1st Appeal• Issueo Dodge County, Nebraska, submitted an application through Nebraska Emergency Management Agency for HMGP funding of a river bank reconstruction and stabilization project on the west side of the Elkhorn River. The project was not approved, and a 1st level appeal was denied by Region VII.• Reason for Denialo Region VII found that the proposed project did not meet the cost-effectiveness requirement of the HMGP.• Reference(s)o 44 CFR 206.434 HMGP Eligibility; 44 CFR 206.440 Appeals2nd Appeal• Issueo Dodge County submitted a 2nd appeal to overturn the Region VII 1st appeal denial. The applicant had provided a benefit-cost analysis that did not address essential elements of benefit-cost analysis, such as flooding recurrence probabilities and present value calculations. An upper bound benefit cost analysis was done by FEMA, generating a benefit-cost ratio of 0.57, indicating that the project was not cost effective.• FEMA Findingso The 2nd appeal decision upheld the 1st appeal denial.o The rationale for the 2nd appeal decision was that the grant application did not meet the cost-effectiveness eligibility requirement of the HMGP.o Reference(s): 44 CFR 206.434 HMGP Eligibility; 44 CFR 206.440 Appeals
DEC 24 1996
Mr. William E. WhitneyGovernor's Authorized RepresentativeState of NebraskaState Civil Defense Agency1300 Military RoadLincoln, NE 68508-1090
Dear Mr. Whitney:
This letter responds to a second appeal filed on behalf of Dodge County for a grant application submitted under the Hazard Mitigation Grant Program (HMGP). The grant was requested for a river bank reconstruction and stabilization project on the west side of the Elkhorn River. The application was submitted under disaster declaration FEMA-908-DR-NE. The State of Nebraska's Project Number is #0013.
Unfortunately, I must deny the grant because it does not meet the cost-effectiveness eligibility requirement of the HMGP, found at 44 CFR 206.434(b)(5). Under this requirement, a project's future benefits must exceed its costs, as computed on a net present value basis. FEMA has assessed the cost-effectiveness of this proposed project, and found that it does not meet this criterion.Nonetheless, funding under the HMGP still remains available. The project can proceed using Nebraska's 5% initiative funding at your discretion.
In closing, should you choose not to use the 5% initiative, FEMA Region VII is available to assist you and Dodge County in identifying suitable alternatives towards reducing flood losses to its inhabitants. We look forward to working with you in this matter.
Richard W. Krimm
Executive Associate DirectorMitigation Directorate
FEMA Riverine Flood benefit-cost software was used. The project generated a benefit-cost ratio (BCR) of 0.57, well below the 1.0 cost effectiveness threshold. The inputs used in the analysis were provided by the applicant. The BCR should be considered an upper-bound result, because several important numbers used in the calculation favored the applicant significantly. The following inputs (among others) were used:
The applicant's estimate that 1,100 acres of agricultural area would be given enhanced protection was used for the BC Analysis. A FEMA study showed that only 400 acres would actually be protected. The area used may overestimate the benefits by a factor of 2.75;
The applicant's estimated project cost of $279,500 was used. The FEMA study indicated, that if the structure were properly designed to function as proposed, the project costs would then be much higher;
The value of damages to infrastructure protected by the project is $11,350. This figure was provided by the applicant;
In the BC Analysis, the proposed project is presumed l00% effective in preventing damage up to 2.5 feet over base flood elevation (BFE). This favors the applicant because the proposed bank design (see later notes) makes it prone to breaching. If the potential for breaching was considered, theeffectiveness of the project would be diminished, as would the benefit-cost ratio.
The applicant provided a benefit-cost analysis that does not address essential elements of benefit-cost analysis, such as flooding recurrence probabilities and present value calculations. The FEMA-generated BC Analysis resulted in a benefit-cost ratio of 0.57, indicating that the project is not cost effective and is thus ineligible for HMGP funding.
Last updated Aug 26, 2014
Would you like to take a brief survey regarding your experience with fema.gov?