exposure without mitigation is critical. Consider a hypothetical $1,000,000 mitigation project. Whether or not the project is worth doing depends on the level of risk before mitigation and on the effectiveness of the project in reducing risk. For example, if the before mitigation risk is low (a subdivision street has a few inches of water on the street every couple of years or a soccer field in a city park floods every five years or so) the answer is different than if the before mitigation risk is high (100 or more houses are expected to have flooding above the first floor every 10 years or a critical facility is expected to be shut down because of flood damages once every five years). All well-designed mitigation projects reduce risk (badly designed projects can increase risk or simply transfer risk from one community to another). However, just because a Public Review Draft August 6, 2004 1-10