Benefit Cost Analysis Workshop
Tuesday, April 24, 2018
1:30 p.m. - 4:30 p.m. EDT
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FEMA's Benefit-Cost Analysis Tool Kit has been developed over a number of years and used to promote efficient resource allocation through well-informed decision-making by the Federal Government. This presentation will discuss the formal economic analysis by the Federal Government for funding hazard mitigation projects. The Stafford Act authorizes the President to establish a program to provide technical and financial assistance to state and local governments to assist in the implementation of hazard mitigation measures that are cost effective and designed to substantially reduce injuries, loss of life, hardship, or the risk of future damage and destruction of property. To evaluate proposed hazard mitigation projects prior to funding FEMA requires a Benefit-Cost Analysis (BCA) to validate cost effectiveness. BCA is the method by which the future benefits of a mitigation project are estimated and compared to its cost. The end result is a benefit-cost ratio (BCR), which is derived from a project’s total net benefits divided by its total project cost. The BCR is a numerical expression of the cost effectiveness of a project. A project is considered to be cost effective when the BCR is 1.0 or greater, indicating the benefits of a prospective hazard mitigation project are sufficient to justify the costs. Although the preparation of a BCA is a technical process, FEMA has developed software, written materials, and training to support the effort and assist with estimating the expected future benefits over the useful life of a mitigation project.
Bill Nechamen, firstname.lastname@example.org