Proper Benefit Cost Analysis Key in Mitigation Grant Application


All of these efforts call for cost-effective projects that may be supported through an acceptable Benefit Cost Analysis (BCA). Preparing such a BCA is the subject of this issue of Disaster Recovery Today.


The Robert T. Stafford Disaster Relief and Emergency Assistance Act requires that mitigation measures be deemed cost effective for funding to be available through the 404 and 406 programs.

The 404 program does not neccessarily apply to facilities damaged from a current disaster. It focuses on repetitive damages from past disasters and funds new or improved facilities.

In contrast, the 406 program focuses on a current disaster and the elements or systems damaged as a direct result of it. Under 406, FEMA will do more than fund the repair or replacement of the damaged facility to its pre-disaster design, function and capacity: it will also authorize additional funding to modify the damaged facility to mitigate potential future damage.

The Stafford Act gives FEMA the authority to fund the restoration of eligible facilities that have sustained damage due to a presidentially declared disaster. Section 406 of the Stafford Act contains a provision for the consideration of funding additional measures (further described in 44 CFR € 206.226) that will enhance a facility’s ability to resist similar damage in future events. These mitigation measures must be cost effective. Under section 406 Repair and Replacement of Damaged Facilities, any one of the following means may be used to determine cost effectiveness:

A Benefit Cost Analysis is a method for determining the potential positive effects of a mitigation measure and comparing them to the cost of the measure. The desired effect is a reduction in future damages. The BCA can also be used to evaluate alternative projects to determine which is the best alternative from a fiscal standpoint. The end result is a Benefit Cost Ratio (BCR), which is derived from a...