1. 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

2. UNIFIED HAZARD MITIGATION ASSISTANCE PROGRAM Hazard Mitigation Grant Program Hazard Mitigation Grant Program Pre-Disaster Mitigation Program Pre-Disaster Mitigation Program Flood Mitigation Assistance Program (flood hazard only) Flood Mitigation Assistance Program (flood hazard only) Repetitive Flood Claims Program (flood hazard only) Repetitive Flood Claims Program (flood hazard only) Severe Repetitive Loss Program (flood hazard only) Severe Repetitive Loss Program (flood hazard only)

3. MITIGATION PROGAMS Project and Planning Grants Project and Planning Grants 75/25% cost share 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 State, local, and tribal organizations eligible applicants –HMGP – certain eligible private, non-profits Approved Hazard Mitigation Plan required Approved Hazard Mitigation Plan required –Exception is RFC Program

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

5. FUNDING AVAILABILITY (cont.) FMA 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

6. Funding Availability (cont.) PDM 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

7. Funding Availability (cont.) RFC 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

8. Funding Availability (cont.) SRL 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

9. ELIGIBLE PROJECTS Either on public or private property Either on public or private property Acquisition/Demolition of structures Acquisition/Demolition of structures Relocate structures Relocate structures Elevation of structures Elevation of structures Retrofit Structures Retrofit Structures Community Shelters Community Shelters Residential Safe Rooms Residential Safe Rooms Development of standards Development of standards Structural hazard control, i.e., debris basins, floodwalls Structural hazard control, i.e., debris basins, floodwalls Development/updates of All Hazards Mitigation Plans Development/updates of All Hazards Mitigation Plans

10. Eligible Projects (cont.) FMA, RFC, SRL FMA, RFC, SRL –Mitigation to NFIP insured structures –Flood mitigation only

11. REQUIREMENTS Participating in the NFIP and in good standing Participating in the NFIP and in good standing Cost-Beneficial Cost-Beneficial Environmentally Sound Environmentally Sound Considered other alternatives Considered other alternatives Best alternative Best alternative Solve the problem Solve the problem Plan requirement (except RFC) Plan requirement (except RFC)

12. Mitigation eGrants HMA applications (PDM, FMA, RFC, and SRL) have to be submitted via FEMA’s eGrants system HMA applications (PDM, FMA, RFC, and SRL) have to be submitted via FEMA’s eGrants system

13. HMA 2010 Guidance/Resources http://www.fema.gov/government/ grant/hma/index.shtm

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

15. Required for BCA Detailed scope of work Detailed scope of work Cost Estimate Cost Estimate Maintenance Cost Maintenance Cost Past Damages and Frequency of Event Past Damages and Frequency of Event

16. Benefits of Mitigation Avoided damages to buildings and contents Avoided damages to buildings and contents Avoided loss of function Avoided loss of function Avoided emergency management costs Avoided emergency management costs Avoided casualties Avoided casualties

17. Calculating Benefits Before mitigation Before mitigation After mitigation After mitigation Probabilities of the hazard Probabilities of the hazard Useful life of the project Useful life of the project Time value of money Time value of money

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

19. Damages after Mitigation Benefits are calculated as the difference between annualized damages with and without undertaking the mitigation project. 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. Annualized benefits are calculated as the difference in the annualized damages before and after mitigation.

20. Software Highlights Streamlined software to allow users to develop an inventory of structures and projects 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 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 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

22. Multiple Structures, Multiple Hazards

23. BCA Import

24. Structure Import

25. BCA Export

26. Structure Export

27. Backup/Restore

29. Using Integrated Calculators Each data element that affects the BCA must be documented Each data element that affects the BCA must be documented Any deviation from the FEMA Standard Values MUST be justified and 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. Once documentation is uploaded into the BCA software, and the software is then loaded into eGrants, all documentation will follow to eGrants.

30. Using the Cost Estimator

36. Flood BCA Module – Key Inputs Mitigation Project Type Mitigation Project Type Mitigation Project Cost Mitigation Project Cost Hazard-Specific Data Hazard-Specific Data Structure Information Structure Information –General –Residential –Non-Residential Damages and Losses Avoided Damages and Losses Avoided Depth-Damage Functions Depth-Damage Functions

37. Flood BCA Documentation: General Guidance Data used in place of FEMA standards or default values MUST be documented Documentation should include justification for the use of data in place of FEMA values. Hydrologic and hydraulic analyses Hydrologic and hydraulic analyses Building Replacement and Contents Values Building Replacement and Contents Values Elevation Certificate(s) Elevation Certificate(s) All data must be obtained from a credible source Federal, State, county, regional, and local government agencies Federal, State, county, regional, and local government agencies Qualified professionals such as licensed architects, engineers, and surveyors Qualified professionals such as licensed architects, engineers, and surveyors

38. Mitigation Project Cost Mitigation Project Cost –Estimating Costs and Benefits Pre-construction Pre-construction Construction Construction Ancillary Ancillary Annual Maintenance Costs Annual Maintenance Costs –Sources: Local historical cost data Local historical cost data Current contractor bids Current contractor bids Cost estimating software Cost estimating software Flood BCA Documentation: Mitigation Project Cost

39. –FIS and/or Hydrology and Hydraulics (H&H) Study Riverine: Flood Profile, Streambed Elevation, Discharges Riverine: Flood Profile, Streambed Elevation, Discharges Coastal: Stillwater Elevation (SWEL), BFE or 100-year elevation including wave action Coastal: Stillwater Elevation (SWEL), BFE or 100-year elevation including wave action –FIRM Panel Number, Effective Date, Community ID Number Panel Number, Effective Date, Community ID Number Flood BCA Documentation: Hazard-Specific Data

40. Structure Information - General Structure Information - General Flood BCA Documentation: Structure Information

41. 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: Structure Information (continued)

42. –Foundation/Building Type, Number of Stories Acceptable forms of documentation: photocopies of tax records, hard copy or electronic photos, appraisals and letters from homeowners 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. Sources: homeowner, local building inspector, local tax assessor's office, or title documents. Flood BCA Documentation: Residential Structure

43. –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 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 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 Documentation is available from agency providing service or published annual report Flood BCA Documentation: Non-residential Structure

44. 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. 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 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. Loss of Rent are costs for rental properties only and do not include one-time costs.

45. Flood BCA Documentation: Contents Value FEMA Standard Value: Contents Residential and Default DDF (USACE) table: 100 percent of Building Replacement Value (BRV) Residential and Default DDF (USACE) table: 100 percent of Building Replacement Value (BRV) All Others: 50 percent of BRV All Others: 50 percent of BRV If default is not used, sources include: Insurance records Insurance records Appraisals Appraisals Receipts Receipts Estimates based on current market prices for similar contents Estimates based on current market prices for similar contents

46. Flood BCA Documentation: Depth Damage Functions –Depth Damage Functions Choose from three options 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 If FEMA Standard Value is not used, sources include: historical loss records and engineering judgments

47. Flood BCA Documentation: Other Avoided Damages BCA Tool automatically estimates avoided losses/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: Other Avoided Damages Table allows user-entered benefit categories that may include: –Debris removal –Emergency Management Costs –Disruption of Life

48. Damage-Frequency Assessment (DFA) Typically requires the most assumptions and engineering judgment Typically requires the most assumptions and engineering judgment Provides the most accurate analysis if no hazard data or specific building data are available 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) 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 Performs an analysis based on historical hazard frequency data, damage observations, and engineering judgment

49. Damage-Frequency Assessment (continued) DFA calculates project benefits based on two or more historical damage events and the frequencies of the events 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 Advantage of DFA module is its flexibility: it can be used for a wide range of hazards and project types

50. When to Use the DFA The DFA approach should be used when one or more of the following situations apply: The DFA approach should be used when one or more of the following situations apply: Non-building projects (utilities, roads, infrastructure) Non-building projects (utilities, roads, infrastructure) Key structure information, such as the first floor elevation data for flood, is not available 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 Hazard data used to determine the expected annual number of flood events is missing or out of date

51. 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

52. DFA Documentation The DFA Module requires documentation of the following key data: The DFA Module requires documentation of the following key data: Value of Services (Roads/Utilities) Value of Services (Roads/Utilities) Loss of Service Durations Loss of Service Durations Historical Damages Historical Damages Loss Event Frequencies Loss Event Frequencies Residual Damages/Losses (Project Effectiveness) Residual Damages/Losses (Project Effectiveness)

53. Value of Services (Roads/Utilities) Recommended documentation: Roads: traffic counts and detour time estimates with maps Roads: traffic counts and detour time estimates with maps Utilities: local utility company data indicating number of impacted customers Utilities: local utility company data indicating number of impacted customers Buildings: annual budget Buildings: annual budget

54. Historical Event Damages/Losses Recommended documentation: FEMA Project Worksheets/Damage Survey Reports 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 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) Newspaper accounts citing credible sources (other than homeowner accounts)

55. Historical Event Frequencies Recommended documentation: Frequencies linked to documented FIS data Frequencies linked to documented FIS data U.S. Geological Society (USGS) stream gauge data or National Oceanic and Atmospheric Administration (NOAA) tide gauge 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 Copies of engineering/technical expert reports Use the unknown frequency calculator with supporting documentation when requirements are met Use the unknown frequency calculator with supporting documentation when requirements are met

56. 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

57. Unknown Frequency Calculator: Documentation Recommended documentation: Three historical events of unknown frequency Three historical events of unknown frequency Date of construction (needed for the period of record) 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. Insurance claims, damage repair records, technical reports, data from the State/local agency, local government, etc.

58. Project Effectiveness Elements to documenting project effectiveness: Keep in mind that nearly all mitigation projects have some residual damages 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 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 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 Assume damages after mitigation occur once the level of effectiveness frequency is reached

59. I 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) Interpolation between known data points (but not by extrapolating above or below known data points) Calculate estimates based on “typical values” such as: Calculate estimates based on “typical values” such as: Examples of good and bad documentation for each of the key DFA inputs are provided on the slides that follow. Examples of good and bad documentation for each of the key DFA inputs are provided on the slides that follow. FEMA Depth-Damage functions for buildings, contents, and displacement costs Damage functions or relationships from other credible sources

60. DFA Documentation: Value of Services (Roads/Utilities) Acceptable Documentation DOT traffic counts and detour time estimates with maps (roads) Local utility company data indicating number of impacted accounts (utilities) Unacceptable Documentation “Ballpark” estimates of traffic counts/detour times without maps (roads) Population/census data not correlated to utility service area (utilities)  For FEMA standard values for services, refer to FEMA’s BCA Toolkit

61. DFA Documentation: Historical Damage Event Costs/Losses Acceptable Documentation FEMA Project Worksheets/DSRs Insurance or damage repair records from DOT, DPW, utility company Damages estimated based on FEMA standard values Unacceptable Documentation Extrapolated damages or service losses Road and utility maintenance costs not tied to damage events Newspaper articles that do not cite credible sources (i.e., other than homeowner accounts)

62. DFA Documentation: Historical Damage Event Frequencies Acceptable Documentation Frequencies linked to documented FIS data USGS stream gauge data or NOAA data Copies of engineering/ technical expert reports Using the unknown frequency calculator with supporting documentation Unacceptable Documentation Assuming all recurring damages occur at the 1-year frequency Extrapolated event frequencies Using the unknown frequency calculator with no explanation or supporting documentation

63. DFA Documentation: After-Mitigation Damages/Losses Acceptable Documentation Engineering or technical report A detailed project scope that clearly indicates the level of effectiveness Plans or specifications Unacceptable Documentation Assuming no damages occur after mitigation for non- acquisition projects Poorly-defined project scopes with no clear level of effectiveness  Remember most mitigation projects do not eliminate all future damages (except acquisition)

64. Conclusion FEMA Damage-Frequency Assessment Remember: It is always about risk, regardless of the hazard Remember: It is always about risk, regardless of the hazard Good mitigation projects address high- risk situations Good mitigation projects address high- risk situations Poor mitigation projects address low- risk situations Poor mitigation projects address low- risk situations

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